Ike v New Zealand Couriers Ltd

[2012] NZHC 558

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-000648 [2012] NZHC 558

UNDER  Part 20 of the High Court Rules

IN THE MATTER OF     Section 72 of the District Courts Act 1947

AND

IN THE MATTER OF     an application for leave to appeal out of time

BETWEEN  ISIDORE OKEY IKE Appellant

ANDNEW ZEALAND COURIERS LIMITED Respondent

Hearing:         7 September 2011

Counsel:         CS Henry for Appellant

EJ Butcher for Respondent

Judgment:      27 March 2012

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 27 March 2012 at 4:00 pm

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:

AJH Witten-Hannah, Witten-Hannah Howard, Auckland:

EJ Butcher, Langton Hudson Butcher, Auckland:  [email protected] ) Copy:

CS Henry, Barrister, Auckland:  [email protected]

IKE V NEW ZEALAND COURIERS LIMITED HC AK CIV-2011-404-000648 [27 March 2012]

Introduction

[1]      Isadore Ike entered into a contract for services dated 24 October 2007 under which he agreed to undertake courier and other delivery services for and on behalf of New   Zealand   Couriers   Limited   (“NZ   Couriers”   or   “the   Company”).      On

2 May 2008, NZ Couriers terminated the contract, purporting to act under provisions which, the Company argued, entitled it to terminate the contract without notice on the grounds of at least two breaches of Mr Ike’s contractual obligations.

[2]      It being common ground that Mr Ike was engaged as a contractor and not as an employee, Mr Ike sued the Company in the District Court at Auckland.  In an oral judgment, Judge Sharp dismissed Mr Ike’s claim, notwithstanding criticisms of the conduct  of  a  manager  employed  by  NZ  Couriers  who  acted  on  behalf  of  the Company at relevant times.

[3]      Mr Ike has appealed. The two broad issues raised by him concerned:

(a)      the proper interpretation of the contract under which he was engaged and, in particular, the interpretation and application of the termination provisions; and

(b)the alleged inadequacy of the evidence adduced by the respondent to establish its grounds for termination.

The relevant contractual provisions

[4]      It is appropriate to consider first the relevant contractual provisions.   The material provisions of the agreement were as follows:

1.        Courier Service

1.1Subject to the provisions hereof the Contractor will carry out for the Company a courier service over such routes or in such areas and servicing such customers and following such procedures as the Company may from time to time direct and the Contractor will from time to time and as often and for such period and in such places as may be agreed upon between the Contractor and the Company assist

with the handling sorting and consolidation of goods in transit, and the delivery of tickets, sales and other material, such marketing and related activity on behalf of the Company as the Company may direct and the collection on behalf of the Company of monies paid by customers (hereinafter called “the Service”).

2.        Duration of Agreement

2.1This Agreement  shall  commence  on  the         day  of             20 (hereinafter called the “Commencement Date”) and shall continue for a period of twelve months from that date and from month to month thereafter unless it is sooner terminated in accordance with the terms of this Agreement.

2.2Notwithstanding clause 2.1, the Contractor or the Company may terminate this Agreement on or at any time after the first anniversary of the Commencement Date by giving to the other of them at least two months’ notice, or less by mutual agreement, in writing.

2.3Notwithstanding clause 2.1 herein, at any time within three months of   the   Contractor   first   having   commenced   the   Service   this Agreement may be terminated on the giving of one month’s written notice by either party.

...

...

6.10    The  Contractor  will  at  the  reasonable  request  of  the  Company provide a certificate from a registered medical practitioner as to the Contractor’s fitness or the fitness of any relief driver to carry on the Service.  In the event of such certificate showing the Contractor not to be fit for the purpose, the Company may require the Contractor to engage a relief driver as provided in clause 6.4 hereof.   If the Contractor remains so unfit for a continuous period of two months or for periods which aggregate to more than two months in any six- monthly period the Crown may forthwith terminate this Agreement without notice.

9.        Status of Contractor

9.1The  Contractor  is  at  all  times  an  independent  self-employed Contractor to the Company and is not the servant or employee of the Company and has no authority to pledge credit make representations or incur liability on behalf of the Company.

9.2The Contractor acknowledges that the Company is the owner of all the courier services managed by it and the goodwill of such services is and remains the sole property of the Company.   The Company retains the right to allocate or re-allocate such services amongst its contractors subject only to the Contractor being given reasonable opportunity to make representations as to the impact of such change.

...

16.      Breach

16.1Without prejudice to the Company’s express powers of termination set out in clauses 2.2, 2.3 and 6.10 herein and any other powers of termination implied by law, the Company may forthwith terminate this Agreement if:

(a)       the Contractor commits any act of dishonesty or is convicted of any offence (whether arising out of the Contractor’s performance of the Service or not) which in the opinion of the  Company  adversely  affects  or  is  likely  to  adversely affect the business or standing of the Company.

(b)       the Contractor commits any act which in the opinion of the Company is incompatible with the Contractor’s continued due and faithful performance of the Service; or

(c)       the Contractor breaches clause 12 twice or more in any 60 day period.

16.2     Notwithstanding  anything  in  clause  16.1,  the  Contractor  or  the

Company may forthwith terminate this Agreement if:

(a)       the other of them is in breach of any of the provisions hereof and (where the breach is incapable of remedy) has failed to remedy the breach within the time (being a reasonable time in all the circumstances) specified in a written notice of the breach  received  by the  party in  default  and  requiring its remedy; or

(b)       the other of them is in breach of any of the provisions hereof and that breach is incapable of remedy.

[5]      The grounds of termination relied upon by NZ Couriers were that Mr Ike had breached  clause 12  of  the  agreement1   “twice  or  more  in  ...  [a]  60 day  period”: clause 16.1(c).  It was the Company’s view that such breaches entitled it to terminate the contract “forthwith”.

[6]      The point taken by Mr Ike in the District Court and on appeal was that the Company’s  power  of  termination  contained  in  clause 16.1  was  limited  by  the requirement in clause 16.2(a) that the contractor should have been given a reasonable time to remedy any breach and failed to do so, or that the breach should be such that it was incapable of remedy, as provided by clause 16.2(b).  Mr Ike argues that the Company  was  contractually  bound  to  follow  a  fair  process  in  terminating  the

contract, and manifestly failed to do so.

1 Set out below at [15].

[7]      Judge   Sharp   considered   that   clauses   16.1   and   16.2   should   be   read disjunctively and that a proper interpretation of the agreement was that the Company was entitled to terminate the contract forthwith, without providing an opportunity to remedy any breach, if the any of the grounds described in sub-paragraphs (a), (b) and (c) of clause 16.1 applied.

[8]      Before turning to consider the factual grounds for the termination, it is convenient  to  determine  the  legal  obligations  under  which  the  Company  was required to act in exercising the powers constituting the termination provisions in s 16.

Interpretation of the termination provision

[9]      The “no fault” termination provisions of the contract entitled the Company or the  contractor  to  bring  the  relationship  to  an  end  by  the  giving  of  notice  of termination under either of clauses 2.2 or 2.3.   The Company was also entitled to terminate the contract without notice under clause 6.10 where the contractor was medically unfit and the other provisions of clause 6.10 applied.

[10]     In addition, the provisions of clauses 16.1 and 16.2 entitled the Company (under both 16.1 and 16.2) and the Contractor (under 16.2) to terminate the contract, without notice, for cause.

[11]     I  agree  with  Ms Butcher  that  clauses  16.1  and  16.2  are  to  be  read disjunctively.

[12]     First, they are drafted as separate provisions.  Second, clause 16.1 provides only the Company with a power to terminate in the event of any of the occurrences specified in paragraphs (a), (b) and (c).  Third, the circumstances contemplated by the two clauses may be differentiated in that clause 16.1 focuses on misconduct on the part of the contractor, whereas clause 16.2 is concerned with other breaches of the contractual arrangements which may not necessarily amount to misconduct on the part of either party.  Fourth, and significantly, clause 16.2 begins with the words, “Notwithstanding anything in clause 16.1 ...”.

[13]     Mr Henry sought to persuade me that the phrase just quoted meant that clause

16.2 was an overriding provision.  He argued that the exercise by the Company of any of the powers of termination available to it under clause 16.1 was subject to the obligation to give written notice of the alleged breach, and allow a reasonable time in all of the circumstances for the contractor to remedy such breach if it was capable of remedy.

[14]     In my view, that interpretation does violence to the plain meaning of the words  used.    Clause  16.1  is  a  specific  provision  authorising  the  Company  to terminate in certain circumstances whereas, “notwithstanding” (or despite or irrespective) of that provision, the contractor or the Company may terminate the agreement on the grounds set out in paragraphs 16.2(a) and (b).

[15]     Clause 12 provides as follows:

12.      Diligence, Dress and Courtesy

12.1Subject to the provisions hereof the Contractor  will perform the Service required by the Company competently, promptly and diligently and in accordance with the current New Zealand Couriers Service Standards and any detailed Memoranda and Working Conditions furnished by the Company from time to time.   The contractor will service such of the Company’s customers as the Company may from time to time and in accordance with the terms hereof direct and the Contractor will endeavour to maintain improve and extend the Company’s business and to protect the interests of the Company and its employees and other contractors at all times.

12.2The Contractor will ensure that all goods entrusted to the Contractor are carefully handled and received.

12.3The Contractor will acquire at the Contractor’s own cost and at all times wear such uniform or other distinctive clothing as is required by the Company and maintain the same at the Contractor’s own cost in a neat and tidy condition at all times.

12.4The Contractor will at all times be courteous and co-operative with the Company’s customers and will co-operate with the Company its servants  and other contractors  whether  on or  off the  Company’s premises.

12.5The Contractor will not during working hours be under the influence of intoxicating liquor or drugs other than those medically prescribed for the Contractor

[16]     As the heading to the clause indicates, its provisions are concerned with the maintenance of certain standards of behaviour.   Read together, the provisions of clauses 12 and 16.1(c) empowered the Company to terminate the contract without notice if Mr Ike failed to meet the required standards of behaviour on two or more occasions in any 60-day period.  This power was not governed by any obligation to give Mr Ike an opportunity to remedy any breach which was capable of being remedied.

Whether the Company was obliged to act fairly

[17]     Before departing from the contractual provisions, it is appropriate to address the submission argued strenuously by Mr Henry that it is necessary to imply into the termination provisions an obligation on the Company to exercise the powers referred to in a fair and reasonable manner.

[18]     In arguing this point, Mr Henry referred me to Brown & Doherty Limited v Whangarei County Council2 which related to a contract for the provision of engineering works in relation to a sewerage scheme.  At issue was the application of the general conditions of contract contained in the New Zealand Standard Specification Conditions of Contract for Civil Engineering Works (NZSS623). In that case, Smellie J held that, because of the drastic and far-reaching consequences

that determination or forfeiture clauses such as those under consideration can have, the courts have always construed such provisions strictly.3    Similar considerations justify a strict construction in the present case, but Smellie J also referred to Davies v Mayor of Swansea4 as emphasising that, although termination provisions could have dire consequences, they would nonetheless be upheld by the courts if there has been compliance with the stipulated conditions.

[19]     Mr Henry also referred me to Sharples Logging Limited v Weyerhauser New

Zealand Limited,5 but I do not consider that case assists the appellant.  MacKenzie J

accepted on the authority of Brown & Doherty that a strict approach to interpretation

2 Brown & Doherty Limited v Whangarei County Council [1988] 1 NZLR 33.

3 At 36.
4 Davies v Mayor of Swansea (1853) 22 LJ Ex 297.

5 Sharples Logging Limited v Weyerhauser New Zealand Limited HC Nelson CIV-2006-442-260,

3 April 2009.

was required and that, having regard to ambiguity and uncertainty in the drafting of the relevant provisions in that agreement, a contra proferentem interpretation was required. There is no ambiguity in the contractual provisions at issue here.

[20]     Mr Henry supported his argument by characterising the contract in this case as a “contract of adhesion”; that is, one which is in a standardised form containing provisions which are offered on a “take it or leave it” basis.  The term is sometimes applied to consumer credit contracts, insurance contracts or tenancy agreements.  But there is no evidence that it is appropriate to regard the arrangements between Mr Ike and NZ Couriers on this basis.   In any event, in the absence of unconscionable conduct,  statutory  intervention  is  almost  always  required  in  order  to  impose

obligations of reasonable treatment upon the party proffering such a contract.6

[21]     Finally,  Mr Henry  submitted  that,  because  of  the  similarity  between  the courier contract in this case and an employment agreement, the Court should imply obligations of fairness on the Company.  In advancing this argument, he relied on the Court of Appeal’s judgment in Andrews v Parceline Express Limited,7  where the plaintiff was also engaged as a courier-driver.  Mr Henry referred to and particularly relied upon dicta in which the Court of Appeal said:8

The Legislature has recently introduced into contracts of employment the concept of damages for humiliation, loss of dignity and injury to the feelings of the employee: see s 40 of the Employment Contracts Act 1991.   The present was not an employment contract, which is defined in the Act as a contract of service.  It was acknowledged to be a contract for services under which Mr Andrews was in business on his own account.  The distinction was clarified  by  the  decision  of  this  Court  in  TNT Express Worldwide  (NZ) Limited v Cunningham [1993] 1 ERNZ 695; [1993] 3 NZLR 681. Nevertheless, the present contract was similar to an employment contract. It was the means by which Mr Andrews earned his living. It was the means by which Parceline obtained the human services it required. The common law is entitled to develop its principles and its approach to contemporary problems bearing in mind, and by analogy with, the way the Legislature has dealt with allied subjects.

[22]     That passage needs to be read in context, however.  The Court of Appeal was referring there to the development of remedies for breach of contract as part of the

6 See the discussion in John Burrows, Jeremy Finn & Stephen Todd Law of Contract in New Zealand

(4 ed , LexisNexis, Wellington, 20120 at 7.5.

7 Andrews v Parceline Express Limited [1994] 2 ERNZ 385.

8 At 397.

justification for including, in that case, a right to damages for distress and anxiety caused by a contractual breach.   It was that aspect of the common law which the Court was developing, not the imposition into a contract for services of an implied obligation of fair dealing.

[23]     Ms Butcher argued, on the authority of Paul v Mobil Oil NZ Limited9 that, in an  owner/driver  contract  for  services,  there  was  no  suggestion  that  procedural fairness was implied by any rule of law; there was no reason to imply terms for business efficacy; and there was no basis on which procedural fairness should be implied as a legal incidence of a contract for services.

[24]     I agree.  It is well settled that courier drivers engaged on the basis set out in

Mr Ike’s contract with NZ Couriers are not to be treated as if they were employees.10

In particular, an obligation of fair and reasonable treatment, which is implied as a necessary incident of an employment relationship, is not to be implied into a contract for services unless the express terms of the contract provide for it.11     The strict construction and application of the relevant provisions in this case does not justify the implication of an over-arching obligation of fair treatment.  It simply means that the Court has to be vigilant to ensure that the powers provided by the contractual

provisions are properly exercised.

[25]     Thus, the only question for determination by the District Court Judge was, and on appeal is, whether the Company had a proper factual basis for exercising the termination powers available to it under the contract.

The facts – alleged grounds for termination

[26]     Mr Henry noted that Mr Ike conceded that he had received a warning letter dated 7 March 2008 alleging that he had breached clause 12 of the contract (failure to perform the service required by the Company competently, promptly and diligently).   It was asserted that he had “consistently failed to perform onboard

scanning of freight up to their 95 percent benchmark as required” by the Company.

9 Paul v Mobil Oil NZ Limited [1992] 2 ERNZ 1, [1992] 3 NZLR 194.

10 TNT Worldwide Express (NZ) Ltd v Cunningham [1993] 3 NZLR 681.

11 Paul at 12.

Mr Ike acknowledged that he had previously been warned, along with other courier drivers, of the need to comply with this requirement and accepted that the warning letter  reminded  him  that,  in  view  of  his  breach,  the  Company  was  entitled  to terminate his contact pursuant to clause 16.1(c) if he breached clause 12 of the agreement again, within 60 days from the date of the warning.

[27]     The reference to the 60-day period running from the date of the warning was not an accurate summary of the contractual provision; it was the timing of the breaches that triggered the termination right, not the timing of the warning.  Nothing turns on the point, however, because the Company’s decision to terminate was based on breaches which were alleged to have occurred not less than 60 days apart.

[28]     Mr Henry accepted that the factual issue the District Court Judge had to determine was whether the material properly admissible in evidence before her could reasonably have satisfied her that Mr Ike committed a second breach of clause 12 within 60 days of the first.

[29]     In the District Court, the Company sought to rely first on a breach alleged to have occurred on 21 April 2008.  It was said that Mr Ike had failed to obtain a proof of delivery and that this amounted to a breach of clause 12.  The letter containing the allegation of the breach was written by a Mr Innes, the then operations manager of the Company, but he was not available as a witness.   The District Court Judge declined to allow the Company’s new operations manager, a Mr Charles, to give evidence about what he had been told by Mr Innes about the circumstances leading to the letter, ruling that Mr Innes was shown to be unreliable and that the evidence could not be admitted in accordance with the hearsay rules.

[30]     Next, the Company referred to two breaches said to have occurred on Friday

2 May 2008.  One of them was based on allegations contained in two emails sent to Mr Innes by a customer, Ms Fergusson.   In the first email, which was sent to the Company at 11:28 am, it was alleged that Mr Ike had failed to pick up some items for delivery between 9:30 am and 10:00 am as required.  The second email, timed at

4:42 pm  that  day,  alleged  what  Ms Fergusson  described  as  “intimidating  and

bullying behaviour by Mr Ike”.

[31]     On appeal, Mr Henry challenged the Judge’s findings on the basis that she had ruled the emails from Ms Fergusson as being admissible as business records.  It appears to me, however, that that submission is based on a misunderstanding of the Judge’s  ruling  and  the  evidence  upon  which  the  Company  ultimately  relied  in support of the dismissal.

Discussion

The admissibility point

[32]     To be fair to Mr Henry, it is not easy to follow the District Court Judge’s ruling on the admissibility issue, because her references to documents and statements in issue were confusing and not clarified by reference to exhibit numbers.  But I am satisfied that Judge Sharp did not rule that Ms Fergusson’s emails were admissible as evidence of the truth of their contents and, in any event, it is clear that the Company did not rely on her complaints as grounds for the termination.

[33]     What the Judge admitted as evidence of the second breach, and on which the Company said the termination was based, were a letter to Mr Ike dated 2 May 2008 and an email from a Mr Morgan, another NZ Couriers employee, dated 2 May 2008 and timed at 10.34am.

[34]     It was alleged in the letter, which Mr Ike acknowledged he had been given that day, that he had left an item at an incorrect address and failed to obtain a printed name in respect of an item that was “signature required”.12   The letter did not specify the details of that event, but it was not the issue about which Ms Fergusson had complained.

[35]     There was insufficient evidence before the District Court to prove that details of the “signature required” incident were supplied to  Mr Ike.   Mr Morgan was present during the termination meeting, but he was unable to say what documents

were handed to Mr Ike by Mr Innes.

12 The material parts of the letter are set out below at [39].

[36]     Mr Morgan did say in evidence, however, that he had sent the email to

Mr Innes that morning.  The email contained a screenshot of a proof of delivery at

8:46:52 am on 2 May 2008 to a business address (not specified) in Silverdale, North Harbour.  The document indicates, on its face, that a signature was not supplied. The District Court Judge held, as she was entitled to do, that since Mr Ike was the only courier operating in that area at that time the delivery must have been one made by him.

[37]     The Company had attempted to rely on a handwritten entry on the copy of the letter dated 2 May 2008; it appears to be a reference number.   This links to the screenshot in the email relating to the delivery at 8:46:52 am.  The Judge ruled that the handwritten entry was not admissible, however, because it was made by Mr Innes and was therefore unreliable.   Nevertheless, the letter itself which was given to Mr Ike and which contains the allegation is sufficient, when read with the email, to identify the circumstances in which the breach is said to have occurred.

[38]     On the basis of admissible evidence, therefore, the Judge found that Mr Ike had failed to obtain a signature from the recipient of a delivery which, it appears, was in fact made to the wrong address.  That amounted to a breach of clause 12.2 of the contract in that Mr Ike had failed to ensure that the goods entrusted to him were “carefully  handled  and  received.”    It  also  arguably  amounted  to  a  breach  of clause 12.1, as Mr Ike’s actions failed to comply with the relevant procedures of which he was aware.

Conflict between letters to Mr Ike dated 2 May 2008

[39]     The position was somewhat complicated, however, by the documents given to Mr Ike on 2 May 2008 at the time his engagement was terminated. The first letter, so far as is material, read as follows:

NZ Couriers Limited (the Company) warns you in accordance with clause 12 of     the      agreement           between    the    Company    and    yourself    dated

24th October 2007 that you have not been performing the service required by the Company competently, promptly and diligently.   The grounds for this

warning are based on an item been been [sic] left at the incorrect address and failed to obtain a printed name.

This item was “Signature required”.

Under no circumstances are you to leave items that are Signature required.

The Company may terminate the agreement pursuant to clause 16.1(c) if you breach clause 12 of the agreement again, within 60 days from the date of this warning.

If you wish to respond to this warning, please do so in writing within seven days of this letter.

[40]     The second letter, provided at the same time, read as follows (the punctuation shown below appearing in the original):

Courier Agreement

NZ  Couriers  Limited  (“the  Company”)  gives  you  notice  pursuant  to clause 16.1(c) of the agreement between the Company and yourself dated [24th October 2007] that you have breached clause 12 of the agreement twice or more in a 60 day period.

You have not been performing the service required by the Company competently,  promptly  and  diligently.    You  have  failed  to  [specify  the grounds for termination].  This is the second breach in 60 days.  The first breach was the subject of a written warning on [date of warning] and as attached.

Accordingly, the Company has decided to terminate the agreement effective

02/05/2008].

The  Company  reminds  you  of  the  following  requirements  prior  to  the contract termination.  Before receiving your final payment for services (paid on 20th of month following final day) you must have:

Removed the decals (including the yellow stripes) from your van, and

Returned your run book, pager, BP fuel card and any other NZ Couriers property.

[41]     The point taken by Mr Henry was that the contents of the two letters were inconsistent and misleading.  The first of them purports to contain a warning that the Company would be entitled to terminate Mr Ike’s contact if he breached clause 12 again within 60 days, and Mr Ike was invited to respond to the warning within seven days.  The second letter, however, purported to be notice to him that the Company had in fact decided to terminate the contact “effective 02/05/08” for a second breach of clause 12 in a 60-day period.

[42]     It seems to be clear that Mr Innes simply printed out incomplete template letters which he then handed to Mr Ike in a perfunctory manner.   Neither of the letters referred expressly to the admitted breach in March, and insufficient particulars were provided in relation to the “signature required” incident to enable Mr Ike to respond to the allegation.

[43]     Ms Butcher did not try to defend the actions of Mr Innes in providing Mr Ike, at the time the contact was terminated, with letters which were wholly inadequate, inappropriate and misleading (except as to the allegation of the breach related to the failure to obtain a signature in respect of a delivery).

[44]     Mr Henry submitted that the combination of the two letters dated 2 May 2008 did not amount in law to cancellation of the contract on the grounds of repudiatory conduct by Mr Ike.  He argued with some force that the letters on their face were in conflict and uncertain or ambiguous.   Relying on Jansen v Whangamata Homes

Limited,13  he submitted that, faced with the alleged repudiatory conduct by Mr Ike,

the Company was required to make an election whether to affirm the contract or to cancel it.  He said that the first letter amounted to an election to affirm the contract and that the Company was not then entitled to purport to cancel the contract by means of the second letter.

[45]     I do not think Jansen assists the appellant.   The present case is not one in which the Company was acting in response to a repudiation of the contract by Mr Ike.    The  Company  was  merely  exercising  its  express  contractual  right  to terminate the agreement for breach. As Smellie J noted in Brown & Doherty Limited v Whangarei County Council,14 the rationale for express termination provisions in a contract  is  the  desire  of  the  parties  to  enable  the  contract  to  be  terminated  in

circumstances which might not amount to repudiation at common law.

13 Jansen v Whangamata Homes Limited [2006] 2 NZLR 300.

14 At 36, n2 above.

Alleged unfairness in failure of the Company to notify reasons for termination

[46]     Mr Henry submitted that the proof of the second breach of clause 12, the email purporting to show a delivery having been made to the wrong address without Mr Ike obtaining a recipient’s signature, was not provided to Mr Ike until discovery, after the issuing of proceedings.  If that was the case, it was undoubtedly unfair and unreasonable.  I have no doubt that, had Mr Ike been an employee, the termination of his engagement in this manner would have been held to have been unjustifiable on the grounds that it was procedurally unfair.   But, as I have already indicated, the Company  was  not  required  to  act  fairly;  its  obligation  was  simply  to  act  in accordance with the terms of the agreement, strictly construed.  It did so in that it had available to it, and relied upon, evidence of two breaches of clause 12 of the agreement having occurred within a 60-day period.

Decision

[47]     As Mr Henry acknowledged, the principal issue before the District Court was whether the Company was able to establish that it had grounds to terminate the contract under the powers provided and those grounds were established on the basis of admissible evidence.

[48]     The letter of 2 May 2008 describing the “signature required” incident was sufficient evidence for the Court to conclude that the Company was relying upon an allegation of a second breach within the 60-day period entitling the Company to terminate the agreement under clause 16.1.

[49]     In these circumstances, the District Court Judge was entitled to hold that

Mr Ike had not proved his case and to enter judgment for the Company. [50]           The appeal is dismissed.

[51]     Prima facie, the respondent is entitled to costs.  I understand Mr Ike may be supported by legal aid in which case the respondent may not wish to make any application.  I reserve leave, however, for the Company to make an application for

costs  by  memorandum  filed  and  served   on  the  appellant’s  solicitor  within

25 working days.  In that event, the appellant shall have a further 25 working days to reply.

...........................................

Toogood J