Engineer battles French giant over unpaid bill

Engineer battles French giant over unpaid bill

June 10, 2013

A small Auckland engineering firm is preparing to liquidate Nutricia, the local healthcare division of French food giant Danone.

Damon Engineering will make its application for wind-up proceedings at Auckland High Court today after Nutricia breached the Construction Contracts Act by failing to pay the company for work on its new infant formula plant in Mt Wellington this year.

This follows orders made in Auckland District Court last Tuesday enforcing payment of an adjudicator's determination of $405,920.

The court ordered Nutricia to pay the amount within two days, plus interest on the judgment sum of $390,515 at a rate of 2% per month, or $260.34 a day, backdated to May 8.

The payment was not received by Friday night so Damon will start wind-up proceedings today.

Charging orders have also been placed over Nutricia's Mt Wellington factory, which allows Damon Engineering to sell the factory to recover the debt.

The land at 37 Banks Rd is owned by Nutricia's sister company Nutritional Packers and, ultimately, by Danone.

East Tamaki-based Damon Engineering, which employs 15 staff, was the head contractor for the plant's construction earlier this year.

Owner Chris Barrett says he has worked with Nutricia for years and had a great relationship until the company employed a new production manager in January.

Contractors were also frustrated when Nutricia extended its payment terms from 30 days to 92 days soon after.

Mr Barrett says he has sold his house to fund the legal action, which has cost him $280,000 so far.

"To have three-quarters of a million dollars of your cash flow taken out for five months is astronomical for anyone to bear. They’ve put our company at risk for $405,000 and breached every order that New Zealand law has put in front of them."

"They are so big and so arrogant."

His lawyer, Bruce Stainton, says he is surprised Nutricia, having acknowledged its debt by being part of the adjudication process, has not complied with the determination.

"Now, with the judgment of the court, it's surprising that an internationally-owned company, using the service of the work done [by Damon Engineering] to produce product, is not paying its accounts." That was the behaviour the Construction Contracts Act was brought in to protect, he says.

"This is an example where the letters of dispute were resolved, but the owner of the operation decided they do not have to comply with the requirements of the laws in New Zealand."

ENDS

© Scoop Media