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Vector Ltd v Utilities Disputes Commissioner

Vector Ltd v Utilities Disputes Commissioner

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Case Copied 28 November 2018 76 min read

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-000605

[2018] NZHC 3096

BETWEEN
VECTOR LIMITED

Applicant

AND

UTILITIES DISPUTES COMMISSIONER, UTILITIES DISPUTES LIMITED

First Respondent

AMERICOLD NZ LIMITED
Second Respondent

PROGRESSIVE ENTERPRISES LIMITED
Third Respondent

WENDCO (NZ) LIMITED

Fourth Respondent

Hearing: 5-7, 9 March 2018

Appearances:

J A Farmer QC, B H Dickey and M P Hardy for Applicant

J W H Little and R Hourigan-Johnston for First Respondent K Anderson and K E F Morrison for Second Respondent No appearance for Third and Fourth Respondents

R G Cahn for Commerce Commission – Intervener

W M Irving for Electricity Networks Association – Intervener J F Anderson QC as Amicus Curiae

Judgment:

28 November 2018

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 28 November 2018 at 3.30 pm
pursuant to R 11.5 of the High Court Rules Registrar / Deputy Registrar Date………………………

VECTOR LTD v UTILITIES DISPUTES COMMISSIONER & ORS [2018] NZHC 3096 [28 November 2018]

Introduction [1]

Approach to judicial review
Error of law  [6]
Materiality  [13]
Evidence adduced for purposes of judicial review  [15]

Some background: the electricity industry and the Scheme

The electricity industry [22]
The Electricity and Gas Complaints Commissioner’s Scheme [27]

The Commissioner’s decisions [34]

First ground of review – error of law in finding that Vector owed a duty of care to electricity consumers
A novel duty  [41]
The Commissioner’s reasoning  [46]
The Commissioner’s approach to foreseeability  [49]
The Commissioner’s proximity analysis  [55]
The contractual context  [61]
The nature of the loss  [78]
The regulatory context as a policy consideration  [85]
Summary: first ground of review  [98]

Second ground of review – error in finding negligence by Vector [99]

The cause of the power outage  [101]
The finding that Vector was negligent in failing to identify the risks
associated with the cable trench  [105]
Reliance on the Electricity Authority’s report regarding fire hazard
systems and what mitigation steps should have been taken  [119]

Third ground of review – the Commissioner acted unreasonably and made an error of law in finding that Vector’s alleged breach caused

the claimed loss  [126]
Fourth ground of review – contractual limitations on the extent of liability [129] Contact’s Standard Terms with Americold and Wendco  [132] Contact’s Special Terms with Progressive (Cabinet Ready Meat Plant/
Mount Wellington/Greenlane)  [141]
The Spot Supply Agreements between Mercury and Progressive
(Newmarket, St Johns, Sylvia Park, Meadowbank and Onehunga)                  [143] Fifth ground of review – exceeding the jurisdictional limit by considering multiple complaints by Progressive
The issue  [145]
The Commissioner’s decisions  [151]
Relief  [161]
Result  [168]

Introduction

[1] In October 2014, a faulty joint in an electrical cable at an Auckland substation failed. The cable ignited. The fire spread to other cables. The result was an electricity outage affecting several Auckland suburbs for three days.

[2] Vector Limited (Vector) owned the cables. Americold NZ Ltd (Americold), Progressive Enterprises Ltd (Progressive) and Wendco (NZ) Ltd (Wendco) owned businesses…

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.

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Details

Case: [2018] NZHC 3096
Decision Date: 28 November 2018

CaseChat Overview and Summary

Vector Limited sought judicial review of decisions made by the Utilities Disputes Commissioner under the Electricity and Gas Complaints Commissioner's Scheme. The Commissioner had found that Vector owed a duty of care to electricity consumers, that it had breached that duty, and that the breach caused losses claimed by three businesses. The Court found that the Commissioner had erred in concluding that a duty of care existed between Vector and electricity consumers, in finding that Vector had been negligent in failing to identify risks associated with the cable trench, and in finding that Vector's breach caused the losses claimed. The Court also found that the Commissioner had erred in failing to apply limitation provisions in the complainants' supply contracts. The Commissioner had also exceeded the jurisdictional limit by considering multiple complaints by one of the respondents. The Court quashed the Commissioner's decisions, ordered the Commissioner to reconsider the complaints in light of the errors identified in the judgment, and ordered the respondents to repay Vector any amounts paid in compliance with the Commissioner's decisions, together with interest.

Orders