Berry v Petroleum Logistics Limited - [2018] NZHC 2765

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2018-419-115

[2018] NZHC 2765

UNDER The District Courts Act 1947

IN THE MATTER

of an appeal and a cross-appeal against a decision of the District Court at Hamilton

BETWEEN

PETER LESLIE BERRY and GLENDA JOYCE BERRY sued as THE PL & GJ

BERRY PARTNERSHIP trading as ACME FASTENERS

Appellants

AND

PETROLEUM LOGISTICS LIMITED

Respondent

Hearing: 24 October 2018

Appearances:

D J G Cox for Appellants T Stevens for Respondent

Judgment:

26 October 2018

JUDGMENT OF LANG J

[on appeal against entry of summary judgment]

This judgment was delivered by me on 26 October 2018 at 10.30 am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

BERRY v PETROLEUM LOGISTICS LTD [2018] NZHC 2765 [26 October 2018]

[1] The appellants in this proceeding, Mr and Mrs Berry, operate a fuel retailing business in the Whitianga area through the PL and GJ Berry Partnership. Their business trades under the name Acme Fasteners.

[2] Between December 2012 and May 2017 Mr and Mrs Berry purchased petrol, diesel fuel and oil products from the respondent, Petroleum Logistics Limited (PL). By May 2017 PL considered Mr and Mrs Berry owed them the sum of $76,354.89 under this arrangement. PL sought summary judgment against Mr and Mrs Berry in the District Court to recover this sum. In a decision delivered on 29 March 2018 Judge Spear entered summary judgment against Mr and Mrs Berry and in favour of PL for the sum of $71,352.18.1

[3] Mr and Mrs Berry appeal against the Judge’s decision. PL cross-appeals, claiming the Judge wrongly dealt with its claim for interest on the judgment sum.

Background

[4] The contractual arrangement between the parties is contained in two documents. The first is a credit account application signed by Mr Berry on behalf of the partnership on 14 December 2012. That document has no relevance for present purposes. The second document is a Reseller Agreement signed by Mr Berry on behalf of the partnership on 22 June 2012. This set out the terms on which the parties were to trade with each other.

[5] Between 2012 and May 2017 PL invoiced Mr and Mrs Berry on a regular basis for fuel supplied to them. The supply occurred in two ways. First, PL supplied bulk fuel directly to Mr and Mrs Berry. Mr and Mrs Berry then on-sold the fuel to retail customers, many of whom operated fishing and charter vessels. Secondly, PL provided Mr and Mrs Berry with fuel cards for distribution to their retail customers. These persons could use the cards to obtain discounts when purchasing fuel from pumps at the wharf, at a BP truck stop and at a Mobil service station situated in the car park of a New World supermarket. PL would charge Mr and Mrs Berry at a discounted rate for the fuel supplied to customers using fuel cards.

1 Petroleum Logistics Ltd v Berry [2018] NZDC…

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.

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Details

Case: [2018] NZHC 2765
Decision Date: 26 October 2018

CaseChat Overview and Summary

In this case, Mr. and Mrs. Berry, trading as Acme Fasteners, appealed against a decision of the District Court that entered summary judgment in favour of Petroleum Logistics Limited (PL). The Berrys claimed PL overcharged them by more than $140,000 and sought to defend the application for summary judgment on that basis, as well as counterclaiming for overpayments made in the past. The court was required to decide whether PL correctly calculated the amounts charged to the Berrys and if the Berrys had raised genuine concerns about the pricing at an appropriate time.

The court found that the Reseller Agreement provided that the price to the Reseller would be the applicable wholesale price as per Petroleum Logistics' book price determined by MOPS. The court rejected the Berrys' argument that the MOPS price was the price PL should charge them. The court held that MOPS was merely an index rate against which the plaintiff's wholesale rate was set, and charging the MOPS rate would mean that PL would lose money on each transaction. The court concluded that the Berrys' argument would produce a commercially absurd result, and the wording used in the clause demonstrates that the Berrys' argument cannot be correct. The court also found that the Berrys did not raise pricing as an issue during their trading relationship with PL, and their failure to do so raised an issue as to whether the argument they now sought to raise was genuine.

As a result, the appeal was dismissed. The court allowed the cross-appeal and amended the order by replacing the word "inclusive" with "exclusive" regarding the amount of the outstanding account as at 30 August 2017. The issue of interest is yet to be determined in the District Court. The court reserved costs at this stage, considering that PL is likely to claim indemnity costs in relation to the appeal based on the terms of the Reseller Agreement.

Orders