Burmester v Norsand Ltd

[2020] NZHC 1945

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2019-488-111

[2020] NZHC 1945

BETWEEN

PETER BURMESTER

Appellant

AND

NORSAND LIMITED

Respondent

Hearing:

16 July 2020

Appearances:

Appellant in person

M R Ridgley for Respondent

Judgment:

5 August 2020

JUDGMENT OF LANG J

This judgment was delivered by me on 5 August 2020 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

Solicitors:

Thomson Wilson, Whangarei Copy to: Appellant

BURMESTER v NORSAND LTD [2020] NZHC 1945 [5 August 2020]

[1]                 This appeal relates to a dispute about the value of maintenance work carried out by the respondent, Norsand Limited (Norsand), on the mast of a Baltic 55 DP yacht owned by the appellant, Mr Peter Burmester.

[2]                 On 5 December 2019, Judge G M Harrison entered judgment in favour of Norsand against Mr Burmester in the sum of $10,111.07.1 Mr Burmester appeals against that decision.

Background

[3]                 Mr Burmester’s yacht, the “Star Appeal”, is also Mr Burmester’s home. He moors it in the Town Basin marina in Whangārei.

[4]                 On 28 April 2017, Mr Burmester spoke to Mr Gerry Jacobs, Norsand’s rigging manager, about undertaking an overhaul of the Star Appeal’s mast. On 12 June 2017 Mr Jacobs sent Mr Burmester an email in which he estimated the cost involved in de- stepping the mast and carrying out required maintenance work. The estimate was in the following terms:

Estimate for ‘Star Appeal’ Re-Rig

Mast Out

Partial mast prep (owner to prep as advised), un-step, mast prep and re-step

$ 1,200.00

Mast Transport

Hireage of truck transporting mast to and from Norsand (mast out and for mast in) on and off loading mast from truck to mast yard at Norsand.

$    998.00

Re-Rig

Removing rigging, making and re-fitting new rod rigging for all except baby stay.

This provided fittings are not seized (difficult to dismantle)

$14,416.84

-     Price of re-heading rods only  $     840.00

Note: This estimate is based on standard fittings, actual lengths and fittings may vary.

Backstay insulators included in price, rigging screws excluded.

1      Norsand Ltd v Burmester [2019] NZDC 24286.

Terms:

This is an estimation of labour and materials and should not be considered as a Quote.

40% deposit before commencement and fortnightly progress payments.

All prices are excluding GST (if any)

Hope this helps, if needed I can give you a further estimate for electrical wiring (not included).

[5]                 Mr Burmester accepted the estimate. On 14 June 2017 he sailed the yacht to Port Nikau, which had a wharf with water of sufficient depth to moor the yacht. Until that point Mr Jacobs had intended removing the mast with a forklift. When he saw the mast, however, he decided it would be better to use a crane to remove it rather than a forklift. He says Mr Burmester agreed to meet the extra cost of using the crane because this method of removing the mast was less likely to cause damage to the vessel and mast. Mr Burmester disputes Mr Jacobs’ evidence on this issue.

[6]                 After removing the mast and arranging for it to be transported to its yard, Norsand began work on the mast. It sent an initial invoice to Mr Burmester on 30 June 2017 seeking payment of the sum of $9,236.19 in relation to the work carried out to date.

[7]                 Mr Burmester immediately disputed the bill but paid the sum of $7,000.00 on a without prejudice basis. This left the sum of $2,236.19 owing on the invoice.

[8]                 Norsand then continued to  work  on  the  mast.  On  31  July 2017  it  sent Mr Burmester a further invoice for the sum of $5,165.59. Mr Burmester refused to pay this invoice.

[9]                 On 15 August 2017 Norsand’s director and manager, Mr Murray Wilkinson, sent Mr Burmester an email advising that his refusal to pay meant Norsand could not continue work on the mast. Mr Wilkinson asked Mr Burmester to pay the balance owing and then to remove the mast from Norsand’s premises.

[10]              Despite further correspondence the dispute had not been resolved by September 2017. At that point Norsand advised Mr Burmester that no further work would be done on the mast until he brought his account up to date. Further discussions

then occurred during November 2017, but the dispute was still not resolved. Ultimately Norsand permitted Mr Burmester to uplift the mast and he arranged for the maintenance work to be completed by another contractor.

[11]              By the time of the hearing in the District Court contractual interest had accrued at the rate of two per cent per annum on the outstanding accounts. This increased the amounts claimed in the invoices to the sum for which the Judge ultimately entered judgment in favour of Norsand.

[12]              Mr Burmester filed a counterclaim against Norsand containing two principal allegations. First, he alleged that he was deprived of income during the period when Norsand was in possession of the yacht. He said this prevented him from chartering the boat out at commercial rates. Mr Burmester claimed the sum of $115,000 under this head. Secondly, he sought a refund of the sum of $7,000 he paid Norsand on or about 30 June 2016.

[13]              In addition, Mr Burmester sought to recover the sum of $805 for the cost of a crane he had been required to hire after he uplifted the mast from Norsand’s yard. Finally, he sought judgment for the sum of $289.80 being storage costs he incurred after that date.

The hearing in the District Court

[14]              Norsand called two witnesses at the hearing before the Judge. The first was Norsand’s director, Mr Wilkinson. His evidence in chief comprised an affidavit together with supplementary questions asked by Norsand’s counsel, Mr Ridgley. Mr Burmester cross-examined Mr Wilkinson on a variety of matters. When it came to work carried out on the mast, Mr Wilkinson said he was unable to answer questions because he had not carried out the work himself. He told Mr Burmester he should direct these questions to Mr Jacobs, who was to be Norsand’s second witness.

[15]              Mr Jacobs gave oral evidence about his dealings with Mr Burmester and, in general terms, the work carried out on the mast. Mr Burmester cross-examined Mr Jacobs briefly. He did not address any questions to him regarding the work Norsand had carried out on the mast.

[16]              Mr Burmester then began reading a detailed affidavit he had prepared in anticipation of the hearing. Part-way through this process the Judge indicated he had read the affidavit and did not require Mr Burmester to read the balance of it to the Court. Mr Burmester was then cross-examined by Mr Ridgley. Mr Ridgley did not cross-examine Mr Burmester in any detail regarding his challenges to the work Norsand had carried out on the mast. He suggested to Mr Burmester that his allegations that Norsand overcharged him for the work it had carried out reflected his own opinion, and were not supported by any other evidence. Mr Burmester agreed that this was the case although he maintained he could justify each and every allegation he made in his affidavit.

The Judge’s decision

[17]              The Judge rejected Mr Burmester’s evidence that he never agreed to the extra cost involved in using a crane to de-step the mast. The Judge pointed out that the original estimate was based on the use of a forklift and Mr Jacobs had been quite clear that he needed Mr Burmester’s approval before engaging the use of a crane because it would exceed the estimated cost to some extent.

[18]              The Judge then found in favour of Norsand based on the amounts claimed in the invoices for the following reasons:2

[31]      I can discern no irregularity in the invoices issued by Norsand. They are sufficiently detailed as to the time expended in carrying out the specified work at what appears to be a reasonable cost. Further supporting details such as time sheets and invoices for parts and work otherwise undertaken by subcontractors were also available for inspection by Mr Burmester if he had pursued that course. He did not. He does not complain about the quality of the work undertaken.

[32]There will accordingly be judgment for Norsand in the sum of

$10,111.07. Interest at the default rate has been claimed up until the time the proceedings were issued. I otherwise allow interest on that amount pursuant to the interest on Monies Claims Act 2016 to the date of this decision and further interest, as allowed by that statute until the date of payment.

[19]              The Judge also dismissed Mr Burmester’s counterclaim in the following paragraphs of his decision:3

2      Norsand Ltd v Burmester, above n 1.

3      Norsand Ltd v Burmester, above n 1.

[25]      Mr Burmester acknowledged, fairly, that if his defence to the claim could not be substantiated, then his counterclaim could not succeed.

[26]In my view the majority of it could not succeed in any event.

[27]      His major claim was for $115,000 as damages for loss of use from 14 April 2018 until 7 August 2018. This was calculated on the basis of charter fees that might have been payable if the yacht had been able to be chartered during the period during which the work was undertaken. However, Mr Burmester acknowledged that the boat had never previously been chartered and there was no evidence of any charters that had to be cancelled as a consequence of any delay in completion of the work. Furthermore, Mr Burmester acknowledged that he lives on the boat and continued to do so during the time the mast had been removed.

[28]      There could consequently be no valid claim for damages for loss of use.

[29]      He otherwise sought repayment of the $7,000 paid to Norsand without prejudice but that could only succeed if I was to find that the invoices rendered by the company were invalid, which I do not. As a consequence the cost of completing the work on the mast is not recoverable although it seems that the amounts claimed were within the original estimate of cost given by Norsand to complete the work. Mr Burmester also claims the cost of having the work completed. That is, he claims to recover what he has paid Norsand and also the subsequent completion costs, which, if successful, is absurd, because that would mean that the entire work on the mast would have cost him nothing.

[30]The counterclaim therefore cannot succeed and is dismissed.

The application to adduce further evidence

[20]              Mr Burmester seeks leave under r 20.16 of the High Court Rules 2016 to adduce further evidence. The evidence consists of an affidavit by Mr Terrence Brunton, a fitter and turner based in Whangaparāoa. Mr Brunton has reviewed the invoices rendered by Norsand and concludes that Norsand has overcharged Mr Burmester for much, if not all, of the work it carried out on his behalf.

[21]Rule 20.16 provides as follows:

20.16 Further evidence

(1)Without leave, a party to an appeal may adduce further evidence on a question of fact if the evidence is necessary to determine an interlocutory application that relates to the appeal.

(2)In all other cases, a party to an appeal may adduce further evidence only with the leave of the court.

(3)The court may grant leave only if there are special reasons for hearing the evidence. An example of a special reason is that the evidence relates to matters that have arisen after the date of the decision appealed against and that are or may be relevant to the determination of the appeal.

(4)Further evidence under this rule must be given by affidavit, unless the court otherwise directs.

[22]              The authorities make it clear that, in general terms, further evidence must be cogent, material and not reasonably discoverable at an earlier stage. In Comalco New Zealand Ltd v Television New Zealand Ltd, for example, Gallen J observed:4

Rule 718 of the High Court Rules [the predecessor to r 20.16] provides in subcl (4), that in respect of a general appeal, the Court has full discretionary powers to hear and receive further evidence. Nevertheless, there are limitations on the introduction of fresh evidence on an appeal, limitations set out by Barker J in Power NZ Ltd v Mercury Energy Ltd [1996] 1 NZLR 106 adopting comments of Wylie J in NZ Co-op Dairy Co Ltd v Commerce Commission (1991) 3 PRNZ 262. It is unnecessary to set out those comments. I accept that the jurisdiction is to be exercised sparingly and the cogency,  relevance and possible effect of the evidence on the result must be taken into account. Generally speaking, the appeal should not be turned into a new case. It is also important that the evidence should not have been available at the earlier hearing by the exercise of reasonable diligence. I accept also however, that the test should not be put so high as to require the circumstances to be wholly exceptional. Every case must be considered in relation to its own circumstances.

[23]              In the present case I am satisfied  it  would  not  be  appropriate  to  permit  Mr Burmester to adduce Mr Brunton’s evidence. The evidence is plainly not new in the sense that Mr Burmester could easily have obtained it prior to the hearing in the District Court if he had turned his mind to it. In effect, the evidence addresses the suggestion put to Mr Burmester in cross-examination that his allegations of overcharging were based on his own opinion and were not supported by any independent evidence.

[24]              The evidence would also enable Mr Burmester to bolster his case on appeal in circumstances where Norsand would have no opportunity of challenging Mr Brunton’s evidence. Furthermore, Mr Brunton does not suggest he has spoken to Norsand’s staff regarding the work they carried out on Mr Burmester’s mast. It is difficult to see how

4      Comalco New Zealand Ltd v Television New Zealand Ltd (1996) 10 PRNZ 573 at 579.

he could give cogent evidence about the work carried out on the mast without fully understanding why Norsand staff took the steps they did.

[25]              For these reasons I am satisfied that it is not in the interests of justice to admit the evidence of Mr Brunton. Mr Burmester’s application to adduce further evidence is accordingly declined.

Decision

[26]              Before dealing with Mr Burmester’s specific grounds of appeal I propose to deal with a preliminary issue. This relates to a dispute that arose between Mr Burmester and Norsand in relation to work done on an instrument box. This was ultimately determined by the Disputes Tribunal, which reduced the amount Mr Burmester was required to pay for that work. The District Court subsequently dismissed an appeal by Mr Burmester against the Dispute Tribunal’s decision. Mr Burmester raised the issue of the instrument box during the hearing but the Judge immediately made it clear that he considered that issue was irrelevant to the issues he was required to decide.5 The Judge reiterated that point in his decision6

[27]              Mr Burmester continues to rely on the dispute relating to the instrument box in advancing his argument on appeal. He contends it shows Norsand has a propensity to make fraudulent claims when rendering invoices. The decision of the Disputes Tribunal was not before the Judge, however, and it was not provided to me when hearing the appeal. Even if it had been, I do not see how any issues arising out of the dispute regarding the instrument box would permit me to conclude that Norsand has a tendency to make fraudulent claims when charging customers for work done on their behalf.

Mr Burmester’s appeal against the judgment given on Norsand’s claim

[28]              Mr Burmester advances three interrelated grounds of appeal. First, he challenges the Judge’s conclusion that he agreed to the meet the extra cost involved in using a crane to deportation-step the mast from the yacht at Port Nikau. Secondly, he

5      Notes of Evidence at 9 and 30.

6      Norsand Ltd v Burmester, above n 1, at [22].

contends Norsand never provided him with properly itemised invoices so that he could understand the work it had carried out on the mast. Thirdly, he contends Norsand was guilty of overcharging him for virtually all of the work referred to in the invoices. He says Norsand did not carry out much of the work for which it charged him or, if it did, it has grossly overcharged him for the work actually carried out.

Use of the crane in de-stepping the mast

[29]              Mr Jacobs said during evidence-in-chief that he initially believed the mast could be removed using a forklift but when he saw the yacht at Port Nikau he changed his mind and considered a crane should be used. He confirmed this evidence at the commencement of Mr Burmester’s cross-examination and Mr Burmester did not challenge him further on this aspect of his evidence. During evidence-in-chief Mr Jacobs also said Mr Burmester accepted the proposal without objection. Mr Burmester did not challenge this evidence during his cross-examination of Mr Jacobs but denied that he had agreed to the use of the forklift when he gave evidence.

[30]              The versions of events given by Mr Jacobs and Mr Burmester were mutually incompatible. The Judge was therefore required to make a credibility finding as to who he believed. Appellate courts are required to reach their own decision regarding the correctness of the judgment under appeal.7 They nevertheless tend to exercise caution where the court below has made findings of credibility after seeing and hearing the witnesses.8 The court at first instance enjoys an obvious advantage over an appellate court in those circumstances.

[31]              The fact that Mr Burmester did not challenge Mr Jacobs’ evidence during cross-examination is significant. In the absence of cross-examination by Mr Burmester I consider the Judge was entitled to accept Mr Jacobs’ evidence that he obtained Mr Burmester’s agreement to the use of the crane before he arranged for it to be used to de-step the mast. This ground of appeal fails as a result.

7      Austin Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [3].

8 At [5].

Insufficient detail in the invoices

[32]              From the outset Mr Burmester contended Norsand’s invoices were insufficiently detailed to enable him to properly comprehend the work it had carried out on the mast. The Judge rejected this submission in the passage set out above9 and I take the same view. To emphasise the point, I set out the first five entries from the invoice Norsand rendered to Mr Burmester on 30 June 2017:

QTY	DESCRIPTION	PRICE	DISC %	EXTENDED	CODE
6.25	Labour June 2016 Gerry Jacobs – 13TO16/06 – to Town basin, check and prep for mast out – check mast collar job – load gear and travel to Port Nikau – unstep mast and off load mast and boom onto drums	64.00	$400.00	S15
6.5	David Davies – 14to16/06 – unstep mast, transport and store in mast yard – remove stay tangs – drill out fastenings seized	64.00	$416.00	S15
5.5	Gerry Jacobs – 20/06 – measure rod lengths to order – inspect rigscrews – check over rig – remove masthead bolts to replace – remove rigging – bring boom into shop – polish bolts an dparts – coil rod rigging	64.00	$352.00	S15
30.5	David Davies – 19to23/06 – drill out tangs to remove stays – remove pins from spreaders ends – drill out stay tangs and re-tap threads – polish lower terminals and rigging screws – dismantle boom – strip furler to remove forestay – remove foil sections	64.00	$1,952.00	S15
2	Aaron Wilkinson – 20&23/06 – prep and prime gauge dash – hang and spray 3 x coats of Epoxy primer …	42.00	$84.00	S15

[33]              I consider these entries, which are cast in the same format as all other entries on the invoices, are sufficient to ensure the recipient of the invoice can readily understand:

(a)The identity of persons who carried out work on the mast;

(b)The dates between which those persons carried out the work;

9 At [18].

(c)The nature of the work that those persons carried out;

(d)The charge out rate applied by Norsand to the persons carrying out the work; and

(e)The total amount charged for the work carried out by each person.

[34]              Mr Burmester appears to be under the impression that an invoice must meet a particular standard in order to render the amount claimed recoverable at law. I am not aware of any universal principle to that effect. Rather, the right to recover the cost of services performed depends on whether the services were in fact performed and, if so, whether the amount charged was either agreed between the parties or reasonable in all the circumstances.

[35]              Logic and common sense suggest, however, that an invoice needs to properly inform the recipient of the identity of persons who carry out work, the nature of the work that has been carried out, the date on which it has been carried out as well as the time spent and hourly rate charged. Norsand’s invoices plainly meet this threshold.

[36]              Furthermore, Norsand’s unchallenged evidence was that it compiled the invoices from the information contained in timesheets filled out by its staff. These have always been available for Mr Burmester to view if he wished to do so. They would also have been available to him through the discovery process available in the District Court. That being the case, I agree with the Judge that Norsand’s invoices were sufficient to fully inform Mr Burmester as to its charges and the nature and scope of the work that underpinned those charges.

[37]              Mr Burmester’s next submission is that Norsand overcharged him in relation to most if not all of the work referred to in the invoices. His affidavit in the District Court set out these allegations in considerable detail, and his submissions on appeal repeated that material.

[38]              The real difficulty for Mr Burmester in this context arises from the fact that he did not put his allegations to Mr Jacobs when he cross-examined him. Mr Wilkinson

had made it plain during his evidence that Mr Jacobs was the person to whom such questions should be addressed.

[39]              This is an important matter because s 92 of the Evidence Act 2006 provides as follows:

92       Cross-examination duties

(1)In any proceeding, a party must cross-examine a witness on significant matters that are relevant and in issue and that contradict the evidence of the witness, if the witness could reasonably be expected to be in a position to give admissible evidence on those matters.

(2)If a party fails to comply with this section, the Judge may—

(a)grant permission for the witness to be recalled and questioned about the contradictory evidence; or

(b)admit the contradictory evidence on the basis that the weight to be given to it may be affected by the fact that the witness, who may have been able to explain the contradiction, was not questioned about the evidence; or

(c)exclude the contradictory evidence; or

(d)      make any other order that the Judge considers just. (Emphasis added)

[40]              I consider the requirements imposed by s 92 meant Mr Burmester was obliged to put each of the allegations he intended to make when he gave evidence to Mr Jacobs for his comment. Mr Jacobs would then have had an opportunity to explain why he and other members of Norsand’s staff took the steps they did and the reasons why those steps took the time charged in the invoices.

[41]              Mr Burmester failed to comply with his obligations under s 92. This meant the Judge did not have the benefit of any explanations Mr Jacobs may have been able to give. It also meant that he could give Mr Burmester’s opinion evidence about the alleged overcharging little weight. This is particularly so given the fact that he called no independent evidence to support his view that Norsand had overcharged him for the work carried out on the mast. It follows that the Judge was entitled to find in favour of Norsand in relation to its claim based on the invoices.

The counterclaim

[42]              Mr Burmester’s counterclaim based on loss of income through lost charter business plainly could not succeed. There was no evidence he had ever chartered his yacht in the past. This is not surprising given the fact that he uses it as his home. There was therefore no basis for a counterclaim based on the loss Mr Burmester allegedly suffered through being deprived of the use of his vessel whilst the mast was in Norsand’s possession.

[43]              The other major aspect of Mr Burmester’s counterclaim could not succeed because it has now been established that Mr Burmester owes Norsand more than the sum of $7,000.00 that he paid on or about 30 June 2017.

[44]              The remaining two aspects of Mr Burmester’s counterclaim cannot succeed because he was responsible for all steps taken to complete the work on the mast after he uplifted it from Norsand’s yard. For this reason he cannot establish any legal basis upon which Norsand is liable to meet storage costs and the cost of crane hire after he uplifted the mast.

Result

[45]The appeal is dismissed.

Costs

[46]              Norsand is entitled to costs on a Category 2B basis together with disbursements as fixed by the Registrar.

Stay of execution

[47]              There is currently an interim order in force preventing Norsand from executing its judgment against Mr Burmester’s yacht. Norsand has never been restrained from executing its judgment against Mr Burmester in other ways.

[48]              The fact that Mr Burmester’s appeal has failed means there is now no basis on which the interim order staying execution of the judgment against the yacht should

remain in force. I propose, however, to give Mr Burmester a final opportunity to pay the judgment debt. I therefore direct that the interim order staying execution of the judgment against the yacht is to remain in force until midnight on 26 August 2020. Thereafter Norsand is free to levy execution against the yacht.

Lang J