Trends Publishing International Ltd v Callaghan Innovation - [2019] NZHC 907

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-1274

[2019] NZHC 907

BETWEEN TRENDS PUBLISHING INTERNATIONAL LIMITED
Counterclaim Plaintiff

AND

CALLAGHAN INNOVATION

Counterclaim Defendant

Hearing:
31 July 2018 – 3 August 2018, 6-10 August 2018, 13-17 August

2018, 23-24 August 2018

Appearances:

M A Corlett QC and H Lawson for the Counterclaim Plaintiff D H McLellan QC, S M Collier and T J Burgess for the Counterclaim Defendant

Judgment:

30 April 2019

JUDGMENT OF POWELL J

This judgment was delivered by me on 30 April 2019 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors/Counsel:
Anderson Creagh Lai Limited, Auckland Wilson Harle, Auckland

M A Corlett QC Auckland
D H McLellan QC Auckland

TRENDS PUBLISHING INTERNATIONAL LIMITED v CALLAGHAN INNOVATION [2019] NZHC 907 [30
April 2019]

Introduction  1
Background to the Funding Agreement  15
Trends’ application for a Growth Grant  32
The Funding Agreement  39
Issue One - Did the Funding Agreement include an implied term and statutory obligations in addition to its written terms?  53

Discussion – Issue One 57
Conclusion – Issue One 60

Trends’ claims under the Funding Agreement 62

Issue Two - Did Callaghan breach the Funding Agreement by withholding payment of Trends’ Q3 claim? 73

Discussion – Issue Two 74
Conclusion – Issue Two 78

Deloitte is brought in to investigate 80

Issue Three – Did Deloitte undertake an audit or review for the purposes of the Funding Agreement?  89
Discussion – Issue Three  91
Conclusion – Issue Three  97
Issue Four - Did Callaghan comply with the procedural requirements of the Funding Agreement as the Deloitte investigation began?  98

Discussion – Issue Four 100
Conclusion – Issue Four 104

The initial Deloitte investigation 105

Issue Five - Was Callaghan entitled to suspend the Funding Agreement on 17 December 2014?  131
Discussion – Issue Five  133
Conclusion – Issue Five  135
Issue Six - Did Callaghan breach the Funding Agreement by issuing the Suspension Press Release?  136

Discussion – Issue Six 143
Conclusion – Issue Six 153

The Trends response to the suspension decision 154

Issue Seven - Did Callaghan comply with the procedural requirements of the Funding Agreement in providing an opportunity for Trends to respond? 180

Discussion – Issue Seven 183
Conclusion – Issue Seven 184

The termination of the Funding Agreement 185

Issue Eight - Did Callaghan have grounds to terminate the Funding Agreement on 21 April 2015? 192

Discussion – Issue Eight 195
Conclusion – Issue Eight 228

Issue Nine - Did Callaghan breach the Funding Agreement by issuing the termination press release? 231

Discussion - Issue Nine 232
Conclusion – Issue Nine 233

Decision 234

Introduction

[1] The counterclaim plaintiff, Trends Publishing International Limited (“Trends”), seeks damages in the sum of $61 million from Callaghan Innovation (“Callaghan”). The damages are for alleged breaches of contract and statutory duties arising out of a Funding Agreement for a Growth Grant entered into by Trends and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Trends Publishing International Ltd v Callaghan Innovation and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2019] NZHC 907
Decision Date: 30 April 2019

CaseChat Overview and Summary

Trends Publishing International Limited, the plaintiff, filed a claim against Callaghan Innovation, the defendant, seeking $61 million in damages for alleged breaches of contract and statutory duties arising from a Funding Agreement. The dispute involved a Growth Grant agreement backdated to 1 January 2014, under which Trends was entitled to seek reimbursement from Callaghan for 20% of its eligible research and development expenditure over a three-year period, with an option to extend for a further two years. The court was tasked with determining nine key issues, including whether the Funding Agreement included an implied term and statutory obligations, whether Callaghan breached the agreement by withholding payment, and if Callaghan was entitled to suspend or terminate the agreement. The court concluded that Trends' claims failed entirely, and Callaghan was entitled to judgment and costs. The court found that Callaghan was entitled to issue the Termination Press Release upon the agreement's termination, as the Funding Agreement specifically provided for such disclosure, and the requirement for Callaghan to act fairly and transparently imposed an obligation to publicly advise of the agreement's termination following the investigation carried out by Deloitte.

Orders