Danny Cancian is the former director of Bella Vista Homes. Photo / File
Former Bella Vista Homes director Danny Cancian has been back in court this week, pursued by building supplies company Carters for just over $1m in outstanding debts.
Cancian, however, argues he was misled and believed the deal he struck with the company limited his personal liability to $50,000.
The former mayoral candidate, who says he is eyeing a run at the newly vacant councillor seat on Tauranga City Council, already spent more than a month in court this year fighting Building Act charges brought by the council over the failed Bella Vista development at the Lakes.
Judge Paul Mabey's reserved decision in that case has yet to be released.
Cancian appeared in the High Court at Tauranga this week facing a civil case brought by Carters, a division of Carter Holt Harvey.
The case has been dragging through the legal system since late 2017. Carters filed its claim shortly before Bella Vista Homes - of which Cancian was a director - went into voluntary liquidation leaving unfinished houses and owing millions of dollars to creditors.
Carters sought a summary judgment - a ruling in its favour without a trial - but this was declined and the matter went to a two-day hearing that finished yesterday.
Cancian defended himself in court and was repeatedly
told off by Judge Edwin Wylie on Wednesday for interrupting and arguing with witnesses for the plaintiff.
At one point Cancian said he was "a little bit overwhelmed", and claimed the lawyer he had engaged for the case had "bailed out".
At another point, he mixed up two people with the same surname. When this was pointed out to him, he said: "Sorry, wrong court case".
The court heard the business arrangement between Bella Vista Homes and Carters started in October 2016.
Carters' case centred on a personal guarantee Cancian signed at that time, which was linked to trade credit Carters extended to Bella Vista Homes.
Carters argued the unlimited "deed of guarantee and indemnity" signed by Cancian - an experienced businessman - made him personally liable for the money Bella Vista Homes owed, and that the deed made no mention of Cancian's claimed $50,000 limit.
As of October 21, 2017, Bella Vista's unpaid debt was $1,078,668.23, a sum Cancian did not dispute.
Carters demanded the sum from Cancian, and also sought default interest payments of 1.5 per cent per month and other legal costs.
Cancian admitted he signed the personal guarantee without reading it.
"I made a mistake this time, I didn't read it or check it."
But he said he had trusted the word of Carters area sales manager at the time, Daren Green, who he claimed misled him.
He claimed Green told him Cancian's personal guarantee for the credit arrangement would be limited to $50,000 - an amount Cancian said he had asked for because it matched the amount he had in an agreement with Placemakers.
He also claimed that in a visit to Bella Vista Homes' offices on October 12, Green pressured him to sign the personal guarantee without getting legal advice. Cancian attributed this to Carters' pursuit of Bella Vista's business, which would become its third-largest account.
Green rejected any suggestion he pressured Cancian and denied having any discussions with him at all about the personal guarantee.
"I did not have the authority to negotiate the terms of the guarantee," Green said. "The conversation simply did not take place."
He also said it was Bella Vista that first approached Carters about doing business, not the other way around.
Cancian also claimed he emphasised his credit and personal guarantee limit of $50,000 again in a meeting between himself and two other Bella Vista staff, and three Carters staff on October 14, and was assured there was no issue.
Two of the Carters representatives, including Green, told the court the matters were not discussed in the meeting, which was arranged to talk about ongoing business arrangements.
Cancian was the only witness for his version of events, but Judge Wylie said that although he could understand why the guarantee may not have come up, he questioned whether it was "realistic" not to discuss the credit limit.
Cancian also argued Carters lifted his credit limit without his knowledge to $800,000, but Carters claimed it had a right to alter the limit without notice, and the initial $50,000 limit was for office use to get the new account started.
Other matters explored in the hearing included a $10,000 gift from Carters to Bella Vista, and whether subsequent agreements between the two parties overrode the initial terms, and Bella Vista's "missing" computer server - which Cancian claims never existed because he used a cloud-based system.
Cancian also gave evidence about how Bella Vista Homes' financial situation went downhill in 2017.
He claimed he was in discussions in late 2016 with The Lakes land developer, Carrus - including meetings with its founder, Sir Paul Adams and others - about Bella Vista being the preferred construction company at Carrus' major new Kenepuru development in Porirua, near Wellington.
He said Carters was also in talks to be the sole provider of building supplies for the development.
The talks continued into 2017, and Cancian said there were discussions about the need to lift his credit limit with Carters because of the large scale of the development.
But before the Wellington work could start, Bella Vista had to finish a 21-house subdivision in The Lakes, Tauranga.
This was behind schedule due to geotechnical issues and Tauranga City Council's raising concerns and asking for more work.
Cancian said work was happening at a frantic pace in early 2017 and this was when his credit balance with Carters rapidly increased, but the Wellington work was still in the pipeline.
Bella Vista Homes, however, never recovered.
The company struck cashflow issues, the houses cost more to build than the contract price, and the company suffered a cash deficit so he had "no choice" but to put it into liquidation.
That resulted in bad publicity for the company that only worsened when, in March 2018, the council evicted all 21 houses on the grounds the subdivision was dangerous.
In a saga that dragged out for months and hit national news, the council wound up buying the houses and either selling them in parts or demolishing them, as well as launching its court case against Cancian, Bella Vista Homes and two other parties.
Cancian said as a result of all the publicity he was ousted from the Wellington subdivision plans.
Judge Wylie reserved his decision.
Tauranga City Council is cutting 98 jobs to save $12.3 million and reduce rates.