Petroleum Logistics Limited v Berry - [2019] NZHC 548

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2018-419-115

CIV-2019-419-40 [2019] NZHC 548

BETWEEN
PETROLEUM LOGISTICS LIMITED

Appellant

AND

PETER LESLIE BERRY and GLENDA JOYCE BERRY sued as THE PL & G J

BERRY PARTNERSHIP trading as ACME FASTENERS

Respondents

Hearing: 18 March 2019

Appearances:

T Stevens for Appellant

D J G Cox for Respondents

Judgment:

25 March 2019

JUDGMENT OF LANG J

[on costs]

This judgment was delivered by me on 25 March 2019 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

PETROLEUM LOGISTICS LTD v BERRY [2019] NZHC 548 [25 March 2019]

[1] This judgment deals with the issue of costs payable by Mr and Mrs Berry to Petroleum Logistics Ltd (Petroleum Logistics) in three proceedings. They comprise two appeals to this Court and a proceeding in the District Court. The issue common to all three proceedings is whether Petroleum Logistics is entitled to an award of indemnity costs by virtue of the contractual arrangement between it and Mr and Mrs Berry.

[2] As I observed in my substantive judgment in CIV 2018-419-115, the contractual arrangement between these parties was contained in a document called the Resellers Agreement.1 Petroleum Logistics relies in the present context on clause
16.1.0 of the Resellers Agreement, which provides as follows:

16.0 RESELLER INDEMNITY

16.1.0Responsibility for Loss

The Reseller is solely responsible for all loss or damage (including claims for injury or death) arising out of:

(a)any breach of this Agreement by the Reseller,

(b)the presence, actions or activities of the Reseller or the presence of its property on or about PETROLEUM LOGISTICS ‘s or a PETROLEUM LOGISTICS Customer’s premises, other than in the operation of the Business.

(c)The operation of the Business (except where the loss or damage is caused by the negligence of PETROLEUM LOGISTICS, its employees, agents or contractors”, or

(d)Any other acts or omissions of the Reseller or any of its agents, employees or contractors.

The Reseller must indemnify and hold PETROLEUM LOGISTICS and its employees, agents and contractors harmless from all such claims, losses and damages, including legal fees.

[3] The issue I need to decide is whether this clause requires Mr and Mrs Berry to reimburse Petroleum Logistics for the legal costs it has incurred in all three proceedings.

1 Berry v Petroleum Logistics Ltd [2018] NZHC 2765 at [4].

[4] An issue also arises in relation to the question of interest on the judgment sum. I deal with that issue by consent at the conclusion of the judgment.

Procedural background

[5] In a judgment delivered on 29 March 2018, Judge Spear entered summary judgment against Mr and Mrs Berry and in favour of Petroleum Logistics for the sum of $71,352.18 inclusive of interest.2 This related to unpaid invoices for fuel and oil that Petroleum Logistics had supplied to Mr and Mrs Berry between 2012 and 2017.

[6] Mr and Mrs Berry appealed against the Judge’s decision to enter summary judgment.…

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.

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Details

Case: [2019] NZHC 548
Decision Date: 25 March 2019

CaseChat Overview and Summary

The case of Petroleum Logistics Limited v Berry involves a dispute between Petroleum Logistics and Mr and Mrs Berry, who were sued as the PL & G J Berry Partnership trading as Acme Fasteners. The primary issue before the court was whether Petroleum Logistics was entitled to an award of indemnity costs under a contractual arrangement between the parties. The contractual arrangement was contained in a document called the Resellers Agreement, and Petroleum Logistics relied on clause 16.1.0 of the Resellers Agreement, which provided that the Reseller was responsible for all loss or damage arising out of various scenarios, including any breach of the agreement by the Reseller. The Reseller was also required to indemnify and hold Petroleum Logistics and its employees, agents, and contractors harmless from all such claims, losses, and damages, including legal fees.

The court considered the approach taken in previous cases and found that the language used in clause 16.1.0 made it clear that Mr and Mrs Berry agreed to reimburse Petroleum Logistics for any losses, whether direct or indirect, caused to it either by breach of contract on their part or through the manner in which they operated their business. The court found that the indemnity for "legal costs" in clause 16.1.0 extended to legal costs incurred by Petroleum Logistics in suing Mr and Mrs Berry to recover the sums claimed in the unpaid invoices. The court allowed the appeal and set aside the order for costs made by the Judge in relation to Mr Berry. In its place, the court made an order that Mr Berry is liable to pay Petroleum Logistics its reasonable solicitor/client costs on the proceeding in the District Court and is likewise entitled to indemnity costs on the two appeals to the High Court. The quantum of costs payable by Mr Berry was not fixed at this stage, and the parties were to endeavour to reach an agreement regarding that issue. If they could not, the costs sought were to be taxed under Subpart 2 of Part 14 of the High Court Rules 2016.

Orders