Aden Electrical Limited v Teamtalk Limited

[2008] NZCA 252

IN THE COURT OF APPEAL OF NEW ZEALAND

CA164/2008
[2008] NZCA 252

BETWEENADEN ELECTRICAL LIMITED

Applicant

ANDTEAMTALK LIMITED

Respondent

Hearing:15 July 2008

Court:William Young  P, Chambers and Ellen France JJ

Counsel:G A Keene for Applicant

D S Lester for Respondent

Judgment:23 July 2008 at 3 pm 

JUDGMENT OF THE COURT

AThe application for special leave to appeal is dismissed.

BThe applicant must pay to the respondent costs for a standard appeal, band A, together with usual disbursements.

REASONS OF THE COURT

(Given by Ellen France J)

Introduction

[1]       This is an application under s 67 of the Judicature Act 1908 for special leave to appeal to this Court against a decision of Stevens J (HC AK CIV 2007-404-003975 2 October 2007) in which he dismissed the applicant’s appeal against a decision of Judge Hole (DC AK CIV-2006-004-000813 22 June 2007).  The applicant sought leave from the High Court to appeal to this Court, but leave was declined by Stevens J on 10 March 2008.

[2]       The question on the proposed appeal will be whether the applicant should have been awarded costs in the District Court.

Background

[3]       The respondent, Teamtalk Limited, provided radio telephone services to the applicant.  It had done so for about three years and then sought to introduce a written contract.  A contract was signed by a member of staff of the applicant.  It had a three year term.  When the applicant terminated the supply of services about a year later, the respondent filed proceedings in the District Court.  The respondent claimed that a lump sum for the unexpired portion of the written contract was due (approximately $12,300 together with some $3,000 collection costs and $1,600 for unpaid services rendered before termination). 

[4]       About seven months later, the applicant’s solicitors sent a Calderbank letter to the respondent’s solicitors.  In the letter, dated 25 October 2006, the applicant disputed the existence of a written contract but offered to resolve the matter by payment of $3,000. 

[5]       There was no response to that letter.  Meanwhile, the proceeding which was on the swift track, had been set down for a two day hearing on 21 and 22 June 2007. 

[6]       About three weeks before the hearing, on 28 May 2007, the applicant’s solicitors sent a further Calderbank letter.  In that letter, the applicant made an offer of $5,000 to settle the proceedings.  The offer was made on the basis that under an oral contract between the parties, the applicant was liable to pay one month’s notice and three months worth of charges.

[7]       If the offer was not accepted, the applicant indicated in the letter that it would amend its statement of defence to advance various defences which ultimately it did.

[8]       The offer was not accepted and the matter proceeded to a hearing.  At the end of the two day hearing, the Judge delivered an oral judgment giving judgment for the respondent in the sum of $2,250 plus interest (a total sum of $2,671.86).  The Judge said that costs were to lie where they fell.

[9]       The applicant filed a memorandum raising the question of costs and a possible recall to reconsider that question.  The Judge refused to recall the judgment.

[10]     In dismissing the applicant’s appeal in the High Court, Stevens J said there was no basis for disturbing the discretion not to award costs.  In that context, Stevens J placed some emphasis on the fact that the respondent had achieved some success,  on the limited success of the applicant’s defences, and on various problems with the pleadings.  As to the Calderbank letters, the Judge concluded that Judge Hole was aware of them and had exercised his discretion in relation to costs.  There was no basis for interfering with that discretion.

[11]     The application for leave to appeal to this Court was out of time.  Stevens J refused to extend time as well as declining leave.  His Honour did so on the basis that the test for such applications was not met, emphasising the small amount of money at stake and the discretionary nature of the decision in issue.

Discussion

[12]     We agree with the applicant that the District Court Judge essentially found for the respondent on the basis that there was no written contract between the parties.  That left an oral contract under which the applicant was required to pay one month’s notice and three months worth of charges.  The reasoning is not entirely clear but we consider that conclusion follows from the Judge’s finding that the written contract was the result of a misrepresentation.  Hence, Judge Hole says at [50] that the misrepresentation would have the effect of cancelling the contract: 

… but with the requirement that monies owed up to the date of termination of the underlying contract, which was the monthly one, would still have to be paid up to the date of termination.

[13]     It follows that the applicant’s liability was limited to that which it had accepted in the second Calderbank letter.  In those circumstances, the District Court Judge should have engaged with the effect of the second Calderbank letter on the costs issue.  Similarly, on appeal, the applicant’s argument as to the effect of that letter on costs warranted further attention than it was given.

[14]     We have nonetheless concluded that the question of costs is not one capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal: Waller v Hider [1998] 1 NZLR 412 at 413 (CA);  Snee v Snee (1999) 13 PRNZ 609 at [22] (CA).  While the matter is of some importance to the applicant, the amounts involved are not great.  More importantly, in terms of the overall merits, the ultimate result may well have been about right.  The applicant had not paid the amounts owing.  Further, the respondent would have been entitled to costs at least to the date of the second Calderbank letter.

[15]     This would have been a Category 2 proceeding for which the daily rate is $1,280.  The scale provides for one day’s costs for the commencement of band A proceedings.  While there was no formal discovery, the respondent was probably entitled to some preparation time; there was one judicial conference (0.3), as well as disbursements.  The latter included the setting down fee of $750 and a $140 fee for commencing the proceeding.  Even if the applicant is right that these costs should be assessed on the basis that a two day hearing was not necessary because the applicant accepted liability under an oral contract, the respondent would have been entitled to some costs.  Ultimately, allowing costs to lie where they fell was probably about where matters would have stood given the timing of the second Calderbank letter.

[16]     Accordingly, while the matter has not been entirely satisfactory, the question does not meet the s 67 threshold.  The application for special leave is dismissed.

Costs

[17]     The respondent having succeeded is entitled to costs (r 58G(1) of the Court of Appeal (Civil) Rules 2005) for a standard appeal, band A, together with the usual disbursements.

Solicitors:

Kemps Weir, Auckland for Applicant
Maude & Miller, Auckland for Respondent