Siemens (NZ) Limited v Stonehill Trustee Limited

[2016] NZHC 1927

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-1449 [2016] NZHC 1927

BETWEEN

SIEMENS (NZ) LIMITED

Plaintiff

AND

STONEHILL TRUSTEE LIMITED First Defendant

GENERAL ELECTRIC INTERNATIONAL INC Second Defendant

CIV-2016-404-1450

BETWEEN  SIEMENS (NZ) LIMITED Applicant

ANDCONTACT ENERGY LIMITED Respondent

Hearing:

On the papers

Counsel:

M F Mabbett for Plaintiff/Applicant

I Hikaka and S Y M Chew for First Defendant B J Upton and E C Gray for Second Defendant No appearance for Respondent

Judgment:

19 August 2016

JUDGMENT (NO 2) OF WHATA J

This judgment was delivered by me on 19 August 2016 at 1.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Russell McVeagh, Auckland

Lee Salmon Long, Auckland

Simpson Grierson, Auckland

Buddle Findlay, Wellington

Date: ………………………

SIEMENS (NZ) LIMITED v STONEHILL TRUSTEE LIMITED [2016] NZHC 1927 [19 August 2016]

[1]      Having  heard  from  the  parties,1   this  judgment  records  and  confirms  the following orders made in relation to CIV-2016-404-1449 and CIV-2016-404-1450.

Order preventing transfer of the Turbine

[2]      In my judgment dated 27 July 2016 I granted the injunctive relief sought by Siemens which prevents Stonehill from transferring the SGT5-400F gas turbine (the Turbine) to GE.2

[3]      I also granted leave to the parties to have the injunction reconsidered in the event of undue delay in the resolution of the proceedings.3

Orders for the uplift and storage of turbine

[4]      In relation to the uplift and storage of the Turbine, I have made the following orders (the uplift and storage orders):4

(a)       The  uplift  and  storage  orders  adopt  defined  terms  from  Siemens’

statement of claim dated 24 June 2016.

(b)Neither GE nor any of its employees, related entities, contractors or agents shall access or inspect the inside of the Turbine until further order of the Court.

(c)      GE shall, however, otherwise be permitted to deal with the Turbine in the following manner and with the following arrangements in place:

(i)       GE and any of its employees, agents or appointed contractors

(which may include Siemens) may uplift the Turbine from the

1      Memorandum of counsel in response to minute dated 27 July 2016 dated 28 July 2016; Consent memorandum for extension of time 3 August 2016; Submissions of the plaintiff/applicant on costs and security dated 3 August 2016; Submissions of the second defendant on security dated 3

August 2016; Joint memorandum of counsel in relation to costs dated 4 August 2016; Joint memorandum of counsel in relation to orders dated 5 August 2016; Memorandum of counsel on behalf of Siemens in relation to security dated 15 August 2016; Second respondent’s further submission in relation to security condition dated 15 August 2016.

2      Siemens (NZ) Ltd v Stonhehill Trustee Ltd & Ors [2016] NZHC 1710 at [62].

3      Above.

4 Minute of Whata J dated 8 August 2016 at [3].

Otahuhu Power Station and move it to a safe storage location within New Zealand (and to the extent possible within the Auckland area) of GE’s choosing in a closed state (that is, without exposing the inside of the Turbine).

(ii)      Such uplift shall take place no later than 1 December 2016.

(iii)GE  and  Siemens  will  jointly  appoint  a  suitably  qualified engineer (Observer) who will observe the said uplift, movement  and  placement  into  storage  of  the  Turbine  and report to Siemens only in the event that there is a breach of the terms of these uplift and storage orders. GE and Siemens agree that the Observer will not be required to observe those tasks if Siemens is the appointed contractor.

(iv)     GE will advise Siemens of the safe storage location of the

Turbine.

(v)Siemens will pay for all reasonable third-party costs and disbursements (but not GE’s staff costs) and insurance costs incurred in the uplift, transport and storage process, to include those presented by the Observer and the Borescope Contractor. As far as reasonably practicable, Siemens will be given an opportunity to review and approve such costs before they are incurred (such approval not to be unreasonably withheld). To the extent there is any disagreement as to the reasonableness or otherwise of the proposed costs, the costs must be approved and determined by the Observer in the first instance, unless they are Siemens’ own costs if appointed contractor, but with Siemens able to review/challenge the Observer’s decision on costs, if required at the conclusion of the underlying claim (if its claim against GE is not proven). All such costs as paid by Siemens will be recoverable by Siemens in the event that its claim against GE is proven.

(vi)GE will be the hirer or lessee (as the case may be) of the place where Turbine is stored.

(vii)To ensure that the integrity of the interior of the Turbine is maintained in as good as present condition during storage, GE will  engage  an  independent  contractor  (Borescope Contractor) to undertake a condition assessment borescope inspection of the inside of the Turbine prior to its uplift from the Otahuhu Power Station. The Borescope Contractor (or its staff  or  subcontractors)  will  alone  attend  to  this  but  is permitted to report to GE to advise the status of the Turbine and report on the work he had undertaken as required. Such reporting, however, will be limited to highlighting areas of deterioration that need or needed attention and a copy of any such reporting will be provided to Siemens. For the avoidance of doubt, this clause is an exception to clause (b) above.

(viii)Subject   to   clause  (b)  above,   GE  employees,   agents   or contractors (which will include Siemens, if appointed) may visit the stored Turbine at any time to verify and attend to its safe storage and preservation, on notice to the Observer, who will supervise such visits and/or preservation work.

(ix)     Stonehill and Contact will take reasonable steps to enable the uplift process at the Otahuhu Power Station to occur. For the avoidance of doubt, nothing in these uplift and storage orders is intended to affect the rights and obligations of GE, Stonehill and  Contact  under the  agreement  for  sale  and  purchase of equipment dated 13 May 2016 (save that the parties agree that no step taken to give effect to these uplift and storage orders will breach any contractual arrangement between any of the parties to this proceeding). Neither Stonehill nor Contact are assuming any new obligations to any party under this clause.

(x)      Any party and the Observer may refer any matter relevant to these uplift and storage orders to the Court on 24-hours’ notice for further orders or directions.

Undertaking as to damages

[5]      I have made the following orders in relation to the undertaking as to damages to be given by Siemens:5

(a)      The undertaking as to damages given by Siemens shall be supported by a guarantee or bond to be posted by 5pm on 24 August 2016 by Siemens Financial Services GmbH in the sum of NZ$5 million.

(b)       The guarantee or bond may have an expiry date of 36 months after the date of issue, provided that a replacement or renewed guarantee must be in place prior to that expiry date.

Costs

[6]      Costs have been settled between Siemens and General Electric.6

[7]      Contact is entitled to costs and disbursements against Siemens as per my judgment dated 9 August 2016.7

5 Minute of Whata J dated 17 August 2016 at [4].

6 Minute of Whata J dated 8 August 2016 at [4].

7      Siemens (NZ) Ltd v Contact Energy Ltd [2016] NZHC 1837.