| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA515/2019 [2020] NZCA 269 |
| BETWEEN | FOCUS CONSTRUCTION INTERIORS LIMITED |
| AND | SPACEWORKS DESIGN GROUP LIMITED |
| AND | ELIZABETH MARY CHARLOTTE HINES (nee WHALEY) |
| Hearing: | 15 June 2020 |
Court: | Goddard, Ellis and Katz JJ |
Counsel: | B P Henry and A R Kenwright for Appellant |
Judgment: | 1 July 2020 at 11.00 am |
JUDGMENT OF THE COURT
AThe appeal is dismissed.
BThe appellant must pay costs to the respondents for a standard appeal on a band A basis with usual disbursements.
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Table of contents
Para No
Introduction
Background
High Court judgment
Period within which Spaceworks was required to refer work to Focus
Negotiated tender work
The obligations imposed on Spaceworks to refer work
Allegations of breach by Spaceworks
Causation and loss
Issues on appeal
The obligation imposed on Spaceworks
Appellant’s submissions
Analysis
Did Spaceworks breach the Agreement?
Appellant’s submissions
Analysis
Result
REASONS OF THE COURT
(Given by Goddard J)
Introduction
The appellant, Focus Construction Interiors Ltd (Focus), is a construction company which provides interior fitout construction, joinery and project management services. The first respondent, Spaceworks Design Group Ltd (Spaceworks), is a commercial interior design company. The second respondent, Ms Whaley, is the owner, sole director and chief executive officer of Spaceworks. We will refer to both respondents as “Spaceworks”, except where it is necessary to make specific reference to the position of Ms Whaley.
In February 2010 Focus and Spaceworks entered into an agreement which required Spaceworks to make reasonable endeavours, acting in good faith, to refer work to Focus with a total gross value of $3 million[1] (the Agreement). Only work actually carried out by Focus would count towards this total.
[1]This figure, and all other figures in this judgment, are exclusive of GST.
Over the next four and a half years Spaceworks provided a number of opportunities to Focus to undertake work with a potential value of around $6.5 million, mostly involving opportunities to participate in competitive tenders for projects managed by Spaceworks. Focus carried out work with an aggregate value of $1,252,255.96. Focus declined to tender for some projects, and unsuccessfully tendered for a number of other projects.
Focus formed the view that Spaceworks was failing to use reasonable endeavours and act in good faith in seeking to refer work to Focus. In July 2016 Focus notified Spaceworks that it would no longer tender for any more of Spaceworks’ projects. Focus then brought proceedings claiming that Spaceworks had breached its obligations under the Agreement. The claim was unsuccessful in the High Court. Gault J found that Spaceworks had met its obligations under the Agreement.[2]
[2]Focus Construction Interiors Ltd v Spaceworks Design Group Ltd [2019] NZHC 2211 [High Court judgment].
Focus appeals to this Court, arguing that:
(a)The Judge erred in his interpretation of the Agreement. He set the bar too low for Spaceworks’ obligation to use reasonable endeavours, acting in good…
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- Case
- [2020] NZCA 269
- Decision Date
CaseChat Overview and Summary
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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