Quest Communications Limited v Telecom Corporation of New Zealand Limited HC Auckland Cp193-Sw01

[2001] NZHC 312

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY CP193-SW01

BETWEEN QUEST COMMUNICATIONS LIMITED
Plaintiff

AND TELECOM CORPORATION OF NEW ZEALAND LIMITED
Defendant

Hearing: 1 May 2001

Counsel: P T Finnigan for Plaintiff
M A Gilbert for Defendant

Judgment: 1 May 2001

JUDGMENT OF ANDERSON J

[1] This matter comes before the Court under considerable urgency. The plaintiff seeks interlocutory relief by way of an interim injunction requiring the defendant to reconnect the plaintiff to the defendant’s telephone network.

[2] The plaintiff is an internet service provider and it entered into a contract with Telecom in or about November 1999 to facilitate its business through the Telecom network. Naturally there is a rental or fee charged by Telecom for the provision of its services. Nothing has ever been paid for that service by the plaintiff. It also had a telephone account for ordinary business purposes with Telecom. That account is now $11,000 in arrears.

[3] There were problems with the initial installation of the internet service, with the plaintiff claiming that Telecom’s equipment was defective and was interfering with the ability by the plaintiff to supply its customers. The plaintiff alleges that it incurred significant costs in proving to Telecom’s satisfaction that it was Telecom’s own fault. In April last year it formulated a claim in writing in the sum of $70,000 plus GST. The basis upon which that amount was calculated is not before the Court and it may be an accurate reflection of true costs allegedly incurred or may be an arbitrary sum presented for tactical reasons. It is impossible at this stage to say.

[4] Telecom appears to have acknowledged fault to the extent of offering a credit in the sum of $26,878.50.

[5] The parties discussed the differences in a desultory way but eventually Telecom threatened to discontinue the service if it was not paid. It gave about 10 days notice of this and carried out its notice today.

[6] A further grievance of the plaintiff is in connection with its interest in the Southern Cross cable providing wide band width services. Mr Gilbert assures the Court that that position is not immediately affected.

[7] The plaintiff’s difficulty, even assuming the validity of its grievance and the extent of it, is to demonstrate a contractual entitlement to continuation of supply. The plaintiff’s solicitors and learned counsel, acting under extreme urgency with geographical limitations on their ability to obtain instructions, have not been able to place before the Court any documentary evidence of the terms of the original contract for the ISP connection. It may or may not be in writing. If in writing one would expect it to have a provision preventing the plaintiff from setting off debts allegedly due by Telecom against the cost of supply. If it is not in writing, one could not infer an ability to set off alleged damages for which no judgment has been taken against debts undoubtedly due under the contract.

[8] Either the plaintiff must abide by the contract when requiring compliance by Telecom, or if it is released from its own compliance it must acknowledge release by Telecom as well. It seeks to split benefits and obligations to the point where it obtains the benefits of non payment but Telecom carries the burdens of supply without payment.

[9] I cannot see, on the case before me at present, any legal entitlement on the part of the plaintiff to insist on supply when it is in arrears, even on its best case. The extent of its arrears on its best case is more than $10,000. Even if there were some jurisprudential basis to issue what would now be a mandatory injunction against Telecom, it would only be subject to payment of the difference between the amount claimed as damages and the amount outstanding in respect of its various contracts.

[10] The plaintiff’s application for an interim injunction is dismissed.

[11] On the face of it this case is within the jurisdiction of the District Court and I make an order for transfer to that jurisdiction.

[12] I make an order for costs in the sum of $1000. 1 direct that the order for transfer to the District Court shall lie in this Court until 5 p.m. next Monday.

[13] Mr Finnigan asks me to reserve leave to re-apply on the present proceedings before the order for transfer to the District Court shall take effect. Leave reserved accordingly.