Sharma v Air New Zealand Ltd
[2020] NZHC 230
•21 February 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-1504
[2020] NZHC 230
BETWEEN ANJELA SHARMA
Applicant
AND
AIR NEW ZEALAND LIMITED
Respondent
Hearing: 22 November 2019 Appearances:
S J Grey for Applicant
S J P Ladd & B A Keown for Respondent
Judgment:
21 February 2020
JUDGMENT OF PAUL DAVISON J
This judgment was delivered by me on 21 February 2020 at 12:30pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
S Grey Lawyer, Nelson Bell Gully, Auckland
SHARMA v AIR NEW ZEALAND LIMITED [2020] NZHC 230 [21 February 2020]
Introduction
[1] Ms Anjela Sharma (the applicant) applies for a mandatory interim injunction directing Air New Zealand (the respondent) to immediately remove a 12 month ban (the ban) it imposed on 2 July 2019 preventing her from travelling on Air New Zealand flights.1
[2] On 26 July 2019, the applicant filed this proceeding alleging that the 12 month ban imposed on her by the respondent is in breach of its contractual obligations to her as a passenger who had booked and paid for several flights on which she was yet to travel.
[3] At the same time as the applicant commenced and filed this proceeding, she applied for an interim order quashing the ban imposed by the respondent on her. The applicant also applies for an order for a change of venue of the proceeding from Auckland to Nelson where she resides, and where the events from which the dispute between her and the respondent arose.
[4]The respondent opposes both applications.
Background
[5] The applicant is a lawyer who resides and practises in Nelson. She travels regularly out of Nelson to other centres for work, training, attending professional committee meetings, family and recreational purposes.
[6] Since around 1980 the applicant has been a regular user of the respondent’s air services, having travelled with Air New Zealand both nationally and internationally on numerous occasions. The applicant has been a member of Air New Zealand’s air points system since 1996, a member of the respondent’s Koru Club2 for several years, and is a paid-up member of that club to 30 March 2020. The applicant says that she
1 Including those of its subsidiary domestic carriers.
2 A membership programme which offers its members various travel benefits, including access to an airport lounge.
is dependent on travelling on the respondent’s air services for work-related travel, to maintain contact with members of her family, holidays and recreation.
[7] The applicant says that on 1 December 2018 she and her husband, accompanied by their six adult children aged between 15 and 25 years were travelling to India for a family holiday. The first leg of their journey was a domestic Air New Zealand flight from Nelson to Auckland. The second leg was a Singapore Airlines flight from Auckland to India travelling business class. When checking in at Nelson Airport they were unable to obtain their boarding passes for the Singapore Airlines flight, and were told by the respondent’s airport staff that they would have to obtain them upon their arrival in Auckland.
[8] Ms Sharma says that on the understanding that their business class tickets entitled them to use of the Air New Zealand Nelson Airport Koru Club Lounge, she and her family went to the Lounge. She says that she and her husband explained to the respondent’s staff that they were travelling first to Auckland and thence on to India on a Singapore Airlines flight, which is an Air New Zealand code share partner, on business class fares. They showed the Air New Zealand Koru Lounge hostess their travel documentation which included material confirming their business class fares on Singapore Airlines. They were permitted to enter and remain in the respondent’s Koru Lounge during a two-hour wait for the departure of their flight to Auckland.
[9] The applicant says that while she and her family were waiting in the Koru Lounge they were approached by a second member of the respondent’s staff who challenged the eligibility of the applicant and her family members to use the Lounge. The applicant says that after she had shown the second staff member her family’s business class travel documentation on the Singapore Airlines flight to India, it was accepted that she and her family could remain in the Koru Lounge while they waited for their flight to depart.
[10] However, the respondent’s staff who were involved in the conversations regarding the applicant’s entitlement to use the Koru Lounge considered that the applicant had acted in an intimidatory and bullying manner. On 4 December 2018 the respondent’s Passenger Services Manager at Nelson Airport, having received reports
from the staff directly involved, sent a written report to the respondent’s relevant managers. In the report she set out details of the interactions between the Air New Zealand staff and the applicant and her family. It is clear from the terms of the Manager’s detailed report that the Air New Zealand staff who had been directly involved with the applicant and her family members on 1 December reported that the applicant’s conduct towards them was abusive and offensive.
[11] The report described the applicant and members of her family as being very loud, disruptive, and intimidating during their dealings with the Lounge hostess over their entitlement to use the Lounge. The report said that members of the applicant’s family called the Lounge hostess stupid and racist, and mocked and loudly mimicked her voice when she greeted other passengers entering the Lounge. The report further noted that at one point a member of the airport security staff was called to the Lounge and had offered to call the Police. The report said that while the applicant and her husband were both Koru Club members, none of their six children were members.
The Koru Club policy allows for members to bring a maximum of one guest.3
[12] The report included the account of the second staff member who spoke to the applicant on 1 December 2018 regarding her family members’ eligibility to use the Koru Lounge, stating:
I was assured everyone was travelling business class ex AKL, but in actual fact 2 passengers on PNR [redacted] and 1 passenger on PNR [redacted] were travelling Premium Economy class. (and one other PNR).
I approached her and asked if I could have a word outside the Lounge, as I have had to have a similar conversation with her before about entering the Lounge using someone else’s air points, and knew there would be an altercation of some sort. She became very loud and quite rude toward myself and [the Lounge hostess], who was on the desk. She mentioned that we always pick on her and her family, and even called both of us racists. I made the decision to walk away, as I could see the other patrons in the lounge becoming quite agitated with their behaviour.
I feel Mrs Sharma uses bullying tactics to gain her own way every time she travels,
We are always courteous and helpful to her, but she pushes the boundaries of decency every time she travels, and I would like to put a stop to her countless demands with us.
3 “Koru benefits” Air New Zealand The Passenger Services Manager’s report said that the applicant was known to the respondent’s staff working at Nelson Airport for engaging in intimidating and bullying behaviour in order to get her own way every time she travelled through the airport. The report concluded:
… I will continue to get information from my staff re previous incidents but… this single situation has left my staff feeling intimidated and rattled to the point that they have questioned their safety. …
To be perfectly honestly [sic], [Ms] Sharma and her family are not welcome in the Nelson Koru Lounge in the future. I am seeking action from the loyalty team to prevent this behaviour from happening again in [Nelson] and anywhere across the Air New Zealand network.
[14] On 21 December 2018 while the applicant and her family were in India, the respondent sent her an email saying that she and her family had entered and remained in the Koru Lounge at Nelson Airport without permission, and warning her regarding the future use of its services (the warning letter). The email written by the respondent’s Senior Manager of Security was headed, “Warning letter regarding the future use of Air NZ Services” and said:
I am informed that on the 01 December 2018 you and your family attended the Nelson Koru Lounge. The Lounge staff advised that you and your family did not meet the Lounge terms and conditions of entry. However you and your family subsequently entered the lounge without permission. Upon entry, you and your family displayed loud and aggressive behaviour which was unacceptable, inappropriate and upsetting for our Air New Zealand staff and other passengers.
I remind you of the Lounge terms and conditions and the Air New Zealand conditions of carriage:
give further clarity to Lounge access availability, in order to access Koru membership benefits, all travel must be on Air New Zealand operated and ticketed flights, regardless of class of travel. On this occasion, as your travel is booked on a Singapore Airlines ticket, you and your family are not eligible for Lounge entry in Auckland when flying home to Nelson on 1st January.
Failure to comply, breach or non-acceptance of these conditions will result in you not being permitted to enter the Lounge, board a flight at the time of
check-in/boarding, being offloaded, and/or being banned entirely from flying on Air New Zealand services in the future.
The above commentary and conditions are without prejudice to any other rights Air New Zealand or its employees may have against you in relation to this matter.
[15] On 7 March 2019 the applicant sent an email to the respondent’s Chief Executive, Mr Christopher Luxon. In her letter she provided a detailed account of the events at the Koru Club Lounge, emphatically disputing that there was any justification for the warning letter sent to her on 21 December 2018. She also complained about the author of the warning letter and the conduct of the respondent’s staff involved in the events of 1 December. Andrew Leckie, Head of Regional Airports for Air New Zealand, responded to the applicant via email on 29 March 2019. In his letter, Mr Leckie said that without going into what had or had not occurred on 1 December, it was important to be clear that tickets issued by Singapore Airlines for travel both within New Zealand and internationally do not satisfy Air New Zealand’s requirements for entry to its Koru Club Lounges. He said:
…To reiterate the letter [of 21 December 2018] outlines our Lounge Terms and Conditions and Conditions of Carriage and as you are aware goes on to further say “Failure to comply, breach or non-acceptance of these conditions will result in you not being permitted to enter the lounge, board a flight at the time of check-in/boarding, being offloaded, and/or being banned entirely from flying on Air New Zealand’s services in the future”.
For complete clarity Air New Zealand welcomes you and your family’s continued custom and providing all of our Terms and Conditions and Conditions of Carriage are consistently met there will be no need to further communicate.
Kind regards,
[16] On 15 April 2019 the applicant made a formal request addressed to the respondent’s privacy officer for the correction of her personal information held by the respondent. On 9 May 2019 Senior Legal Counsel for Air New Zealand, Mr Hugh Roberts responded to the applicant’s personal information request. With his reply he attached a copy of a “Record Event” regarding the events of 1 December 2018 and a copy of the 4 December 2018 report prepared by the Passenger Services Manager.
[17] Then on 24 June 2019 the applicant, when using the respondent’s internet website in order to check-in for an early morning flight the following day from Nelson
to Wellington, was denied online access. This meant that she would be required to check-in in person at Nelson airport. That same day she wrote again to Mr Luxon. In this second letter she provided a detailed account of her travel on an Air New Zealand flight from Wellington to Nelson on 13 April 2019, and complained about the manner in which Air New Zealand’s check-in staff at Wellington had treated her. She complained that a dispute had arisen when she was waiting to check in, and that the staff member had been abusive and hostile towards her. She said that although the Air New Zealand staff member had been in tears, her distress appeared to be contrived. She said that when a team leader was called and attended, she had demanded that the applicant and her son produce personal identification which the applicant was unable to do. The applicant said that it appeared that she had been “blacklisted” by the respondent’s staff, and she described the conduct of Air New Zealand’s staff members towards her and her family members as being aggressive and hostile, and a deliberate attempt to set her family up for failure. She also accused an Air New Zealand staff member based at Nelson of embellishing her account of the incident, to the point of lying and describing her as being “on a venomous mission” against her. The applicant said that in the future when checking in for flights she would be recording all interactions between Air New Zealand staff, herself and her family.
[18] On 1 July 2019 Mr Roberts responded to the applicant’s email addressed to Mr Luxon of 24 June. He said:
Mr Luxon has asked me to respond to your email to him dated 24 June.
I have authority to deal with your complaint. Please direct all further correspondence to me.
Your email to Christopher Luxon is distasteful and insulting. We won’t respond to the content of that email.
Rather, we will deal with the substance of your complaint. We disagree that the personal information that we have disclosed is inaccurate or untrue. It reflects the views and opinions of our staff and the effect that your recent behaviour has had on them. It is clear from your email to Mr Luxon, that you don’t consider that you are in anyway [sic] responsible for the position that you now find yourself in and that you have no awareness of the effects of your behaviour.
Given the tone of your email, we have no confidence that your intimidatory and aggressive behaviour toward our staff won’t be repeated when you travel with us again.
While Air New Zealand will always endeavour to exceed our customer’s expectations, we are very clear that we have obligations to our staff and we will not tolerate ill treatment of them by any customer.
I have forwarded the email that you sent to Mr Luxon to our Group Security Team with a recommendation that they review your eligibility to access both the Koru Lounge and Air New Zealand operated flights.
If they elect to take further action, they will notify you directly.
[19] On 2 July 2019, the respondent’s Senior Manager of Group Resilience, Mr Giles Carter, wrote to the applicant advising that as a result of her “recent intimidatory and aggressive behaviours towards Air New Zealand staff” she would be banned for a period of 12 months from the date of the letter from travelling on Air New Zealand flights. At the time that the ban was imposed the applicant had booked and paid for a number of return trips from Nelson dated between 18 July 2019 and 12 December 2019. In addition, as of 2 July 2019, the applicant had a paid up Koru Club membership valid until 30 March 2020, and also had an accumulation of air points rewards.
[20] On 4 July 2019 the respondent refunded the amounts which had been paid by the applicant for those flights.
[21] The applicant says that, as a result of the respondent’s ban, on 18 and 19 July 2019 she was forced to drive approximately 13 hours to attend one of her son’s birthday celebrations in Invercargill.
[22] In her statement of claim the applicant alleges three causes of action: (i) breach of contract; (ii) breach of principle 7 of the Privacy Act 1993; and (iii) breaches of the Fair Trading Act 1986 by the manner in which the respondent treated her and her family as customers and failed to comply with the provisions of the Privacy Act.
Applicant’s Submissions
[23] Ms Grey for the applicant submits that her claim against the respondent involves a serious question to be tried, and that the balance of convenience and overall interests of justice are best served by the granting of interim orders directing the
respondent to provide travel services to the applicant pending final determination of her claim.
[24] Ms Grey submits that the airfares purchased by the applicant were issued and subject to Air New Zealand’s Conditions of Carriage which contains the terms of its contract for carriage of passengers. Ms Grey says that Article 7.1 of the Conditions of Carriage, entitled “Right to Refuse Carriage”, confers a discretion on the respondent to refuse carriage on one or more of the 12 grounds set out in 7.1, all being matters arising prior to a passenger boarding an aircraft. Counsel says that Article 11 deals with conduct occurring on board an aircraft such as may threaten or endanger an aircraft or its occupants during a flight. She submits that the provisions of Article 7.1.11, which refer to the respondent’s right to refuse carriage of a passenger where the respondent has previously notified the passenger in writing that it would not thereafter carry the passenger on its flights or those of its operators, can only be employed by the respondent to justify refusing to carry a passenger where one or other of the specifically described grounds and circumstances contained in Article 7.1.1 to
7.1.9 has occurred.
[25] Furthermore says Ms Grey, irrespective of whether a prior breach of any of those provisions has occurred, carriage can only be refused under Article 7.1 provided the respondent has exercised “reasonable discretion” in doing so. She submits that the respondent’s exercise of reasonable discretion requires it to satisfy a standard of objective reasonableness. She submits that satisfying the objective test of what is a reasonable exercise of discretion will depend on the circumstances and require all relevant considerations to be taken into account.
[26] Ms Grey further submits that the respondent’s exercise of reasonable discretion implicitly requires fairness and for the passenger to be accorded natural justice. She says that natural justice requires the passenger to be notified of any allegations and given an opportunity to be heard before a decision to refuse carriage is made. She submits that a decision made without complying with the requirements of natural justice, or based on error of fact or law, will inevitably be unreasonable and consequently be set aside.
[27] Ms Grey submits that Article 11 of the Conditions of Carriage, entitled “Conduct on Board Aircraft”, contains the grounds on which the respondent may remove a passenger from its aircraft or refuse to carry them in the future, by reason of their conduct on board an aircraft. Ms Grey submits that passengers such as the applicant who have booked and paid for their airfares do not expect their travel to be arbitrarily restricted nor to incur a ban unless such consequences were based on objectively reasonable and robust grounds. She submits that frequent travellers with Air New Zealand who pay for Koru Club Lounge membership have an expectation that they will be permitted to use those facilities and services whenever they travel with the respondent, and that they will be able to book future travel and use the Koru Lounge services throughout the currency of their Koru Club membership.
[28] In relation to the alleged breach of contract, Ms Grey submits that the respondent breached the contractual obligations it owed to the applicant pursuant to Article 7.1 by imposing the ban upon the applicant notwithstanding the applicant’s denial of any misconduct in relation to the events of 1 December 2018 in the Nelson Airport Koru Lounge.
[29] She says that the respondent’s decision to ban the applicant for a period of 12 months was not lawful, reasonable, procedurally fair or compliant with its contractual obligations pursuant to Article 7.1 because:
(a)It failed to act fairly and disregarded its obligation of according natural justice to the applicant. The breaches of natural justice included failing to provide the applicant with: specific notice about the process and possible outcomes including a ban; and the opportunity to be heard before a decision was made.
(b)It failed to act promptly during the period between 1 December 2018 and 2 July 2019 despite the applicant’s repeated requests for information which would have enabled her to know the respondent’s specific concerns about her conduct.
(c)It failed to exercise its discretion on an objectively reasonable basis prior to making the decision to impose a ban upon her. The applicant says that the decision to impose a ban was unreasonable as it was based on patently false allegations and without due consideration for the proportionality of a ban compared to the gravity of the conduct complained of.
(d)It purported to impose a one year ban upon the applicant despite the absence of a contractual provision for doing so in relation to conduct not occurring on board an aircraft. Article 11 governs conduct taking place on board an aircraft.
[30] Ms Grey submits that at this interim stage the Court is not required to and cannot resolve the conflicts of evidence as regards what took place during the applicant’s dealings with Air New Zealand staff prior to its decision to impose the ban. Further, she submits that the applicant is simply required to establish that she has an arguable case, and if so, whether the balance of convenience favours the granting of the interim relief sought. Nevertheless Ms Grey submits that the applicant’s evidence is comprehensive, coherent, detailed and is confirmed by her recordings of the most critical conversation she had with the respondent’s staff.
[31] As to the balance of convenience, Ms Grey submits that the ban has had and continues to have a significant adverse effect on the applicant, including on her legal work, family, and recreation. She says there were no documented security or other allegations regarding her conduct at Nelson Airport or otherwise until the respondent’s staff report following the 1 December 2018 misunderstanding at the Koru Lounge. The applicant says that the travel ban has seriously interfered with her ability to travel for professional purposes and to travel between Nelson and Invercargill and Dunedin to visit members of her family.
[32] Ms Grey submits that the obtaining of interim relief and reinstatement of the applicant’s ability to travel with the respondent will not dispose of the whole of the applicant’s claim but only that part of it which is most urgent. She says that the interim order sought does not resolve the issue of other contractual breaches by the respondent.
These include the termination of the applicant’s right to access the Koru Club Lounge during the period of the ban despite her membership being paid up to 30 March 2020. Nor does the interim order concern the respondent’s obligation to correct private information it holds regarding the applicant.
[33] As regards the application for transfer of venue for the substantive hearing of the proceeding to Nelson, Ms Grey submits that many of the events on which the claim is based arose in Nelson. Further, she notes that both the applicant and her counsel reside in Nelson, as do several key Air New Zealand staff likely to be summonsed as witnesses.
[34] Ms Grey says that as the respondent is a commercial airline, it is far more expedient for it to fly counsel and witnesses around the country to attend court hearings than it is for the applicant. Moreover, the applicant is unable to fly directly from Nelson to Auckland to attend court; the ban bars any present travel with Air New Zealand, and the alternative air carrier, Jetstar, has discontinued its Nelson service.
[35] Ms Grey submits that in these circumstances it is in the interests of justice that the proceeding be transferred to the High Court at Nelson.
The Respondent’s Submissions
[36] Mr Ladd for the respondent submits that the mandatory interim injunction sought by the applicant will determine the substantive issue concerning the respondent’s travel ban. He notes that the applicant’s substantive claim will not be heard and determined before the ban expires on 2 July 2020, and thereafter provided the applicant adheres to the respondent’s Conditions of Carriage she will be able to resume travelling on Air New Zealand flights, rendering her application for interim relief redundant.
[37] The respondent submits that given that the mandatory interim injunction will effectively determine the issue in dispute in the proceeding, the applicant must establish her arguable case such as to provide the Court with a high degree of assurance that it is right that it be granted.
[38] Counsel submits that the respondent has no legal obligation to carry anyone on its flights, including the applicant.
[39] The respondent says that it is not a monopoly supplier of essential services. As such, it bears no obligation to carry the applicant as a passenger. In the absence of any legal basis requiring Air New Zealand to carry the applicant her applicant must fail.
[40] Mr Ladd further submits that the exercise of reasonable discretion in a contractual context does not import the natural justice considerations claimed by the applicant to: specify the grounds on which it relied to impose the ban; to provide reasons to the applicant; to provide an opportunity to the applicant to be heard before reaching a decision; acting unfairly by imposing the ban on the applicant as the representative member of her family who has challenged the respondent.
[41] Mr Ladd further submits that the applicant has not and cannot establish an arguable case based on breach of contract. He says that in the absence of an arguable case of breach of contract, the applicant is only left with a damages claim related to past cancelled flights.
[42] The respondent submits that Article 7.1.11 which provides that Air New Zealand may refuse to carry a passenger where it has previously notified her or him in writing that they would not be carried, is a stand-alone provision that does not depend on any of the other grounds for refusing to carry passengers set out in Article 7.1.
[43] As regards the exercise of the reasonable discretion provision of Article 7.1, counsel submits that the discretion must be exercised in good faith, and not in a manner that is arbitrary, capricious, or unreasonable in the public law sense of being a decision that no reasonable decision-maker could make. However, in the contractual context here, it is not for the Court to substitute itself for the contractual decision maker.
[44] Mr Ladd submits that the evidence clearly establishes that the respondent exercised its discretion in good faith. Further, it has not been shown to have made the decision to refuse carriage of the applicant capriciously or unreasonably. He says that the imposition of the ban followed a substantial history of incidents involving the
applicant which included her engaging in bullying and intimidatory behaviour to members of the respondent’s staff, and which continued despite the respondent giving her a written warning.
[45] Mr Ladd also notes that in dealing with the incidents and staff complaints about the applicant’s behaviour, the respondent proceeded in accordance with its standard operating procedure for dealing with such matters. This procedure involved a review of the relevant statements and material by senior Air New Zealand staff who have extensive security qualifications and experience, and who were independent of those staff members directly involved in the incidents. He also notes that the applicant’s correspondence, containing her detailed account of events and her contentions, was received and considered by the senior staff responsible for security before the decision was made to impose the ban.
[46] The respondent says that its safety and security standards and procedures are of critical importance. Mr Ladd notes that, as an airline operator, Air New Zealand is subject to the requirements of the Civil Aviation Act 1990, and associated rules and regulations. These statutory requirements and rules import New Zealand’s international obligations under the Chicago Convention on International Civil Aviation, imposing stringent safety and security obligations on Air New Zealand.
[47] Mr Ladd also notes that, as an employer, Air New Zealand is subject to the provisions of the Health and Safety at Work Act 2015. In particular, it has a duty to ensure the physical and mental health and safety of its employees while they are at work.4
[48] Mr Ladd submits that on the basis of the respondent’s detailed evidence, it is clear that the respondent acted in good faith to protect its staff and passengers using its air services. He submits that it is also clear that the respondent made its decision after following a reasonable process and that it had a substantial and reasonable basis for the decision to impose the 12 month ban. He says that in making the decision the respondent exercised its contractual discretion to prevent the applicant from travelling on her booked flights in accordance with the terms of carriage. Mr Ladd submits that
4 Health and Safety at Work Act 2015, ss 36(1)(a) and 16.
the respondent had an entirely reasonable basis for refusing to carry the applicant as a passenger for the duration of the 12 month ban.
[49] Turning to the issue of the balance of convenience, Mr Ladd notes that the test requires the Court to weigh the harm to the applicant from refusing interim relief, against the harm to Air New Zealand resulting from granting the interim order. He submits that the evidence presented by the applicant falls well short of establishing that she will suffer any significant or irreparable harm due to the ban.
[50] He says that the applicant has failed to: provide details of the nature and extent of legal work she does outside Nelson; explain whether she has lost any work opportunities as a result of being unable to fly on Air New Zealand; nor detail alternative arrangements she has made to travel and work around the ban. Counsel notes that the applicant says that the ban has resulted in her being unable to attend two continuing legal education courses. She also asserts, in general terms, inconvenience and stress caused by the increased travel times and cost which she now incurs having, for example, to drive to family events.
[51] Mr Ladd says that there is an alternative air carrier, Sounds Air, which operates to and from Nelson. He notes that the applicant has not explained why she cannot fly with Sounds Air from Nelson to Wellington to connect with the Jetstar network beyond saying that the Sounds Air aeroplanes are small and that their passengers have a 15 kilogram baggage limit. He submits that the applicant’s evidence regarding the effect of being unable to fly with Air New Zealand amounts to mere inconvenience.
[52] Mr Ladd says that if the applicant’s claim succeeds, she can be compensated for any losses incurred and shown to be consequences of a breach of contract, by an award of damages.
[53] Addressing the issue of balance of convenience, Mr Ladd says that a mandatory interim order requiring the respondent to carry the applicant on its aircraft pending the hearing and determination of her claim would cause a risk of further harm and distress to its staff members located at Nelson Airport and elsewhere who would be required to deal with the applicant. He says that Air New Zealand’s ability to
manage abusive customers is an important aspect of its ability to discharge its statutory obligations relating to the public’s use of its air services and to provide its staff with a safe working environment. He says that the granting of a mandatory injunction would undermine its ability to discharge these obligations. Mr Ladd says that the fact that much of the applicant’s unacceptable behaviour occurred after receipt of the warning letter indicates that she is likely to repeat that sort of conduct.
[54] As regards the application for transfer of the proceeding to Nelson, the respondent says that the proceeding was correctly filed in the High Court at Auckland under rule 5.1(1)(a) of the High Court Rules 2016. Further, that the Nelson Registry is not more convenient to all parties for the purposes of rule 5.1(5). Mr Ladd notes that the respondent’s staff responsible for the management and carriage of the proceeding are based in Auckland, and the respondent’s witnesses are based in Auckland, Wellington and Nelson. Mr Ladd says that should the matter proceed to a substantive hearing, the respondent may need to call additional witnesses who are not based in Nelson, and he notes that a hearing date for the substantive hearing is more likely to be available earlier in the Court at Auckland than in Nelson.
Discussion
ALaw relating to interim mandatory injunctions
[55] Arnold J summarised the principles governing interim injunctions in NZ Tax Refunds v Brooks Homes Ltd:5
The applicant must first establish that there is a serious question to be tried or, put another way, that the claim is not vexatious or frivolous. Next, the balance of convenience must be considered. This requires consideration of the impact on the parties of the granting of, and the refusal to grant, an order. Finally, an assessment of the overall justice of the position is required as a check.
[56] As Palmer J expressed in Clode v Oliphant, “[a]n interim injunction is usually granted for the purpose of preserving the status quo pending trial of the substantive proceeding.”6 Here, the applicant seeks a mandatory interim injunction directing the
5 NZ Tax Refunds Ltd v Brooks Homes Ltd [2013] NZCA 90, (2013) TCLR 531 at [12] (footnotes omitted). See also: American Cyanamid Co v Ethicon Ltd [1975] AC 396, [1975] 1 All ER 504 (HL).
6 Clode v Oliphant [2018] NZHC 1442 at [21].
respondent to reinstate her cancelled bookings and forthwith accept her future bookings. She seeks to disrupt the status quo. Her application will be subject to the same test as one seeking an interim prohibitory injunction, however it has been observed that it will be a rare application for an interim mandatory injunction that “will withstand the scrutiny of that test”.7
BInterim relief as final disposition of the proceedings
[57] The 12 month ban is due to expire in early July 2020 and there will be an inevitable delay in the obtaining of a substantive fixture for the determination of the applicant’s claim. It is thus clear that a grant of interim relief would effectively operate as a final disposition of the applicant’s claim.
[58] Where a mandatory interim order will have the effect of a final order, the Court should adopt a more robust approach to its assessment of the merits of an applicant’s case than it would otherwise.8 The application is still subject to the same underlying legal test as that applied to applications for any standard interim injunction, however in assessing whether the application meets this test, the Court will apply additional scrutiny.9 Before granting a mandatory interlocutory injunction, the Court will consider whether the cogency of the applicant’s case is such that the Court has a substantial degree of assurance that at trial it would appear that the interim injunction had rightly been granted.10
CA Serious Question to be Tried?
[59] The fundamental issue is whether the applicant has established that her contractual claim against the respondent involves a serious question to be tried. It turns on whether there is any arguable contractual basis obliging the respondent to provide the applicant with its flight services. A broader common law basis relating to the provision of essential services by monopoly suppliers11 is not applicable to the
7 Pilkington v Fidelity Life Assurance Co Ltd HC Wellington CIV-2007-485-2270, 14 April 2010 at [18], as cited in Clode v Oliphant [2018] NZHC 1442 at [21].
8 McKay Electrical (Whangarei) Ltd v Hinton [1996] 1 ERNZ 501 (CA) at 507; Wilfred v Gan
[2013] NZCA 457 at [21].
9 Clode v Oliphant [2018] NZHC 1442 at [23].
10 Precast NZ Ltd v Anystep Ltd [2016] NZHC 377 at [43]-[44].
11 Vector Limited v Transpower New Zealand Limited [1999] 3 NZLR 646 at [51].
applicant’s claim. The respondent is not a monopoly supplier of essential services. Its Koru Lounge and departure gates are not the modern day “public [wharves], unto which all persons…must come” or from which all persons must depart.12 I will therefore consider only the contractual basis for the claim.
1The terms of the contract between the applicant and the respondent
[60] The applicant alleges that the respondent has breached the terms of the contract of carriage. For the applicant to establish that she has an arguable case here, the Court must be satisfied that the applicant has shown there to be an arguable factual and legal foundation for her claim that the respondent acted in breach of its contract with her in imposing the ban. To determine this issue, it is necessary to first consider the relevant provisions of the Air New Zealand Conditions of Carriage.
[61] The terms of contract established between a passenger and the respondent when a ticket is purchased are set out in the “AIR NEW ZEALAND CONDITIONS OF CARRIAGE”. The term “TICKET” is defined in the Conditions of Carriage as:
"TICKET" means either the document entitled "Passenger Ticket and Baggage Check" or the Electronic Ticket, in each case issued by us or on our behalf, and includes these Conditions, Important Notices and Coupons.
[62] Article 7 is entitled “REFUSAL OF CARRIAGE AND SPECIAL ASSISTANCE”. Article 7.1 provides:
RIGHT TO REFUSE CARRIAGE
We and/or Our Operators may at any time prior to boarding refuse to carry you or your Baggage if, in the exercise of our reasonable discretion, we decide or establish any of the following:
7.1.1such action is necessary for reasons of safety;
7.1.2such action is necessary in order to comply with any applicable laws, regulations, or orders of any state or country to be flown from, into or over;
7.1.3your conduct, age or mental or physical state including your impairment from alcohol or drugs, is such as to require special assistance, cause discomfort or make yourself objectionable to other
12 Lord Hale’s ‘Treatise de Portibus Maris’, as cited in Vector Limited v Transpower New Zealand Limited [1999] 3 NZLR 646 at [29].
passengers or involve any hazard or risk to yourself or to other persons or to property;
7.1.4such action is necessary because you have failed to observe any of our instructions including non compliance with these Conditions in relation to carriage of dangerous or prohibited goods;
7.1.5you have refused to submit to a security check;
7.1.6you have not paid the applicable fare, charges or taxes for your current or any previous carriage with us;
7.1.7you do not appear to have valid travel documents; you may seek to enter a country through which you are in transit; you may destroy your travel documents during flight; you refuse to surrender your travel documents to the flight crew, against receipt, when so requested;
7.1.8the Ticket you present has been acquired unlawfully or has been purchased from an entity other than us or our Authorised Agent; has been reported as being lost or stolen; is a counterfeit; or contains a Flight Coupon that has been altered by anyone other than us or our Authorised Agent, or has been mutilated;
7.1.9you cannot prove that you are the person named in the Ticket;
7.1.10you have previously committed an act or omission of the type referred to in Article 7.1 on a previous flight or at any location connected with airline services including airports and Ticket selling offices, and we have reason to believe that such act or omission may be repeated on a flight operated by us or Our Operators;
7.1.11we have notified you in writing that we would not, after the date of such notice, carry you on our flights or those of Our Operators. In this circumstance you will be entitled to a refund, less any reasonable service fee to cover our administration costs;
7.1.12you are wearing or otherwise displaying gang patches, insignia, signs or symbols, or other attire which we deem offensive or believe will cause discomfort to other passengers and you have refused to remove such offensive items.
[63] Article 11 is entitled “CONDUCT ON BOARD AIRCRAFT”. Article 11.1 provides:
GENERAL
If in our opinion you conduct yourself on board the aircraft so as to endanger the aircraft or any person or property on board, or obstruct the crew in the performance of their duties, or fail to comply with any instructions of the crew, including but not limited to those with respect to smoking, alcohol or drug consumption, or behave in a manner which causes or is likely to cause discomfort, inconvenience, damage or injury to other passengers, the crew or any property, including the aircraft, we may take such measures as we deem necessary to prevent continuation of such conduct, including restraint. You
may be off-loaded at any point, prosecuted for offences committed on board the aircraft and we may decide to refuse to carry you at any time in the future.
[64] It is not disputed that when the respondent imposed the carriage ban on the applicant it did so relying upon Article 7.1.11. It is also not disputed that the respondent had previously notified the applicant in writing that it would not carry her on its flights or those of its operators for a period of 12 months commencing 2 July 2019.
[65] The provisions of Article 7.1.1 – 7.1.12 set out 12 circumstances or grounds upon which the respondent may decide to exercise its discretion to refuse to carry a customer on its aircraft. The 12 grounds are disjunctive. Article 7.1.11 cannot be interpreted as requiring the prior occurrence of one of the other matters described in
7.1 as a basis upon which written notice under 7.1.11 can be given. Article 7.1.11 is not like Articles 7.1.4 and 7.1.10, which relate to breaches of other Articles. These Articles specify as their respective triggers “non compliance with these Conditions” and “[previous commission] of an act or omission of the type referred to in Article 7.1”. Article 7.1.11 includes no such prerequisite.
[66] In my view, any pre-boarding or on-board conduct which causes the respondent to have legitimate concerns, about whether a customer will comply with its conditions of carriage, entitles the respondent to give written notice to the customer under Article 7.1.11, provided that the decision to refuse carriage is made pursuant to the exercise of reasonable discretion. Or put another way, such a decision to refuse carriage will be lawful so long as it is not unreasonable in the sense that it is irrational, capricious, or unreasonable in the public law sense of being a decision that no reasonable decisionmaker could make.
2The decision to impose the ban as an exercise of reasonable discretion
[67] The applicant construes the exercise of reasonable discretion as requiring the respondent to: take all considerations into account; notify the passenger of all matters it considers relevant to the making of the decision; and give the passenger an opportunity to be heard before reaching a decision not to carry that person. As I have said, the 12 grounds upon which the respondent may in its reasonable discretion decide
to refuse carriage are disjunctive. For the applicant to succeed in her claim she must establish that the respondent failed to exercise reasonable discretion in deciding not to carry the applicant on its flights following the imposition of the 12 month ban.
[68] The parameters of “reasonable discretion” in a contractual context have been summarised by Mander J:13
Commonwealth Courts are willing to intervene in the exercise of a prima facie unfettered discretion. Such intervention will ordinarily be premised on an implied term to constrain the exercise of the discretion so as to give effect to the reasonable expectations of the parties. The exercise of contractual discretion will be open to challenge where it can be established that it was not exercised honestly in good faith; or not exercised for the purpose(s) for which it was conferred; or when exercised in a capricious or arbitrary manner; or otherwise falls into the category of what would be considered Wednesbury unreasonableness.
[69] The law does not require the outcome of the exercise of reasonable discretion to also be objectively reasonable.14
3Good faith, reasonableness, and the absence of arbitrariness or capriciousness
[70] While the Court is unable to resolve any disputed factual issues at this preliminary and interim stage, it can give weight to factual matters where there is no dispute or where the evidence is obviously cogent and reliable.
[71] The applicant has filed five affidavits in support of her application and in reply to the affidavits filed by the respondent in opposition. In her affidavits, the applicant has set out her account of the events occurring at Nelson Airport on 1 December 2018, and of her subsequent communications with the respondent prior to and after being advised of the ban imposed on her. The applicant has also exhibited transcripts of the recordings she made of her conversations with the respondent’s staff members during 2019. She says that she has been a customer of Air New Zealand for almost 40 years, and she disputes that the respondent has any proper basis to impose a ban. She says that she cannot comprehend how the respondent’s discretion to impose a severe 12 month ban can be supported by what she views as unsubstantiated and disputed
13 C & S Kelly Properties Ltd v Earthquake Commission [2015] NZHC 1690 at [73], as cited in L & M Coal Holdings Ltd v Bathurst Resources Ltd [2018] NZHC 2127 at [198].
14 Briaganza v BP Shipping Ltd [2015] UKSC 17 1 WLR 1661 at [30].
allegations against her and her family that had nothing to do with flight security. She also asserts that the ban could not reasonably be imposed seven months after the events which the respondent asserts warranted the imposition of a ban.
[72] The applicant says that the ban has and will continue to have significant ramifications for her personally and professionally because Nelson offers limited options for air travel by other air carriers. She says that prior to the ban she had purchased tickets for a number of flights with the respondent, and was unable to use them. The applicant says that one of her sons resides in Invercargill and that Air New Zealand is the only airline serving that city. She says that as a consequence of the ban she has been unable to fly to Christchurch to attend family functions and will be unable to fly to Dunedin to visit her three sons who are studying there. The applicant says that the ban has affected her professionally as she has not been able to travel to attend continuing professional development courses as she would normally do. She says that one effect of being unable to travel with the respondent will be to put severe limitations on her work as an independent workplace investigator, which is a role she has been developing and for which she has invested a significant sum to obtain the necessary qualifications. She further says that by the end of the ban she will have lost her accrued frequent flying status and benefits with the respondent, as well as the benefit of her paid Koru Club membership. She recognises that she could travel to Wellington to connect with Jetstar flights. However, she says that those flights are typically mid- morning to mid-afternoon and are therefore not convenient by reason of the increased time required for travel which sometimes necessitates overnight stays when travelling to other centres.
[73] The applicant says that she does not consider herself to present any security risk when travelling on the respondent’s air services and similarly no risk to the respondent’s staff when travelling on the respondent’s air services in future. She says that her confidence that future travel with the respondent will be undertaken in an orderly manner is corroborated by the respondent’s willingness to resume accepting her bookings for flights once the ban has expired.
[74] In opposition, the respondent has also filed affidavits sworn by three staff members based at Nelson Airport and one based at Wellington Airport. In their
affidavits these staff set out accounts of their dealings with the applicant. The two staff members involved in the events in the Koru Lounge at Nelson Airport on 1 December 2018 describe the applicant’s conduct and language, as well as the abuse that was directed at them by accompanying members of the applicant’s family. The Koru Lounge hostess on duty that day says that her involvement with the applicant left her confidence shaken. She says that whenever she saw the applicant following the incident, she felt panicked and fortunate to be able to avoid dealing with her. She says that some eight months after the events she is getting over the worst of the effects it had on her. She describes the news of the ban as the best news ever; she greeted it with a huge sense of relief for herself and her colleagues. She says that the ban has had a positive impact on staff morale and that it is good to know that senior people within Air New Zealand are looking out for her and her fellow staff members. The second staff member involved in the events of 1 December confirms the account of her colleague in her affidavit, and of being reassured by the respondent taking action to back up their staff. She also speaks of being relieved by not having to deal with the applicant because of the ban.
[75] In another affidavit, a member of the respondent’s staff who is a Team Manager based at Wellington Airport describes an incident involving the applicant that occurred at the Air New Zealand check-in counter on 14 April 2019. She says she was called in when another staff member who had been attending to the applicant was reduced to tears. She says the applicant was talking in an aggressive tone and several other members of the applicant’s family were crowding around the staff member who was clearly distressed. The Team Leader describes the applicant criticising the staff member serving her, calling the staff member as “pathetic” and claiming that the staff member had “put on the tears”. The Team Leader says that she immediately recognised that the other staff member was in no state to continue working, so she took over the counter to deal with the applicant and her family. She says that when she asked the applicant for identification, the applicant initially refused to provide any, later throwing her identification at her. The Team Leader says that in her 24 years as an Air New Zealand employee, the applicant’s bullying behaviour is some of the most extreme she has encountered. She says that the incident caused the staff member initially dealing with the applicant to lose her confidence; for months following the incident the staff member was afraid to work on her own at the check-in counter, and
was reassigned to other duties. The Team Leader also says that her staff reacted positively when told of the ban, and are encouraged that, by imposing the ban, the respondent has signalled that it will not tolerate its staff being abused by customers. She says that she and her staff feel that they have the respondent’s backing and were the ban to be lifted by the Court, staff morale would drop from the current high to low.
[76] Another of the affidavits filed by the respondent is sworn by a staff member employed as a Customer Service Agent based at Nelson Airport. In her affidavit she describes her dealings with the applicant at the check-in counter on 25 June 2019. She said that when she requested the applicant to produce some personal identification as required by the check-in system, the applicant immediately became upset and defensive, asking why she was being singled out. The staff member says that the applicant then complained about her treatment and referred extensively to the Air New Zealand Passenger Services Manager at Nelson Airport, who she said was responsible for how she was being treated. It appeared to the staff member that the applicant was focussed on the Passenger Services Manager and “had it in for [her].” When the incident was reported to the Passenger Services Manager she became distraught and upset.
[77] The respondent also filed affidavits sworn by its Senior Legal Counsel, Hugh Roberts, and by its Senior Manager of Group Resilience, Giles Carter.
[78] Prior to joining Air New Zealand in 2016, Mr Carter had almost 25 years of experience in security and operations in both public and private sector positions including with the British Army, Australian Defence Force as a senior operations manager, and as a senior operations manager and security manager working for an oil and gas field services company in Iraq. As Senior Manager of Group Resilience at Air New Zealand, he is responsible for operational and corporate security. Mr Carter says that as part of its commitment to providing its employees with a safe working environment, the respondent has adopted a “People, Safety and Working Policy”, the intent of which includes:
We will continuously strive to eliminate serious harm and ensure as far as is reasonably practicable the health and safety of our customers, employees, contractors, and visitors in all our endeavours.
[79] Mr Carter has exhibited the respondent’s Group Security Watch List Process Standard Operating Procedure document (the Watch List SOP), which he says was developed to provide a robust structure and consistency for the respondent’s treatment of unruly passengers. The Watch List SOP sets out the process by which the respondent and its staff are required to deal with any incidents considered to involve unruly, disruptive or dangerous conduct by customers. The process requires employees to report any conduct which they consider may be a threat to the safety of the respondent’s aircraft, staff, passengers or facilities. The reporting requires a written Operational Safety Report (OSR). The OSR is then referred to the Group Security section for investigation by a security advisor who collates information relating to the reported incident. Once the information has been collected, analysed and evaluated, a risk assessment is conducted to determine the severity of the incident and the appropriate response. The OSR provides four potential outcomes: no further action; information only; warning letter; ban. Mr Carter says that any decision to impose an information only, warning letter, or ban outcome is first subject to peer review within the Group Security section. Further, that the recommended outcome must be approved by the Group Security Manager, who must also personally approve and sign any warning or ban letter. In taking that step, the Group Security Manager consults with other relevant stakeholders, including the respondent’s legal counsel.
[80] In his affidavit Mr Carter describes how staff reported the incident involving the applicant in the Koru Lounge at Nelson Airport on 1 December 2018 in accordance with the OSR and how the incident was thereafter investigated, documented and assessed. This process led to the issue of the warning letter sent to the applicant on 21 December 2018.
[81] Mr Carter also refers to the applicant’s conduct after the warning letter had been sent to her. These further incidents are said to have occurred:
(a)On 1 January 2019 at the Koru Lounge at Auckland Airport, the applicant and her family arrived back in New Zealand from India. Her conduct resulted in the preparation of a staff report which was sent to Group Security.
(b)On 27 or 28 January 2019, and on 21 February 2019, the applicant spoke to staff at Nelson Airport regarding the events of 1 December 2018. This resulted in the preparation of another OSR for Group Security. (It was resolved that no further action would be taken).
(c)The applicant wrote letters to the respondent’s Chief Executive, dated 7 March and 24 June 2019.
(d)A staff member attended the applicant at Wellington Airport on 25 June 2019. The staff member submitted an OSR. The OSR investigation concluded that the applicant’s behaviour in dealing with the staff member was intimidating, threatening and abusive. This assessment found that the applicant had engaged in sustained intimidation and bullying using aggressive behaviour which caused significant distress for staff. The assessment further found that the applicant had not accepted any responsibility for her actions and that she had a history of similar conduct. The assessment recommended that, as the applicant had not adhered to the respondent’s conditions of carriage, a one year ban should be imposed.
[82] Mr Carter says that he reviewed the assessment and discussed it and the recommended ban with his Group Security Manager, the Airport Manager for Nelson, and the respondent’s Head of Regional Airports. The consensus was that the warning letter sent to the applicant in December 2018 had not had its desired effect. On the contrary, the applicant had demonstrated a complete disregard for the letter. It appeared that there had been a deterioration in her behaviour and treatment of staff, her hostility intensifying in a focus on a specific staff member.
[83]Mr Carter says:
In my judgment and in the judgment [sic] of other security professionals in the Group Security function, the persistent and escalating nature of Ms Sharma’s intimidation and bullying almost immediately after the warning letter had been issued elevated that behaviour squarely into the major severity category. The integrity of Air New Zealand’s workplace had been breached and the welfare and operational capability of staff had been affected. A ban was therefore the only response available under the Decision Support Matrix
and the Watch List SOP. No other response would meet Air New Zealand’s security standards or its obligations to provide staff with a safe and secure working environment.
[84] The affidavit evidence filed by the respondent comprehensively establishes that its decision to impose the ban was reached following a process of information gathering, assessment, and review. That process commenced in December 2018 immediately following the events at the Nelson Airport Koru Lounge when the respondent received and considered the reports from its staff which set out their accounts of their dealings with the applicant. By that process, the respondent then sent a formal, written warning to the applicant about the possible consequences of her behaviour. Those consequences included denial of access to the Koru Lounge and being banned from flying on Air New Zealand’s services if her unacceptable conduct was repeated.
[85] The respondent’s process provided the applicant with an opportunity to comment on and present her own account of her dealings with Air New Zealand’s staff. As I have noted, following her receipt of the warning letter, the applicant wrote two detailed letters to Air New Zealand’s CEO. Further in separate correspondence, she requested and received copies of the respondent’s staff reports regarding their dealings with her. She thereby had the information on which Air New Zealand was basing its decisions.
[86] It is also clear that the respondent’s senior staff considered the applicant’s account and explanation of her dealings with Air New Zealand. Having done so, the respondent’s senior staff confirmed the warning that any further conduct of the applicant involving a breach of its Terms and Conditions and Conditions of Carriage would result in her not being permitted to enter the Lounge and being banned entirely from flying on the respondent’s services in the future. While the respondent made its position quite clear to the applicant, it nevertheless also made it clear to her that provided she complied with the respondent’s Lounge Terms and Conditions and Conditions of Carriage, she and her family would be able to continue to use its services. In the email sent by the respondent’s Head of Regional Airports, Mr Leckie, to the applicant on 29 March 2019, the respondent advised the applicant that Air New Zealand welcomed her and her family’s continued custom, and noted that there would
be no need for further communication from her or to her, provided that all of the respondent’s terms of conditions of carriage were consistently met.
[87] I find that the evidence in the respondent’s affidavits establishes that its process was thorough. The respondent gathered the relevant information, and was careful and measured in assessing and considering that information. Moreover, it is also clear that its approach and attitude towards the applicant was constructive throughout, and that the respondent sought to preserve its relationship with the applicant. It was only after she continued, despite the warning letter, to engage in what the respondent considered was unacceptable treatment of its staff, as well as indicating in her correspondence that she did not intend to desist, that the respondent finally made the decision to impose the ban. In subsequent correspondence with the applicant through her counsel, the respondent advised that at the end of the 12 month period she would be free to use the respondent’s air services once again.
[88] The fact the ban was imposed for a finite term of 12 months, and that the applicant would thereafter be welcome to resume using the respondent’s air services, is in my view, wholly inconsistent with the applicant’s allegation that the ban was imposed irrationally, capriciously, maliciously or unreasonably. Having regard to the respondent’s legal obligations to keep its passengers and staff safe and the material upon which the respondent based its decision to impose the ban, there are simply no grounds upon which the respondent’s decision could be considered to lack sufficient justification or to have been made other than in accordance with the exercise of its reasonable discretion.
[89] As the Court’s decision on this application for interim relief will operate to determine the applicant’s substantive claim, I have examined the evidence contained in the affidavits filed both in support and opposition in more detail than would ordinarily be required at a preliminary stage of proceedings when considering an application for interim relief. While it is not possible to determine any disputed facts at this stage, it is appropriate to take account of evidence that is indisputable. Here the respondent has presented evidence and produced exhibits which prove that it has a policy and procedure for dealing with staff reports of any bad behaviour by the airline’s customers. The evidence appearing by the respondent’s affidavits also clearly
establishes that the respondent and its staff followed the procedure described, and that the decision to impose the ban on the applicant was arrived at after the procedure had been followed and applied in good faith. Conversely, there is no cogent evidence to support the applicant’s allegation that the respondent’s decision to impose the ban was unreasonable, irrational, arbitrary, malicious, or capricious.
[90] I accordingly find that the applicant has not established that she has an arguable case to support her claim that the respondent has acted in breach of contract by imposing the ban without having exercised reasonable discretion in deciding to do so. That being the case, the applicant has failed to establish the first pre-requisite for obtaining interim relief, and her application for a mandatory injunction requiring the respondent to provide her with air travel services pending determination of her claim must fail.
Balance of Convenience
[91] I shall nevertheless also consider and determine the issue of balance of convenience. Denial of access to the respondent’s air services causes the applicant inconvenience as there is currently no other provider offering direct flights within New Zealand from Nelson. The applicant is however able to use the services of Sounds Air to travel to Wellington where she can connect with the Jetstar network. While the applicant may not favour travelling on Sounds Air by reason of smaller baggage allowances and aircraft sizes than the respondent’s, those considerations do not prevent her from travelling by air to Wellington. I also consider that the duration of the ban and the remaining time until expiry are relevant considerations as regards the balance of convenience. Making alternative travel arrangements rather than travelling on Air New Zealand until the ban expires in early July 2020, is not in my view a significant inconvenience to the applicant.
[92] On the other hand, were the respondent required to provide air services to the applicant during the remainder of the duration of the ban, its air terminal staff at Nelson particularly, but also at Wellington and elsewhere, would be required to engage with the applicant. They would risk confrontations with the applicant involving the kind of behaviour that the respondent has found to be unacceptable. The measures which it
has taken to protect its staff would cease to be of any effect, and it would need to employ other measures to fulfil its obligations under the Health and Safety at Work Act 2015.
[93] A mandatory injunction, requiring the respondent to provide the applicant with air travel while awaiting the Court’s determination of the merits of her claim, would also frustrate the respondent’s efforts to uphold the standards of behaviour set out in its Conditions of Carriage. These Conditions of Carriage are there for the protection of its passengers. The maintenance of safety standards necessarily requires the respondent to be able act promptly whenever it encounters behaviour or circumstances that breach its Conditions of Carriage. The respondent’s maintenance of standards of its service to other customers, requires it to have regard to the effect of any unacceptable behaviour by a customer on other users of its services. A mandatory injunction here would frustrate the measures the respondent has taken to uphold its standards as embodied in its conditions of carriage pending determination of the applicant’s claim. In my view, a mandatory injunction which operated to thwart the respondent’s measures taken to uphold its standards in the interests of its staff and other customers would amount to a significant interference with how it goes about discharging its statutory duties as an air carrier and as an employer.
[94] Weighing the competing interests, I find that the balance of convenience in this case strongly favours the respondent, and not making an order which would remove the ban it has imposed on the applicant pending determination of the applicant’s claim. Furthermore, should the applicant succeed in establishing her claim, any loss caused by a breach of contract can be adequately compensated by way of damages.
The Overall Justice of the Position
[95] For the reasons canvassed above, it is clear that upholding the ban is a just outcome.
Application for Transfer of Proceeding to Nelson Registry
[96] The applicant’s proceeding was correctly filed in the Auckland Registry. Rule 5.1(1)(a) of the High Court Rules 2016 provides that where the proceeding names a
sole defendant, the proper registry for filing the proceeding is that nearest the defendant’s principal place of business. The respondent’s principal place of business is Auckland where it is headquartered. The respondent’s senior staff responsible for the conduct of the proceeding and likely to be witnesses are based in Auckland. While other members of the respondent’s staff who are likely to be called as witnesses are based in Nelson and Wellington, they will be readily available to travel to Auckland for the substantive hearing of the applicant’s claim.
[97] The applicant resides in Nelson and, as she has demonstrated by travelling to Auckland for the hearing of this interim application, she is well able to travel to Auckland to attend the substantive trial.
[98] Moreover, I agree with the submission made for the respondent that as the substantive hearing is likely to take place after the expiry of the ban, the applicant will then be able to use the respondent’s air service to travel directly between Nelson and Auckland. In those circumstances she will be in no different position to any other litigant who is required by the High Court Rules 2016 to commence their proceeding in the court located nearest to the defendant’s principal place of residence or business.
[99] In my view there are no compelling or sufficient grounds for making an order to transfer the proceeding to Nelson. The application is accordingly declined.
Result
[100] The applicant’s application for a mandatory interim injunction directing the respondent to provide her with air services is dismissed.
[101] The application for an order transferring the proceeding to the Nelson Registry is dismissed.
[102] The respondent, having succeeded in relation to both of the applications, is entitled to an award of costs and to recover its reasonable disbursements. The respondent is to file and serve a memorandum setting out its claim for costs and disbursements within ten working days from the date of delivery of this judgment. The applicant is to file and serve a memorandum in reply within a further period of ten
working days following receipt of service of the respondent’s memorandum. The costs memoranda of the parties are not to exceed five pages in length apart from any annexed schedule or annexures relating to disbursements.
Paul Davison J
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