Hadlow v Carter Holt Harvey Limited HC Auckland CIV 2006-404-5151 [2007] NZHC 1855 (18 June 2007)

High Court of New Zealand

[Index] [Search] [Download] [Help]

---

Hadlow v Carter Holt Harvey Limited HC Auckland CIV 2006-404-5151 [2007] NZHC 1855 (18 June 2007)

Last Updated: 24 September 2011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV 2006-404-5151}

CAMERON GROSVENOR HADLOW Appellant

AND CARTER HOLT HARVEY LIMITED Respondent

Hearing: 6 June 2007

Appearances: M C Black for Appellant

D M Salmon & L N Milne for Respondent

Judgment: 18 June 2007

_{JUDGMENT OF KEANE J}

This judgment was delivered by Justice Keane on 18 June 2007 at 2pm pursuant to Rule540(4) of the High Court Rules.

Registrar/ Deputy Registrar

_Date:

_Solicitors:

Burton & Co., Auckland for Appellant

Lee Salmon Long, Auckland for Respondent

HADLOW AND ANOR HC AK CIV 2006-404-5151 18 June 2007

[1] On 22 August 2006 a Judge of the District Court gave judgment in favour of CHH for $67,500. Cameron Hadlow’s counterclaim failed. I upheld that judgment on 21 December 2006. Mr Hadlow now seeks leave to appeal to the Court of Appeal.

[2] The Judge held Mr Hadlow liable to reimburse CHH $67,500 for a payment CHH had made to Forestry Road Services Limited for constructing roading and skid sites on Mr Hadlow’s land to enable CHH, on Mr Hadlow’s behalf, to harvest timber on his land and sell it on commission. That liability, the Judge held and I agreed, though crystallising when sales were made, rested finally with Mr Hadlow. When sales were not made, a contingency the contract did not allow for, the Judge held and I agreed, it was right to imply a term that Mr Hadlow reimburse CHH within a reasonable time.

[3] On the proposed appeal Mr Hadlow wishes, as he did in the appeal before me, to contend that such an implied term cannot be reconciled with the express term as to payment. That term, he wishes still to contend, says expressly that the liability to reimburse only become his once CHH had both harvested and sold the timber specified and, absent any sales, the cost remained with CHH.

[4] In seeking leave to appeal his counsel puts the propositions of law on which

Mr Hadlow wishes to rely in this way:

Applying recognised principles of construction, this express term did not permit the implication of any other term which was in conflict with and contrary to this term. This is particularly when the contract contained an

‘entire agreement clause’, which also expressly precluded the ... (CHH) the opportunity to introduce any implied terms.

[5] As to the threshold for leave, Mr Hadlow’s counsel then says this of the entire agreement clause:

Such clauses are often used in commercial contracts and the importance of the appeal, is that it raises a question of law which is capable of bona fide and serious argument as to the use and effect of such clauses when considering the implication of other terms.

Leave threshold

[6] The threshold for leave is set by s 67 of the Judicature Act, which deems decisions made by this Court on appeal from the District Court to be ‘final’, subject only to an appeal to the Court of Appeal by leave of this Court, or if that is refused, by leave of the Court of Appeal itself. And to obtain leave under s 67 Mr Hadlow must show that his appeal raises, as the Court of Appeal said in Waller v Hyder [1998] NZLR 412, 413, CA:

Some 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.

[7] The reason why the threshold for leave has those two facets, the Court went on to say a paragraph or so later, is this:

Upon a second appeal this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.

[8] In the following year, in Snee v Snee CA 198/99 1 November 1999, the Court was at pains to stress, with numerous examples, how literally the test is to be taken. Earlier cases, like Cuff v Broadlands Finance Ltd [1987] 2 NZLR 343, which may have appeared to allow more latitude, the Court said, no longer apply. Leave will be granted only where the test, as more stringently expressed in Waller v Hyder, is satisfied.

Issue capable of serious argument

[9] A judge under appeal may not be the best assessor of whether a point to be taken on the appeal proposed is capable of serious argument but I remain unconvinced that the proposition Mr Hadlow wishes still to advance has that degree of merit.

[10] The contract between CHH and Mr Hadlow was both singular and skeletal. It comprised a letter and two annexures. The terms in question are to be found partly in the letter and partly in the first annexure. The letter confirms that:

The fees payable by the Owners to Wood Metrics for performances of the

Services are:

Direct Costs including any GST (the actual costs as shown in Schedule 1 attached).

Schedule 1, to which the letter refers, says:

Direct costs are made payable at the time a sale is contracted and will be deducted from the deposits made by the successful purchaser.

[11] The contract was silent as to what was to happen if there were no sale. Mr Hadlow contended that then the cost CHH had incurred remained with it. His liability arose only once he had the means to satisfy it from the proceeds of sale. The Judge held, however, and I agreed, that when set against the contract as a whole, and the evident balance of advantage and risk, these terms still imposed the ultimate liability on Mr Hadlow.

[12] If no sale were made to trigger liability, the Judge held and I agreed, Mr Hadlow was obliged to reimburse CHH within a reasonable time. That was necessarily implicit and could not, we agreed, infringe the standard term in the second annexure, more usual in a fully realised commercial contract and incongruous in this setting, the entire agreement clause. That term could not, we considered, preclude a term being implied to complete the logic of an incomplete express term.

[13] That remains my view having heard a second time the essence of the argument and having reviewed the authorities said to underpin Mr Hadlow’s argument. He does not have the advantage, as I see it, of any overriding principle of law. Nor does he have the advantage of a contract that favours him.

Public or private importance

[14] That apart, Mr Hadlow is in this difficulty. He does not claim, in seeking leave, that the proposition he contends for has any public importance. Instead he contends that the issue how express and entire agreement terms interact and how far, it at all, they permit terms to be implied, transcends the case.

[15] Any proposition of law, of course, including that propounded for Mr Hadlow, can be stated so abstractly as to apply more widely. But to have public importance, the point of law must have that significance within, and because of, its context. That is not so here. To repeat, this contract was singular, skeletal, and left much unsaid; and that afflicted both the terms in question. What effect they had in their Spartan context calls for interpretation and, as was said in Snee v Snee, para [23], that, without more, cannot justify a second appeal.

[16] Mr Hadlow does not distinctly contend that his proposed appeal has high private significance. $67,500, I accept, is a far from negligible liability. It is not, however, of such magnitude that this of itself ought to justify the grant of leave. A sum in excess of twice that was found recently not to suffice: MJR Ltd v Freemont Design & Construction Ltd v Swindale & Colyer HC AK CIV 2005-404-003184 28

September 2005, Venning J.

Conclusion

[17] Mr Hadlow’s application for leave to appeal to the Court of Appeal will be declined. CHH will have costs. If costs cannot be agreed CHH is to file a memorandum within ten working days of this decision and Mr Hadlow within the

_{ten days succeeding.}

P.J. Keane J