Sharma (aka Kumar) v Cool Cars (Wholesale) Limited (in liquidation)

[2012] NZHC 2015

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2012-419-000508 [2012] NZHC 2015

BETWEEN  IRENE REENITA SHARMA (AKA IRENE KUMAR)

Appellant

ANDCOOL CARS (WHOLESALE) LIMITED (IN LIQUIDATION) BY NICHOLAS HAYES (LIQUIDATOR)

Respondent

Hearing:         10 August 2012

Appearances: S McKenna for Appellant

D Hayes for Resepondent

Judgment:      13 August 2012

JUDGMENT OF ANDREWS J

Solicitors:

A J Nolan, PO Box 1268, Hamilton (Appellant) Brook Law, PO Box 9600, Hamilton (Respondent)

Counsel:

S McKenna, PO Box 19432, Hamilton

D Hayes, PO Box 9323, Hamilton

SHARMA (AKA KUMAR) V COOL CARS (WHOLESALE) LTD(IN LIQ) HC HAM CIV 2012-419-000508 [13 August 2012]

[1]      The appellant appealed against the judgment of Judge R G Marshall given in the District Court at Hamilton on 3 April 2012, on the claim by the respondent (Cool Cars) in respect of an Agreement for Sale and Purchase of a commercial property.[1]

Cool Cars had claimed against Ms Sharma, under ss 9 and 43 of the Fair Trading Act

1986.

[1] Cool Cars (Wholesale) Ltd (In Liq) v Sharma DC Hamilton CIV 2011-019-179, 3 April 2012.

[2]      As set out in her notice of appeal, the appellant’s grounds of appeal were that:

(a)       the Judge was wrong to find that the parties were “in trade”;

(b)      the Judge was wrong to conclude that the appellant had engaged in

“misleading or deceptive or likely to mislead or deceive”;

(c)      the Judge failed to give sufficient weight to the fact that Ms Jacobs, who signed the agreement for sale and purchase as director of the respondent, did so despite having a criminal conviction and was therefore banned; and

(d)the Judge was wrong to conclude that the agreement for sale and purchase was unconditional.

[3]      Ms Sharma represented herself in the District Court, and filed the notice of appeal and submissions in this Court.

[4]      This morning, Mr McKenna appeared as instructed counsel, advising that he had been instructed late last week.  In Court this morning Mr McKenna advised that the only ground of appeal that would be pursued was the Judge’s finding that the appellant had engaged in misleading or deceptive conduct, and the consequent award of damages.  All other grounds (including the challenge to the Judge’s finding that the parties were “in trade”) were abandoned.

[5]      However, Mr McKenna’s submissions on the remaining ground of appeal are in different terms from those set out in Ms Sharma’s submissions.  Put briefly, the

grounds of appeal now are that the Judge failed to follow the approach set out in the judgment of the Supreme Court in Red Eagle Corporation Ltd v Ellis,[2] at [26]–[31].

[2] Red Eagle Corporation Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492.

[6]      Translated into the present case, that approach would require the Judge to decide, first, whether the claimant had proved a breach of s 9 of the Fair Trading Act, which was to be considered by asking whether a reasonable person in the claimant’s situation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware – would likely to have been misled or deceived, then go on to consider s 43.  If the Judge was satisfied that the breach of s 9 had been proved, the Court should have looked to see whether it was proved that Cool Cars had  suffered  loss  or  damage  “by”  Ms  Sharma’s  conduct.    That  required  two questions to be answered: whether Cool Cars (in the person of Ms Jacobs) was deceived by Ms Sharma’s conduct then to ask whether Ms Sharma’s conduct in breach of s 9 was an operating cause of Cool Cars loss or damage.

[7]      As the matters which should be considered (as set out in Red Eagle) were not addressed at the District Court hearing, either in the evidence or in counsel’s submissions, it is understandable that the Judge did not follow the approach in his decision.

[8]      Having discussed the matter with counsel I have concluded, and counsel are agreed, that the appropriate course is to make a direction under r20.19 of the High Court Rules, that the proceeding be remitted to the District Court for re-hearing.

[9]      Pursuant  to  r 20.19(2)  I am  required  to  state  my reasons  for  giving this direction.  Quite simply, the reason is that the judgment of the Supreme Court in Red Eagle  was  not  referred  to  the  Judge  and,  indeed,  it  appears  not  to  have  been addressed by counsel or the parties in the course of the hearing in the District Court. I considered that the Red Eagle judgment should have been referred to the Judge and the fact that it was not has led to a possible gap in the evidence, and certainly a gap in the submissions made to the Judge

[10]     The re-hearing may be limited in its extent.  The “facts not in dispute” set out at [13] to [32] of the judgment may be adopted for the purposes of the re-hearing. The same applies to the Judge’s finding that the contract was unconditional, his finding that the parties were “in trade” and his finding at [70] that the contract was not rendered illegal by the fact of Ms Jacobs’s conviction.

[11]     The re-hearing is to be limited to the elements of the claim under ss 9 and 43 of the Fair Trading Act, with particular attention to the approach set out at [26] to [31] of Red Eagle, and will involve any evidence the parties wish to adduce in that respect, any cross-examination, and submissions of counsel.

[12]     In all of the circumstances, it is appropriate that the matter be re-heard by

Judge Marshall.

Directions

[13]     Accordingly, the appeal is formally allowed and the proceeding is remitted to the District Court for re-hearing, as set out above.  The Registry is to advise counsel as to a suitable hearing date before Judge Marshall.  I note counsel’s estimate that half a day will be sufficient to encompass any evidence, cross-examination and submissions.

[14]     As these directions are consequent upon a new point being raised on appeal, it is appropriate that no costs order is made in relation to the appeal.

Andrews  J