Damon Engineering (2009) Limited v Jourdain
[2015] NZHC 1395
•19 June 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2012-044-001413 [2015] NZHC 1395
BETWEEN DAMON ENGINEERING (2009)
LIMITED Plaintiff
AND
CHERIE JOURDAIN Defendant
Hearing: 30 March - 1 April 2015 (closing submissions received 28
April, 5 May 2015)
Appearances:
S Carey for Plaintiff
R S Pidgeon for DefendantJudgment:
19 June 2015
(RESERVED) JUDGMENT OF ANDREWS J
This judgment is delivered by me on 19 June 2015 at 2 pm pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
DAMON ENGINEERING (2009) LIMITED v JOURDAIN [2015] NZHC 1395 [19 June 2015]
Introduction
[1] The plaintiff, Damon Engineering Ltd (“Damon”) alleges that it entered into a contract with the defendant, Ms Cherie Jourdain, to produce a health and safety manual (“H&S manual”), to provide to Damon’s clients. Damon then alleges that Ms Jourdain invoiced Damon and was paid $20,000 for producing the manual. Damon further alleges that the manual was not of the required standard, causing Damon loss. Damon claims that Ms Jourdain is in breach of contract, and of a duty of care owed to Damon.
[2] Further, Damon alleges that Ms Jourdain converted a hazard identification manual (“hazard ID manual”), and that she is liable to pay Damon for repair work done on a motor vehicle.
[3] Ms Jourdain denies all of Damon’s allegations.
Background
[4] Mr Christopher Barrett is the sole director of Damon. A trust with which he is associated purchased Damon in February 2009. Much of Damon’s work involves maintenance of engineering equipment in factories. Ms Jourdain has for many years worked in the area of human resources, in particular, as a recruitment consultant, and in human resource and organisational change management. Mr Barrett and Ms Jourdain were in a long-term de facto relationship. They finally separated during
2010. It is evident that the separation has been acrimonious.
[5] In late 2009 or early 2010, Ms Jourdain was asked to do some work in the health and safety area. There is an issue as to what work she was asked to do, by whom, and for whom. During 2010, Ms Jourdain issued a number of invoices, totalling $20,000, and payments were made to her bank account by Damon. There is an issue as to whether Ms Jourdain’s invoices were issued to Damon or to Mr Barrett.
[6] In mid-2010, a document purporting to be an H&S manual for Damon was delivered to the offices of Quality Bakers (part of the Goodman Fielder Group) in
East Tamaki. It was scanned into Quality Bakers’ computer system, but not inspected by anyone at Quality Bakers at that time. At about the same time, a similar document (in electronic form) was delivered to Fonterra Brands (Tip Top). It was not inspected by anyone at Tip Top. Quality Bakers and Tip Top were major clients of Damon.
[7] From around March 2010, Ms Jourdain had possession of a Volkswagen Passat car. She had owned it previously, from 2004 until October 2007, but it was then purchased by Damon. In June 2012 repair work was carried out, at a cost of
$837.81. Damon has invoiced Ms Jourdain for these repairs, but she has not paid.
[8] In June or July 2012, defects were identified in the documents provided to Tip Top and Quality Bakers. There is no dispute that the documents held by both companies were defective. These documents will be referred to as “the defective H&S manuals”). The defective H&S manuals were incomplete and, among other things, contained repeated references to “Waikato Kindergarten Association”. Damon was stood down as a contractor to both companies. Mr Barrett asked Ms Jourdain to assist with correcting the document, but she did not respond to that request. There is an issue as to why this was.
[9] In early August 2012, Damon engaged Salus Workplace Safety & Compliance Ltd (“Salus”) to provide a replacement H&S manual. Salus invoiced Damon for this work. Although Damon in its statement of claim alleges that the cost of this work was $19,607.50 (GST incl), evidence given at the hearing was that the actual cost was “about $3,000”.
Damon’s claims
[10] Damon’s first cause of action is for breach of contract. It alleges an oral contract between Damon and Ms Jourdain under which she was to produce an H&S manual, to be provided to Damon’s clients. It is alleged that an implied term of the contract was that Ms Jourdain would complete the work to an acceptable standard, and that it would be fit for purpose. It is alleged that, in breach of that term, Ms Jourdain provided an H&S manual which was not of an acceptable standard, and not fit for purpose. It is further alleged that as a result of the breach of contract,
Damon was stood down as a supplier of services to Goodman Fielder (Quality Bakers) and Fonterra (Tip Top) and, although a replacement H&S manual was completed by September 2012, Damon received next to no work from those companies after being stood down, notwithstanding having been reinstated by Quality Bakers in September 2012, and by Tip Top in October 2012.
[11] Damon claims the cost of the replacement H&S manual. Although, as noted earlier, this is alleged as being $19,607.50, Mr Carey in his closing submissions asserted that the claim was to be reduced to $2,375. No evidence has been provided as to the exact amount paid to Salus for the replacement H&S manual.
[12] Damon also claims $288,052 for compensation for lost sales up to the end of February 2015 and $39,000 (excl GST) in respect of time spent by Mr Barrett in attempting to rectify the defective H&S manual alleged to have been provided by Ms Jourdain.
[13] Damon’s second cause of action is in negligence. It is alleged that in preparing the H&S manual Ms Jourdain owed a duty of care to Damon to prepare the manual to an acceptable standard. It is alleged that she was in breach of that duty. The same damages are sought as in respect of the first cause of action.
[14] Damon’s third cause of action is in conversion and relates to a hazard ID manual. It is alleged that in or about November 2011 Damon engaged Ms Jourdain to provide further services in respect of Damon’s workplace health and safety and she subsequently issued an invoice for this work in the sum of $3,000. Damon alleges that while preparing this work Ms Jourdain removed from Damon’s premises a hazard ID manual belonging to Damon and has refused to return it. Damon alleges that it engaged Salus to prepare a replacement manual, at a cost of $2,357.50 (GST
incl).1 It claims that sum from Ms Jourdain, together with interest pursuant to the
Judicature Act 1908.
1 It will be noted that this is the same amount as Damon asserts was the costs of the replacement
H&S manual prepared by Salus.
[15] Damon’s fourth cause of action relates to work done on the Volkswagen Passat vehicle. It is alleged that the work was carried out, then invoiced to Ms Jourdain, care of Damon, on 21 June 2012, in the sum of $837.82. It is alleged that Damon has paid for the work and subsequently invoiced Ms Jourdain, but she has failed or refused to pay Damon. The sum of $837.82 is claimed, together with interest at 2 per cent per month.
Evidence as to matters in dispute
Evidence for Damon
[16] In his evidence, Mr Barrett said that in October 2009 he, on behalf of Damon, asked Ms Jourdain to prepare an H&S manual for Damon to be provided to Damon’s clients. He said this was a commercial arrangement, and came after a meeting with one of Damon’s clients, Contact Energy, when the subject of H&S manuals was discussed. Mr Barrett said that Ms Jourdain agreed. In his oral evidence he said that she “begged to do it” as she needed the money. He said that as she wanted the job, Damon gave it to her. Mr Barrett’s evidence is summarised below.
[17] He said that Ms Jourdain confirmed the contract in an email to him on
8 January 2010:
From: Cherie Jourdain ([email protected])
Sent: Friday, 8 January 2010 8:05 A.M.
To: ‘ChrisBarrett’
Subject: Invoice
Hi Chris
Please find attached first invoice on work completed to date on health &
safety management system. Your requirements are:
1. New manual and systems to cover all 10 areas of the ACC WSMP audit (self-audit attached) with the goal to achieving tertiary level and a 20% discount on ACC.
2. Your systems to comply with HSE Act.
3. Systems to comply with your clients’ contractor and subcontractor HSE
requirements.
4. Staff preparation to understand their responsibilities and the requirements of the company.
Expectation is that this will take approximately 200 hours. Kind regards
Cherie
[18] Mr Barrett’s email address is an “alias-linked” email to Ms Jourdain’s email address. He said that the email addresses all run off the same phone number, and each has its own privacy and log-in codes. His evidence was that Ms Jourdain could not get into his email, and he could not get into hers. .
[19] Ms Jourdain issued invoices to Damon for a total of $20,000, dated
31 January, 28 February, 20 March and 31 March 2010. Mr Barrett said that Damon paid the invoices by way of a deposit into Ms Jourdain’s bank account, by cheque, and by the transfer of the Volkswagon Passat vehicle to Ms Jourdain.
[20] In May 2010, he received a telephone call from Mr Gordon Wallace, who was at that time Northern Regional Engineering Manager at Quality Bakers. Mr Barrett said that he understood that Quality Bakers needed health and safety policies from all contractor, and that Damons’s H&S manual needed to be provided urgently.
[21] In his oral evidence, Mr Barrett said that on or about 10 May 2010, he forwarded to Ms Jourdain a letter from Mr Wallace, which said that Damon’s H&S manual had to be in hard copy, and posted or hand delivered to Quality Bakers. He said that he talked to Ms Jourdain about the letter, and she agreed to its requirements. Mr Barrett said that he saw Ms Jourdain printing off a sheet of paper with Damon’s logo on it. He said she complained about the cost of a folder.
[22] Mr Barrett said that in early June 2010, Ms Jourdain came to Damon’s offices to load the H&S manual onto Damon’s server. Mr Barrett said she brought a white laptop with her. He said that Damon’s IT consultant (Mr John Taylor) was in the office at that time, and he asked Mr Taylor to assist with the download. Mr Barrett said he did not see the documents that were downloaded, and assumed that they were the comprehensive H&S manuals promised by Ms Jourdain.
[23] Mr Taylor confirmed that he visited Damon’s offices in mid-2010 and was asked by Mr Barrett to come to another office to give assistance. He said that Ms Jourdain was with Mr Barrett. Mr Taylor cannot remember the exact words used but said that Mr Barrett said that Ms Jourdain was “doing some health and safety work for Damon” and needed access to a printer and to Damon’s server to upload
files. Mr Taylor said that he suggested that Ms Jourdain use a USB stick and a PC in Damon’s offices. He then left and went on to other work. He did not see Ms Jourdain uploading any files but said that he clearly remembered coming out of the office knowing Ms Jourdain was working on some sort of manual.
[24] In cross-examination, Mr Taylor accepted that he works primarily “on-site” at his clients’ offices, making on average one client visit a day. He could not recall the main purpose of his visit to Damon in mid-2010 and had not invoiced Damon for the visit. However, he said he recalled being asked to assist, although he could not remember anything of other visits around the time of the one where he said he saw Ms Jourdain. He accepted that he had “pieced together” his recollection, having been prompted by being asked if had any recollection of a manual, and of discussions regarding the creating of a manual, and it having been suggested to him that this was in mid-2010.
[25] Mr Nicholas Wezenbeek gave evidence that he is a manager at Damon, effectively second in charge after Mr Barrett. His evidence was that Mr Barrett and he discussed the need to have a health and safety policy. He also said that Damon engaged Ms Jourdain to prepare a health and safety policy, and manuals. Mr Wezenbeek accepted that he was not a party to any arrangements between Mr Barrett and Ms Jourdain. He also gave evidence that a health and safety manual was loaded onto Damon’s computer system and forwarded to Damon’s clients. He said that he saw Ms Jourdain at Damon’s offices “that day”, but accepted that he did not see her downloading any documents. He did not look at any of the documents.
[26] Mr Wallace, a former employee of Quality Bakers, gave evidence that “sometime in the middle of 2010 a health and safety manual for Damon was dropped off at the Quality Bakers reception”. He did not see who dropped the manual off. He received only a hard copy. He said that other than glancing at the front page, he did not look at Damon’s manual. He said that was because he had a large number of suppliers sending similar documents to him and there was no way that he could look through them all. All he did was to tick a box and sign to confirm that a contractor
had sent a document to him. The document was subsequently scanned into the
Quality Bakers system.
[27] Mr Wallace went on to say that about a week after Damon’s H&S manual had been dropped off, Mr Barrett visited him at his Quality Bakers office. Mr Barrett said that at this time, he saw a document with the same cover page as he had seen Ms Jourdain printing.
[28] Mr David Hall gave evidence that for a period of four years, up until September 2012, he was the Reliability Manager at Fonterra Brands – Tip Top. He said that in 2009/2010 Tip Top was in the early stages of implementing an accreditation system for workplace health and safety, under which contractors were required to provide various documents, such as health and safety policies and insurance policies, in order to be accredited. All documentation was required to be provided electronically.
[29] Mr Hall said that Damon provided Tip Top with a health and safety manual in or about mid-2010. It was not looked at by anyone at Tip Top at the time. He said that the volume of documentation received form contractors, or potential contractors, was such that Tip Top could not, and did not even attempt to, read or examine Damon’s manual (or any other documentation provided at the time).
[30] Mr Barrett said he did not look at the H&S manual before it was delivered to
Quality Bakers or Tip Top, or when he saw it in Mr Wallace’s office.
[31] The evidence of a former employee of Damon, Ms Leach, was taken as read. She said that she arranged payment of three invoices issued by Ms Jourdain, dated
8 January, 31 January, and 31 May 2010 (totalling $9,000), by direct credit into Ms Jourdain’s bank account on 17 May 2010. She also said that she was told by Mr Barrett that Ms Jourdain’s invoices dated 28 February and 20 March 2010 (totalling $10,000), were paid by way of transfer of the Volkswagen Passat car. She said that a further payment of $1,000 was made to Ms Jourdain by cheque dated
1 April 2010.
[32] The evidence of another former employee of Damon, Ms Eriksen, was read. Her evidence was as to asking Ms Jourdain to pay Damon for work done on the Volkswagen Passat.
[33] Mr Barrett said that in June or July 2012, he received a call from Mr Hall. He said that Mr Hall said that he had recently looked at Damon’s H&S documentation and that it was “in disarray”. He said that this was the first time he was given any reason to question the quality of Ms Jourdain’s work.
[34] Mr Hall said that “in or around June 2012” he had received a telephone call from “someone in Fonterra’s health and safety team” who advised him that Damon’s health and safety manual had been inspected, and found to be substandard. Mr Hall was asked to look at the document and deal with Damon. He inspected Damon’s health and safety manual on Tip Top’s computer system, for the first time, in early July 2012. He described it as “a joke”. He then rang Damon and spoke to Mr Barrett and advised him that because it had supplied a substandard health and safety manual, Damon would lose accreditation as a contractor to Tip Top. He said that Damon had provided excellent work for Tip Top and that the only reason that its accreditation was removed was because of the deficient health and safety manual.
[35] Mr Barrett said that, as a result of Mr Hall’s telephone call, he inspected Damon’s H&S manual for the first time, in early July 2012. He then attempted to call Mr Wallace at Quality Bakers, but was told he no longer worked there. He spoke to a woman in Quality Bakers’ head office who looked at Damon’s H&S manual and found the same issues. Damon was then stood down as a contractor by Quality Bakers.
[36] Mr Barrett said that he tried to repair the H&S manual, recording his time in his diary. He said that despite spending an enormously long time on it, he could not get the manual into an acceptable shape. He asked Damon’s then solicitors (who were also acting for Mr Barrett in issues arising after the breakup of his relationship with Ms Jourdain) to ask Ms Jourdain to provide an appropriate H&S manual. He said that Ms Jourdain did not respond to his solicitors, and her own solicitor said she
had no instructions on the matter. Mr Barrett then asked Salus to do the work and received a first draft late August 2012.
[37] Mr Barrett said that Damon was re-registered as contractor to Quality Bakers at the end of September 2012. It was re-registered as a contractor to Tip Top in mid- October 2012. In the interim, however, other contractors had taken Damon’s place as contractor.
[38] Mr Taylor also gave evidence that in mid-October 2012, he carried out an IT analysis of the G: drive on Damon’s system, which was a health and safety manual. He said that this consisted of a number of files, often of a single page. He said that documents with the Damon logo appeared to have been created by “J McDonnell” of “Tenix Group” (where Ms Jourdain worked during the first half of 2010). He said some files had been modified (that is, noted as “last saved by”) Ms Jourdain. He also noted that many of the files related to the Waikato Kindergarten Association, and that Ms Jourdain was stated to be the author of the Waikato Kindergarten files.
[39] Mr Taylor said that his instructions in October 2012 had been to confirm that files on the server were as they had been for some time, that no changes had been made, and no files had been lost. In cross-examination he accepted that the record of an “author” of a document does not necessarily identify the person who actually created the document; rather, it identifies the person registered as user of the computer on which the document was created.
[40] Mr Sean McBride is a director of Salus. When giving oral evidence, he said that he had provided Damon’s former owners with a workplace safety manual. Mr McBride confirmed that Salus had provided a replacement H&S manual to Damon in August 2012. In cross-examination, he said that he believed that Salus had charged “about $3,000” for providing the manual. He did not give any evidence as to the exact cost. Further, Mr McBride estimated that the cost of re-doing the work which Damon says Ms Jourdain was contracted to do would have been
$31,464 (incl GST).
[41] The final witness for Damon was Mr Jeffrey Roberts, a recently retired chartered accountant. Up until the end of December 2012 he was a partner and director of BDO Tauranga Ltd. He has been Damon’s accountant since 2009. He has also acted for Mr Barrett, and trusts associated with Mr Barrett. Mr Roberts purported to give evidence as an expert witness but in the light of his having acted for many years for both Damon and Mr Barrett, I do not consider that he has sufficient independence to be accepted as an expert witness.
[42] Mr Roberts gave evidence to support the quantum of Damon’s claim for lost profits, and as to the claim in respect of Mr Barrett’s time attempting to rectify the defective H&S manual. His evidence was that Damon’s loss of profits, for a period of five years, amounts to $312,202, and that Mr Barrett’s time is properly assessed at
$175 an hour.
Evidence for defendant
[43] Ms Jourdain said that Mr Barrett asked her to do work for himself, on a personal basis, and not for Damon. She said that when Mr Barrett had purchased Damon he was struggling financially, and Damon had no resources. She said Mr Barrett put pressure on her to help him, which she did, to assist him (in the context of their relationship) and not Damon. She said that she never did any work for Damon.
[44] Ms Jourdain said she has expertise in assembling health and safety documents, and collating documents for audit purposes, however, she has not drafted any H&S manuals. She accepted that in around 2000, she created an H&S document for the Waikato Kindergarten Association, and that portions of it were contained within the defective H&S manual which was received by Quality Bakers and Tip Top. However, she said she did not provide the defective H&S manual to Damon, Quality Bakers, or Tip Top. She said “it would be absurd for me to provide to Damon the documentation referring repeatedly to Waikato Kindergarten Association”.
[45] Ms Jourdain said that she prepared a substantial ten-part health and safety management system for Mr Barrett (on a personal basis, in the context of their
relationship) to support the minimum requirements for the ACC workplace safety management practices audit standards. She referred to this as an “audit manual”. She said this was an internal document, given to Mr Barrett for the purpose of his applying to be audited against ACC workplace safety management practices standards (and thus pay lower ACC levies). It was not suitable as an H&S policy manual to be given to clients. She said she gave Mr Barrett a hard copy of this and an electronic version on a “flash drive”.
[46] She did not retain any hard copy of this document. The electronic version had been on her computer, but not backed up, and had been lost when that computer was destroyed. She had part of a working draft of the audit manual, because it was on old “PST files” which she had emailed to Mr Barrett at some point.
[47] Ms Jourdain accepted that she had emailed some documents to Mr Barrett, by way of making an inquiry as to the kind of format he was looking for. Ms Jourdain said she had not loaded any documents onto Damon’s computer, she was not at Damon’s offices in June 2010, and she had never had a white laptop. She could not log on to Damon’s computer as she did not have a profile to log on, and did not know anyone else’s log-on details.
[48] Further, Ms Jourdain said she had not sent the email of 8 January 2010. She said that she did not agree to produce an H&S manual for Damon to send to its clients, as she did not have time to do such work. She was working fulltime in a senior management role, and was also studying. She said she told Mr Barrett that he needed to hire a consultant to do it, and she believed it would cost approximately
$20,000. Ms Jourdain believed that Mr Barrett had in fact sent the email from her computer.
[49] Ms Jourdain said that she had also prepared for Mr Barrett a basic staff employee agreement, and a template letter to accompany the agreement.
[50] As to invoicing for work done for Mr Barrett, Ms Jourdain said she sent invoices to Mr Barrett because he asked for them. She said they were all emailed to Mr Barrett at Damon, in order that Damon could claim a tax benefit. She said they
were not pursuant to any contract with Damon and, in particular, they were not for producing a H&S manual to provide to Damon’s clients. Ms Jourdain said that Mr Barrett paid all his costs out of the Damon business account.
[51] Regarding the claim in relation to the hazard ID manual, Ms Jourdain first said that the document referred to by Mr Barrett in his evidence is not in fact a hazard identification manual. Rather, she said it is a standard “OSH” (Occupational Safety & Health) accident/incident investigation book used for recording accidents and “near misses”. Regardless, Ms Jourdain said she never received this book.
[52] Ms Jourdain said that in November 2011 she had received a call from Mr Barrett as one of his employees had had a serious harm injury at work when the tips of his fingers were severed when using a machine from which the guard had been removed. She said that Mr Barrett did not know what to do, and was interested in seeing if he could discipline the employee. She said Mr Barrett did not engage her as a consultant; rather, he rang her as his ex-partner because he needed help. She said she told Mr Barrett what he needed to do, including completing an Accident/Incident form, reporting to the Department of Labour, carrying out an investigation, and arranging for a drug and alcohol test of the employee. She produced a copy of the scanned incident report.
[53] Ms Jourdain’s evidence was that Mr Barrett asked her to provide an invoice, and told her how much to invoice him for. She issued an invoice for $3,000 for which she was paid by Damon. The payment was used to pay school fees for their son, which Mr Barrett had not wanted to pay from his own account.
[54] Regarding the claim for work on her car, Ms Jourdain said that when on her way to parent-teacher interviews for their son, on 19 June 2012, she had to stop en route as she found she had two flat tyres. She rang Mr Barrett who came and picked her up and they went to the parent-teacher interview. Mr Barrett then arranged for new wheel rims for the car, and paid for the work from Damon’s account. She said Mr Barrett had not asked her to pay for the repairs.
[55] Ms Jourdain said that about a week later she was sent an invoice for the repair costs, but did not respond as she considered the invoice to be part of Mr Barrett’s harassment of her following the break-up of their relationship. Later, she sent an email to Mr Barrett, advising that she would be happy to pay for the repairs to the car, when he paid veterinary bills for his horse, for which she had paid more than $1,200. As she did not receive a reply from Mr Barrett, she assumed he was not going to pursue payment of the invoice for the car repairs.
[56] Evidence was also given for Ms Jourdain by Mr Denis Lane, a chartered and forensic accountant. Mr Lane gave evidence as an expert witness in relation to the quantum of Damon’s claim for lost profits, and its claim for Mr Barrett’s time spent attempting to rectify the defective H&S manual. Mr Lane’s conclusion, having reviewed Mr Roberts’ evidence and Damon’s accounts, was that Damon’s claim for gross profits is overstated, with the correct calculation being $2,925 per month, for a period of six to nine months, rather than $9,292 per month, for a period of five years. As to the claim for Mr Barrett’s time, Mr Lane’s opinion was that Damon’s claim is overstated because of an excessive salary allowance, and because the work was, in any event, beyond Mr Barrett’s competence.
Mr Barrett’s evidence in response to Ms Jourdain’s evidence
[57] Mr Barrett said that it was not the case that Ms Jourdain had said she was too busy to do the work requested. He went on to give evidence as to his typical working day and said that, if anything, Ms Jourdain had more time available to her than he did. He also said that he had never accessed Ms Jourdain’s email. He said that they had separate passwords, and he did not know her password.
[58] Mr Barrett denied Ms Jourdain’s evidence that work she did was done for him personally, rather than for Damon. He also denied that he directed Ms Jourdain as to when the invoices should be provided, and how they should be worded. He said that Ms Jourdain issued invoices progressively because she had resigned from a job, and needed cash and a car for the period until she started her next job.
Damon’s claims against Ms Jourdain
Introduction
[59] There was no dispute as to the applicable legal principles relating to each of Damon’s four causes of action against Ms Jourdain. Damon’s claims must be determined by making findings of fact on the matters in dispute. Both counsel made extensive submissions on the evidence in their closing submissions.
Damon’s claim for breach of contract
[60] As noted earlier, there is no dispute that the H&S manuals received by Tip Top and Quality Bakers were defective. If Damon can establish that it had a contract with Ms Jourdain to produce an H&S manual to provide to Damon’s clients, and that Mr Jourdain produced the defective H&S manual, then its claim for breach of contract will succeed.
[61] The core issue is whether there was a contract between Damon and Ms Jourdain under which she was engaged to produce an H&S manual to be provided to Damon’s clients.
[62] I accept Ms Jourdain’s evidence that any work she did, she did for Mr Barrett, as his partner, in the context of their relationship, and that she did not enter into any agreement with Damon, on a “commercial basis”, as Mr Barrett asserted. There is no reason in principle why Ms Jourdain should not have done work for Mr Barrett, personally, in the context of helping him as her partner, rather than as a commercial arrangement with the separate entity of which he was director.
[63] In particular, I accept Ms Jourdain’s evidence that she did not agree to produce an H&S manual for Damon to provide to its clients. I accept Ms Jourdain’s evidence that she has many years’ experience in the field of human resources. She gave detailed evidence as to what her expertise was – and what she did not have expertise in. She spoke in some detail, and displayed detailed knowledge about, workplace safety matters. Generally, I found her evidence to be credible,
notwithstanding the challenges in her cross-examination. She made appropriate concessions, and gave reasonable explanations when inconsistencies were put to her.
[64] I am not satisfied that Damon has established, on the balance of probabilities, that Ms Jourdain sent the email of 8 January 2010. There is sufficient doubt cast on Damon’s assertion that she sent it, because of the “alias-linked” email addresses of Mr Barrett and Ms Jourdain, and in the manner in which the email was signed off. As Mr Barrett said in an answer to a question from the Court, the sign off “Kind regards Cherie” is more similar to his own default sign-off than to Ms Jourdain’s customary sign-off.
[65] Nor do I accept that the invoices assist Damon to establish a contract between Ms Jourdain and Damon. The invoices were addressed to Mr Barrett, not to Damon. Damon’s address is given as Mr Barrett’s address, but the invoices are not addressed to Damon. Further, the invoices themselves strongly support Ms Jourdain’s claim that she produced a health and safety management system for Mr Barrett for the purposes of an ACC audit, rather than a health and safety manual to be provided to clients. The invoices do not support Damon’s contention that they related to a contract to produce an H&S manual to provide to Damon’s clients. The narrations are as follows:
(a) (8 January 2010): “Review of current Safety management system, set up of Health and Safety Management system stage 1 policies and forms.”
(b) (31 January 2010): “Health and Safety Management system stage 2
system set-up, part 3-5 WSMP.”
(c) (28 February 2010): “Preparation of Sections 6-8 WSMP Safety
management system.”
(d) (20 March 2010): “Preparation of Sections 9 & 10 WSMP Safety
management system”
(e) (31 March 2010): “Staff inductions. Education sessions with 14 staff.
Implementation of WSMP into workplace.”
[66] Accordingly, I find that Damon has not established, on the balance of probabilities, that Ms Jourdain entered into a contract with Damon to produce an H&S manual to be provided to Damon’s clients.
[67] I am also not satisfied that Damon has established, on the balance of probabilities, that Ms Jourdain was responsible for providing the defective H&S manuals to Tip Top and Quality Bakers. As noted earlier, Ms Jourdain accepted that she had created a health and safety document for the Waikato Kindergarten Association, and that portions of it were contained within the defective H&S manual which was received by Quality Bakers and Tip Top. Further, she accepted that she had emailed some documents to Mr Barrett, but said that this email was limited to an inquiry as to whether he was looking for a similar format for his own document.
[68] There is no evidence that establishes that Ms Jourdain provided the defective H&S manual to Damon, to be provided to Damon’s clients, or that she made the delivery to Quality Bakers, or that she emailed an H&S manual to Fonterra. In relation to the former, Mr Wallace’s evidence was that “a health and safety manual for Damon was dropped off at the Quality Bakers reception”, and that he did not see who dropped the manual off. For Damon, Mr Wezenbeek’s evidence was that” a health and safety manual was loaded onto Damon’s computer system and forwarded to Damon’s clients”. Mr Wezenbeek accepted that he did not see Ms Jourdain downloading any documents. That evidence does not establish that Ms Jourdain downloaded the defective H&S manual into Damon’s system, or that she forwarded the defective H&S manual to any of Damon’s clients.
[69] Nor does Mr Taylor’s evidence assist Damon, as it is equally unspecific as to what Ms Jourdain was said to be doing. First, Mr Taylor relied on what Mr Barrett said to him, that Ms Jourdain was “doing some health and safety work for Damon” and secondly, he did not see Ms Jourdain uploading any files. Further, I am not able to exclude the possibility that Mr Taylor’s evidence has been compromised by the fact that, as he accepted, it had been pieced together by a specific question about
discussions about a manual, and the suggestion that these discussions had occurred in mid-2010. This is particularly so given that Mr Taylor was not able to recall anything of other visits around that time, and had not invoiced Damon for the visit when he was alleged to have assisted Ms Jourdain.
[70] Further, as noted earlier, I accept Ms Jourdain’s evidence that she has many years’ experience as a “human resources” professional. I accept her evidence that it would be “absurd” for her to have provided a defective H&S manual – containing repeated references to the Waikato Kindergarten Association – when that document was to be forward to Damon’s clients.
[71] Accordingly, I find that Damon has not established its claim in contract against Ms Jourdain.
Damon’s claim in negligence
[72] For similar reasons, I find that Damon has not established its claim in negligence. I am not satisfied that Damon has established on the balance of probabilities that Ms Jourdain agreed to produce a H&S manual that was to be provided to Damon’s clients. In fact, the evidence is to the contrary; the work that Ms Jourdain did for Mr Barrett was for his internal use at Damon, and not for providing to clients. Further, there is no evidence that that the work that she did do was defective.
Quantum of Damon’s claims in contract and negligence
[73] My findings in respect of Damon’s claims in contract and in negligence dispose of the major part of Damon’s claim against Ms Jourdain, and it is not necessary to consider its claim for damages. However, I record that had I found that there was a contract between Damon and Ms Jourdain pursuant to which she was required to produce an H&S manual to be delivered to Damon’s clients, and that she produced and delivered the defective H&S manuals, I would have concluded that the quantum of Damon’s claim should be substantially reduced.
[74] This is for three reasons. First, I am satisfied that Damon contributed substantially to its own loss by failing to look at the H&S manual before it was sent to clients. The most cursory of inspections, even by a person with no expertise in H&S manuals, would immediately have revealed the defects. The defective H&S manuals would not have been delivered or forwarded to Tip Top and Quality Bakers, thus preventing any loss. Secondly, I am satisfied that Damon failed to mitigate its loss adequately. Rather than spending time (which he calculated at $175 an hour) attempting to remedy the defects, Mr Barrett should immediately have engaged a person with appropriate expertise to do so. The replacement manual was prepared by Salus at a cost of only approximately $3000. Thirdly, I accept Mr Lane’s evidence that Damon has considerably overstated its claims both for lost profits and for Mr Barrett’s time.
Damon’s claim in conversion
[75] I find that Damon has not established on the balance of probabilities that Ms Jourdain converted a hazard identification manual. I accept Ms Jourdain’s evidence that she never received a book maintained by Damon to record accidents and near misses. I accept her evidence as to the incident in November 2011; that she advised Mr Barrett, by email, as to the forms that had to be filled in, and the process that had to be gone through.
Damon’s claim for payment of car repair costs
[76] The Volkswagen Passat car was, on Mr Barrett’s evidence for Damon, transferred to Ms Jourdain in 2010 as part payment for an H&S manual. Ms Jourdain agreed that the car was transferred to her, although she said it was nothing to do with payment for an H&S manual to be sent to Damon’s clients. Whichever was the true position, I accept Mr Pidgeon’s submission that from that time, Damon had no interest in the vehicle.
[77] Ms Jourdain’s evidence was then when she asked Mr Barrett where she should take the car to be repaired, she learned that he had already arranged for the repairs, and Damon had paid for the repairs. Mr Barrett had not, at that time, asked
her to pay for the repairs. Mr Barrett accepted in cross-examination that he had told
Ms Jourdain “I’ll sort the car out”.
[78] In order to succeed in its claim for the repair costs, Damon must establish that it had a contract with Ms Jourdain which required her to pay the repair costs. It must establish on the balance of probabilities that Ms Jourdain agreed to pay the costs2 and that she intended that promise to be legally binding.3 In the present case, I am not satisfied as to those matters. It is at least equally likely that Mr Barrett made an
ex gratia offer to pay for the car repairs, and the offer was accepted on this basis. Further, I consider that Ms Jourdain’s response when payment was first sought indicates that she thought these repairs formed part of the couple’s extended relationship, which involved elements of give and take, rather than being an individual and binding bargain.
[79] Accordingly, I find that Damon has not established its claim against
Ms Jourdain relating to the payment for car repairs.
Mr Pidgeon’s submissions as to economic and financial abuse by Mr Barrett
[80] Much of Mr Pidgeon’s submissions for Ms Jourdain focussed on an allegation that in causing Damon to bring this proceeding, Mr Barrett was motivated by a desire to cause financial embarrassment and stress to Ms Jourdain (which Mr Pidgeon described as a form of domestic violence), and a desire to exact revenge against her, as a result of his anger or annoyance regarding the breakdown of their relationship, and Ms Jourdain’s subsequent complaints to the Police regarding Mr Barrett.
[81] The acrimony between Mr Barrett and Ms Jourdain was evident, and the evidence of both of them was permeated with critical comments about each other, and expressions of their opinions as to the nature and cause of the breakdown of the
relationship, disputes about relationship property, and disputes regarding their child.
2 Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401 (CA).
3 Rose and Frank Company v J R Crompton and Brothers Ltd [1923] 2 KB 261 (CA).
[82] I have not taken those matters into account. They are not relevant to the determination of the issues in this proceeding.
Result
[83] I find for the defendant, Ms Jourdain, on all of Damon’s causes of action.
[84] Costs should follow the event. In the event that the parties cannot agree on costs, then brief memoranda may be filed: that for Ms Jourdain within 20 working days of the date of this judgment, and that for Damon within a further 20 working
days. I anticipate making a determination as to costs, if required, on the papers.
Andrews J
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