SHARMA v AIR NEW ZEALAND LIMITED [2023] NZHC 1005

SHARMA v AIR NEW ZEALAND LIMITED [2023] NZHC 1005 [2 May 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV 2019-404-001504[2023] NZHC 1005BETWEEN ANJELA SHARMAPlaintiffAND AIR NEW ZEALAND LIMITEDDefendantHearing: 10-14, 17 19 October 2022Appearances: R J B Fowler KC for the PlaintiffJ Q Wilson, A M Boberg & T M J Shiels for the DefendantJudgment: 2 May 2023JUDGMENT OF TAHANA JThis judgment was delivered by me on 2 May 2023 at 3.00pmPursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors:Bartlett Law, WellingtonBell Gully, AucklandTABLE OF CONTENTS[Para No.]Introduction 1BACKGROUND 5Travel from Nelson to India 5Entering the Koru lounge 9Ms Whyte's shift report 19Ms Stewart investigates 212018 unruly passenger report 27Warning letter 30Travel from India to Nelson 35Monitoring the family's travel 38February 2019 – Ms Sharma visits Nelson Airport 43March 2019 – correspondence to Chief Executive 51Ms Sharma and Mr Christopher Leaper write to Mr Luxon 51Mr Leckie investigates and responds to Ms Sharma 53Ms Sharma's request for personal information 60April 2019 – Ms Sharma travels to Wellington 6224 June 2019 – Ms Sharma complains to Chief Executive 6425 June 2019 – check-in at Nelson Airport 66Conversation with Ms Gillooly 66Ms Stewart submits OSR 702019 unruly passenger report 73Air NZ decide to ban Ms Sharma 77Ms Sharma files proceedings 82Air NZ obtains further information 83LEGAL PRINCIPLES 85Reasonableness 88Standard of investigation 89Context of decision-making power and applicable principles 97Conclusion on legal principles 101BREACH OF CONTRACT 102Terms of carriage 102Air NZ's policies and procedures 111Investigation by Air NZ 113Relevance of tape recordings 118December 2018 incident 1401Attempts at getting answers 163Imposing check-in restrictions 178June 2019 email to Mr Luxon 190Health and safety 208Previous complaints 217Conclusion 221FAIR TRADING ACT 1986 228Law 230Section 9 of the FTA 230Section 11 of the FTA 233Air NZ's representations 235Singapore Airlines and Star Alliance website 236Representation to go to the Koru lounge 248Representation as to premium economy 249Relief 250Overall conclusion 253Costs 254Introduction[1] In July 2019 Ms Anjela Sharma was banned from flying with Air New Zealand(Air NZ) for 12 months and was refunded her booked travel.[2] Air NZ says Ms Sharma's ban followed a pattern of consistent "rude" and"abusive" behaviour towards Air NZ staff and its decision was necessary to protectstaff welfare. Air NZ maintains that it acted in accordance with its terms of carriageand exercised a reasonable discretion when banning Ms Sharma.1[3] Ms Sharma disputes Air NZ was entitled to ban her travel and says Air NZacted capriciously, arbitrarily and in bad faith and its decision was unreasonable.2Ms Sharma recorded her interactions with Air NZ staff and describes those recordingsas "her truth."[4] The issues I need to determine are:(a) Did Air NZ breach its terms of carriage by failing to exercise reasonablediscretion in banning Ms Sharma?(b) If yes, did Ms Sharma suffer stress and/or anxiety as a result, for whichdamages should be awarded?(c) Did the Koru lounge access rules or Air NZ's conduct in allowing thefamily into the Koru lounge on 1 December 2018 constitute misleadingor deceptive conduct in contravention of s 9 and/or s 11 of the FairTrading Act 1986 (the FTA)?(d) If yes, should relief be granted to Ms Sharma under s 43 of the FTA?1 Air New Zealand Conditions of Carriage, art 7.1.2 Unreasonable in the sense that no reasonable contracting party could have so acted.BACKGROUNDTravel from Nelson to India[5] On 1 December 2018, Ms Sharma embarked on a family holiday to India withher husband (Mr Christopher Leaper) and her six children, aged from 15 to 26 yearsat the time (the family). Ms Sharma and Mr Christopher Leaper were Koru members.[6] The family was flying business class and had purchased their tickets fromSingapore Airlines, which is a member of the Star Alliance along with Air NZ andother airlines. The first leg of the trip was from Nelson to Auckland on an Air NZflight.[7] Ms Sharma's son, Mr James Leaper, said that prior to flying he went on theSingapore Airlines' website which referred passengers to the Star Alliance website.That website included a search tool which returned Nelson Airport as having loungeaccess for Singapore Airlines' business class customers flying from Nelson. Thefamily understood they could access the Koru lounges at Nelson and AucklandAirports.[8] The family arrived at Nelson Airport two hours prior to departure and checkedtheir luggage in with Air NZ based on their business class allowance. The attendanttold the family to go to the Koru lounge and to collect their international boardingpasses in Auckland as they were unable to be printed at Nelson Airport.Entering the Koru lounge[9] Entry was initially declined when the family's boarding passes were scannedon the electronic pod at the Koru lounge. Mr Christopher Leaper did not initially enterthe lounge as he was outside on a phone call.[10] Ms Kara Matuszewski was the Koru lounge host that day. Ms Matuszewskiallowed the family to enter the lounge and then went to check the internal Air NZhandbook to see whether lounge access was allowed.[11] The Air NZ handbook confirmed that the family were not entitled to enter theKoru lounge. This is despite the international flight from Auckland to Singapore beingbusiness class and despite Ms Sharma and Mr Christopher Leaper being Korumembers travelling on an Air NZ operated flight from Nelson to Auckland.[12] Ms Matuszewski then contacted Ms Sheryl Whyte who was the Air NZ NelsonTeam Leader on duty that day. Ms Whyte then went to the Koru lounge to speak withMs Sharma.[13] Ms Whyte asked Ms Sharma to speak outside the Koru lounge, but Ms Sharmawould not agree so Ms Whyte spoke to Ms Sharma inside the lounge. Ms Sharma saysshe explained to Ms Whyte that they were travelling business class on SingaporeAirlines and showed her their travel documentation. Ms Whyte says she wassurrounded by Ms Sharma and three of her sons who insisted they were entitled to bein the lounge.[14] There is a 20 second video, recording the point at which another Koru loungeguest approaches Ms Sharma, Ms Whyte and three of Ms Sharma's sons. The videorecords the following was said:Male 1: The issue is that the equity.Ms Sharma's daughter: How do you know if it's –Male 1: The next one comes in as economy despite the fact –Ms Whyte: That's fine.Lounge guest: Excuse me, this is really loud –Ms Whyte: Yeah, I know. I knowLounge guest: – and its's really disturbingMs Whyte: I know. I understand.Lounge guest: – so I'd really appreciate it if you'd quieten it downor take it somewhere else.Ms Whyte: So we'll leave it be. That's lovely folks.Male 2: Yeah, do you want to take it out –Male 3: I'd agree that they shouldn't discuss in thecustomer lounge.Ms Sharma: Yeah, I know. They shouldn't make it so public for us.Male 4: It's embarrassing.Ms Sharma's daughter: It's humiliating.[15] Ms Whyte then left the lounge and allowed the family to remain.[16] Ms Matuszewski gave evidence that the family had made derogatorycomments about her when they were in the lounge including calling her "stupid" anda "German racist." All of the family (except Ms Sharma's daughter and Mr TimothyLeaper) gave evidence and denied that they had said any derogatory comments aboutMs Matuszewski.[17] Mr Jonathan Cameron, a friend of the family, entered the lounge afterMs Whyte had left and says that he did not hear any comments from the family aboutMs Whyte or Ms Matuszewski.[18] On arrival in Auckland, the family entered the Koru lounge without incident.Ms Whyte's shift report[19] At the end of her shift that day, Ms Whyte emailed her shift report to Ms LisaStewart, the Passenger Services Manager, who had recently been employed at NelsonAirport. The shift report recorded that:Note for shift: Had yet another incident with [Ms] Sharma and her charmingfamily in the Koru Lounge. She was travelling business class with SQAKL/SIN and assured us everyone else D class but 3 sons were U class, alsonot allowed in Regional lounge if booked SQ.Caused quite a stir in lounge when I spoke with her as Kara questioned if herand her 6 children were allowed in there.I phoned AKL Lounge and spoke to them and they are aware she will try toenter up there as well.We have some sort of trouble every time this woman travels from Nelsonunfortunately and she accuses us of being racist, which is totally unfounded.[20] Ms Stewart responded to Ms Whyte's shift report indicating that she wouldfollow up to "have something formal put into place so this cannot happen again in thefuture." She also asked Ms Whyte for details about historical incidents involvingMs Sharma.Ms Stewart investigates[21] Ms Whyte and Ms Matuszewski then spoke to Ms Stewart who capturedMs Whyte's and Ms Matuszewski's recollections in an email dated 4 December 2018.Ms Matuszewski's recollection was that the family had made comments about her,including the following:"why do they hire stupid people""She is racist""We always get targeted""they should retrain all the stupid people who don't know what theyare doing"One of the sons commented "I am going on to My Voice and will leavea review saying she's just a racist"Later one of the sons had lost their boarding pass and said "I wonderif Kara can reprint it, probably not she's too f**king stupid sheprobably doesn't know how so I'll go down stairs"At one point they described Kara as a "German racist" – Kara has aPolish last name which was on the bar managers licence signEvery time that Kara welcomed a guest into the lounge the family wouldpretend to be her, mock her voice, and mimic her very loudly. Kara feltextremely humiliated because everyone could hear.[22] Ms Stewart then forwarded that email to the Security, Fraud and Koru Loyaltyteams with an email stating:Please note that the 'husband' Mr Christopher Leaper was not seen in thelounge on Saturday by Kara (lounge host) or Sherry (team leader) – but wasswiped in..hence someone was using his name/boarding pass for entry. Thishas apparently happened in the past and one of the family members was deniedboarding in WLG I believe. Their names are all similar and one of the sonswas travelling as the father (something like this). I will continue to getinformation from my staff re previous incidents but I this single situation hasleft my staff feeling intimidated and rattled to the point that they havequestioned their safety. I am hoping that there may already be records re thisfamily and dodgy behaviour with Airpoints numbers and use of other namesto gain points.To be perfectly honestly, Mrs Sharma and her family are not welcome in theNelson Koru Lounge in the future. I am seeking action from the loyalty teamto prevent this behaviour from happening again in NSN and anywhere acrossthe Air New Zealand network.I am available to discuss this incident and I look forward to working with youto ascertain a suitable outcome that I can share with those involved.[23] Mr Jason Legge who was the Air NZ Security Manager at the time was copiedinto Ms Stewart's email of 4 December 2018. He responded recommending thatMs Stewart submit an operational safety report (OSR) in Air NZ's KoruSafe system.[24] Ms Stewart completed an OSR as suggested by Mr Legge. Ms Karon Martin,a security adviser, was responsible for investigating the incident.[25] Ms Stewart obtained information about two previous incidents and providedthis information to Ms Martin. One incident concerned a complaint from Ms Sharmaabout how she had been treated in the Koru lounge when she had been asked for avoucher for her daughter in April 2017. The other concerned an incident in September2017 when one of Ms Sharma's sons had travelled on a ticket issued in his brother'sname (Mr Charles Leaper). An internal Air NZ email dated 20 September 2017records that Mr Charles Leaper's Koru membership might have been used by "othermembers" of the family. It notes they have similar names and that a staff member hadspoken to Mr Charles Leaper about it. The email told staff to ask for identificationand if there were any concerns, to raise the issue with the Koru Loyalty and/or Fraudteams.[26] Ms Martin asked the Koru Loyalty team about lounge access rules and theyacknowledged that the rules may be confusing for Koru members and "a bit moreconfusing" for business class travellers. Despite Koru membership and business class,the family were not entitled to lounge access because the domestic flight from Nelsonto Auckland had not been bought from Air NZ, despite being operated by Air NZ.2018 unruly passenger report[27] Ms Martin then prepared an "unruly passenger report" based on theinformation she was provided (2018 unruly passenger report). The executivesummary stated:Mrs Sharma and family walked in to Koru Lounge in NSN refusing to showboarding passes to Lounge HostAs the family were travelling on SQ they did not have their SQ boardingpassesMrs Sharma and family became aggressive with the Lounge Host when theywere asked questions about their membership and how their membershipnumbers needed to be in the systemMrs Sharma and family went and sat in the lounge when the Team Leader re-read the entry requirements for passengers travelling on Singapore Airlines inBusiness ClassThe Team Leader approached Mrs Sharma and asked to speak to her outsidethe lounge to advise her that they were all not entitled to lounge accessMrs Sharma became very argumentative and aggressive directing her anger atthe Lounge HostAnother lounge passenger became very concerned and told Mrs Sharma toleave the lounge as she was being disruptiveThe Team Leader left the lounge to investigate Mrs Sharma's lounge entryclaims, leaving the Lounge Host on her ownMrs Sharma and her children became extremely abusive towards the LoungeLeader, called her a German Racist, swore at her and mimicked her voice eachtime she welcomed someone in the loungeThe concerned Lounge passenger continued to check on the Lounge Host asshe was concerned about herNSN Security were called and offered to call the Police, however the LoungeHost declined the offer which in hindsight she regretted as she was moreconcerned about the experience the other lounge members would haveDuring boarding, Mrs Sharma was abusive again towards Kara and theSecurity officer at the gate[28] The family's behaviour was assessed against the Air NZ "decision supportmatrix" as meeting criteria 4 for "behaviour" and "severity." Criteria 4 includesbehaviour that is intimidating (frightens into acquiescence, scares, unnerves, bullies,is menacing) and that has a major impact (causing staff or passenger(s) significantdistress).[29] Air NZ Security reviewed the 2018 unruly passenger report and consideredthere were a number of "security red flags" to justify sending a warning letter.Warning letter[30] A warning letter was sent to Ms Sharma on 21 December 2018, which stated: The Lounge staff advised that you and your family did not meet the Loungeterms and conditions of entry however you and your family subsequentlyentered the lounge without permission. Upon entry, you and your familydisplayed loud and aggressive behaviour which was unacceptable,inappropriate and upsetting for our Air New Zealand staff and otherpassengers.I remind you of the Lounge terms and conditions and the Air New Zealandconditions of carriage:https://www.airnewzealand.co.nz/lounge-access-terms-of-usehttps://www.airnewzealand.co.nz/conditions-of-carriageTo give further clarity to Lounge access availability, in order to access Korumembership benefits, all travel must be on Air New Zealand operated andticketed flights, regardless of class of travel. On this occasion, as your travelis booked on a Singapore Airlines ticket you and your family are not eligiblefor Lounge entry in Auckland when flying home to Nelson on 1st January.Failure to comply, breach or non-acceptance of these conditions will result inyou not being permitted to enter the lounge, board a flight at the time of check-in/boarding, being off-loaded, and/or being banned entirely from flying on AirNew Zealand's services in the future.The above commentary and conditions are without prejudice to any otherrights Air New Zealand or its employees may have against you in relation tothis matter.[31] On 27 December 2018, Ms Martin forwarded a copy of the warning letter toother Air NZ staff. Her cover email repeated that Ms Sharma and her family hadentered the lounge without permission. This was incorrect. They had been allowedin.[32] On 31 December 2018, prior to the family returning to New Zealand,Ms Stewart also sent an email to Nelson Airport front of house team leaders attachingthe warning letter and giving them guidance on how to deal with Ms Sharma.[33] Ms Sharma contacted Air NZ Customer Relations indicating the family were"very upset" and requesting an "urgent response." Air NZ Customer Relationsresponded on 28 December 2018 confirming that the family were not entitled to loungeaccess for their flight from Auckland to Nelson.[34] Ms Sharma responded again continuing to dispute eligibility.Travel from India to Nelson[35] The family went to the Koru lounge at Auckland Domestic Airport.Mr Christopher Leaper says they went because he had discussed the issue withSingapore Airlines and Ms Sharma had spoken to an Air NZ attendant in Aucklandand they were advised that they were entitled to enter the Koru lounge.[36] The family recorded the conversation at the Koru lounge without informingthe Air NZ staff. The transcript of the conversation indicates that:(a) Air NZ again confirmed the position that to gain access to the Korulounge the tickets needed to be "ticketed" Air NZ tickets, that is,purchased from Air NZ.(b) The family said that the situation explained to them by SingaporeAirlines was different.(c) The family felt like Air NZ staff had been briefed and would not allowthem into the Koru lounge.(d) Ms Sharma asked for a contact so that they could respond to thewarning letter. Air NZ confirmed she could email the Chief Executive,Mr Christopher Luxon.3[37] An email from a flight attendant on the family's flight from Auckland to Nelsonrecords that Ms Sharma came onboard "quite angry" and "upset" but once settled thefamily were "very nice and apologetic to us." The flight attendant's account wasprovided to Ms Stewart.Monitoring the family's travel[38] After the warning letter, the Nelson Airport closely monitored the family'stravel. The Fraud team notified Ms Stewart when the family were travelling andconfirmed that restrictions had been placed on their check-in. The decision to do thisappears to have been made during the investigation of the December 2018 incidentwhen Ms Stewart contacted the Koru Loyalty and Fraud teams.[39] There is an email from Ms Sarah Turner, Koru Loyalty Specialist, on6 December 2018: can we place something on all of these members accounts to prohibit kioskcheck-in in the interim, so the check-in teams can process manualidentification at the service desks.[40] Ms Andrea Paul from the Fraud team responded noting that placing restrictionson the family may "inflame" the situation.[41] These restrictions meant that the family could not check in online or at a kiosk.They were required to check in at an Air NZ counter. On some occasions they werealso asked to provide identification.[42] Air NZ staff reported to Ms Stewart after Ms Sharma travelled, and this wasnoted in shift reports which, as early as 3 February 2019, indicate that Ms Sharma was3 Ms Sharma sought to make something of the fact that the lounge host gave her the wrong spellingfor Mr Luxon's name. This was an easy mistake to make and I do not accept it was a deliberateattempt by Air NZ to make things difficult for Ms Sharma.asking about check-in restrictions. Ms Stewart followed up with staff after Ms Sharmatravelled asking if there were any issues.February 2019 – Ms Sharma visits Nelson Airport[43] On 18 February 2019, Ms Sharma and her son, went to Nelson Airport todiscuss the warning letter. They recorded the conversation without informing Air NZstaff. The recording discloses that:(a) Ms Sharma said she was about to write to Mr Luxon about the warningletter and wanted to discuss it.(b) Ms Sharma said the warning letter was incorrect. They were notrefused access to the Koru lounge and had entered with permission.(c) Ms Whyte said to Ms Sharma that two of the family were not travellingbusiness class. Ms Sharma said this was incorrect.(d) Ms Stewart did not agree that it was a good idea for them to talk.(e) Ms Whyte said she had been told that she could not get into anydiscussions with Ms Sharma.(f) Mr Andrew Leckie, Airport Manager, invited Ms Sharma to put herconcerns in an email and he would respond.[44] Ms Stewart sent an email to Mr Leckie which said that Ms Sharma "was sayingthat the letter was incorrect stating that they all had business class tickets (incorrect)very inconsistent." Ms Sharma was in fact correct, and Ms Stewart was wrong on thispoint.[45] Ms Stewart sent an email to staff on 21 February 2019 stating:We will not accept any form of discrimination, harassment or bullying. Thespecific information that you provide is crucial to successfully monitoring andbuilding an overall case and behavioural profile. What you think as a minorpiece of information more than often builds part of a bigger picture. It is alsoimportant that if you are feeling intimidated outside of the work environmentfrom a member of the public who is in dispute with the NSN Air NZ team thatyou report this, again, this is not o.k.(emphasis in original)[46] Ms Martin replied to Ms Stewart about the email:Great email to your team, let's hope the reporting culture improves so we canget the desired outcomes we want. I am a little concerned that Andrew isgetting so involved. It has been dealt with so any further issues that occurwith the Sharma family need to be reported so we can investigate and takeaction.[47] In the meantime, Ms Stewart continued to liaise with Nelson Airport staff aboutMs Sharma, including providing instructions on how they should deal with her whenshe checked in on 20 February 2019:Basically in no way are we "allowing" her behaviour nor rewarding herbehaviour..but basically we want to give her the opportunity NOT to kickoff (in my opinion this will be hard for her).So thought of a plan, if we can execute it this way (knowing that a lot of workis going on behind the scenes) and keep a mental note of the steps, convo hadand her behaviour..If possible can we get either Wendy or Dennis to check her in – ask her for ID.Then if she and/or the daughter has a bag and she wants to check it in – explainthe ticket that she is on..seat only (be 100% sure that she hasn't purchasedone online between yesterday and tomorrow first). Follow procedure here, nofree bags etc.If she has a cabin bag with a fast bag tag – explain the rules but LET her usethe fast bag "this one time we will let you pop your bag on the trolleyetc".this is the opportunity for her to be kind/understanding or even say'thank you' ..if she then kicks off and we have done all that our case isbasically much stronger. The daughter cannot have a fast bag as not koru etc.Having a CHC agent check her in also removes the NSN element from it andthen its completely bias free in terms or her coming back on us.we can say"well actually you were served by a CHC CSA and this process is air NZ wideetc"I am staying away from the action! Do not want any risk of her commentingon me watching or anything like that. I will however be ready for a call if itturns to custard.@Louise Wise same in the lounge – note behaviour and if she tries tointimidate you in ANY manner please call me.Again, security is aware, but please don't make a call without talking to myselfor Andrew unless your safety is compromised.we need to be very carefulhere.Please come back to me with any questions and lets brief the team on the planearly and be ready for her check-in early (she will likely want the time in thelounge)I want to reiterate that us doing it this way is part of a biggerpicture Andrew has reached out to the senior manager of lounges and I havebeen in contact with our security advisor.(emphasis in original)[48] Mr Grant May, Nelson Airport Manager, enquired about Ms Sharma's travelon 20 February 2019 and Ms Stewart responded that she had behaved but the staffcould "immediately" tell she was "high maintenance." Ms Stewart then referred tothe 18 February 2019 conversation in which Ms Sharma had wanted to talk about thewarning letter and said about Ms Sharma, "I have never in my life met such a nastywoman, who lies through her teeth."[49] In response, Mr May said:That's what manipulative bullies do – twist facts to suit their position. Youprobably scared her and she's picked up that Sherry [Ms Whyte] is a softertouch.[50] Ms Martin followed up with Ms Stewart to submit an OSR for her interactionwith Ms Sharma on 18 February 2019.March 2019 – correspondence to Chief ExecutiveMs Sharma and Mr Christopher Leaper write to Mr Luxon[51] On 7 March 2019, Ms Sharma wrote to Mr Luxon providing her version ofwhat happened on 1 December 2018. She refuted that the family had not beenpermitted into the lounge and provided a copy of their business class tickets.Ms Sharma questioned the check-in restrictions describing the "unexplained situation"as "inhumane" and expressing her view that there was "an element of corporatebullying and harassment." She said they were entitled to request an explanation forwhy they were being treated in this way.[52] On 12 March 2019, Mr Christopher Leaper emailed Mr Luxon in support ofhis wife's letter. He reiterated that the family had all been travelling business class.He said the warning letter was a "total shock" and Air NZ had "threatened our wholefamily in a bullying type militaristic fashion over alleged behaviour which has beenpresented in the worst light possible." He reiterated that lounge access was neverrefused. He complained that there was no right of reply.Mr Leckie investigates and responds to Ms Sharma[53] After the 18 February 2019 conversation with Ms Sharma, Mr Leckierequested information from Air NZ staff about Ms Sharma so that he could respond toher once he received her email. Staff members forwarded him the information thathad been gathered prior to the issue of the warning letter.[54] Ms Martin provided information to Mr Leckie and said the family became"aggressive" when queried about their membership and "entered the loungeuninvited." She also said that Mr Christopher Leaper had given one of the childrenhis pass to enter the lounge.[55] On 8 March 2019, after receiving a copy of Ms Sharma's letter to Mr Luxon,Mr May acknowledges to Mr Leckie the need to "do some highly accurateinvestigation here." Mr May says to Mr Leckie:If (that's truly if) some of the points Ms Sharma raises in her letter are correct,(e.g. the statement that all pax were business class as opposed to Sherry's [MsWhyte's] assertion that some of them were premium economy) we will needto ensure accuracy in response and own any errors.My approach will be to keep to facts and facts alone, ignoring the emotion.The main issue which seems to have been avoided is the behaviour.I've advised Lisa [Ms Stewart] I will take this over for now.(emphasis in original)[56] On 14 March 2019, Mr May sent Mr Leckie an email setting out a "summaryof facts" which referred to earlier complaints and issues. Mr May concluded bystating: There have been a number of events where Ms Sharma and/or her familymembers have asserted themselves to the point of staff feeling bullied or therehas been an irregularity in the travel. This is the reason for the letter fromGiles Carter, and the reason for not allowing kiosk check in. There is an established pattern of questioning, challenging and intimidatingstaff when the anticipated response is not forthcoming. We cannot have ourstaff treated in this way and exposed to the belligerence Ms Sharma and someother members of her family display when they don't get their own way. I ampersonally proud of the way my team have handled the various difficultsituations that Ms Sharma and family have presented us with over time. I fullysupport the statement in the Giles Carter letter to Ms Sharma that "Failure tocomply, breach or non-acceptance of these conditions will result in you notbeing permitted to enter the lounge, board a flight at the time of check-in/boarding, being off-loaded, and/or being banned entirely from flying on AirNew Zealand's services in the future."I trust that we as an organisation can take steps to ensure our staff are notsubjected to this treatment.[57] On 15 March 2019, Ms Sharma asked Mr Leckie whether she would be ableto check in online for an upcoming flight. Mr Leckie sent Ms Sharma's query to otherAir NZ staff and asked that if they were still comfortable to continue the restrictionsthat someone call Ms Sharma and inform her. On 21 March 2019, Ms Martin repliedas follows:As per the warning letter issued to Mrs Sharma, there is no conditionrestricting her ability to check in online. The letter was outlining the loungeaccess eligibility and our conditions of carriage which she must comply with.[58] It appears from the above email, that Ms Martin was not aware of the check-inrestrictions. On the same day, Ms Paul separately informed Ms Stewart thatrestrictions were in place for Ms Sharma's upcoming flight. No one called Ms Sharmaas Mr Leckie had asked.[59] On 29 March 2019, Mr Leckie responded to Ms Sharma's 7 March 2019 letterto Mr Luxon stating, among other things, that:Having completely read your detailed outline of the event and reviewed theletter Giles Carter our Senior Manager Security sent you on 21 December2018 I am comfortable with the position we have taken.Without further debating what did and did not occur it is important to be cleartickets issued by Singapore Airlines for travel both within New Zealand andInternationally do not meet out Lounge entry Terms and Conditions.Ms Sharma's request for personal information[60] On receiving Mr Leckie's response, Ms Sharma wrote to Air NZ's privacyofficer, requesting a response to her personal information requests made in the letterof 7 March 2019.[61] On 9 May 2019, Mr Hugh Roberts, Senior Legal Counsel at Air NZ, sentMs Sharma a copy of the December 2018 OSR prepared by Ms Stewart.April 2019 – Ms Sharma travels to Wellington[62] In April 2019, Ms Sharma travelled with Mr Christopher Leaper and two ofher children from Nelson to Wellington return. The family checked in at NelsonAirport and were not asked for identification. On their return at Wellington AirportAir NZ staff asked them for identification, which they did not have for the two childrenwho were still at secondary school.[63] Ms Sharma recorded the conversation. Ms Sharma questioned why they werebeing asked for identification and asked who she could talk to about the issue. Whenthe check-in attendant said she would get her team manager to come over, Ms Sharmasaid she did not want to talk to anyone and had a flight to catch. The check-in operatorbecame upset and an Air NZ manager intervened and spoke with Ms Sharma. Theinteraction was the subject of Ms Sharma's next letter to Mr Luxon on 24 June 2019.24 June 2019 – Ms Sharma complains to Chief Executive[64] On 24 June 2019, Ms Sharma emailed Mr Luxon to complain about theincident at Wellington Airport: It was clear to us that Ms Stewart has written defamatory comments aboutus, that creates a knee-jerk reaction from ground staff. This is exactly whathappened in Wellington. [65] Ms Sharma said the "hostility" directed towards them was "completely awful."She said the check-in attendant had "put on a show of tears" and it was a "deliberateset up." She complained that the manager had "aggressively" shut down her son.Ms Sharma told Mr Luxon she had taped the encounter and would tape all futureencounters at Air NZ check-in. Ms Sharma also accused Ms Stewart of being "on avenomous mission" against her.25 June 2019 – check-in at Nelson AirportConversation with Ms Gillooly[66] The morning after emailing Mr Luxon, Ms Sharma caught a flight from NelsonAirport with her son. She taped her conversation with the Air NZ check-in attendant,Ms Cheryl Gillooly, without her knowledge.[67] The transcript of the recording indicates that when Ms Gillooly askedMs Sharma for identification, she said she did not know why she had to provideidentification and said "it is all to do with Lisa Stewart. Is she still here?" Ms Sharmasaid that Ms Stewart has "put a block on us and made all these allegations against ourfamily." Ms Sharma told Ms Gillooly she had written to Mr Luxon the night before.She said Ms Stewart had accused them of "all these things", that Ms Stewart was fromChristchurch, and that "[s]he doesn't know us at all but [has] a vendetta and it's justabsolutely upsetting."[68] Ms Gillooly checked them in for their return flight. Ms Sharma said, "Great,awesome. So we're checked in. We don't have to check in – great. Thank you." Theconversation ended amicably.[69] Ms Gillooly told Ms Stewart about her encounter with Ms Sharma. Ms Stewartasked Ms Gillooly to write down what had happened. Ms Gillooly made handwrittennotes. The handwritten notes include the following observations:(a) Ms Gillooly found Ms Sharma hard to deal with and "verydisrespectful."(b) Ms Sharma had informed her that she had sent a detailed email toMr Luxon telling him of her "disgust" with Ms Stewart.(c) Ms Sharma said she had no respect for Ms Stewart or Air NZ and thatMs Stewart has a "vendetta" against Ms Sharma and her family.(d) Ms Sharma said Ms Stewart would have trouble coming her way onceMr Luxon received her email.(e) Ms Gillooly said all of Ms Sharma's words were "negative [and]malicious."Ms Stewart submits OSR[70] At 11.26 am that same morning, Ms Stewart submitted an OSR attachingMs Gillooly's written statement and a screenshot showing Ms Sharma had checkedMs Stewart's LinkedIn profile. Ms Stewart said she had been made to feel"intimidated and personally attacked in my own workplace." She felt "intimidatedand concerned of what Ms Sharma is capable of, what she is trying to do to myprofessional career and the effect that she could potentially have on my personal lifeoutside of work if given the opportunity (Nelson is small)."[71] Ms Stewart forwarded the OSR to Mr May on the same day. Mr May spokewith Mr Giles Carter and Mr Legge and forwarded the OSR to them and Mr Leckie.Ms Martin and a security adviser then investigated the OSR.[72] Ms Gillooly met with Ms Stewart and Mr May a couple of days after theincident. Ms Gillooly says she was asked to write down everything that happened inas much detail as she could remember. That information was then captured in an emailthat Ms Stewart sent to Ms Martin and includes a statement from Ms Gillooly that:I definitely felt that she [Ms Sharma] was unstable, her body language andaggressiveness was not normal human behaviour. Her demeanour was quiteaggressive. There was no reasoning with her to stop her being aggressivetowards Lisa and the company.2019 unruly passenger report[73] On 26 June 2019, Ms Martin prepared an unruly passenger report about theincident on 25 June 2019 (2019 unruly passenger report). That was based onMs Gillooly's account. She assessed Ms Sharma's conduct as intimidating,threatening and abusive, and of major severity, justifying a ban.[74] On 1 July 2019, Mr Roberts responded to Ms Sharma's email of 24 June 2019:Mr Luxon has asked me to respond to your email to him dated 24 June.I have authority to deal with your complaint. Please direct all correspondenceto me.Your email to Christopher Luxon is distasteful and insulting. We won'trespond to the content of that email.Rather, we will deal with the substance of your complaint. We disagree thatthe personal information that we have disclosed is inaccurate or untrue. Itreflects the views and opinions of our staff and the effect that your recentbehaviour has had on them. It is clear from your email to Mr Luxon, that youdon't consider that you are in anyway responsible for the position that younow find yourself in and that you have no awareness of the effects of yourbehaviour.Given the tone of your email, we have no confidence that your intimidatoryand aggressive behaviour toward our staff won't be repeated when you travelwith us again.While Air New Zealand will always endeavour to exceed our customer'sexpectations, we are very clear that we have obligations to our staff and wewill not tolerate ill treatment of them by any customer.I have forwarded the email that you sent to Mr Luxon to our Group SecurityTeam with a recommendation that they review your eligibility to access boththe Koru Lounge and Air New Zealand operated flights.[75] On the same day, Ms Sharma responded to Mr Roberts's email saying therehad been no ill treatment of Air NZ staff – it was a "fabricated litany of lies."Ms Sharma considered the way her family had been treated was "completelydistasteful" and "unprofessional."[76] Mr Roberts forwarded Ms Sharma's email to the Security team andrecommended that Air NZ not renew Ms Sharma's Koru membership, saying, "it'stime to put an end to Ms Sharma's travel with us for a period."Air NZ decide to ban Ms Sharma[77] On 2 July 2019, after considering the unruly passenger report about theincident with Ms Gillooly and the 24 June 2019 email, Air NZ decided to banMs Sharma and sent her a letter:As a result of your recent intimidatory and aggressive behaviours towards AirNew Zealand staff, you will be banned for 12 months from the date of thisletter from travelling on Air New Zealand flights or use of any Air NewZealand Group Services, including its subsidiary domestic carriers.Any attempt by you to enter any Air New Zealand premises, properties orfacilities during the prohibited period will be promptly reported to the Policeand the Civil Aviation Authority, for them to respond as they considerappropriate.Any unused bookings you hold with Air New Zealand will be fully refundedto you or to the third party who paid for the booking. Any bookings made byyou or by a third party on your behalf during this ban will not be processed.Any enquiries from a third party regarding such a refund or the non-processingof any booking should be directed to the entity with whom the booking wasmade.The above commentary and conditions are without prejudice to any otherrights Air New Zealand or its employees may have against you in relation tothis matter.[78] At the time of her ban, Ms Sharma had booked and paid for travel scheduledbetween July and December 2019 and had paid for a Koru membership valid until 30March 2020.[79] On 4 July 2019, Air NZ refunded Ms Sharma.[80] Ms Sharma then sent four separate letters to Mr Roberts on 4, 5, 6 and 8 July2019. In those letters:(a) Ms Sharma requested that the information held by Air NZ about theDecember 2018 incident be removed from their records. Ms Sharmadescribed the allegations as "blatant untruths."(b) Ms Sharma described the banning as "disproportionate" and "severe."(c) Ms Sharma alleged that Air NZ was in breach of its privacy policy.(d) Ms Sharma described the allegations about her sons' behaviour towardsMs Matuszewski as "denigrating", "offensive" and "abhorrent."(e) Ms Sharma said there had been no openness, transparency or honesty.(f) Ms Sharma described her "mental shock" at the banning letter and thatshe felt "totally consumed" by the "significant humiliation, upset anddistress" from the ban.(g) She had not received a "substantive response" to her 7 March 2019letter other than Mr Leckie saying he was comfortable with Air NZ'sposition.[81] There was further correspondence between Ms Sharma and Mr Roberts, andthen between Ms Sharma's counsel and Air NZ's inhouse legal team, but no resolutionwas reached.Ms Sharma files proceedings[82] Ms Sharma then filed proceedings seeking to reinstate her ability to travel withAir NZ. She was unsuccessful in obtaining an injunction requiring Air NZ to removethe ban and this Court determined that Ms Sharma had not established that she had anarguable case that Air NZ had breached its terms of carriage.4Air NZ obtains further information[83] After proceedings were filed, Air NZ made further internal enquiries andobtained information from Ms Janine Hamilton and Ms Dayana Joseph regarding theirinteractions with Ms Sharma at the Wellington Airport in April 2019. It was reportedthat Ms Sharma spoke to Ms Joseph in a "very aggressive and condescending manner"and caused her to burst into tears. Ms Joseph was sent home because she was upset.[84] Air NZ also located an OSR dated 5 May 2019 from a cabin crew member whoreported that Ms Sharma was "very vocal" about not being seated next to her son. The4 Sharma v Air New Zealand Ltd [2020] NZHC 230.OSR had been closed without any further action and was not considered when Air NZdecided to ban her.LEGAL PRINCIPLES[85] The parties agree as to the applicable legal principles when considering theexercise of a contractual "reasonable discretion."[86] Mr Fowler for Ms Sharma accepted the formulation of the test by Davison J inthis Court:5Or put another way, such a decision to refuse carriage will be lawful so longas it is not unreasonable in the sense that it is irrational, capricious, orunreasonable in the public law sense of being a decision that no reasonabledecision maker could make.[87] The above passage reflects the position as summarised in C & S KellyProperties Ltd v Earthquake Commission:6 the position is reflected in New Zealand cases which recognise absolutediscretions in a contract must be exercised in a way that is not capricious,arbitrary or unreasonable, and that an apparently unfettered discretion may besubject to an implied term of reasonableness and the need to give businessefficacy to the contract.Reasonableness[88] Air NZ relied on Braganza v BP Shipping Ltd in arguing that the decision doesnot have to be objectively reasonable.7 There, the court held:8It is clear, however, that unless the court can imply a term that the outcome beobjectively reasonable – for example, a reasonable price or a reasonable term– the court will only imply a term that the decision-making process be lawfuland rational in the public law sense, that the decision is made rationally (aswell as in good faith) and consistently with its contractual purpose.[89] The key issue is therefore not whether the decision is objectively reasonable,but rather whether it was made rationally, in good faith, and consistently with itscontractual purpose.5 Sharma v Air New Zealand Ltd [2020] NZHC 230 at [66].6 C & S Kelly Properties Ltd v Earthquake Commission [2015] NZHC 1690 at [68].7 Braganza v BP Shipping Ltd [2015] UKSC 17, [2015] 1 WLR 1661.8 At [30].[90] The majority of the United Kingdom Supreme Court in Braganza recognisedthat there are two limbs to the question of "reasonableness."9The first limb focusses on the decision-making process – whether the rightmatters have been taken into account in reaching the decision. The secondfocusses on its outcome – whether even though the right things have beentaken into account, the result is so outrageous that no reasonable decision-maker could have reached it. The latter is often used as a shorthand for theWednesbury principle, but without necessarily excluding the former.[91] In terms of process and the first limb, in Braganza the United KingdomSupreme Court considered what a rational decision-making process involves:10If it is part of a rational decision-making process to exclude extraneousconsiderations, it is in my view also part of a rational decision-making processto take into account those considerations which are obviously relevant to thedecision in question. It is of the essence of 'Wednesbury reasonableness' (or'GCHQ rationality') review to consider the rationality of the decision-makingprocess rather than to concentrate on the outcome. Concentrating on theoutcome runs the risk that the court will substitute its own decision for that ofthe primary decision maker.[92] This Court considered the applicability of the majority's approach in Braganzato a commercial contract in Woolley v Fonterra Co-Operative Group Ltd.11 Isac Jnoted that Braganza concerned an employment agreement, and about that contextstated:12It is not surprising, then, that the nature of that relationship might importprocess requirements not generally found in commercial cases involving theexercise of a contractual discretion.[93] Isac J noted that there had been no explicit endorsement in New Zealand of theBraganza approach and he considered it remains questionable whether it can beapplied in the context of more commercial contracts. The Court declined to follow theexpanded default rule in Braganza and considered that the approach should focus onthe contract and not import public law concepts to strictly commercial contracts:13An approach focussed on the contact itself, a broad view of the purpose of theventure, and the uncertainty the contractual discretion was designed to manageensures the Court is focussed on giving effect to the bargain the parties made.9 At [24].10 At [29].11 Woolley v Fonterra Co-operative Group Ltd [2021] NZHC 2690.12 At [427].13 At [460].It also avoids category errors caused by the application of public law conceptsto a contract, or employment based fiduciary obligations to strictlycommercial contracts.[94] Counsel for Ms Sharma did not seek to rely on the expanded approach inBraganza and Air NZ submits that it is inappropriate to expand the default rule in thecontext of this case. It is not therefore necessary for me to determine whether theexpanded approach in Braganza applies to Air NZ's terms of carriage.[95] I consider Air NZ's decision-making process to the extent that this is relevantto determining whether the decision was reasonable, in the Wednesbury sense, and todetermine whether Air NZ acted in good faith, rationally and consistently with theterms of carriage.Standard of investigation[96] Where a reasonable discretion is required, a lay decision maker is not expectedto investigate to the same standard as a court of law:14Where, as here, the success or failure of a claim depends upon the exercise ofa discretion by a lay body, it would be a mistake to expect the same expert,professional and almost microscopic investigation of the problems, bothfactual and legal, that is demanded of a suit in a Court of law.Context of decision-making power and applicable principles[97] The context of the contractual relationship is also relevant.15 In CanaanFarming Dairy Ltd v Westland Dairy Company Ltd the applicable principles werehelpfully summarised, as follows:16(a) absolute contractual discretions may not be exercised in a way that isarbitrary, capricious, or unreasonable, having regard to the provisionsof the contract;(b) the meaning of good faith in this context is the parties to the contractmust be true to the ideal that lies behind the contract or, in other words,"the reasonable expectations of honest [people] must be protected";and14 CVG Siderurgicia del Orinoco SA v London Steamship Owners' Mutual Insurance AssociationLtd (The "Vainqueur José") [1979] 1 Lloyd's Rep 557 (QB) at 577.15 Braganza v BP Shipping Ltd [2015] UKSC 17, [2015] 1 WLR 1661 at [18].16 Canaan Farming Dairy Ltd v Westland Dairy Company Ltd [2022] NZHC 2524 at [122].(c) an approach focused on the contract itself, a broad view of the purposeof the venture, and the uncertainty the contractual discretion wasdesigned to manage ensures the Court is focused on giving effect tothe bargain the parties made.[98] In Canaan, which was an application for an interim injunction, Doogue Jconsidered that a contract-focused approach required that the discretion must be set inthe context of the contract as a whole and should not be interpreted in such anexpansive way as to render other provisions redundant or meaningless.17 In that case,the Court looked at the purpose of the bargain – that being for Westland to takeCanaan's milk supply for a set period. Canaan had duties regarding milk quality andWestland had the right to refuse to take milk at its discretion. There were numerousgrounds for refusing milk including where the milk did not comply with the supplyterms or legal requirements, where it was not in Westland's best interests, and wherethere was "any other reason to refuse the milk."[99] The Court considered that the more general grounds to refuse milk should beread in the context of the more limited grounds. Westland was concerned aboutCanaan's employment practices after the Employment Court had made findingsregarding farms at Gloriavale. It was because of concerns arising from that decisionthat led Westland to refuse to take Canaan's milk. Canaan had offered to provideWestland with any information or reports to satisfy itself as to Canaan's operations,but Westland had not taken up that offer and determined that it would not take themilk.[100] The Court held that Westland should have taken the opportunity to obtain theinformation offered by Canaan to satisfy itself of the current position, rather thansimply relying on related historical matters. That should have happened beforeexercising its discretion to refuse milk. There had been a 30-year amicable businessrelationship between the parties and there had been no findings of breach of any legalobligations. In these circumstances, the Court considered there was a strong case thatWestland's discretion had not been exercised reasonably or in a manner that gaveeffect to the bargain between the parties.17 At [142].Conclusion on legal principles[101] In assessing Air NZ's decision to ban Ms Sharma, the applicable legalprinciples require consideration of:18(a) The context of the terms of carriage between Air NZ and consumers,including the reasonable expectations of parties to that contract;(b) Whether Air NZ acted honestly and in good faith;(c) Whether Air NZ acted arbitrarily or capriciously; and(d) Whether Air NZ's decision is unreasonable in the Wednesbury sense.BREACH OF CONTRACTTerms of carriage[102] Air NZ's terms of carriage provide:7.1 RIGHT TO REFUSE CARRIAGEWe and/or our operators may at any time prior to boarding refuse to carry youor your Baggage if, in the exercise of our reasonable discretion, we decide orestablish any of the following:7.1.1 such action is necessary for reasons of safety;7.1.2 such action is necessary to comply with any applicable laws,regulations, or orders of any state or country to be flown from, into orover;7.1.3 your conduct, age or mental or physical state including yourimpairment from alcohol or drugs, is such as to require specialassistance, cause discomfort or make yourself objectionable to otherpassengers or involve any hazard or risk to yourself or to other personsor to property;7.1.4 such action is necessary because you have failed to observe any of ourinstructions including non-compliance with these Conditions inrelation to carriage of dangerous or prohibited goods;18 C & S Kelly Properties Ltd v Earthquake Commission [2015] NZHC 1690; Braganza v BPShipping Ltd [2015] UKSC 17, [2015] 1 WLR 1661; CVG Siderurgicia del Orinoco SA v LondonSteamship Owners' Mutual Insurance Association Ltd (The "Vainqueur José") [1979] 1 Lloyd'sRep 557 (QB); and Canaan Farming Dairy Ltd v Westland Dairy Company Ltd [2022] NZHC2524.7.1.5 you have refused to submit to a security check;7.1.6 you have not paid the applicable fare, charges or taxes for your currentor any previous carriage with us;7.1.7 you do not appear to have valid travel documents; you may seek toenter a country through which you are in transit; you may destroy yourtravel documents during flight; you refuse to surrender your traveldocuments to the flight crew, against receipt, when so requested;7.1.8 the Ticket you present has been acquired unlawfully or has beenpurchased from an entity other than us or our Authorised Agent; hasbeen reported as being lost or stolen; is a counterfeit; or contains aFlight Coupon that has been altered by anyone other than us or ourAuthorised Agent, or has been mutilated;7.1.9 you cannot prove that you are the person named in the Ticket;7.1.10 you have previously committed an act or omission of the type referredto in article 7.1 on a previous flight or at any location connected withairline services including airports and ticket selling offices, and wehave reason to believe that such act or omission may be repeated on aflight operated by us or Our Operators;7.1.11 we have notified you in writing that we would not after the date ofsuch notice, carry you on our flights or those of Our Operators. In thiscircumstance you will be entitled to a refund less any reasonableservice fee to cover our administrative costs;7.1.12 you are wearing or otherwise displaying gang patches, insignia, signsor symbols, or other attire which we deem offensive or believe willcause discomfort to other passengers and you have refused to removesuch offensive items.[103] Article 11 refers to conduct on board aircraft. Article 11.1 provides:ARTICLE 11: CONDUCT ON BOARD AIRCRAFT11.1 GENERALIf in our opinion you conduct yourself on board the aircraft so as to endangerthe aircraft or any person or property on board, or obstruct the crew in theperformance of their duties, or fail to comply with any instructions of the crew,including but not limited to those with respect to smoking, alcohol or drugconsumption, or behave in a manner which causes or is likely to causediscomfort, inconvenience, damage or injury to other passengers, the crew orany property, including the aircraft, we may take such measures as we deemnecessary to prevent continuation of such conduct, including restraint. Youmay be off-loaded at any point, prosecuted for offences committed on boardthe aircraft and we may decide to refuse to carry you at any time in the future.[104] Air NZ relies on art 7.1.11 and says the 2 July 2019 letter notified Ms Sharmathat it would not carry her on its flights for a period of 12 months and that Air NZwould refund her booked flights.[105] I accept Air NZ's submission that the breach of contract claim applies inrespect of booked flights only. Subject to compliance with applicable laws, Air NZ isnot obliged to sell a ticket to any person. The issue is therefore whether Air NZexercised their "reasonable discretion" under art 7.1.11 when refusing to carryMs Sharma.[106] The Air NZ terms of carriage are structurally similar to those in Canaan in thatAir NZ has discretion to refuse carriage on a number of grounds as specified in art 7.1.While the other grounds are specific (see [102]), art 7.1.11 is general and only requiresprior notice before carriage is refused. I agree with Davison J that art 7.1.11 cannotbe interpreted as requiring the prior occurrence of one of the other matters describedin art 7.1 as the express wording does not specify those grounds as a prerequisite tonotice.19[107] While art 7.1.11 does not prescribe any underlying reason for refusing carriage,it does require that Air NZ exercise reasonable discretion. The other grounds in art7.1 are relevant context and examples (not prerequisites) of the types of factors thatwould justify banning a customer. It would also be a reasonable expectation of thecontracting parties that Air NZ have a broad discretion to notify customers that itcannot carry passengers given the inherent nature of air travel. Travel may need to becancelled for many reasons including, for example, a pandemic or weather. Therequirement that Air NZ exercise a "reasonable discretion" fetters its discretion to relyon art 7.1.11 arbitrarily.[108] The discretion to refuse carriage appears to be designed to allow Air NZflexibility to decline travel if there is a reasonable basis for so doing. This is consistentwith the regulatory context within which Air NZ operates under the Civil Aviation Act1990 and the Civil Aviation (Offences) Regulations 2006. Air NZ is required to ensureits activities are carried out safely and in accordance with prescribed safety standards19 Sharma v Air New Zealand Ltd [2020] NZHC 230 at [65].and practices.20 This supports that discretion not being unreasonably fettered to ensureAir NZ is able to meet safety standards and practices.[109] Air NZ's terms of carriage also apply to consumers. The terms are notnegotiated, in contrast to commercial contracts. Suppliers of services to consumersare subject to consumer protection legislation, including the Consumer Guarantees Act1993 (CGA). The purpose of the CGA includes to contribute to a trading environmentin which the interests of consumers are protected, businesses compete effectively, andconsumers and businesses participate confidently. Section 28 of the CGA providesthat where services are supplied to a consumer there is a guarantee that the service willbe carried out with reasonable care and skill.[110] Air NZ's obligation to exercise reasonable discretion under art 7.1.11 istherefore to be considered against the regulatory context prescribed by the CivilAviation Act 1990 and the consumer context as prescribed by the CGA. Air NZ isrequired to provide its services with reasonable care and skill and its decision-makingpowers are to be assessed in that context.Air NZ's policies and procedures[111] Mr Legge gave evidence about Air NZ's policies and procedures wheninvestigating a security incident. These are captured within Air NZ's "Group SecurityWatch List Process Standard Operating Procedures" (security procedures). Mr Leggeexplained the investigation process as follows:(a) Reporting – any employee may report a threat to safety. This mayinvolve an initial call or email and then completion of an OSR.(b) Allocation – the OSR is allocated to security staff for investigation.(c) Investigation – a security adviser and security consultant investigate theOSR based on its identified level of urgency. Information may becollated from internal and external sources.20 Civil Aviation Act 1990, s 12(3).(d) Assessment – once all information has been collated, analysed andevaluated, a risk assessment is completed to determine the severity ofthe incident and any actions required to mitigate risk. Potential actionsinclude no further action; information only; warning letter; or ban.(e) Peer review and approval – for a ban or warning, the Senior Managerof Security must approve the action and an unruly passenger reportmust be submitted to inform the assessment and justify the decision.The report must also be circulated to relevant parties. A copy of theunruly passenger report and the ban or warning letter must be attachedto the "Watchlist" entry along with any other relevant information.There are template warning and ban letters that should be used forpassenger correspondence.(f) Post action review – warning letters and bans are reviewed, generallyafter 12 months but this can be altered on a case by case basis.[112] Where Air NZ is considering a ban the Security Procedures requireconsultation with "legal, Chief Ops (and Customer where required)."Investigation by Air NZ[113] Mr Legge explained that the decision to ban Ms Sharma was made after theOSR was prepared in relation to the incident with Ms Gillooly on 25 June 2019. Thatincident was investigated by Ms Martin who prepared an unruly passenger report.Mr Legge discussed that report with Mr Carter and Mr May of Nelson Airport. Theyall agreed that, consistent with Ms Martin's assessment, a one year ban should beissued.[114] Mr Legge says they took into account "all of the reports of Air New Zealandemployees including the concerns raised after the warning letter had been issued."They also considered Ms Sharma's email of 24 June 2019 where she had complainedto Mr Luxon about the incident at Wellington Airport. They considered there had been"insulting conduct and statements" which included personalised statements. Theyconsidered the conduct crossed the line from being rude and into being unacceptablebehaviour and "it was persistent."[115] In cross-examination, Mr Legge acknowledged the importance of not missingsomething important when investigating. He agreed that if there was somethingimportant, he would want to know about it when making his decision.[116] Mr Legge also acknowledged that it would be a very significant failure in theinvestigative process if matters contained in the unruly passenger report on which thedecision was based were never said by Ms Sharma.[117] Air NZ submits that investigative failure is not the legal test. Any investigativefailures are relevant to the reasonableness of the decision, whether Air NZ acted ingood faith and whether there is any arbitrary or capricious conduct. If, absent theinvestigative failures, the same decision would have been reached, then this mayindicate that the decision was not unreasonable, in the Wednesbury sense.Relevance of tape recordings[118] Mr Legge acknowledged he had seen the 24 June 2019 email to Mr Luxon andthat this was considered in making the ban. In that email, Ms Sharma told Air NZ thatshe had taped the interaction at Wellington Airport and would tape interactions goingforward:What have we done to deserve this type of hostile customer treatment? Thatwas my question at the time, and it remains that. I taped the interaction,because it was completely hostile towards us, and we felt strongly that it wasa deliberate attempt to set us up for failure. In the lounge, the host suggestedthat the reason why we may have to check-in is because of the similarity innames. It seems nobody really knows the reason why we are being asked tocheck-in as through we are some security risk. However, it is so obvious thatMs Stewart is behind it, because previously travelling to India, we never hadthis issue.From now on, I will be recording all interactions between us and Air NewZealand at kiosk check-in. After the debacle in Wellington, I realise now thatMs Stewart is on a venomous mission, which makes her look so veryunprofessional.(emphasis added)[119] In fact, Ms Sharma had taped earlier interactions, and had done so sinceJanuary 2019 when the family returned from India. She did not disclose that fact toAir NZ.[120] In exercising a reasonable discretion, a decision maker should considerrelevant information offered by the other contracting party.21 In Canaan, the Courtdetermined that the decision maker should have taken the opportunity to satisfy itselfas to the position between the parties, rather than relying on historical matters, beforeexercising the discretion.22[121] This is also consistent with the recent decision in Targa Capital Ltd v WestpacNew Zealand Ltd where the Court considered whether Westpac had exercised areasonable discretion in terminating banking services to Targa:23As to process, it cannot seriously be argued that Westpac acted unreasonably.It did not rush to terminate. It sought information from Targa. It made otherinquiries. The decision was made at a high level within Westpac. Westpacengaged in correspondence with Targa once the decision was made andprovided extensions to the termination date.[122] In contrast to the above, Air NZ did not make inquiries about the recording ofthe Wellington Airport incident or subsequent recordings at check-in with Ms Gillooly.Ms Sharma was not provided with any opportunity to respond to Ms Gillooly'scomplaint before the decision was made to ban her. This is despite Air NZ's securityprocedures indicating that consultation with the customer may be required. Incircumstances where the customer had indicated they have recordings of theirinteractions with Air NZ, it would have been prudent to ask for those recordings.[123] The existence of recordings was relevant to the matters under investigation.The investigation concerned Ms Sharma's conduct at check-in and Ms Sharma hadnotified Air NZ that she had recorded the incident in Wellington and would berecording all her interactions at check-in (which is what she subsequently did whenshe checked in at Nelson Airport).21 Canaan Farming Dairy Ltd v Westland Dairy Company Ltd [2022] NZHC 2524.22 Canaan Farming Dairy Ltd v Westland Dairy Company Ltd [2022] NZHC 2524 at [149].23 Targa Capital Ltd v Westpac New Zealand Ltd [2023] NZHC 230 at [48].[124] Mr Wilson for Air NZ submitted that it is speculative to assume Ms Sharmawould have disclosed the recordings if the allegations had been put to her, and saidMs Sharma first disclosed them in her reply affidavit dated 30 August 2019. Thisignores the fact that Ms Sharma had told Air NZ she had recorded the Wellingtoninteraction and would record future interactions. Air NZ was on notice that recordingsexisted.[125] It would have been difficult for Ms Sharma to refuse to disclose the recordingswhen she had told Mr Luxon about them in her 24 June 2019 email. If Ms Sharmarefused disclosure, Air NZ would have been entitled to rely only on the informationbefore it.[126] That the recordings were relevant is clear from their content. I consider thatMs Gillooly's account of her conversation with Ms Sharma portrayed Ms Sharma in amore negative light than can be inferred from the recording. In particular:(a) By saying Ms Sharma said, "why doesn't she piss off back toChristchurch", instead of, "she's from Christchurch," Ms Gilloolyalleged Ms Sharma used inappropriate language and showed a degreeof malice, which cannot be inferred from the recording.(b) By saying Ms Sharma "began getting aggressive about the companyand Lisa [Ms Stewart]" infers Ms Sharma used an aggressive and angrytone and that cannot be inferred from the tone used by Ms Sharma inthe recording.(c) By saying Ms Sharma was unstable, aggressive, was not displayingnormal behaviour, and that there was no reasoning with her to stopbeing aggressive, is inconsistent with the recoding in which Ms Sharmais heard laughing, thanking Ms Gillooly and saying "awesome."Ms Gillooly at one point even says to Ms Sharma, "I know what youmean" when Ms Sharma made comments about Ms Stewart.[127] Ms Gillooly's account formed the basis for the 2019 unruly passenger report.The 2019 unruly passenger report summarised Ms Sharma's conduct as follows:Mrs Sharma has made the NSN PSM feel intimidated and personally attackedShe has searched for the PSM via LinkedIn for no reasonA NSN CSA who was unaware of Ms Sharma's past was grilled by Ms SharmaMs Sharma's aggressive behaviour made the CSA feel very uncomfortableand intimidatedMs Sharma made it clear to the CSA she had an issue with the PSM and wasgoing to take it furtherShe told the CSA she had sent an email to Christopher Luxon telling him ofher disgust with the PSMMs Sharma told the CSA that the PSM will have trouble coming her way andaccused the PSM or having a vendetta against her and her family[128] Ms Stewart did feel intimidated and personally attacked so this is true (as is theLinkedIn search, although any member of the public is entitled to access thatplatform). Ms Gillooly was unaware of Ms Sharma's past and likely did feeluncomfortable when Ms Sharma criticised Ms Stewart, a fellow Air NZ staff member.Ms Sharma did make it clear that she had an issue with Ms Stewart and had written toMr Luxon. Ms Sharma also used the word "vendetta."[129] The transcript of the conversation with Ms Gillooly discloses that Ms Sharmawas willing to speak negatively about Ms Stewart to Ms Gillooly and her reasons fordoing so:Anjela: she's put a block on us and made all these allegations against ourfamily.Anjela: I've actually written to Chris Luxon last night, saying we don't evenknow this lady and she's made all these allegations. We've actuallygot some information from Air New Zealand where she's accused usof all these things. She's actually from Christchurch. She doesn'tknow us at all but [has] a vendetta and it's absolutely upsetting.Anjela: We've lost all the joy of travelling. We're quite frequent flyers and it'sjust lost all its joy cos we have to get here and check-in as well. She'sput this big thing on our whole family all overAnjela: and made these accusations. We are going to be dealing with AirNew Zealand about it but it's just been so wrong.[130] Ms Sharma had been provided with Ms Stewart's report in December 2018.That included the recollections of Ms Whyte and Ms Matuszewski. Ms Stewart hadnot made those allegations. Rather, she had captured the recollections of staff atNelson Airport and communicated them to Security. That was an appropriate actionto take in light of the nature of the comments that had been relayed by Ms Whyte andMs Matuszewski to Ms Stewart. Ms Stewart had not made allegations herself but hadtaken action.[131] Ms Sharma was also willing to complain about Wellington staff to Ms Gillooly:Anjela: In fact, the first time we left here from Nelson in the last trip we didand nobody asked us for ID and I had no idea. We got to Wellingtonand they were so horrible to us. They said, "You haven't got any ID."I said, "But no one told us." No one told us that we had to bring ID.It was just awful, it was insidious.[132] The transcript of the Wellington conversation does not disclose any "horrible"conduct on the part of Wellington staff. Those staff were following instructions andasking for identification as they had been instructed to do.[133] Ms Sharma was correct in that the check-in restrictions appear to have beeninstigated by Ms Stewart when she emailed the Security and Fraud teams as a resultof the 1 December 2018 incident. Ms Stewart had no authority alone to implementthose restrictions.[134] The reason for the check-in restrictions had not been communicated toMs Sharma despite Mr Leckie asking someone to call her if they were to remain inplace. It was not unreasonable for Ms Sharma to express concern about thoserestrictions and the fact it was difficult to comply with them when she had not beeninformed about them. This did not however, entitle Ms Sharma to insinuate thatfrontline staff had been "horrible."[135] I accept that a large part of Ms Gillooly's account is accurate. While the degreeof aggressiveness and malice Ms Gillooly suggests was present is not evident from therecording, Ms Sharma was willing to disparage other staff (including Ms Stewart andWellington staff).[136] Air NZ says there is "an inherent unfairness" in challenging the credibility ofMs Gillooly who prepared evidence for the injunction proceeding without the benefitof the recording. This submission ignores the content of Ms Sharma's 24 June 2019email where she told Air NZ she would be recording all interactions at check-in goingforward (which therefore includes the conversation with Ms Gillooly the next day).[137] Ms Sharma's 24 June 2019 email was given to Air NZ's legal team to preparea response, so Mr Roberts was aware there may be a recording of the conversation.Air NZ should therefore have been aware of the risk of inconsistencies if Ms Gilloolygave evidence without Air NZ first asking Ms Sharma for a copy of the recording. AirNZ was on notice.[138] Mr Wilson for Air NZ submits that while Ms Gillooly's account was not exact,it accurately captured the nature of the conversation. Ms Gillooly's account didexaggerate Ms Sharma's conduct. It did however, accurately record that Ms Sharmawas willing to accuse Ms Stewart of making allegations about the December 2018incident when the information provided to Ms Sharma indicated that it was other AirNZ staff who had shared their recollections with Ms Stewart. Ms Stewart had decidedto take action and refer the issues to Security, as she was entitled to do. That was notprompted by any vendetta but by the shift report she had received and then therecollections of Ms Matuszewski and Ms Whyte. Ms Stewart was entitled to beconcerned about staff health and safety.[139] Mr Legge's evidence was that in banning Ms Sharma, Air NZ also consideredher conduct on 1 December 2018 and her subsequent conduct after the warning letter.Air NZ considered that Ms Sharma had been warned but that she had ignored thatwarning and had continued to intimidate, threaten and be aggressive.[140] Ms Sharma was aggrieved about the contents of the warning letter and theemail report of Ms Stewart that she had received from Mr Roberts. Ms Sharmadisputed that her family had made disparaging remarks about Ms Matuszewski, andshe wanted an explanation for the warning letter saying the family had entered thelounge without permission. She also contested Ms Whyte's false accusation that thefamily were not all travelling business class. That incident is therefore relevantbackground to the ultimate decision to ban Ms Sharma.December 2018 incident[141] The 1 December 2018 incident is relevant to the extent that it shows apropensity for Ms Sharma to behave in a particular way. It was open to Air NZ toconsider that background in banning Ms Sharma.[142] Air NZ submits that Ms Sharma's conduct in relation to that incident indicates"overbearing behaviour and insulting comments."[143] The short video recording in the Koru lounge is helpful. The tone of theconversation sounds civil and not aggressive. It was disruptive to another loungeguest, but this is likely because of the size of the lounge and the number of peopletalking rather than any yelling or shouting, which is not evident from the video.Ms Whyte acknowledged this:It was only a very small lounge at that stage so everything was, it was quite,if it was anyone was vocal it was quite prominent and I know it was upsettingthe rest of the customers so[144] Ms Whyte's tone and words captured on the video indicate she was willing tobe conciliatory to diffuse the situation.[145] The words "embarrassing" and "humiliating" heard on the video are consistentwith Ms Sharma's letter to Mr Luxon when she says those family members addressingMs Whyte may have "appeared somewhat reactive." Ms Sharma says there was sometension because the family's integrity was being questioned.[146] There are consistencies between the video, Ms Whyte's recollection andMs Sharma's recollection, as follows:(a) The family's business class travel was questioned by Ms Whyte.(b) The conversation included discussions about Ms Matuszewski.Ms Whyte told Ms Sharma that Ms Matuszewski had raised the issueof Koru lounge eligibility, and Ms Sharma acknowledged she hadreferred to Ms Matuszewski as "that lady" and that she was told byMs Whyte to use her name.(c) A lounge guest did request that the discussion be taken elsewhere andsaid it was "really loud."(d) There was some tension between Ms Whyte and the family.Ms Sharma acknowledged that those addressing Ms Whyte "may haveappeared somewhat reactive."[147] Ms Whyte was honest when cross-examined. She made appropriateconcessions and accepted that she had confused the business class travel when shewent to check the tickets after she left the lounge. She mistakenly thought some ofMs Sharma's sons were travelling premium economy and that this mistake wasreflected in her subsequent shift report.[148] Ms Sharma's March 2019 letter to Mr Luxon did not mention that a loungeguest had asked them to quieten down. She withheld that relevant information whencomplaining to Mr Luxon. Ms Sharma also complained about the public nature of theconfrontation without disclosing to Mr Luxon that Ms Whyte had asked her to speakoutside of the lounge, so the public nature of the conversation was of her own doing.Ms Sharma also referred to Ms Matuszewski in her letter to Mr Luxon as an "ice-queen." Ms Matuszewski was however, simply doing her job, and was correct aboutthe access rules.[149] What happened after Ms Whyte left the lounge is disputed. Ms Matuszewskisays the family made insulting and rude comments about her and mimicked her. Shesays she had to step out of the Koru lounge and call security because of her concerns.[150] Ms Sharma and her sons who gave evidence all categorically denied they madederogatory comments about Ms Matuszewski. Mr Christopher Leaper said he was inthe Koru lounge and did not observe any mimicking or derogatory comments.Mr Timothy Leaper and Ms Sharma's daughter did not give evidence.[151] Mr Cameron, who knows the family, gave evidence that he entered the Korulounge at approximately 4.30 pm and was likely in the lounge for about 20 minutesbefore his flight departed. This was after Ms Whyte had left the Koru lounge. He saidhe did not observe any of the family mimicking Ms Matuszewski or makingderogatory comments. This is contrary to Ms Matuszewski's evidence that thecomments were made for the entire time the family were in the Koru lounge.[152] Of the family members who gave evidence, all said that no one lost a boardingpass and that Air NZ's records would show this. I accept that no boarding pass waslost. I do not consider anything can be inferred from Air NZ's failure to check itsrecords as the remark could be made and then the boarding pass found.[153] When she gave evidence, Ms Matuszewski became upset. I accept thatcomments were said that deeply upset her.[154] Comments from Ms Sharma's children, recorded in the video, that what washappening was "embarrassing" and "humiliating," suggest that they were also upset.In the absence of any other explanation for being questioned about the legitimacy oftheir business class travel, it is plausible that a member of the family may haveexpressed concern that they were being questioned because of their race. This isparticularly so for people who may have experienced racism before. One of the Leapersons indicated in cross-examination that he had been called names because of hisbackground.[155] Ms Whyte's evidence during cross-examination suggests the insults were madeby one of Ms Sharma's sons:No. It was more the sons, it wasn't Ms Sharma at all. The sons were quitederogatory calling Kara she, she doesn't know what she's doing. I did mentionI said to her look, just – words, I don't know what my exact words were butjust cut her a wee bit of slack, you know, she's relatively new up here, be awee bit mindful and a wee bit kinder. They were calling her "she this" and"she that" and I took offence, it was quite disrespectful so I said: "Would youmind not calling her she, her name is Kara."[156] Ms Whyte noted in her shift report for that day that she and Ms Matuszewskihad been accused of being racist. There was no reason for Ms Matuszewski orMs Whyte to make this up and I am satisfied that Ms Matuszewski's upset wasgenuine. In those circumstances, I accept that one or more of the family made acomment that led Ms Matuszewski and Ms Whyte to believe they were being accusedof being racist.[157] In terms of comments about Ms Matuszewski's intellect, the March 2019 letterfrom Ms Sharma to Mr Luxon records that: I should note that at this point, that I find it difficult to comprehend howboth Kara and Ms Whyte struggled with our lounge access eligibility, whenthe check-in staff fully acknowledged our business class travel, and verballyinvited us to access the lounge. [158] The above comment indicates that Ms Sharma had negative views ofMs Matuszewski and Ms Whyte's ability to understand the lounge access rules.However, both were correct in their assessment of the rules.[159] I therefore accept that comments were made that caused Ms Matuszewski tobecome very upset. Ms Matuszewski could overhear the comments made about herwhen Ms Whyte was speaking to the family. The blame appears to have been put onMs Matuszewski for questioning their eligibility. It was not her fault. She was simplydoing her job. The fact she became upset again, over four years later, supportscomments having been made that were deeply upsetting to her.[160] Against that, I accept Mr Cameron's evidence that he did not observe anyissues after he entered the Koru lounge, despite Ms Matuszewski saying the remarkscontinued for the entire time the family were in the lounge. I find that it is unlikelythat the comments continued while Mr Cameron was in the lounge.[161] There was also no evidence from Mr Simon Trillo of Nelson Airport security.Air NZ's explanation is that this evidence was not necessary because Mr Trillo wasnot an eyewitness to the events in the Koru lounge. No security incident however, wasrecorded at Nelson Airport that day. Mr Trillo could have corroborated the seriousnessof the incident.[162] Ms Whyte mistakenly thought some members of the family were flyingpremium economy. Ms Whyte communicated this mistake to Ms Stewart who thenpassed it on to Ms Martin who prepared the 2018 unruly passenger report. Further,Ms Stewart wrongly considered that Mr Christopher Leaper may have deliberatelygiven his boarding pass to his children so that they could get into the Koru loungeunder his name. There was no basis for this suggestion.Attempts at getting answers[163] Ms Whyte's mistake was relevant context to Ms Sharma's questioning whenshe visited Nelson Airport in February 2019 to clarify the contents of the warningletter. After speaking with Ms Sharma in February 2019, Ms Stewart again repeatedthis mistake to Mr May. That this mistake mattered was acknowledged by Mr May inMarch 2019 when he noted that if it was correct, Air NZ would need to ensure accuracyin its response and "own any errors." Air NZ, however, did not own its error when itdiscovered the mistake and Ms Sharma continued to express concerns.[164] The warning letter said that Ms Sharma and her family had entered the Korulounge without permission. Mr Wilson, for Air NZ, acknowledged this statement wasuntrue but submitted it was irrelevant because Air NZ did not take this into accountwhen it made its decision to issue the warning letter.[165] This false allegation, however, was relevant to Ms Sharma's insistence on anexplanation. Air NZ communicated this mistake to Ms Sharma and other Air NZ staff.She rightfully felt aggrieved about that aspect of the warning letter because it was nottrue.[166] Further, Ms Martin repeated the allegation and circulated it to other Air NZstaff with the warning letter in her email of 27 December 2018. Ms Stewart alsodistributed the warning letter to Nelson Airport staff without the 2018 unrulypassenger report. While the 2018 unruly passenger report may have been included inthe "Watchlist" system, it would have been necessary for Air NZ staff to read throughthat report to identify that Air NZ had mistakenly said the family had entered thelounge without permission.[167] The circulation of the warning letter without context to other Air NZ staffsupports Mr Fowler's argument that Air NZ enabled "suggestibility" so that other AirNZ staff were led to believe the family had entered without permission when this wasnot true.[168] The issue however, that caused Air NZ to issue the warning letter was thecontent of the comments about Ms Matuszewski. It was that conduct that created apotential threat to the health and safety of staff.[169] Making inaccurate accusations is provided as an example of corporate bullyingin WorkSafe's guidelines on workplace bullying (WorkSafe guide).24 A consumer isentitled to expect that reasonable care is taken to ensure any allegations are correctand if they are not, they are withdrawn. Air NZ knew the allegation was wrong,because it was acknowledged in the 2018 unruly passenger report thatMs Matuszewski had allowed the family into the Koru lounge. Despite thisknowledge, it issued a warning letter and circulated it internally with the inaccurateallegation.[170] Further, Air NZ is required to exercise reasonable skill and care in providingservices to customers so it was a reasonable expectation of Ms Sharma to request AirNZ to explain the allegation or, if it was wrong, to withdraw it.[171] Mr Fowler submits that Air NZ "stonewalled" Ms Sharma and would notrespond to her requests for an explanation of the warning letter. He says Ms Sharma's24 WorkSafe Preventing and Responding to Bullying at Work (New Zealand Government, March2017) at 17.requests were reasonable in circumstances where the warning letter had said that thefamily had entered the lounge without permission and no details were provided aboutthe family's alleged offensive behaviour until Ms Sharma made a privacy request andreceived Ms Stewart's report.[172] When the warning letter was circulated to Nelson Airport staff on 31 December2018, Ms Stewart instructed them not to engage with Ms Sharma, to refer Ms Sharmaback to the information in the warning letter and to tell her to contact the Air NZSecurity team. This approach was reinforced during the 18 February 2019conversations with Ms Sharma at Nelson Airport during which:(a) Ms Stewart said about the warning letter, "I'm not going to get into thatwith you today."(b) In response to Ms Sharma saying it was good to talk, Ms Stewart said"No, it's not. I actually think we're going to stop it now."(c) Ms Whyte said to Ms Sharma she had been told that she could not getinto any discussion with her and she would have to deal with Mr Carter.[173] Ms Stewart, on Ms Martin's suggestion, filed an OSR about the aboveconversation and described the conversation as "inappropriate" and "offensivebehaviour." That OSR also repeated the inaccurate accusation about business classtravel. To request an explanation is not "inappropriate" or "offensive" incircumstances where inaccurate allegations have been made against a customer, andin the context of receiving a related warning letter.[174] In Ms Sharma's March 2019 letter to Mr Luxon, she said she felt "shut down"when she wanted to make reasonable enquiries. When responding to that letter, AirNZ did not "own its errors" (as Mr May had suggested it should). Ms Sharma appearsto have been shut down because her questioning and previous behaviour wereperceived as rude and intimidating without regard to her legitimate concerns. Thefailure to respond contributed to Ms Sharma's growing angst that she was being "setup." Ms Stewart did ensure that Ms Sharma was the subject of increased surveillance.Ms Stewart liaised with the Fraud team about the check-in restrictions, asked staff forfeedback when Ms Sharma travelled, submitted an OSR when Ms Sharma had wantedto discuss the warning letter, and encouraged staff to report any incident withMs Sharma, including incidents outside of work.[175] I accept Air NZ did not respond to Ms Sharma's attempts at getting a responseto her legitimate concerns. If Air NZ's primary concern was staff welfare (which Iaccept it was), then it should have taken steps to minimise adverse interactionsbetween Ms Sharma and check-in staff by responding to Ms Sharma's legitimateconcerns. By not addressing Ms Sharma's legitimate concerns or being clear withMs Sharma that the key concern was the way she spoke to staff, there was an increasedrisk that frontline staff would be exposed to Ms Sharma's frustrations.[176] I accept that Air NZ's failure to address Ms Sharma's legitimate concerns wasonly relevant when considering the fact of Ms Sharma's questioning and not themanner in which she questioned staff. Air NZ was entitled to consider the manner inwhich Ms Sharma questioned staff alongside whether the questioning was reasonablein all of the circumstances.[177] It was open to Air NZ to accept the recollections of Ms Matuszewski andMs Whyte in so far as those recollections did not contain accusations that Air NZ knewwere inaccurate. Air NZ was therefore entitled to accept that Ms Matuszewski hadbeen insulted but not that the family had entered the lounge without permission.Imposing check-in restrictions[178] There is no evidence that Air NZ considered whether Ms Sharma's concernsabout the check-in restrictions were valid in considering her behaviour after thewarning letter. The check-in restrictions were one of the causes of Ms Sharma'sfrustrations. They led to the incident at Wellington Airport and the incident withMs Gillooly in June 2019. It was those events that led to her being banned.[179] Ms Sharma provided a list of her and her family's flights between 22 January2019 and 28 June 2019 which show that out of 15 flights, online check-in was notpermitted for 12 of them. Identification was required for five flights but not the others.[180] The internal Air NZ documentation indicates that there was confusion as to thereason for imposing check-in restrictions. They appear to have been imposed becauseupon investigating the 1 December 2018 incident, the Fraud team identified theincident with one of Ms Sharma's sons in September 2017. The Fraud team thenagreed to impose identification restrictions to avoid the incident happening againgiven the similarity of names amongst the Leapers (some of whom share a middlename and others whose first names are similar to that). Ms Sharma does not share thesame name. An Air NZ staff member acknowledged that taking this action may"inflame the situation."[181] Against that, Air NZ is entitled to ask passengers for identification. Whenasking for identification, Air NZ staff are also entitled to be spoken to in a reasonablemanner.[182] Mr Legge gave evidence that different divisions within Air NZ can imposerestrictions including the Security, Fraud and Koru Loyalty teams. Mr Legge'srecollection was that the decision was made between the Security and Fraud teams.Mr Legge also said that whether restrictions are communicated to the customerdepends on the circumstances. In his experience, this information is kept internal.This is consistent with the family not being informed.[183] Ms Sharma asked directly about check-in when she emailed Mr Leckie on 15March 2019:We (4 family members) are travelling to Auckland on Friday 22 March – doyou know whether we will be able to check-in on line as we are accustomedto doing?I do get anxious when I think about that. I do have enough conflict in myprofessional life to deal with, and do not like it coming into my personal spaceif I can help itI do hope you have a nice weekend.[184] Mr Leckie forwarded Ms Sharma's email to Air NZ's Security team on 21March 2019 indicating he had received a call from Ms Sharma and then said:If we are comfortable on our grounds to continue to restrict Anjela[Ms Sharma] and her travelling companions checking in online or throughkiosks can someone please call her today and outline this.. and I wouldencourage a factual concise response as there is the potential to be drawn intoan extensive recap of historical experiences.(emphasis added)[185] While Mr Legge's evidence suggests the restrictions were a result of thewarning letter, Ms Martin replied to Mr Leckie's email on the same day saying:As per the warning letter issued to Mrs Sharma, there is no conditionsrestricting her ability to check in online. The letter was outlining the loungeaccess eligibility and our conditions of carriage which she must comply with.[186] The restrictions remained in place and Ms Paul of the Fraud team informed MsStewart that same day (21 March 2019) that Ms Sharma's check-in would be restricted.There does not appear to have been any assessment at this time as to whether therestrictions were necessary to protect staff health and safety. The reason for therestrictions appears to have been because of the concern about fraud. That related tothe similar names of the Leaper family members and not because of any action byMs Sharma.[187] Mr Leckie asked Air NZ staff to call Ms Sharma if the restrictions were toremain in place, but there is no evidence that anyone did. This appears to be becauseMr Leckie's email was sent to the Security team and did not include the Fraud team(Ms Paul) and Ms Stewart.[188] Further, Ms Stewart appears to have been under the misapprehension that therestrictions had been explained to the family when she questioned this in her email toMs Martin on 26 June 2019:. Just her usual manner and demanding questions around having to show idand wondering why they have too – which was clear in her correspondenceright? This has probably happened around the country.[189] None of the Air NZ correspondence acknowledged or explained the check-inrestrictions. No one called Ms Sharma to explain the restrictions as Mr Leckiesuggested they should.June 2019 email to Mr Luxon[190] Air NZ says Ms Sharma displayed an "intense interest" and "hostility" towardsMs Stewart in her June 2019 email to Mr Luxon, which included the following: Lisa Stewart has completely blacklisted us in a way that is totally untrue.We don't even know this individual, but she clearly has an axe to grind withus, and it would seem that she and Ms Whyte in tandem are hell bent onmaking our lives as customers very difficult, clearly to add momentum to thelies that have been documented against me and my family. Some of what MsStewart has recorded is so completely far-fetched, that it is unbelievable, butshe has been allowed to document it.I am completely appalled over the treatment that we have been dealt as afamily, and the absolute abuse of process that Ms Stewart has been allowed tofollow in blocking us from checking in on our phone apps, or online. Heraccount contained in the information is premised on lies and embellishment.But clearly it is okay for her to spin a yarn like this, and treat us with absolutelyno regard, even to the extent of your failure from the top to address our seriousconcerns. Ms Stewart has embellished her story to the point of lying – clearly so that shecan be viewed as justifying her position – and you as the leader of thisorganisation have done absolutely nothing about that, – I see that as being toyour personal detriment. After the debacle in Wellington, I realise now that Ms Stewart is on avenomous mission, which makes her look so very unprofessional. I have alsoread her LinkedIn profile, – she is just somebody working her way up theladder with no professional backing to give credibility to the lies that she hasmade about us, and me personally. [191] The evidence suggests that Ms Sharma's focus on Ms Stewart arose because:(a) Ms Stewart confirmed to Ms Sharma during the 18 February 2019conversation that she had instigated the warning letter in December2018;(b) Mr Roberts provided Ms Sharma with the OSR prepared by Ms Stewartregarding the 1 December 2018 incident; and(c) Ms Stewart was new to Nelson Airport and Ms Sharma had notpreviously received any warning about her conduct.[192] Ms Sharma was entitled to dispute the recollections of Air NZ staff. To suggestthat Ms Stewart was lying however, was inconsistent with the report that Mr Robertshad provided to her. Ms Stewart had reported the recollections of Ms Matuszewskiand Ms Whyte. They were not allegations by Ms Stewart. Air NZ is entitled to acceptthe recollections of Air NZ staff unless it holds information that indicates thoserecollections are untrue.[193] Ms Stewart did not give evidence so I am unable to assess her credibility otherthan from documents. The documents disclose Ms Stewart's concern to protect AirNZ staff and to take action to address incidents. Ms Stewart made comments in emailsthat indicate she wanted Ms Sharma to be banned after she had received therecollections of Nelson Airport staff.[194] Ms Stewart also got some things wrong about Ms Sharma. Ms Sharma had notlied about travelling business class and had not entered the Koru lounge withoutpermission. These mistakes appear to have contributed to Ms Stewart's view that, "Ihave never in my life met such a nasty woman, who lies through her teeth."[195] Ms Sharma was also entitled to challenge the imposition of check inrestrictions. The internal Air NZ documents indicate check-in restrictions were notimposed because of Ms Sharma's conduct but because of concerns that the familymight attempt to travel under each other's names because one of Ms Sharma's sonshad done this in 2017.[196] Air NZ had a legitimate reason to ask for identification to prevent fraud as wasflagged in December 2018. That decision however, was made at the same time as thewarning letter and without any explanation to Ms Sharma to ensure she was aware ofthe requirements she was expected to meet when checking in – this is particularlyrelevant because school aged children do not ordinarily carry identification. Incircumstances where Air NZ was monitoring Ms Sharma's interactions with Air NZstaff, it was arbitrary to impose those restrictions and then fail to acknowledge thatthose restrictions may be difficult to comply with if you are not told about them. Therestrictions were also relevant to Air NZ staff safety as the failure to inform a customerabout them may increase the risk of customers being upset and questioning frontlinestaff when they cannot comply.[197] Air NZ says that Ms Sharma's 24 June 2019 email to Mr Luxon was a "tiradeof insults" and followed a pattern of "consistent rule and abusive" behaviour.Ms Sharma failed to acknowledge any responsibility for her behaviour or its impacton others:Q. Are there any aspects of your behaviour that you're not happy with orthat you take some responsibility for?A. Well no because generally I mean we are just wanting to understandabout this letter and what they were saying about we've enteredwithout permission. So that was our main, and then of course whenwe – so the main enquiry was: "Look why, why have you said this it'snot how we"[198] Regarding the impact of her behaviour on staff, when asked about thisMs Sharma responded:Q. It's Air New Zealand's case staff did feel very personallyuncomfortable and intimidated.A. I don't, I don't understand why they would feel that way. I don't acceptthat.[199] I accept that Ms Sharma appears to lack awareness as to the impact herbehaviour has on others. The recording of the Wellington incident indicates shecontinued to question Ms Joseph and asked to speak with someone, and then did notunderstand why Ms Joseph became upset when she told her she did not want to speakto anyone. Ms Sharma showed no compassion for Ms Joseph's position. Ms Josephwas at work and had been instructed to ask for identification, so could not concede toMs Sharma's demands without acting contrary to the instructions before her, in otherwords, not doing her job. Ms Sharma sought to belittle Ms Joseph's upset. On theone hand Ms Sharma said she "put on a show of tears," and then when giving evidencesaid she did not see her cry.[200] In her 24 June 2019 email to Mr Luxon, Ms Sharma accused Ms Hamilton of"abusing" her and "publicly raising her voice" and as having "aggressively" shut herson down. She considered the whole incident was a "deliberate set up." The recordingdoes not support these allegations.[201] Ms Sharma described Ms Hamilton as "mannish" in the June email. Duringclosing submissions, counsel for Ms Sharma indicated she wished to apologise for thatcomment, which shows some insight, although somewhat late in the piece.[202] Air NZ considered Ms Sharma's June email was insulting to Air NZ staff. Itwas insulting, but it was not communicated directly to the staff members. The insultswere made in the context of a complaint to the Chief Executive. They show apropensity to blame others and focus on what they did and not what Ms Sharma mayhave done to contribute to staff becoming upset.[203] The transcript of the recording of the Wellington incident does not discloseMs Sharma making insults directly to Ms Hamilton or Ms Joseph. The recording doesdisclose that Ms Sharma kept questioning Ms Joseph about why she had to showidentification. Both Mr Christopher Leaper and Ms Sharma asked why it washappening to them and who they should talk to about it. When Ms Joseph said theycould talk to her team manager, Ms Sharma said she didn't want to talk to a manager.By this stage, the team manager (Ms Hamilton) was coming to speak to Ms Sharma.[204] The transcript records that:Anjela [Sharma]: We've never had this before. We know we have tocheck in but no one's actually gone this far, to sayyou're checking our security, checking our ID. If youtold us that, we would have brought ID with us.Dayana [Joseph]: Can you please shouting at me.Anjela [Sharma]: I'm not shouting.Dayana [Joseph]: You're shouting at me now.Anjela [Sharma]: No, it's unfair.Anjela [Sharma]: Why do we have all these problems? We pay all thismoney to come on a flight. I cannot believe it. What if we miss our flight?Christopher [Leaper]: Who do we ask why this is happening?Anjela [Sharma]: Who do we talk to about this? You need to tell us.You can't just do this to us.Dayana [Joseph]: Do you want to talk to my team manager?Anjela [Sharma]: Not right now, cos we've got a plane to catch andwe're not risking missing it.Anjela [Sharma]: We want a name. You cannot do this to us.Janine [Hamilton]: Yeah, I know, thank you for that, but it doesn't needto get my staff members so upset that she's cryingbecause she's actually doing her job.Anjela [Sharma]: Actually, I understand she's clearly pregnant and I'vehad six children and I know what it's like. You do getemotional about little things.Janine [Hamilton]: I know that too.Anjela [Sharma]: I don't believe we've shouted at her.Janine [Hamilton]: You don't need to be condescending.Anjela [Sharma]: Everything I say is wrong.Janine [Hamilton]: You don't need to be condescending. I'll let you go.Anjela [Sharma]: Thank you very much, Janine.Janine [Hamilton]: I will talk to security about why this is happening.[205] That Ms Joseph was genuinely upset is corroborated by her and Ms Hamilton'sevidence that she had to take the remainder of the day off work. The recordingindicates frustration with not being able to meet the identification requirements incircumstances where they had not been told about them, their children were schoolaged so did not carry identification, and they had not been asked for identification onthe first leg of their trip. The concern however, is the manner in which Ms Sharmaaddressed her frustrations to Ms Joseph.[206] The above shows the relevance of the recording of the Wellington Airportincident.[207] Air NZ also says that Ms Sharma insulted Mr Luxon in her letter by statingthat his entry into politics was a "frightening prospect." Ms Sharma had been told towrite to Mr Luxon and she was not satisfied that he had done anything about herconcerns. The comment was made in that context.Health and safety[208] When exercising the discretion, Air NZ was entitled to give due considerationto its legitimate interests and the purpose for which the discretion was conferred.25[209] At the heart of Air NZ's concern was the health and safety of its staff.Mr Wilson referred to Air NZ's obligations to its employees under the Health andSafety at Work Act 2015 (HSW Act). Under the HSW Act, Air NZ has a statutory dutyto ensure, so far as is reasonably practicable, the health and safety of its workers whilethey are at work,26 and the provision and maintenance of a work environment that iswithout risks to health and safety.27 Health means "physical and mental health," and"hazard" includes a person's behaviour where that behaviour has the potential to causedeath, injury, or illness to a person.28[210] Further, the HSW Act imposes a duty to eliminate risks to health and safety, sofar as is reasonably practicable, and if it is not reasonably practicable to eliminate risksto health and safety, to minimise those risks as far as practicable.29[211] Mr Wilson referred to the WorkSafe guide which refers to "bullying" at workas "repeated and unreasonable behaviour directed towards a worker or a group ofworkers that can lead to physical or psychological harm."30 The WorkSafe Guidecontemplates bullying involving customers where "workers are bullied by those theyserve."31 Examples of bullying are provided and include belittling remarks, being25 C & S Kelly Properties Ltd v Earthquake Commission [2015] NZHC 1690 at [73].26 Health and Safety at Work Act 2015, s 36(1)(a).27 Section 36(3)(a).28 Section 16.29 Section 30(1).30 WorkSafe Preventing and Responding to Bullying at Work: for Persons Conducting a Business orUndertaking (PCBUs) (New Zealand Government, March 2017) at 1.31 At 16.shouted or yelled at, insulting comments about one's personal life and intimidation,acting in a condescending manner, and making inaccurate accusations.32[212] The WorkSafe guide also refers to examples of corporate bullying, whichinclude withholding or concealing information, failing to return calls or pass onmessages, ignoring or excluding by silent treatment, humiliation, judging wrongly,and supplying incorrect or unclear information.33[213] That Air NZ was primarily concerned with the welfare of its staff is reflectedin the various internal emails throughout the period from December 2018 to June 2019:(a) Ms Stewart in different communications in December 2018:I will continue to get information from my staff re previous incidents this single incident has left my staff feeling intimidated and rattledto the point that they have questioned their safety.She has made numerous staff upset in the past.We feel that a warning letter is not a strong enough message (to ourstaff) on how we manage such situations where our staff are treatedso poorly.(b) Mr May in March 2019: We cannot have our staff treated in this way and exposed to thebelligerence of Ms Sharma and some other members of her familydisplay when they don't get their own way. (c) Mr May in June 2019: Staff should not have to be dealing with this intimidatory andbullying behaviour.(d) Ms Stewart in June 2019:After hearing of the interaction with my staff member and Ms Sharmawhen I arrived at [work] this morning, I have been made to feelintimidated and personally attacked in my own workplace from whatshe has said and what she has done/will do.32 At 17.33 At 17.Again one of my team have been put in a position that was describedas "this customer was hard to deal with and disrespectful" "At the timeI was in shock at her words" "all the words that were coming out ofher mouth were negative and malicious."(e) Mr Carter on 26 June 2019:If the integrity of the workplace has been breached by acts ofintimidation and aggressive behaviour and as such [affects] our staffworking environment, potentially their welfare and operationalcapability then I'm very much inclined to ban Ms Sharma for up to 2yrs. This behaviour is compound[ed] by the tirade against one of ourstaff members (and CML) and intrusion into her background isunacceptable in my opinion and therefore supports banningMs Sharma.(f) Mr Roberts in his 26 June 2019 email:The intimidating behaviour is causing issues for our staff. We maywell need to consider threatening to prevent her from flying for aperiod.[214] Given the numerous internal emails expressing concern about staff welfare, Iaccept that Air NZ was motivated by the desire to protect the health and safety of itsstaff.[215] Mr Fowler, for Ms Sharma, accepted that the health and safety of Air NZ staffis a legitimate concern. He submitted that this, however, did not allow Air NZ toaccept staff statements about a customer without enquiry, particularly where thestatements form the basis of a banning decision.[216] Air NZ's legitimate desire to protect staff is relevant and indicates that Air NZwas not motivated by bad faith but by a concern that Ms Sharma would continue toupset staff because of the way she engaged with them. That concern was legitimate.Further enquiries may have resulted in Air NZ receiving the recordings, which furthercorroborated Air NZ's suspicions that Ms Sharma would criticise staff to other Air NZstaff and speak to them in a way that would cause them to get upset.Previous complaints[217] Mr Fowler submits that Air NZ should not have taken into account previouscomplaints by Ms Sharma or Mr Leaper to Air NZ.[218] I consider that previous complaints by Ms Sharma provide insight intoMs Sharma's conduct when engaging with Air NZ staff. They may corroborate orweigh against Ms Sharma's conduct being inappropriate. I consider they wererelevant to Air NZ's investigation.[219] Further, the Air NZ privacy policy provided that complaints or concerns canbe used in relation to any "vital interest" or "legitimate interest," including to "managecustomer and employee safety and security." I accept that Air NZ was thereforeentitled to consider complaints it held under its privacy policy when considering therisk a customer might pose to staff health and safety.[220] I accept that in the context of investigating Ms Sharma's conduct, it was alsoappropriate for Air NZ to consider complaints by Mr Christopher Leaper as they mayalso disclose information that is relevant to the investigation of Ms Sharma. Thosecomplaints, however, were only relevant to the extent that they did discloseinformation relevant to Ms Sharma.Conclusion[221] I make the following findings:(a) There were investigative flaws in Air NZ's process in deciding to banMs Sharma in circumstances where:(i) Air NZ decided to ban Ms Sharma without first requestingrecordings of her interactions with Air NZ staff, about which ithad prior notice; and(ii) the 2019 unruly passenger report contained statements thatexaggerated the malice of Ms Sharma in her conversation withMs Gillooly.(b) While Air NZ is not required to consult with customers, incircumstances where a customer has indicated they have a recordingand will make recordings at check-in, obtaining those recordings wouldenable Air NZ to be satisfied that the information it was relying on wasaccurate.(c) The content of the recordings however, are unlikely to have changedthe outcome of the decision. Those recordings corroborated much ofAir NZ's concerns that Ms Sharma would criticise Air NZ staff tofrontline staff and make allegations about Air NZ staff to Mr Luxon thatwere untrue.(d) It was open to Air NZ in the exercise of its reasonable discretion toissue a warning letter to Ms Sharma in December 2018 incircumstances where comments had been made about Ms Matuszewskiwhich caused her to become upset. Air NZ is obliged to protect thehealth and safety of its staff.(e) In investigating and then issuing the warning letter, Air NZ made falseaccusations that not all of the family were travelling business class andthat the family had entered the lounge without permission. Those falseaccusations were communicated to Ms Sharma and circulatedinternally within Air NZ. Air NZ did not withdraw them norcommunicate a correction when it became aware they were untrue.Those false accusations were relevant to Ms Sharma's continuedinsistence on an explanation for the warning letter.(f) Air NZ imposed check-in restrictions on Ms Sharma and her familybefore it decided to issue the warning letter. Despite Mr Leckierequesting that Ms Sharma be informed about the check-in restrictions,no one informed her. Those restrictions were directly relevant toMs Sharma's requests for an explanation as to why they were beingimposed.(g) Air NZ had a legitimate purpose in safeguarding the health and safetyof its staff in deciding to ban Ms Sharma.(h) Ms Sharma's interactions with Air NZ frontline staff and hercomplaints to Mr Luxon indicate that she was willing to accuse staff ofacting in a hostile and aggressive manner when they had not so acted.That communication also indicated that a staff member had cried as aresult of their interaction with Ms Sharma. Air NZ was entitled toconsider that information in the context of the 1 December 2018incident where Ms Matuszewski had become upset.(i) Ms Sharma's conduct indicates a lack of awareness of the impact of herconduct on others. Ms Sharma showed no compassion or empathy forAir NZ frontline staff who were simply doing their jobs.[222] This case is unfortunate as neither party has acted in a manner that is withoutfault. The key issue I need to determine however, is whether Air NZ's decision to banMs Sharma was an exercise of reasonable discretion. That requires me to be satisfiedthat Air NZ has not acted capriciously, arbitrarily, in bad faith, or made a decision thatno reasonable decision maker could have made.[223] I do not consider that the investigative flaws in failing to request the recordingsresulted in the ultimate decision to ban Ms Sharma being so unreasonable that noreasonable decision maker would have made it. Even setting aside the exaggerationby Ms Gillooly of her conversation with Ms Sharma, the content of that conversationdisclosed that Ms Sharma was willing to talk negatively to frontline staff aboutMs Stewart. It is obvious that the information would likely be relayed to Ms Stewart,who would become upset. Talking negatively to frontline staff about their fellow AirNZ employee would naturally cause staff to feel uncomfortable.[224] Ms Stewart had acted on a shift report and recollections of Nelson Airport staffwhen she took action in December 2018. Ms Stewart had sent the report to Securitybecause she was concerned that staff were being treated in an inappropriate manner.While Ms Stewart got some things wrong (business class travel and entry into thelounge), it was not those matters that led to the warning letter. Air NZ was concernedabout the comments that were made about Ms Matuszewski and the impact of thosecomments on her wellbeing.[225] When Ms Sharma relayed her concerns to Mr Luxon, she did so by disparagingAir NZ staff (calling Ms Hamilton mannish, calling Ms Matuszewski an ice-queen andsaying Ms Joseph had "put on a show of tears"). In the March 2019 letter, Ms Sharmaalso failed to disclose relevant information (including that another guest had askedthem to quieten down and that she had refused to speak outside when approached byMs Whyte). In the June 2019 email to Mr Luxon, Ms Sharma did not include therecordings with her correspondence to clarify what had happened. Ms Sharma tookno responsibility for the impact of her actions, which resulted in staff in Wellingtonand Nelson crying.[226] It was in the above context that Mr Legge and Mr Carter decided to ban MsSharma for 12 months. While Air NZ could have addressed Ms Sharma's legitimateconcerns in a more constructive and direct manner, that failure does not then result inits decision to ban her being arbitrary, capricious or made in bad faith. Nor was it sounreasonable that no reasonable decision maker could have made it. This is a highstandard, and despite Air NZ's errors and investigative flaws, it has not been met.[227] In deciding to ban Ms Sharma, Air NZ did not therefore breach art 7.1.11 of itsterms of carriage.FAIR TRADING ACT 1986[228] Ms Sharma claims that Air NZ, in breach of s 9 and/or s 11 of the FTA, engagedin misleading conduct in trade by:(a) representing through its agent, Singapore Airlines, that on account of:(i) Ms Sharma and her family having business class tickets; and(ii) Ms Sharma being a Koru member and flying on an Air NZ flightto Auckland;that Ms Sharma and/or her family were entitled to enter the NelsonAirport Koru lounge;(b) creating rights of entry to the Koru lounge that were so complex andconfusing that even its own staff were unable to determine Ms Sharma'seligibility to enter the Koru lounge;(c) advising Ms Sharma to proceed to enter the Koru lounge; and(d) erroneously stating that members of Ms Sharma's family only hadpremium economy tickets, this error was unknown to the decisionmaker.[229] Ms Sharma claims that as a result of the misleading conduct, she has sufferedmental distress from inconvenience and anxiety.LawSection 9 of the FTA[230] Section 9 of the FTA states:9 Misleading and deceptive conduct generallyNo person shall, in trade, engage in conduct that is misleading ordeceptive or is likely to mislead or deceive.[231] The Supreme Court in Red Eagle Corporation Ltd v Ellis set out a two-stageapproach to determine liability under ss 9 and 43 of the FTA:3434 Red Eagle Corporation Ltd v Ellis [2010] NZSC 20.(a) First, the Court must ask whether a reasonable person in the claimant'ssituation – that is, with the characteristics known to the defendant or ofwhich the defendant ought to have been aware – would likely have beenmisled or deceived. If yes, a breach of s 9 is established.35(b) Second, if a breach of s 9 is established, the Court must assess whetherit is proved that the claimant has suffered loss or damage by the conductof the defendant.36[232] The Supreme Court has recognised that an "operating cause" of loss or damagemay be the "claimant's own conduct in failing to take reasonable care to look after[their] own interests."37Section 11 of the FTA[233] Section 11 of the FTA states:11 Misleading conduct in relation to servicesNo person shall, in trade, engage in conduct that is liable to mislead the publicas to the nature, characteristics, suitability for a purpose, or quantity ofservices.[234] Section 11 differs from s 9 in that it is necessary that the conduct is liable tomislead the public rather than an individual. It follows that there must be a publicelement to the statement.38Air NZ's representationsSingapore Airlines and Star Alliance website[235] Ms Sharma did not provide any evidence that she spoke to Singapore Airlinesprior to her travel. Ms Sharma said that her son checked the Singapore Airlines'website and shared the content with the family. Ms Sharma's son gave evidence thatthe Singapore Airlines website refers customers to the Star Alliance website where a35 At [28].36 At [29].37 At [30].38 Commerce Commission v Accent Holidays Limited (1997) 8 TCLR 1 at 6.lounge finder tool and a lounge access policy is available. During cross-examination,he said he remembered that the Air NZ website also referred customers to that sameStar Alliance lounge access policy. While he could not confirm that the particular pageprovided to the Court included the link to the Star Alliance website, he maintained hisview that Air NZ's website referred customers to the Star Alliance lounge accesspolicy.[236] It was open to Air NZ to call evidence as to the actual contents of its websiteat the relevant time to refute Ms Sharma's son's recollection. It did not. In thosecircumstances and given Air NZ is a member of the Star Alliance, I accept that MsSharma's son's recollection that the Air NZ website referred customers to the StarAlliance website is likely to be accurate.[237] A copy of the lounge finder tool on the Star Alliance website as at 29 August2019, shows that for Nelson Airport there is Koru lounge access for Singapore Airlinesbusiness class travellers, but not for Singapore Airlines economy class travellers.[238] Air NZ says the family were travelling economy from Nelson to Auckland andso there was no lounge access.[239] I consider that the lounge finder tool is confusing in that it returns Koru loungeaccess for Singapore Airlines business class flights from Nelson. Where a customerhas booked return international business class travel with Singapore Airlines, and thattrip includes domestic flights (here from Nelson to Auckland), it is reasonable for thecustomer to view their travel as business class, or at least including business classperks, in circumstances where the lounge finder tool indicates there is Koru loungeaccess for Singapore Airlines business class travellers in Nelson. In fact, there wereno Singapore Airlines business class flights from Nelson to Auckland, the flight was aAir NZ operated domestic flight which does not have business class, so the loungefinder tool created confusion by suggesting there was lounge access for those flights.[240] Air NZ also refers to the lounge access policy. That policy provides that"International Business Class Customers" have access at the airport where "your flightdeparts," if the following conditions are met:(a) You present a boarding pass in "International Business Class" on a StarAlliance member airline operated flight;(b) Your flight departs on the same day or by 5.00 am the next morning;and(c) The lounge shows the Star Alliance Gold logo at the entrance.[241] The family say their flight departed in Nelson and they checked in as thoughthey were flying international business class (that is, two hours before departure andwith an international business baggage allowance). The international flight fromAuckland Airport departed before 5.00 am the next morning. They did not haveinternational boarding passes because the check-in operator was unable to print them.On that basis, they say, there were entitled to lounge access.[242] Air NZ says the lounge access policy is clearly referring to the airport wherethe international flight departs, not the domestic flight. The reference to "your flight"is a reference to the flight for which there is a boarding pass in "International BusinessClass."[243] "International Business Class Customers" is defined in the lounge accesspolicy on the Star Alliance website as "[c]ustomers holding a boarding pass for a StarAlliance member airline operated flight in International Business Class." Air NZ saysthat Ms Sharma did not meet the above criteria because her international flightdeparted from Auckland.[244] While I accept Air NZ's interpretation of the lounge access policy that the flightbeing referred to is the relevant international flight, I also consider that the policy maybe confusing for consumers, especially if they are also Koru members.[245] Air NZ's own staff acknowledged that lounge access eligibility was confusing.The Koru loyalty team said in an email dated 19 December 2018:These customers were not permitted lounge access as per the details below –let me know if you need further clarity on this.I could appreciate that this MAY be confusing for the customer, however wedo state in numerous places, online and within their membership card pack –that in order to access Koru member benefits all travel must be on Air NewZealand operated and ticketed flights.For Business Class this may be a bit more confusing for the customer becausewe're getting into Star Alliance lounge access rules for Business Class Travel,however this only permits passengers travelling in business class from thatspecific port (i.e access is granted at AKL prior to their AKLSIN Businessclass flight, is not granted at domestic/regional lounge connections i.e.NSN in this instance).Had they been granted access as a Business Class travellers anyway – they arenot permitted to take guests in with themDue to the above, I think we should tread cautiously and outline the details ofissue with the customer and be really clear on why they weren't permittedaccess.(emphasis in italics added, "ticketed" italicised in original)[246] I consider it confusing for the lounge finder tool to return Nelson Airport asavailable in circumstances where the tool did not require the customer to specifywhether the travel was domestic or international. The evidence was that there was noSingapore Airlines domestic class flight from Nelson. In those circumstances, it wasnot unreasonable for a customer to put 'Singapore Airlines' and 'business' in therelevant fields. When that happened, the tool indicated there was Koru lounge access.[247] Air NZ denies that it is liable for the representations on the Star Alliancewebsite. In circumstances where Air NZ is a member of the Star Alliance and its ownwebsite refers customers to the Star Alliance website, I do not consider it can denyresponsibility for Star Alliance content about Air NZ lounges. Consumers are entitledto expect that Air NZ will act reasonably and by referring customers to the StarAlliance website, customers are entitled to rely on that information especially wherethe information relates directly to Air NZ.Representation to go to the Koru lounge[248] In terms of Air NZ staff informing Ms Sharma to go to the Koru lounge, AirNZ submits that any confusion caused was clarified when the boarding passes flashedred when scanned, indicating they were ineligible for entry. Air NZ says any confusionwas therefore only for a short time and was clarified when Ms Matuszewski and thenMs Whyte spoke with Ms Sharma. I accept this submission.Representation as to premium economy[249] That Air NZ staff erroneously stated that some of Ms Sharma's family were inpremium economy cannot have been likely to mislead or deceive Ms Sharma becauseshe knew this was incorrect.Relief[250] Section 43 of the FTA requires that Ms Sharma establish that she has suffered,or is likely to suffer, loss or damage by the alleged misleading conduct. The lossclaimed is damages of $15,000.00 for the ongoing effect of the notation in Air NZrecords that she has been banned from travelling for 12 months; the effect of thatrecord on Ms Sharma's travelling convenience and freedom both in New Zealand andelsewhere; and mental distress from inconvenience and anxiety. That is the same lossas is claimed for breach of contract.[251] Air NZ was entitled to issue the warning letter given the insults directed atMs Matuszewski. While the Koru lounge access rules were background context forthe 1 December 2018 incident, I do not accept that they were the reason for the warningletter or the subsequent banning decision.[252] In those circumstances the requirements under s 43 are not made out and I amnot satisfied that the loss suffered was caused by any representations regarding loungeaccess.Overall conclusion[253] For the reasons set out in this judgment, Ms Sharma's claims against Air NZfail.Costs[254] It is my preliminary view that some factual aspects of Ms Sharma's claim hadmerit. It was not unreasonable for Ms Sharma to proceed to a substantive hearing toenable the Court to consider all relevant evidence and to make factual findings. Someof those findings indicate Ms Sharma did have some legitimate concerns. In thosecircumstances, it may be appropriate for costs to lie where they fall.[255] If Air NZ disagrees with this preliminary view, leave is granted for Air NZ tofile a costs memorandum within 20 working days from the date of this judgment.Ms Sharma then has a further 10 working days to file a response. Memoranda arenot to exceed five pages.[256] Unless I need to hear from counsel, costs will be determined on the papers.______________________Tahana J