Howard Trading Auckland Limited v Nissan New Zealand Limited

[2012] NZHC 123

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2009-404-003111 [2012] NZHC 123

BETWEEN  HOWARD TRADING AUCKLAND LIMITED

First Plaintiff

ANDHOWARD PROPERTY LIMITED Second Plaintiff

ANDNISSAN NEW ZEALAND LIMITED Defendant

ANDCOCKRAM PREMISES LIMITED Third Party

Hearing:         10 February 2012

Counsel:         B Gustafson for the Plaintiffs

D Hurd and B J Spiers for the Defendant

Judgment:      10 February 2012

[ORAL] JUDGMENT OF WYLIE J

Distribution:

B Gustafson: [email protected]

D Hurd: [email protected]

HOWARD TRADING AUCKLAND LIMITED & ANOR V NISSAN NEW ZEALAND LIMITED HC AK CIV

2009-404-003111 10 February 2012

[1]      This  is  a  commercial  dispute  relating  to  a  Nissan  franchise  in  Central

Auckland.

[2]      The first plaintiff was the Nissan franchisee from 1 September 2005 until March 2009.    In very broad terms, it claims that there were various misrepresentations made to it at the time that it took up the franchise.  It also asserts that the defendant, Nissan New Zealand Limited, set a sales target for it that was too high, thereby breaching an implied term of good faith and a duty to act reasonably.

[3]      Nissan was the franchisor.  It partly funded the purchase of the premises by the  second  plaintiff.    The  premises  were  occupied  by the  first  plaintiff  for  the purpose  of  its  franchise  operations  in  Central Auckland.    Nissan  has  lodged  a counterclaim against the plaintiffs. Again, in very broad terms, it asserts that the first plaintiff did not achieve the level of sales and profitability that should have been achieved, and that it breached the franchise agreement.   It asserts that it lost the benefit of the resulting sales revenue because of the breaches and that it has lost profit from the sale of new cars and parts as a result.

[4]      The matter is set down for trial, due to commence on 5 March 2012.  It has already been necessary to adjourn the fixture on one occasion because the parties were not ready.  Both parties are anxious to retain the fixture.

[5]      On 20 December 2011, the plaintiffs sought further and better discovery by Nissan under r 8.19 of the High Court Rules 2008.  That application was initially opposed.

[6]      I heard from the parties today through their respective counsel and discussed the matter with them in what was a reasonably open discussion.  It seemed to me that there was a large measure of agreement between the parties.  Both have co-operated to, first, confine the application and secondly, to ensure that appropriate discovery is given.

[7]      The parties have prepared a consent memorandum addressing the further discovery issues.  I have read that memorandum and am satisfied with it.  I am also satisfied that there are grounds for believing that Nissan has not discovered various

documents that should have been discovered.  Accordingly, I make an order in terms of the memorandum. A copy is annexed to this judgment.

[8]      The issue of costs has arisen.   Mr Gustafson for the plaintiffs is content to allow costs to be dealt with by the trial judge.  Mr Hurd for the defendant suggests either, that costs should be dealt with today, or in the alternative, that they should be dealt with by the trial judge.

[9]      I am satisfied that no costs order is appropriate.  The plaintiffs’ application was made very late in the day.  The discovery sought could and should have been anticipated at a much earlier date.  However, from Nissan’s perspective, it seems to me that much of the material now sought should have been provided at an earlier stage pursuant to its general discovery obligations, and its ongoing obligations pending hearing.  In the circumstances, I am not prepared to make a costs order and I direct that costs should lie where they fall.

[10]     There was a further late application filed by the plaintiffs.  They sought leave to  file  a  fourth  amended  statement  of  claim.    That  application  was  filed  on

24 January 2012.

[11]     Mr Hurd, responsibly in my view, did not oppose the grant of leave to the plaintiff to file the fourth amended statement of claim.   He did however seek that directions should be given to deal with any further evidence which is required as a consequence.  Mr Gustafson did not oppose those further directions.

[12]     In the circumstances, it seems to me to be appropriate to grant leave to the plaintiffs to file a fourth amended statement of claim.  It is common ground that the fourth amended statement of claim reduces the matters in issue and that it is, in many respects, a more coherent and easily understood document.

[13]     Accordingly, leave is granted to the plaintiffs to file the fourth amended statement  of  claim.    I further  direct  that  the  plaintiffs  are  to  serve  any further evidence required as a consequence of the amended pleading by 17 February 2012. The defendant is to file any further evidence in reply by 29 February 2012.

[14]     I record the parties’ common anticipation that little, if any, further evidence will be required.  It is not the intention that either party should seek in any additional evidence to refocus their case in any wholesale way.  If either party seeks to exploit the position, then the matter can be raised with the trial judge.

[15]     The issue of costs in relation to the amended statement of claim has arisen. [16]      Mr Gustafson sought that costs should be left to the trial judge.

[17]     Mr Hurd asserted that the late amendment has significant cost implications for his client.  He noted for example, that one of the causes of action now abandoned by the plaintiffs required the defendant to brief an expert witness, who prepared a brief dealing with the issue.   He also noted that much of the evidence that the defendant has already filed will need to be redacted as a consequence of the amended statement of claim.   He submitted that the cost implications for the defendant are serious.  He did not wish that those implications should be lost sight of, although he accepted that I did not have sufficient material before me to make a costs order in relation to the matter.

[18]     It seems to me that the issue of costs should be dealt with by the trial judge. The trial judge will, in the course of the trial, develop an appreciation of the full factual matrix of the dispute between the parties.  He or she will be in a position to ascertain what additional costs Nissan has been put to as a consequence of the filing of the fourth amended statement of claim and to deal with the costs issue in light of that information.

[19]     Accordingly, I direct that costs in relation to the filing of the fourth amended statement of claim are to be reserved for determination at trial.

Wylie J