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Chatha v Wanganui Gas Limited [2006] NZCA 189 (31 July 2006)

Last Updated: 15 August 2006

IN THE COURT OF APPEAL OF NEW ZEALAND

CA59/06

BETWEEN ARSHAD MAHMOOD CHATHA
Applicant

AND WANGANUI GAS LIMITED
Respondent

Hearing: 17 July 2006

Court: Chambers, O'Regan and Ellen France JJ

Counsel: R B Lewis for Applicant
T J Anderson and S J Burlace for Respondent

Judgment: 31 July 2006

JUDGMENT OF THE COURT

A The application for special leave to appeal is dismissed.

B Costs of $1500 together with usual disbursements are awarded to the respondent.

REASONS OF THE COURT

(Given by Ellen France J)

Introduction

[1] This is an application under s 67 of the Judicature Act 1908 ("Act") for special leave to appeal to this Court against a decision of Ronald Young J which was delivered on 14 April 2005. The applicant sought leave from the High Court, but that was refused by Ronald Young J on 28 February 2006.
[2] The questions in respect of which the applicant seeks leave are as follows:
1. General damages of distress and humiliation are available in breach of contract cases between commercial organisations and domestic/private customers. The distress and humiliation were caused by two breaches one after other.

a. Wrongful disconnection of gas at the first stage; and
b. Refusal to follow the arbitration procedure within the contract.

2. Exemplary damages: the respondent’s act was deliberate/wilful not a mistake.
3. Costs should have followed the event and so costs awarded in the applicant’s favour on a party and party basis.
4. The applicant should have been awarded costs in the High Court.

Background

[3] The applicant wanted gas to be supplied by the respondent for his rental property in Palmerston North. He entered into a domestic customer agreement with the respondent’s Palmerston North agent, a gas fitter. The gas was turned on but, eight days later - without notice - the respondent turned off the gas supply. The decision to turn off the supply came after the respondent found out through Gas Network (a network of gas suppliers) that Contact Energy had been a previous supplier at the property and had discontinued supply when the account holder known to Contact as "Mr Chatha" had not paid. The respondent, wrongly, took the view that this "Mr Chatha" was the applicant.
[4] Some time after the disconnection, the applicant rang another gas retailer who immediately supplied gas to the property.
[5] The applicant brought proceedings against the respondent relating to its turning off the gas. He sought general damages for distress and humiliation in the sum of $10,000. He also sought exemplary damages in the sum of $20,000 pleading damage to his personal reputation; humiliation; and breach of cultural obligation. He had guests staying with him at the time.
[6] In the District Court, Judge Ross dismissed the applicant’s claim. In a decision delivered on 10 March 2004, Judge Ross found there had been no breach of contract. Judge Ross subsequently awarded costs to the respondent. The applicant was represented by counsel in the District Court.
[7] The applicant, representing himself, then appealed out of time to the High Court. Associate Judge Gendall declined to exercise the High Court’s jurisdiction to extend time, but the applicant was successful in an application for review of that decision. His appeal was then heard by Ronald Young J. Ronald Young J concluded that once the respondent’s agent signed the customer service agreement and the applicant signed the agreement, the respondent was obliged to provide gas to the applicant as they agreed. In cutting off supply on 16 February 2001, the respondent breached the contract with the applicant. Ronald Young J therefore took a different view on this aspect from the District Court and the appeal was allowed to that extent.
[8] However, Ronald Young J concluded that the applicant was not entitled to damages. Further, the Judge set aside the costs award made in the District Court, and made no order as to costs in the High Court.
[9] Ronald Young J subsequently refused to grant leave to the applicant to appeal to this Court.

Discussion

[10] The Court may grant leave under s 67 of the Act if there is a question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal: Waller v Hider [1998] 1 NZLR 412 at 413; Snee v Snee [1999] NZCA 252; (1999) 13 PRNZ 609 at [22].
[11] We do not consider that this case raises any question of such importance. In respect of the damages claim, the applicant says the loss to him was extreme because of the cultural circumstances. He was humiliated when the gas was turned off by not

being able to provide for his guests in accordance with their cultural expectations. He says the fact he could have had the gas re-connected much sooner than he did is no answer to that.

[12] The applicant says that the humiliation was compounded by the respondent’s failure to follow its procedures, which meant that the gas supply was not reinstated in a way which would have demonstrated the applicant’s standing to his guests. The fact that this was a commercial contract should not have prevented an award of damages being made.
[13] The Judge in the assessment of damages has applied orthodox principles. On the claim for general damages, Ronald Young J observed that claims for general damages for non-pecuniary loss in contract cases are not normally available in New Zealand: Bloxham v Robinson [1996] 2 NZLR 664; Anderson v Davies [1997] 1 NZLR 616. The Judge did not say such damages were never available but rather that this was not a case where such an award was appropriate. Similarly, in terms of exemplary damages, on the facts the Judge concluded that the respondent had not been "outrageous and flagrant" in disregarding the applicant’s rights. That was an assessment that was open to him and no point of principle arises. In any event, it is plain from this Court’s decision in Paper Reclaim Limited v Aotearoa International Limited [2006] NZCA 27; (2006) 11 TCLR 544 that exemplary damages are not available for breach of contract.
[14] Accordingly, as the respondent says, no broader question arises. Rather, the case involves the application of general principles to the facts. These principles are well settled. Therefore, it cannot be said that an issue of sufficient public importance has been raised. Nor is there any evidence of more general problems with contracts of this kind. Rather, this appears to be a one off situation.
[15] As to any question of private interest, the case has limited importance. The matter was never going to be significant in terms of an award of damages, which at best, would have been nominal. Further, the applicant has at least had a judgment in his favour. He can show he has been vindicated by the High Court judgment.
[16] As to costs, the applicant says he should have been awarded costs in the District Court, and was similarly entitled to costs in the High Court. Although he represented himself at the High Court hearing, he says that he did get assistance from legal counsel for his submissions and so should at least recover that cost.
[17] It was open to Ronald Young J to deal with the District Court costs award by simply setting that award aside. Costs are a discretionary matter. Further, the respondent had sent a Calderbank letter to the applicant which would have affected the ultimate outcome in terms of costs. There is no merit in this point. Nor does it raise a question which ought to be submitted to this Court.
[18] The applicant would have been entitled to an appeal in relation to the decision as to costs in the High Court but the appeal has not been properly brought. There was no notice in terms of r 30 and the appeal application was out of time in terms of r 29. For that reason, we treat this aspect also as an application for special leave. The Calderbank letter could have had an impact on costs in the High Court. In any event, the applicant does not advance any matters which would support this Court taking a different view on the Judge’s exercise of discretion as to costs. We do not consider it appropriate to grant special leave in relation to an argument for which there is, at best, a minimal chance of success.
[19] For these reasons, the application for special leave to appeal is dismissed. The respondent is entitled to costs of $1,500, with the usual disbursements.

Solicitors:

Lewis Beavon Law, Palmerston North for Applicant
Treadwell Gordon, Wanganui for Respondent

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[1]	This is an application under s 67 of the Judicature Act 1908 ("Act") for special leave to appeal to this Court against a decision of Ronald Young J which was delivered on 14 April 2005. The applicant sought leave from the High Court, but that was refused by Ronald Young J on 28 February 2006.
[2]	The questions in respect of which the applicant seeks leave are as follows:
1.	General damages of distress and humiliation are available in breach of contract cases between commercial organisations and domestic/private customers. The distress and humiliation were caused by two breaches one after other.

2.	Exemplary damages: the respondent’s act was deliberate/wilful not a mistake.
3.	Costs should have followed the event and so costs awarded in the applicant’s favour on a party and party basis.
4.	The applicant should have been awarded costs in the High Court.

[3]	The applicant wanted gas to be supplied by the respondent for his rental property in Palmerston North. He entered into a domestic customer agreement with the respondent’s Palmerston North agent, a gas fitter. The gas was turned on but, eight days later - without notice - the respondent turned off the gas supply. The decision to turn off the supply came after the respondent found out through Gas Network (a network of gas suppliers) that Contact Energy had been a previous supplier at the property and had discontinued supply when the account holder known to Contact as "Mr Chatha" had not paid. The respondent, wrongly, took the view that this "Mr Chatha" was the applicant.
[4]	Some time after the disconnection, the applicant rang another gas retailer who immediately supplied gas to the property.
[5]	The applicant brought proceedings against the respondent relating to its turning off the gas. He sought general damages for distress and humiliation in the sum of $10,000. He also sought exemplary damages in the sum of $20,000 pleading damage to his personal reputation; humiliation; and breach of cultural obligation. He had guests staying with him at the time.
[6]	In the District Court, Judge Ross dismissed the applicant’s claim. In a decision delivered on 10 March 2004, Judge Ross found there had been no breach of contract. Judge Ross subsequently awarded costs to the respondent. The applicant was represented by counsel in the District Court.
[7]	The applicant, representing himself, then appealed out of time to the High Court. Associate Judge Gendall declined to exercise the High Court’s jurisdiction to extend time, but the applicant was successful in an application for review of that decision. His appeal was then heard by Ronald Young J. Ronald Young J concluded that once the respondent’s agent signed the customer service agreement and the applicant signed the agreement, the respondent was obliged to provide gas to the applicant as they agreed. In cutting off supply on 16 February 2001, the respondent breached the contract with the applicant. Ronald Young J therefore took a different view on this aspect from the District Court and the appeal was allowed to that extent.
[8]	However, Ronald Young J concluded that the applicant was not entitled to damages. Further, the Judge set aside the costs award made in the District Court, and made no order as to costs in the High Court.
[9]	Ronald Young J subsequently refused to grant leave to the applicant to appeal to this Court.

[10]	The Court may grant leave under s 67 of the Act if there is a question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal: Waller v Hider [1998] 1 NZLR 412 at 413; Snee v Snee [1999] NZCA 252; (1999) 13 PRNZ 609 at [22].
[11]	We do not consider that this case raises any question of such importance. In respect of the damages claim, the applicant says the loss to him was extreme because of the cultural circumstances. He was humiliated when the gas was turned off by not

[12]	The applicant says that the humiliation was compounded by the respondent’s failure to follow its procedures, which meant that the gas supply was not reinstated in a way which would have demonstrated the applicant’s standing to his guests. The fact that this was a commercial contract should not have prevented an award of damages being made.
[13]	The Judge in the assessment of damages has applied orthodox principles. On the claim for general damages, Ronald Young J observed that claims for general damages for non-pecuniary loss in contract cases are not normally available in New Zealand: Bloxham v Robinson [1996] 2 NZLR 664; Anderson v Davies [1997] 1 NZLR 616. The Judge did not say such damages were never available but rather that this was not a case where such an award was appropriate. Similarly, in terms of exemplary damages, on the facts the Judge concluded that the respondent had not been "outrageous and flagrant" in disregarding the applicant’s rights. That was an assessment that was open to him and no point of principle arises. In any event, it is plain from this Court’s decision in Paper Reclaim Limited v Aotearoa International Limited [2006] NZCA 27; (2006) 11 TCLR 544 that exemplary damages are not available for breach of contract.
[14]	Accordingly, as the respondent says, no broader question arises. Rather, the case involves the application of general principles to the facts. These principles are well settled. Therefore, it cannot be said that an issue of sufficient public importance has been raised. Nor is there any evidence of more general problems with contracts of this kind. Rather, this appears to be a one off situation.
[15]	As to any question of private interest, the case has limited importance. The matter was never going to be significant in terms of an award of damages, which at best, would have been nominal. Further, the applicant has at least had a judgment in his favour. He can show he has been vindicated by the High Court judgment.
[16]	As to costs, the applicant says he should have been awarded costs in the District Court, and was similarly entitled to costs in the High Court. Although he represented himself at the High Court hearing, he says that he did get assistance from legal counsel for his submissions and so should at least recover that cost.
[17]	It was open to Ronald Young J to deal with the District Court costs award by simply setting that award aside. Costs are a discretionary matter. Further, the respondent had sent a Calderbank letter to the applicant which would have affected the ultimate outcome in terms of costs. There is no merit in this point. Nor does it raise a question which ought to be submitted to this Court.
[18]	The applicant would have been entitled to an appeal in relation to the decision as to costs in the High Court but the appeal has not been properly brought. There was no notice in terms of r 30 and the appeal application was out of time in terms of r 29. For that reason, we treat this aspect also as an application for special leave. The Calderbank letter could have had an impact on costs in the High Court. In any event, the applicant does not advance any matters which would support this Court taking a different view on the Judge’s exercise of discretion as to costs. We do not consider it appropriate to grant special leave in relation to an argument for which there is, at best, a minimal chance of success.
[19]	For these reasons, the application for special leave to appeal is dismissed. The respondent is entitled to costs of $1,500, with the usual disbursements.