Hewitt v Window World Franchise Limited HC Whangarei CIV 2009-488-000488
[2011] NZHC 663
•7 July 2011
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
CIV 2009-488-000488
BETWEEN MARK HEWITT Appellant
ANDWINDOW WORLD FRANCHISE LIMITED
First Respondent
ANDROGER BROWN Second Respondent
Hearing: 7 July 2011
Counsel: S Grant for the Appellant
D M Grindle for the Respondents
Judgment: 7 July 2011
ORAL JUDGMENT OF WYLIE J
Distribution: S Grant:
D M Grindle:
M HEWITT V WINDOW WORLD FRANCHISE LIMITED & ANOR HC WHA CIV 2009-488-000488 7 July
2011
[1] The applicant, Mr Hewitt, seeks leave to appeal to the Court of Appeal in respect of a decision given by Rodney Hansen J on 4 March 2011. Hansen J dismissed an appeal from the decision given by Judge Cadenhead in the District Court at Whangarei on 29 June 2009.
[2] It follows that Mr Hewitt is seeking leave to bring a second appeal, this time to the Court of Appeal, notwithstanding that both the District Court and the High Court have found against him.
[3] The application is filed in reliance on s 67 of the Judicature Act 1908. Relevantly, that section provides as follows:
67 Appeals against decisions of High Court on appeal
(1) The decision of the High Court on appeal from an inferior court is final, unless a party, on application, obtains leave to appeal against that decision—
(a) to the Court of Appeal; or
(b) directly to the Supreme Court (in exceptional circumstances as provided for in section 14 of the Supreme Court Act
2003).
(2) An application under subsection (1) for leave to appeal to the Court of Appeal must be made to the High Court or, if the High Court refuses leave, to the Court of Appeal.
[4] It was common ground that the leading decision in this area is that of the
Court of Appeal in Waller v Hider.1 Blanchard J for the Court noted as follows:2
[T]he test is well established. The appeal must raise some question of law or fact 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: ...in the end the guiding principle must be the requirements of justice.
...
Upon a second appeal this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. It is not every alleged error of law that is of such importance, either generally or to the
1 Waller v Hider [1998] 1 NZLR 412.
2 Ibid at 413.
parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.
When the disputed matter is entirely or largely a question of fact the task of the applicant under s67 is harder. An issue of fact in a matter falling within the jurisdiction of an inferior Court will seldom be of public importance. It is better that we make no attempt to define the circumstances in which a factual contest can be taken to have private importance but obviously it may do so if the amount at stake is very substantial or the decision reflects seriously on the character or conduct of the would-be appellant or, ...the judgment below has special consequences (for example, bankruptcy) for the losing party. Even then, however, leave cannot be anticipated if the applicant is seeking to disturb concurrent findings of fact in the lower Courts.
[5] The application alleges that Hansen J erred in fact and law. It particularises
11 separate findings where it is said the Judge erred. They cover every aspect of the
Judge’s decision.
Background Facts
[6] To put this matter in context, it is helpful to briefly summarise the facts.
[7] Mr Hewitt and his wife were building a multi-storey house on a cliff-side site in Northland overlooking the Kerikeri inlet. Their house had been designed by an architect, and it required very extensive aluminium joinery. The architect’s plans specified as the exterior joinery “light commercial suite from Fletcher Aluminium Limited”.
[8] Mr Hewitt appointed the second respondent, Mr Brown, as his project manager. Inter alia, Mr Brown took responsibility for finalising the supply of the aluminium window joinery required. It was agreed that he would obtain quotes from contractors and present them to Mr Hewitt for approval. It was, however, understood that Mr Hewitt was to have the final say.
[9] When Mr Brown took over the window file from Mr Hewitt, there was already a quotation on file from Nebulite, an aluminium joinery firm based in Warkworth, for the Fletcher aluminium light commercial suite joinery specified in the architectural plans. Mr Brown decided to obtain a further quote from the first respondent, Window World Franchise Limited (“Window World”), so that Mr Hewitt
had an alternative price and could compare the ability of the two suppliers to handle what was a very large job.
[10] Window World was a franchise operation which supplied aluminium extrusions produced under the brand name Nulook.
[11] Mr Brown had an initial meeting with a Mr Poffley of Window World. After reporting to Mr Hewitt, it was agreed that Mr Hewitt would meet Mr Poffley so that Mr Hewitt could decide whether Window World should be asked to submit a quote for the provision of the joinery. Mr Brown did not attend that meeting. It was held on 25 May 2006.
[12] It is common ground that at the meeting, Mr Poffley suggested to Mr Hewitt changes to the system specified by the architects, and that he explained the changes he would recommend. They included replacing the sash windows on the side of the house with fixed windows because of the perceived risk that the sash windows could blow out when they were opened.
[13] After the meeting, Mr Hewitt told Mr Brown to proceed with obtaining a quote from Window World.
[14] Mr Poffley prepared a quote. In the quote he specified a mixture of commercial and residential extrusions.
[15] The quote was collected from Window World by Mr Brown. It comprised a letter, which was accompanied by standard terms and conditions, and a number of drawings illustrating the window configuration proposed by Window World. The evidence suggests it was also accompanied by “dye” drawings showing the detail of the aluminium extrusions proposed by Mr Poffley, although there was no express finding in this regard by Judge Cadenhead in the District Court. Nor did Hansen J comment on the evidence in the High Court.
[16] Mr Brown took the quote to Mr Hewitt. After a brief discussion, Mr Hewitt
endorsed the letter with the word “accepted” and signed it. He did not sign a form
attached which specifically recorded agreement with the enclosed terms and conditions of sale.
[17] Window World considered that a contract for the supply of the joinery had been concluded with Mr Hewitt, and it undertook substantial work towards fulfilment of that contract. It says that the contract was later repudiated by Mr Hewitt on or about 5 July 2006. It sued him for damages. Mr Hewitt denied liability. Further, he issued third party proceedings against Mr Brown. He claimed that Mr Brown acted negligently and in breach of fiduciary duties in advising him in relation to the aluminium joinery in his dealings with Window World. He sought that Mr Brown should be required to indemnify him for any damages recovered by Window World.
[18] Judge Cadenhead awarded Window World damages of $112,221.84. He dismissed the claim against Mr Brown.
[19] Mr Hewitt appealed to the High Court. He initially raised a very large number of issues, although they were, to an extent, refined at the hearing. Hansen J held that the appeal failed on all grounds and upheld the judgment of Judge Cadenhead.
[20] Against this background, I consider each of the alleged errors asserted by
Mr Hewitt the subject of his application for leave to appeal.
Was there was a contract between Mr Hewitt and Window World?
[21] At the heart of the dispute is Mr Hewitt’s contention that the joinery supplied by Window World is different in appearance to the Fletcher aluminium light commercial suite joinery referred to in the architectural plans. Window World did not supply joinery which was similar in appearance on two floors of the dwelling. The issue is what did it contract to supply?
[22] Ms Grant for Window World asserted that both parties were mistaken as to the essential subject matter of the contract, and that they were mistaken and held
different beliefs as to the appearance and configuration of the aluminium joinery. It was argued that in the circumstances no contract was formed, because the parties were not ad idem at the stage that the contract was formed and that this justified a further appeal to the Court of Appeal. She claimed that Hansen J erred when he observed that Mr Hewitt’s assertions in this regard were tantamount to a plea of non est factum.
[23] In my judgment, leave to appeal should not be granted in respect of this alleged error.
[24] The quotation documents supplied to Mr Hewitt by Window World were lengthy. They showed in detail what was to be supplied. Mr Hewitt had time to consider the documents, to take advice, and to decide whether to accept them. He did not avail himself of that opportunity. Rather, he signed the quote, and noted the word “accepted” on it. It simply cannot be disputed that a contract was then formed. As Hansen J noted, Mr Hewitt cannot rely on his failure to read the documents sent to him before signing. The law does not allow him to repudiate his signature.
[25] The law in this area is clear. This case presents no special features and, in my view, there are no questions of law or of fact capable of bona fide and serious argument.
Was there any misrepresentation and/or false and misleading conduct which induced Mr Hewitt to enter into the contract?
[26] Mr Hewitt’s statement of defence alleged that Mr Poffley misrepresented the situation by saying at the 25 May meeting that the Window World joinery would be “the same thing” as the Fletcher’s commercial suite joinery. It was asserted that that representation became a condition of any contract entered into between the parties.
[27] The statement of defence also alleged that the joinery offered by Window World was “of a lesser value and quality, and was substantially different” to the Fletcher’s joinery. It was pleaded that Window World’s statement to the contrary
was misleading, and amounted to a misrepresentation which induced Mr Hewitt to
later accept the plaintiff ’s quotation.
[28] In the District Court, Judge Cadenhead rejected Mr Hewitt’s account of the meeting, and found that his claim that the joinery was represented to be the same thing was implausible. He found that Mr Poffley did not make any such representation in his discussions with Mr Hewitt. Judge Cadenhead also found that the quotation documents did not contain any misrepresentation, but rather that they accurately set out what Window World proposed to supply under the contract.
[29] When the case came before Hansen J, Ms Grant for Mr Hewitt did not assert any express misrepresentation that the joinery would be the same. Instead, she asserted that Mr Poffley failed to disclose that the Window World joinery would have a different appearance. It was argued that this silence or failure to disclosure amounted to a misrepresentation.
[30] Hansen J considered the case before him on appeal was materially different to that which had been pleaded, and which had been advanced in the District Court. Notwithstanding this observation, he went on to find that even if the alleged misrepresentation had been characterised at first instance in the way in which it was characterised before him on appeal, it would not have affected the outcome. He noted that Judge Cadenhead found that Mr Poffley made it clear that the joinery needed to be changed to meet the practical concerns he had identified at the meeting, and that a reasonable person in Mr Hewitt’s position would have inferred from Mr Poffley’s advice that there would need to be consequential changes to the appearance of the joinery. He also noted that the quotation was accompanied by detailed specifications, and that there was no complaint about their accuracy. He held that there was nothing in the circumstances in which the quotation was provided which gave rise to a duty on Window World to make further disclosure to Mr Hewitt.
[31] Ms Grant argued that the Judge erred in finding that the misrepresentation claim was materially different than that pleaded. She refers to an earlier paragraph in the pleadings where it was alleged that Window World’s initial quotation provided insufficient detail to inform Mr Hewitt of, inter alia, the appearance of the windows.
[32] There is in my judgment nothing in this point. I have considered the pleadings. They do refer to the appearance of the joinery, but not under the heading “misrepresentation”. Under the heading misrepresentation, the alleged misrepresentation is not as to appearance, but rather as to value and quality. Hansen J has recorded the way in which the case was argued before him. It is clear that there was a significant and obvious difference in the way in which the matter was presented before the District Court, and then the High Court. Moreover, Hansen J has dealt with the matter regardless of the pleadings. He held that there was nothing which imposed a duty on Window World to make further disclosure to Mr Hewitt and that Window World had done all that could reasonably be expected of it.
[33] Moreover, the matters raised by Ms Grant in this regard turn on findings of fact. Judge Cadenhead determined that Mr Poffley was the more credible witness. He placed significant weight on the fact that Mr Poffley’s memory of events surrounding the meeting on 25 May was fresher and more accurate than Mr Hewitt’s. He also noted that Mr Poffley made contemporaneous notes of the meeting, unlike Mr Hewitt. He found that what Mr Poffley said in respect of the meeting was a true and accurate version of what occurred. He also found that Mr Hewitt’s objection to the appearance of the Window World joinery was “highly exaggerated”. He noted that viewed from the inside, the Window World joinery was similar in appearance to the alternative Nebulite joinery which was the same as the light commercial suite from Fletcher Aluminium Limited. He held that Mr Hewitt objected only to the appearance of the Window World joinery as seen from the outside of the house and that the plans for the home did not provide for people to be able to step outside and view the joinery. He noted that any view from below the house would be at an angle and from a distance.
[34] The alleged error of law turns entirely on findings of fact made by the District Court, and endorsed by the High Court. An issue of fact falling within the jurisdiction of the District Court will seldom be a matter of public importance, and it is certainly not a matter of public importance in this case. The alleged error of law raises no question of fact capable of bona fide and serious argument, let alone an argument of sufficient importance to outweigh the cost and delay of a further appeal.
Was there a breach of the Sale of Goods Act 1908 or of the Consumer
Guarantees Act 1993?
[35] Section 56A of the Sale of Goods Act 1908 provides as follows:
56A Exclusion where Consumer Guarantees Act 1993 applies
Nothing in section 10 or in sections 13 to 17 or in section 38 or in section 54 of this Act shall apply to any supply of goods to which the Consumer Guarantees Act 1993 applies.
[36] Judge Cadenhead found that Mr Hewitt was a consumer as defined in s 2 of the Consumer Guarantees Act 1993, because he would have acquired the joinery from Window World for a domestic use. Accordingly, he held that the Consumer Guarantees Act applied, and that this precluded the application of certain sections in the Sale of Goods Act, particularly ss 15 and 16 relied upon by Mr Hewitt.
[37] Hansen J upheld those findings.
[38] Ms Grant accepted that the Consumer Guarantees Act applied, but argued that Hansen J failed to address s 8 of the Consumer Guarantees Act (the fitness for particular purpose guarantee).
[39] It is correct that Hansen J did not expressly refer to s 8. It also seems that the issue was argued before the High Court. However, Mr Hewitt did not expressly plead s 8 of the Consumer Guarantees Act. The statement of defence included an affirmative defence under the Sale of Goods Act, which asserted that matters of design, appearance, value, consistency and finish were conditions of any contract between the parties. It was argued that these matters went to the reasonable fitness of the goods for the particular purpose made known by Mr Hewitt as the consumer, and that as a consequence, s 8 was engaged.
[40] I cannot see that there is anything in this point which justifies the grant of leave.
[41] Parties to litigation are entitled to rely on pleadings as defining the parameters which are in issue. If a defendant in proceedings does not particularise his defence, then he cannot expect the Court, or the other party or parties to anticipate it. If it is appreciated at a hearing that there is a deficiency in a pleading, then application should be made to amend the pleading. In appropriate cases the Court may permit the amendment and if necessary, will grant an adjournment, so that the other party/parties can properly prepare in respect of any amendments which take them by surprise. This did not happen in the present case.
[42] Further, and in any event, s 8 cannot assist Mr Hewitt. Section 8(1) reads as follows:
8 Guarantees as to fitness for particular purpose
(1) ...the following guarantees apply where goods are supplied to a consumer:
(a) that the goods are reasonably fit for any particular purpose that the consumer makes known, expressly or by implication, to the supplier as the purpose for which the goods are being acquired by the consumer; and
(b) that the goods are reasonably fit for any particular purpose for which the supplier represents that they are or will be fit.
[43] The particular purpose that underlined this contract was the supply of fashionable window joinery that was not unattractive and could cope with the functional requirements of the house design, be used in a very high-wind zone, and remain watertight. The joinery to be supplied by Window World would have met those purposes. This point was not expressly dealt with by Hansen J, but that fact does not justify a further appeal.
[44] The point now raised is not of sufficient importance, either generally, or indeed to the parties, to justify the further pursuit of this litigation.
[45] Ms Grant argued that the Judge erred when he found that there was no breach of an express term. She referred to cl 2.1 in the general conditions of the contract forming part of the quote which Mr Hewitt accepted. Clause 2.1 reads as follows:
Quotations are based on details supplied by the Customer. Any variation will be at the Customer’s expense. The Customer shall ensure that the sizes and number of items quoted correspond with the Customer’s requirements.
[46] Clearly, that clause cannot have been breached. The details provided by Mr Hewitt were not limited to the architect’s plans. They extended to matters that were discussed at the meeting. Mr Poffley made it clear that the architect’s plans were unworkable and he recommended changes which Mr Hewitt then accepted when he signed the quote.
[47] Ms Grant argued that the Judge erred when he failed to find that there was an implied term. She submitted that the implied term was to the effect that the subject matter of the contract would be that specified in the plans provided by Mr Hewitt, except for minor changes resulting from the use of different brands and to changes that had been expressly agreed by the parties.
[48] Judge Cadenhead found that there was no basis on the evidence for implying a term restricting Window World from departing from the architect’s plans without Mr Hewitt’s express consent. Further, he considered that any implied term was excluded by cl 8.1 in the terms and conditions which was attached to the quotation. That clause provided as follows:
All warranties, descriptions, representations or conditions whether implied by law, trade, custom or otherwise are, and all other liability of the company, whether in tort (including negligence), contract or otherwise, is expressly excluded to the fullest extent permitted by law.
[49] Hansen J also considered that the implied term was not pleaded, and he expressed the opinion that it was another defence that should not even have been considered. Nevertheless, he expressed the view that Judge Cadenhead was plainly right to reject it, both by reference to the express terms of the contract, and the facts as he found them.
[50] It is now asserted that the statement of defence did raise the implied term now asserted. I have read [31] in the statement of defence. It is argued that this clause raised the implied term now alleged. I disagree. There is no reference in the pleadings to the implied term.
[51] In my judgment, Mr Hewitt’s position in this regard is plainly untenable. There is no question of law capable of bona fide and serious argument.
Did Window World repudiate the contract?
[52] Hansen J observed that this was also a ground of appeal which required
Mr Hewitt to depart from the case he relied on in the District Court.
[53] In the District Court, Mr Hewitt pleaded that, by failing to supply details and shop drawings, Window World repudiated any contract for supply of the joinery. In the High Court he claimed that repudiation occurred by Window World refusing to supply the joinery specified in the architect’s plans.
[54] It is now contended that the two arguments are substantially the same, and that Hansen J erred in finding that it was Mr Hewitt, rather than Window World who repudiated the contract.
[55] In my judgment, Mr Hewitt’s assertions in this regard are a nonsense. As Hansen J found, a refusal to supply in accordance with the architect’s plans would involve a repudiation only if Window World had agreed to supply the joinery specified in the plans. That was not the agreement as found by Judge Cadenhead. Mr Hewitt’s argument faces an insuperable factual barrier. It is patently clear that it was Mr Hewitt who repudiated the contract when he wrote giving notice that he would not be proceeding. Again, there is no question of law or fact capable of bona fide and serious argument.
[56] The damages awarded to Window World by Judge Cadenhead were based on the contract price with an allowance for costs that had been saved. The contract price was $168,721.25. The evidence, which Judge Cadenhead described as unchallenged, was that the variable costs saved were $56,499.31, and that Window World’s loss was accordingly $112,221.94.
[57] Before Hansen J, it was argued that the evidence to support Window World’s claim was inadequate. Hansen J disagreed. He noted detailed evidence given by a Mr Hawke, who was Window World’s former manager, substantiating the calculation of the variable costs saved. He noted there was no challenge to that aspect of the evidence. He also noted an assertion made that the calculation did not take account of extrusions sold. He considered that that assertion was factually incorrect, and that they were included in the figure for variable costs saved.
[58] The submissions advanced to me repeat those arguments. They remain equally untenable. They rely on the proposition that there is some error in the figures which were put to the District Court by Window World. As I understand it, those figures were not challenged in that Court. I also note an acknowledgement by Mr Hewitt’s expert accountant, a Mr Hagen, that if the calculations and data provided by Mr Poffley were correct, then Window World’s approach would put it back into the position that it would have been in had the contract not been cancelled.
[59] Mr Hewitt also asserted that Window World failed to mitigate its loss.
[60] Again, this is a matter which was not pleaded by Mr Hewitt. This issue was raised for the first time during closing submissions. It was repeated in the course of this application. It must fail on the facts. Judge Cadenhead found that Window World did not fail to mitigate its loss because it could do nothing until Mr Hewitt clearly indicated that he was repudiating the contract. As noted above, that did not occur until 5 July 2005.
[61] Again, in my judgment, there are no questions of law or fact capable of bona fide and serious argument.
Was there was a breach by Mr Brown of his duties to Mr Hewitt?
[62] While it is asserted by Mr Hewitt that this is a question of law, the matter was dealt with on a factual basis by Judge Cadenhead, and Hansen J refused to overturn those findings of fact.
[63] Judge Cadenhead set out in some detail why he preferred Mr Brown’s evidence. He considered that Mr Brown was a truthful and accurate witness, and noted that where his evidence differed from that of Mr Hewitt, he preferred that of Mr Brown.. He expressed the view that his credibility findings determined the liability of not only Mr Hewitt, but also Window World and Mr Brown. He took the view that Mr Hewitt was a dominating character, and that he was clearly responsible for the situation that arose.
[64] The question posed by Mr Hewitt does not reach the threshold expressed in the Waller v Hider decision noted above. The issue is not new. It does not raise a question of law that is yet to be resolved. Rather, what it attempts to do is revisit adverse findings of fact made by the lower Court that were unfavourable to Mr Hewitt. The issue raised is simply not one of public importance.
Errors of Fact
[65] Mr Hewitt then set out four occasions where it was alleged that both Judge Cadenhead at first instance, and subsequently Hansen J on appeal, made the same errors of fact in the absence of evidence, or against the weight of the evidence.
[66] I do not propose to traverse those various assertions of fact. It was clearly for the District Court to determine the same. They do not raise issues of public importance. As is noted in Waller v Hider, leave should not be anticipated if the applicant is seeking to disturb concurrent findings of fact in the lower Courts. That is the situation which faces Mr Hewitt in the present application.
[67] In summary, it is my clear view that the issues raised by Mr Hewitt are simply attempts to re-litigate matters which have already been decided against him, and on two occasions. Most of the issues are simply issues of fact where Mr Hewitt disagrees with the decisions of Judge Cadenhead and Hansen J.
[68] The proposed appeal does not raise any question of law capable of bona fide and serious argument. The law applied by the District Court, and endorsed by Hansen J, is not complicated and its application depends on the facts. The District Court made factual findings against Mr Hewitt, and those factual findings do not involve any issue of public importance. In the context of a house valued in the millions, the amount at stake in this case is not substantial. This matter has already been outstanding for some considerable time, and Window World has been, and continues to be, out of pocket. There is nothing in the alleged points of appeal that involves the public interest. I accept that Mr Hewitt’s private interests are affected. I am told that Mr Hewitt feels aggrieved, that he considers that the Courts have preferred “function over form”, and that he believes that the appearance of the joinery has been understated. These private concerns, while no doubt very real for Mr Hewitt, are not of sufficient importance to outweigh the cost and delay of a further appeal.
[69] Justice would not be served were leave to appeal to be granted. Indeed, in my view, it would be frustrated.
[70] The application for leave to appeal is declined.
Security for Costs
[71] Some time ago, Window World was required to pay security for costs in the sum of $12,000 on Mr Hewitt’s application. I have heard from Mr Brown, who appeared on instructions from Ms Grant this afternoon in relation to that issue, and also from Mr Grindle. Mr Hewitt failed in his defence before the District Court. He appealed to the High Court. He has been unsuccessful in his application seeking
leave to appeal. I am told he may want to seek special leave from the Court of Appeal. That is a matter for him. I can see no justification for the Court continuing to hold security for costs and I direct the Registrar to re-pay the monies to Window World, together with interest which has accumulated thereon.
Stay
[72] Mr Hewitt also applied for a stay. In light of the judgment I have just given, a stay is inappropriate and I decline to grant the same.
Costs
[73] Ms Grant was not in Court for the delivery of this judgment. I indicated to her when she sought leave to withdraw, that I would not deal with costs in her absence. Accordingly, I direct as follows:
(a) Window World is to file a memorandum in support of its application for costs within 10 working days of the date of this judgment.
(b) Mr Hewitt is to respond within a further five working days thereafter.
I will then deal with the issue of costs on the papers, unless I require the assistance of counsel.
Wylie J
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