Kimble Contracting Limited v Wouldes - [2017] NZHC 3151

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-002121 [2017] NZHC 3151

BETWEEN
KIMBLE CONTRACTING LIMITED

Plaintiff

AND

GRAHAM WOULDES First Defendant

ANMAR ALMOMEN Second Defendant

Hearing: 26 October 2017

Appearances:

P F Dalkie for the Plaintiff
No appearance by or on behalf of the Defendants

Judgment:

15 December 2017

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on 15 December 2017 at 11:00 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar
Date:

Solicitors: L M Nicholson, Dyer Whitechurch, Auckland for the Plaintiff
J M Skinner, Skinners Law, Auckland for the First Defendant

Counsel: P Dalkie, Auckland

KIMBLE CONTRACTING LTD v WOULDES & ANOR [2017] NZHC 3151 [15 December 2017]

Introduction

[1] In early 2015, Kimble Contracting Limited (Kimble Contracting) had dealings with Euro Vehicles Limited, a car dealership in Auckland. Euro Vehicles Limited, whose sole director at the time was the first defendant, Graham Wouldes, has since gone into liquidation, as has Kimble Contracting. At the time Kimble Contracting dealt with the second defendant, Anmar Almomen, as an employee of Euro Vehicles Limited. Kimble Contracting says that Mr Almomen engaged in misleading or deceptive conduct in breach of s 9 of the Fair Trading Act 1986 (the Act).

[2] Kimble Contracting subsequently purchased two Mercedes Benz vehicles from Euro Vehicles Limited for $123,000. Those vehicles were not mechanically sound, and were returned to Euro Vehicles Limited for repair. Euro Vehicles Limited neither returned the vehicles repaired nor refunded the purchase price as agreed by Mr Almomen. Kimble Contracting therefore alleges that as a result of Mr Almomen’s misleading and deceptive conduct, it lost $123,000. It seeks an order that Mr Almomen pay damages of $123,000.

[3] Substituted service was effected on Mr Almomen by way of newspaper advertisement on 13 December 2016, but he has taken no steps to defend the proceeding. Kimble Contracting thus proceeds against Mr Almomen by way of formal proof.1

The proceedings thus far

[4] In a statement of claim dated 29 August 2016, Kimble Contracting Limited sought judgment against Mr Wouldes and Mr Almomen for a total sum of $923,000 it says it lost as a result of misleading or deceptive conduct in breach of s 9 of the Act. Kimble Contracting did not say that Mr Wouldes himself contravened s 9, but rather that he was complicit under the accessory liability provisions, s 43(1)(b) and (d). Kimble Contracting says that it was the second defendant, Mr Almomen, who directly engaged in the misleading or deceptive conduct in trade that caused Kimble
Contracting loss.

1 High Court Rules, r 15.9.

[5] In a judgment dated 7 July 2017, Associate Judge Bell struck out the statement of claim against Mr Wouldes because Kimble Contracting did not have a cause of action for payments totalling $800,000 made before it was incorporated and because it had not pleaded adequately or shown a prima facie case for secondary liability under s…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Kimble Contracting Limited v Wouldes

Details

AGLC: Kimble Contracting Limited v Wouldes [2017] NZHC 3151
Case: [2017] NZHC 3151
Decision Date: 15 December 2017

CaseChat Overview and Summary

In the case of Kimble Contracting Limited v Wouldes, the plaintiff, Kimble Contracting, alleged that the defendants, Graham Wouldes and Anmar Almomen, engaged in misleading or deceptive conduct in breach of the Fair Trading Act 1986. The plaintiff sought damages of $123,000, which it claimed was lost due to the defendants' conduct. The court had to decide whether the plaintiff had established that the defendants engaged in misleading or deceptive conduct, and if so, whether that conduct caused the loss claimed. The court examined the evidence provided by the plaintiff, including an affidavit from a representative of Kimble Contracting and bank statements showing payments made to Euro Vehicles Limited. However, the court found that the plaintiff had not provided sufficient evidence to establish that the defendants engaged in misleading or deceptive conduct, or that such conduct caused the loss claimed. The court was sceptical that a reasonable person in the plaintiff's position would have been misled or deceived by the alleged representations. The court also found that there was no clear nexus between the conduct and the loss claimed. Therefore, the court declined to grant the relief sought by the plaintiff.

The court's reasoning was based on the objective test for misleading or deceptive conduct, as established in Red Eagle Corp Ltd v Ellis. The court had to consider whether a reasonable person in the plaintiff's situation would have been likely to have been misled or deceived. The court found that the plaintiff had not provided sufficient evidence to establish that the defendants engaged in misleading or deceptive conduct. The court was also not satisfied that the conduct, even if misleading or deceptive, was causative of the loss claimed. The court found that there was no clear nexus between the conduct and the loss claimed. The court's decision was based on the evidence provided by the plaintiff and the principles established in Red Eagle Corp v Ellis. The court found that the plaintiff had not made out its claim, and therefore declined to grant the relief sought. This case highlights the importance of providing sufficient evidence to establish a claim for misleading or deceptive conduct, and the need for a clear nexus between the conduct and the loss claimed.

Orders