About Image Limited v Advaro Limited - [2018] NZHC 3002

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV2016-404-2183

[2018] NZHC 3002

BETWEEN
ABOUT IMAGE LIMITED AND OTHERS

First to Sixty-Fourth Plaintiffs

AND

ADVARO LIMITED

Defendant

AND

ADVARO FUNDING LIMITED

Counterclaim Plaintiff

AND

JENNIFER DOHERTY AND OTHERS

First to Fifty-Third Counterclaim Defendants

Hearing: 15, 16, 17, 23 and 25 October 2018

Appearances:

D M Fraundorfer and T J Conder for the Plaintiffs and Counterclaim Defendants

D H McLellan QC and J C Adams for the Defendant and Counterclaim Plaintiffs

Judgment:

19 November 2018

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 19 November 2018 at 4:30 p.m. pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Counsel / Solicitors:
D Fraundorfer and T Conder, Holland Beckett, Tauranga D McLellan QC, Barrister, Auckland
J Adams, Barrister, Auckland
P M Hunter, Simpson Western, Auckland

ABOUT IMAGE LTD v ADVARO LTD [2018] NZHC 3002 [19 November 2018]

Introduction

[1] The plaintiffs are each small to medium-sized businesses, who entered into arrangements with the defendant (“Advaro”) and Intagr8 Limited (“Intagr8”) to obtain telecommunications equipment and services.

[2] Intagr8 promoted its provision of telecommunications services over equipment to be leased from Advaro. On each plaintiff’s entry into the arrangement, Advaro acquired the equipment from Intagr8 and leased it to the plaintiff on a five-year term, often secured by guarantees from the plaintiff’s principal. The arrangements’ selling point was Intagr8’s payment of ‘call credits’ to the plaintiffs for the term of the leases, usually equalling their monthly rental charges payable to Advaro. On Intagr8’s liquidation, the plaintiffs ceased receiving telecommunications services (and call credits) from Intagr8.

[3] The plaintiffs principally allege in this proceeding (a) their arrangements with Advaro and Intagr8 are to be construed as a single contract, (b) under which provision of the services and call credits is an essential or implied term, (c) Intagr8’s failure to deliver which entitled them to cancel the contract, and (d) such cancellation caused the guarantees also to lack any legal effect. They also allege the conduct of Intagr8 sales representatives, as agents for Advaro, was in breach of the Fair Trading Act 1996.

[4] These principal allegations, and related ‘common issues’, were ordered to be tried separately in a ‘stage one trial’,1 under HCR 10.15, which my judgment now determines.

Background

[5] The parties agree the following facts for admission as evidence under s 9 of the Evidence Act 2006:

1.Intagr8 Limited (Intagr8) was a telecommunication communication company that facilitated the provision of telephone and internet services (the services) and office equipment (the equipment) to businesses.

2.The equipment was sourced by Intagr8 from various third-party suppliers.

1 About Image Ltd and others v Advaro Limited [2017] NZHC 3264.

3.Advaro Limited (Advaro) is a finance company. Advaro was one of four finance companies that financed the supply of equipment, arranged by Intagr8, to businesses.

4.On 30 June 2014 Rent Plus Limited changed its name…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read About Image Limited v Advaro Limited and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2018] NZHC 3002
Decision Date: 19 November 2018

CaseChat Overview and Summary

The plaintiffs, each small to medium-sized businesses, entered into arrangements with the defendant (Advaro) and Intagr8 Limited to obtain telecommunications equipment and services. The plaintiffs principally alleged that the arrangements were to be construed as a single contract, under which provision of the services and call credits was an essential or implied term. Intagr8’s failure to deliver which entitled them to cancel the contract, and such cancellation caused the guarantees also to lack any legal effect. The plaintiffs also alleged the conduct of Intagr8 sales representatives, as agents for Advaro, was in breach of the Fair Trading Act 1996. The issues before the court were: 1) whether there was a “Tripartite Agreement” between Advaro, Intagr8 and each plaintiff as pleaded; 2) if so, whether certain terms were essential terms of the Tripartite Agreement; 3) whether an essential term was breached by Intagr8; 4) if so, whether the plaintiffs were entitled to cancel the Master Rental Agreement; 5) whether there was an implied term that the Master Rental Agreement was conditional upon the continuing provision of the Services and/or the Credits; 6) if so, whether the implied term had been breached; 7) if so, and subject to the trial Judge holding that this issue can properly be determined as a common issue at the stage one trial, whether breach of the implied term entitled the plaintiffs to cancel the Master Rental Agreement; 8) whether Intagr8 representatives marketed the Arrangement to the Plaintiffs as agents for Advaro; 9) whether the terms of the Documents prevent the plaintiffs from relying on the Explanation in making a claim under the Fair Trading Act; 10) whether the guarantees cease to have any legal effect as a consequence of the plaintiffs being entitled to cancel the Master Rental Agreement, subject to them having validly exercised that right; and 11) whether the Rent Plus Guarantees cease to have any legal effect as a consequence of the plaintiffs being entitled to cancel the Master Rental Agreement, subject to them having validly exercised that right. The court found that there was no Tripartite Agreement between Advaro, Intagr8 and each plaintiff as pleaded. The court also found that there was no implied term that the Master Rental Agreement was conditional upon the continuing provision of the Services and/or the Credits. The court found that it was “maybe” that Intagr8 representatives marketed the Arrangement to the Plaintiffs as agents for Advaro, and that it was “maybe” that the terms of the Documents prevent the plaintiffs from relying on the Explanation in making a claim under the Fair Trading Act. The court found that the guarantees do not cease to have any legal effect as a consequence of the plaintiffs being entitled to cancel the Master Rental Agreement, subject to them having validly exercised that right. The court also found that the Rent Plus Guarantees do not cease to have any legal effect as a consequence of the plaintiffs being entitled to cancel the Master Rental Agreement, subject to them having validly exercised that right. The court dismissed the plaintiffs’ application for leave to amend. The court also upheld Advaro’s objections to the admission of certain documents and witness statements on grounds of relevance.

Orders