Teinangaro v Fastways Couriers (NZ) Limited

[2012] NZHC 910

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CRI-2009-441-751 [2012] NZHC 910

BETWEEN  JAMES DOUGLAS TEINANGARO AND SHARON HAZEL TEINANGARO Plaintiffs

ANDFASTWAY COURIERS (NZ) LIMITED First Defendant

ANDAUCKLAND CITY COURIERS LIMITED

Second Defendant

Hearing:         30 April 2012

Counsel:         Plaintiffs (In person)

J M von Dadelszen and M Nicol for Defendants

Judgment:      4 May 2012

JUDGMENT OF MILLER J

[1]      Before me is an application for review of a decision of the Associate Judge in which the plaintiffs were ordered to give security for costs in the sum of $50,000, the proceeding being stayed meantime.   This decision should be read with that of the Associate Judge dated 1 March 2012 and a minute of Toogood J dated 24 April

2012.

[2]      The claim is for the allegedly wrongful termination of a courier franchise agreement.  There are a number of liability issues:

(1)       whether the franchise agreement incorporated an industry Code of

Practice;

JAMES DOUGLAS TEINANGARO AND SHARON HAZEL TEINANGARO V FASTWAY COURIERS (NZ) LIMITED HC NAP CRI-2009-441-751 [4 May 2012]

(2)       whether  the  second  defendant,  with  whom  the  plaintiffs’  had  the

direct franchise agreement, had grounds to issue the notices of breach;

(3)whether due process was followed in accordance with the franchise agreement, in dealing with the alleged breaches;  and

(4)whether  the  ultimate  decision  to  terminate  the  franchises  was justified.

[3]      A series of breach notices was issued, complaining about the behaviour of the plaintiffs.  Most of them concern obscene, abusive and derogatory language offered to other franchisees, employees of Fastway Couriers, and customers by both plaintiffs.  Some concern egregious failure to deliver to customers in a timely way. The plaintiffs flatly deny that these incidents happened and accuse the defendants’ employees of behaving abusively towards them.

[4]      It seems plausible that at trial the defendants will produce a good number of independent witnesses who will depose to the plaintiffs’ misconduct, but for present purposes the Court is in no position to decide where the truth lies and I must assume that the plaintiffs’ allegations will be made out.   The Associate Judge correctly directed himself accordingly, noting that it cannot be said that the plaintiffs’ claim was clearly untenable.

[5]      The Associate Judge was satisfied that the plaintiffs are impecunious.   He noted that the plaintiffs claim the defendants have caused their impecuniosity, but held “however, this claim is always difficult to establish, and in this case there is simply insufficient evidence before the Court to show that acts of the defendants caused the plaintiffs impecuniosity.”

[6]      Before me, Mr von Dadelszen conceded that termination of the franchise agreement may have caused the plaintiffs’ impecuniosity, although the extent of such impecuniosity is disputed.  I think the concession was sensibly made, because there is evidence that the plaintiffs incurred substantial costs in setting themselves up as franchisees and the termination of the franchise resulted in a loss of substantial

gross income.  I observe that a different stance seems to have been adopted before the Associate Judge.  In the result, I have reached a different conclusion.

[7]      The Associate Judge also noted that the proceedings were issued two years ago and they have been the subject of three amended pleadings by the plaintiffs, who have repeatedly failed to comply with the requirements of the High Court Rules.  He saw a need to protect the interests of the defendants.  I share those sentiments, but it must be said that delays are partly the defendants’ fault.   They have persisted in another application to strike out the statement of claim notwithstanding what was said by Kós J in a judgment of 25 November 2011;  that application failed before the Associate Judge.

[8]      I think the defendants have gone the wrong way about responding to this claim.     The  central   issue   –   whether  they  had   grounds   to   terminate   -  is straightforward, but they have yet to file a statement of defence.  They should get on and try the case instead of seeking needlessly refined pleadings from lay plaintiffs.

[9]      I advised the parties of my decision at the conclusion of the hearing, and I discussed with them what is to happen next.  The following directions are made by consent:

(1)A  statement  of  defence  is  to  be  filed  within  three  weeks.    That statement of defence should articulate the defendants’ affirmative defence, namely that the termination was justified, and why.  It will much assist the Court if that is clearly set out;

(2)       Each side is to make discovery within six weeks;

(3)The proceeding is transferred to the Auckland Registry, that being where the events occurred and the Registry closest to both parties;

(4)There is to be a conference before a case management Judge at a time set by the Registrar shortly after the date (six weeks hence) fixed for discovery.

[10]     The application for review succeeds.  The order for security for costs is set aside, and the stay associated with it is lifted.

Miller J

Solicitors:
Bannister & von Dadelszen, Hastings for Defendants