SHARMA (AKA KUMAR) V COOL CARS (WHOLESALE) LTD(IN LIQ) HC HAM CIV 2012-419-000508

SHARMA (AKA KUMAR) V COOL CARS (WHOLESALE) LTD(IN LIQ) HC HAM CIV 2012-419-000508 [13 August 2012]IN THE HIGH COURT OF NEW ZEALANDHAMILTON REGISTRYCIV 2012-419-000508[2012] NZHC 2015BETWEEN IRENE REENITA SHARMA (AKAIRENE KUMAR)AppellantAND COOL CARS (WHOLESALE) LIMITED(IN LIQUIDATION) BY NICHOLASHAYES (LIQUIDATOR)RespondentHearing: 10 August 2012Appearances: S McKenna for AppellantD Hayes for ResepondentJudgment: 13 August 2012JUDGMENT OF ANDREWS JSolicitors:A J Nolan, PO Box 1268, Hamilton (Appellant)Brook Law, PO Box 9600, Hamilton (Respondent)Counsel:S McKenna, PO Box 19432, HamiltonD Hayes, PO Box 9323, Hamilton[1] The appellant appealed against the judgment of Judge R G Marshall given in the District Court at Hamilton on 3 April 2012, on the claim by the respondent (Cool Cars) in respect of an Agreement for Sale and Purchase of a commercial property.1Cool Cars had claimed against Ms Sharma, under ss 9 and 43 of the Fair Trading Act 1986.[2] As set out in her notice of appeal, the appellant's grounds of appeal were that:(a) the Judge was wrong to find that the parties were "in trade";(b) the Judge was wrong to conclude that the appellant had engaged in"misleading or deceptive or likely to mislead or deceive";(c) the Judge failed to give sufficient weight to the fact that Ms Jacobs, who signed the agreement for sale and purchase as director of the respondent, did so despite having a criminal conviction and was therefore banned; and(d) the Judge was wrong to conclude that the agreement for sale and purchase was unconditional.[3] Ms Sharma represented herself in the District Court, and filed the notice of appeal and submissions in this Court.[4] This morning, Mr McKenna appeared as instructed counsel, advising that he had been instructed late last week. In Court this morning Mr McKenna advised that the only ground of appeal that would be pursued was the Judge's finding that theappellant had engaged in misleading or deceptive conduct, and the consequent awardof damages. All other grounds (including the challenge to the Judge's finding that the parties were "in trade") were abandoned.[5] However, Mr McKenna's submissions on the remaining ground of appeal are in different terms from those set out in Ms Sharma's submissions. Put briefly, the1 Cool Cars (Wholesale) Ltd (In Liq) v Sharma DC Hamilton CIV 2011-019-179, 3 April 2012.grounds of appeal now are that the Judge failed to follow the approach set out in the judgment of the Supreme Court in Red Eagle Corporation Ltd v Ellis,2 at [26]–[31].[6] Translated into the present case, that approach would require the Judge to decide, first, whether the claimant had proved a breach of s 9 of the Fair Trading Act, which was to be considered by asking whether a reasonable person in the claimant'ssituation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware – would likely to have been misled or deceived, then go on to consider s 43. If the Judge was satisfied that the breach of s 9 had been proved, the Court should have looked to see whether it was proved that Cool Carshad suffered loss or damage "by" Ms Sharma's conduct. That required twoquestions to be answered: whether Cool Cars (in the person of Ms Jacobs) wasdeceived by Ms Sharma's conduct then to ask whether Ms Sharma's conduct inbreach of s 9 was an operating cause of Cool Cars loss or damage.[7] As the matters which should be considered (as set out in Red Eagle) were notaddressed at the District Court hearing, either in the evidence or in counsel'ssubmissions, it is understandable that the Judge did not follow the approach in his decision.[8] Having discussed the matter with counsel I have concluded, and counsel are agreed, that the appropriate course is to make a direction under r20.19 of the High Court Rules, that the proceeding be remitted to the District Court for re-hearing.[9] Pursuant to r 20.19(2) I am required to state my reasons for giving this direction. Quite simply, the reason is that the judgment of the Supreme Court in Red Eagle was not referred to the Judge and, indeed, it appears not to have been addressed by counsel or the parties in the course of the hearing in the District Court. I considered that the Red Eagle judgment should have been referred to the Judge and the fact that it was not has led to a possible gap in the evidence, and certainly a gap in the submissions made to the Judge2 Red Eagle Corporation Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492.[10] The re-hearing may be limited in its extent. The "facts not in dispute" set outat [13] to [32] of the judgment may be adopted for the purposes of the re-hearing.The same applies to the Judge's finding that the contract was unconditional, his finding that the parties were "in trade" and his finding at [70] that the contract wasnot rendered illegal by the fact of Ms Jacobs's conviction.[11] The re-hearing is to be limited to the elements of the claim under ss 9 and 43 of the Fair Trading Act, with particular attention to the approach set out at [26] to [31] of Red Eagle, and will involve any evidence the parties wish to adduce in that respect, any cross-examination, and submissions of counsel.[12] In all of the circumstances, it is appropriate that the matter be re-heard by Judge Marshall.Directions[13] Accordingly, the appeal is formally allowed and the proceeding is remitted to the District Court for re-hearing, as set out above. The Registry is to advise counselas to a suitable hearing date before Judge Marshall. I note counsel's estimate thathalf a day will be sufficient to encompass any evidence, cross-examination and submissions.[14] As these directions are consequent upon a new point being raised on appeal, it is appropriate that no costs order is made in relation to the appeal.________________________Andrews J