Employment Court of New Zealand Te Kōti Take Mahi o Aotearoa

[2022] NZEmpC 19 Kang v Saena Company Ltd (Interlocutory Judgment of Chief Judge Inglis, 10 February 2022) APPLICATION FOR LEAVE TO FILE AMENDED PLEADINGS – applicant should be allowed to increase quantum of remedies sought – application granted – APPLICATION TO EXCLUDE EVIDENCE – evidence to be included but taken into account when considering costs – ADMISSIBILITY OF EVIDENCE – part of evidence contains reference to mediation – offending paragraphs to be struck out.

Contract / Contract and Commercial Law Act 2017 / Applicant enrolled her child to attend afterschool care run by the Respondent for the first two terms of 2021 / In July 2021, Applicant prepaid $1,088 for the third term / Due to Covid-19 some classes were not delivered while others were moved online / Applicant sought a refund for the classes that were not delivered / Respondent asked Applicant to sign form on back of enrolment form before it would process request for refund / Applicant refused to sign the form, which contained terms regarding accepting a credit / Respondent maintained Applicant was only entitled to a credit rather than a refund / Applicant claimed a refund of $779.80 based on the Respondent’s original calculation of the credit due / Were the unsigned terms on the back of the enrolment form part of the contract / Whether the contract was frustrated / What sum, if any, should be refunded / Held: evidence indicated that the terms on the back of the enrolment form were no…

Appeal / vendor sold property to another purchaser / complaint licensee dealt unfairly with an unsuccessful offeror, leading to unfair sale process and wasted due diligence costs / did not advise of another higher offer, and did not engage in multi-offer process / also alleged licensee failed to disclose subsidence issue to successful purchaser / Committee took no further action / Real Estate Agents Act 2008, s 109A, s 111 / Professional Rules 2012, rr 5.1, 6.2, 6.4, 10.7, 10.8 / HELD / strike-out grounds not met / reasonable to recommend due diligence / licensee not aware of other bidder at times relevant to allegations / successful purchaser dealt directly with vendor / licensee raised multi-offer process but vendor declined / licensee disclosed subsidence issue to purchaser when sending draft sale and purchase agreement / no evidence purchasers not told of subsidence issue by vendor / purchasers declined to speak to investigator / Committee’s decision confirmed

Tort / Detinue / Applicant booked Polaris Ranger into Respondents’ workshop / Respondent refused to return the ranger until Applicant paid outstanding invoice for a different Polaris / The vehicle was returned, after Applicant filed an initial Disputes Tribunal claim / Applicant seeks damages to cover the cost of hiring an alternative vehicle while Polaris was detained / Held: It was unlawful for Respondent to withhold the Polaris / The first and third Respondent must pay the Applicant $1,100.00 for hiring costs / The claim against the second respondent is dismissed. Claim: partially upheld.

Costs. Whether costs fall under category 1A or category 2B. Outcome: the Court found it is a category 1 proceeding.

Liability / charged with practising outside terms of practising certificate by providing pro bono regulated services to the public, and failing to provide client service information and act independently / represented his wife and eight others in litigation before courts / Lawyers and Conveyancers Act 2006, section 9 / section 69 / section 94 / Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rule 3.4 / rule 3.5 / rule 5 / rule 5.6 / HELD / misconduct found per s 9 / practitioner employed, not entitled to practice on own account / putting issue of wife to one side, other parties clearly constituted “the public” / clients exposed to significant adverse costs award including an uplift for practitioner’s conduct / breaches of rr 3.4, 3.5 and 5 are unsatisfactory conduct per ss 12(a) or 12(b)(ii) / charges under s 7(1)(a)(iii) a duplication of s 9 charges / misconduct and unsatisfactory conduct proved

Penalty / misconduct / assisted a person to avoid GST, failed to account for GST, miscoded accounts / business dealing unconnected with legal services / whether suspension from practise necessary to mark seriousness, denounce conduct and signal standards of integrity required of lawyers in all business dealings / HELD / conduct not most serious, involves private business arrangements / aggravating features include long delay in failing to pay GST and previous unsatisfactory conduct finding / mitigating feature include full payment of GST and penalties, no harm to clients and outsourced accounting responsibilities / positive references go beyond usual references, include senior criminal jury work in South Auckland, and mentoring young Māori and Pacifica lawyers / practitioner fit and proper, preventing him from doing so would risk serious loss to clients and employees /  Tribunal ordered censure, $10,000 fine / practitioner to pay Standard’s Committee’s and Tribunal’s costs 

Contract / Companies Act 1993 / Applicant company placed in liquidation and through its liquidator brings a claim against Respondent for $17,1756.50 / Whether Respondent indebted to Applicant / Whether Respondent entitled to set off for costs of GPS rental contract and sign writing / Whether Respondent indebted to Applicant for unapproved invoices / Whether Respondent commencing or continuing legal proceedings against Applicant by claiming a set-off in breach of the Companies Act / Held: Respondent indebted to Applicant / Held: Respondent entitled to off-set sum owed to Applicant for sign writing / Held: Respondent entitled to off-set outstanding costs of GPS rental / Held: Respondent do not owe Applicant for unapproved invoices / Held: Respondent established a set-off and not a counter-claim / Claim dismissed

Contract / Consumer Guarantees Act 1993 / Applicant purchased a laptop from the Respondent for $2,119.00 / After four years, Applicant began to have issues with the laptop screen display / Respondent advised it would cost the Applicant $1,239.70 to repair the issue / Applicant claimed the laptop was not of acceptable quality and was not fit for purpose / Applicant sought a refund of the purchase price of $2,119.00 / Whether the laptop was of reasonable quality / Whether the laptop was fit for purpose / If not, what remedy was available to the Applicant / Held: evidence suggested laptop was of acceptable quality and was fit for purpose / Reasonable for a laptop to require repairs after four years / No remedy available to the Applicant / Claim dismissed.

Review / Committee found unsatisfactory conduct / own-motion investigation following confidential report that on two occasions, lawyer inappropriately touched employees without consent / NZLS applied to review culpability determination / whether conduct should have been referred to LCDT / whether LCRO should lay charges / HELD / conduct occurred after work-related social event / constitutes conduct connected with regulated services / culpability inquiry should not generally consider external factors such as lawyer’s personal circumstances or matters unconnected with alleged breach / Committee incorrectly allowed unrelated mitigation issues to affect assessment of culpability / these factors more appropriately considered in penalty / Committee’s examination of whether force was used in incidents is incomplete / use of force requires careful and critical assessment / Committee directed to reconsider culpability for conduct without considering unrelated mitigation issues / section 209

Contract / Contract and Commercial Law Act 2017 / Applicant accepted fixed price quote from Respondent for renovation job / Respondent requested additional $5,250 due to cost miscalculation / Applicant refused to pay / Respondent ceased work for a period / Applicant claimed work order, declaration that she was not required to pay the extra amount, and $7,150.00 for losses suffered from unjustified delay / Respondent counterclaimed for additional cost / Held: Respondent did not have the right to impose extra charge of $5,250 / Counterclaim dismissed / Respondent recommenced work which was almost completed by hearing date / Applicant’s calculation of damages too high / Respondent ordered to pay Applicant $3,500 in damages / Claim allowed in part.

Insurance / Applicants submitted a claim for stolen BMW with Respondent / Respondent interviewed Appellants and noted incorrect and inconsistent statements / Respondent subsequently declined the claim and cancelled three other insurance policies / Applicants claim $14,70700  in damages to cover the agreed insured value of the car, modifications and legal costs / Applicants seeks to also have the cancellation of their insurance policies reversed / Held: The Applicants suffered the loss claimed / The Respondent was not entitled to decline Applicants claim or cancel the policies / Respondents must pay Applicants $10,13700, including a contribution towards legal costs/ Respondent agrees to reverse its decision to decline the claim and cancel policies / Respondent also agrees to allow Applicants to cancel since they have since moved to another insurer / claim: upheld.