MCCARTHY v CHRISTCHURCH CANTERBURY MARKETING LTD [2017] NZHC 1896

MCCARTHY v CHRISTCHURCH CANTERBURY MARKETING LTD [2017] NZHC 1896 [10 August 2017]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2016-409-1188[2017] NZHC 1896BETWEEN ROBIN MAX MCCARTHY T/ACHRISTCHURCH TOURS GROUPApplicantAND CHRISTCHURCH CANTERBURYMARKETING LIMITED T/ACHRISTCHURCH CANTERBURYTOURISMRespondentHearing: 28 July 2017Appearances: Appellant in PersonA N Riches for the RespondentJudgment: 10 August 2017JUDGMENT OF MANDER J[1] The applicant, Mr Robin McCarthy, seeks leave to appeal the dismissal of his appeal from a judgment of the District Court declining his claim against the respondent, Christchurch Canterbury Marketing Limited (CCM), for alleged losses arising from the breakdown of their contractual relationship. Mr McCarthy is also seeking an interim stay of the enforcement of costs awarded against him following the dismissal of his appeal.[2] As an ancillary to his application for leave to appeal, Mr McCarthy also made application to admit further evidence and has made an ex-parte application for discovery of certain documents from CCM. The application for leave to appeal and the other applications are all opposed by CCM.Background[3] The background to the dispute between the parties is outlined both in Judge Kellar's decision on Mr McCarthy's claim before the District Court and in my judgment delivered as a result of Mr McCarthy's appeal.1 However, it is convenient to provide a broad outline of the relevant circumstances for the purpose of this leave application.[4] CCM is a private organisation which advertises and promotes tourism in Christchurch and Canterbury. Tourist operators pay a fee to CCM to advertise theirbrochures at CCM's premises which displays Tourism New Zealand's official "I-Site" logo. CCM also provides a booking facility for subscribing operators or"business partners" to sell their services through the visitor centre for a commission. Prior to the earthquakes of 2011, CCM operated out of a building situated in Cathedral Square which was evacuated and abandoned as a result of the widespread and extensive earthquake damage suffered by the city.[5] Mr McCarthy is a land transport operator licensed by the New Zealand Transport Agency. He has operated numerous transport and touring services, primarily related to tourism, and has subscribed to CCM's services in one form or another since 2002 or thereabouts. Mr McCarthy had for many years displayedbrochures advertising his tours at CCM's premises and sold his services through the centre.[6] In 2010 disagreements developed between Mr McCarthy and CCM regarding the quality and accuracy of some of Mr McCarthy's brochures. The difficulties withthe brochures led to a series of disputes between Mr McCarthy and CCM staff which ultimately led to CCM terminating Mr McCarthy's contractual relationship with it in December 2010. It continued to administer bookings for Mr McCarthy on a commission basis until 2015.[7] Mr McCarthy sued CCM and sought compensation in the sum of $200,000, effectively alleging wrongful cancellation of their agreement, which he maintained1 McCarthy v Christchurch Canterbury Marketing Ltd [2016] NZDC 22655; McCarthy v Christchurch Canterbury Marketing Ltd [2017] NZHC 1321.resulted in the loss of business and income, and affected his reputation. CCM denied any breach of contract, and maintained that Mr McCarthy's membership had beenlawfully cancelled in accordance with the terms and conditions of the contract which governed their business relationship.[8] In the District Court, Judge Kellar held that Mr McCarthy had agreed and was bound by the standard terms and conditions of membership which included CCM reserving the right to terminate their contractual relationship in the event it was of the opinion that the subscriber's operation, product or service was substandard. These contracted terms also required a business partner to act "in a professional and respectful manner" when dealing with CCM and in the absence of so doing the company was entitled to suspend or terminate membership.[9] The District Court found that CCM had legitimate concerns regarding the standard of Mr McCarthy's brochures which he sought to display at the I-Site centre, and that upon Mr McCarthy failing to amend and update the information contained within them it was entitled to cancel their business relationship. Based upon CCM'sview of Mr McCarthy's interaction with CCM staff, Judge Kellar also found that CCM was entitled under the terms and conditions of the contract to terminate Mr McCarthy's membership.[10] Aside from those rulings, Judge Kellar was not satisfied that Mr McCarthy had proved his monetary loss from any alleged wrongful termination of the contract. It was considered that, on the evidence he adduced before the District Court, any loss Mr McCarthy may have suffered was comparable to that of other tourist operators as a result of the downturn in tourist operations as a result of the 2011 earthquakes.[11] The District Court's findings on these essential elements of Mr McCarthy'sclaim were substantially upheld on appeal. In particular, I held on the evidence that Mr McCarthy had on a number of occasions during the course of his business relationship with CCM agreed to be bound by the terms and conditions of the membership or business partner agreements which were operative at the time Mr McCarthy came into dispute with CCM in 2010.[12] Because of the concerns CCM held regarding the standard of the advertising material which Mr McCarthy sought to have displayed by the I-Site centre, andCCM's assessment of the unsatisfactory nature of Mr McCarthy's interaction withCCM and its staff under the terms and conditions of their business relationship, it was entitled to terminate its relationship with Mr McCarthy.[13] I also considered that Mr McCarthy had failed to prove a causal link between the alleged wrongful repudiation of the contract and the losses he claimed in compensation. Because of the circumstances in Christchurch in 2011 and subsequent years and the impact of the earthquakes on the tourist industry in general, Mr McCarthy was unable to provide evidence which demonstrated discrete losses as a result of CCM's decision to terminate its business relationship with him and no longer display his brochures.Application for leave to bring a second appeal[14] For a second appeal to be justified there must be some identifiable question of law or fact which is capable of bona fide and serious argument, and which is of sufficient importance to outweigh the cost and delay of a further appeal.2[15] The Court of Appeal's primary function is to clarify the law and to determinewhether it has been properly construed and applied by the Court below. When the disputed matter is entirely or largely a question of fact, as is the situation in the present case, the general correction of error will seldom amount to an issue of public importance warranting a second appeal.3 Ordinarily, it will only be if the case involves some wider public interest that the expense to the parties and to the court system will justify a second appeal.4[16] Mr McCarthy has filed extensive submissions in support of numerous grounds set out in his application for leave. In an endeavour to address these points in a logical way I have considered the matters he seeks to raise under the following headings.2 Snee v Snee (1999) 13 PRNZ 609 (CA) at [15]; Waller v Hider [1998] 1 NZLR 412 (CA) at 413.3 Waller v Hider, above n 2, at 413.4 Snee v Snee, above n 2, at [21].Limited admission of further evidence[17] Mr McCarthy complains that only four documents from a large bundle of approximately 80 documents which he sought to adduce as additional evidence on the hearing of his appeal were admitted for that purpose.[18] The test for the admission of further evidence on appeal is that the evidence must be cogent and fresh in the sense that it could not reasonably have been discovered at an earlier stage of the proceeding.5 The documents which Mr McCarthy sought leave to have admitted were available to him and in his possession at the time of the District Court hearing. They were neither disclosed to CCM during the proceedings before that Court nor sought to be produced at trial.[19] Despite the fact the evidence did not qualify for admission on the appeal, an indulgence was extended to Mr McCarthy by provisionally admitting the documents for the purpose of hearing his appeal in order to gauge the documents' materiality to Mr McCarthy's argument. In the event, only a limited number of documents were referred to by him in the course of his argument. Most of the documents related either to Mr McCarthy's ongoing dispute with CCM and the Christchurch CityCouncil after his membership was terminated, or to Mr McCarthy's more recent and current tours and activities.[20] Mr McCarthy submitted the documents were sought to be adduced on the appeal as a response to any suggestion he had not, in response to the earthquakes, diversified his operation to mitigate his losses, and that he had attempted to resolve matters between himself and CCM. However, any suggestion on behalf of CCM that Mr McCarthy had not tried to mitigate his losses was immaterial to the issues before the Court. Importantly, the balance of the documents in respect of which leave was declined were irrelevant to Mr McCarthy's allegations that CCM had unlawfullyterminated the contract. My ruling regarding this evidence, which was neither fresh nor material, is not capable of supporting a second appeal.5 Telecom Corp of NZ Ltd v Commerce Commission [1991] 2 NZLR 557 (CA).Terms and conditions[21] Mr McCarthy in his submissions in support of his application for leave to appeal continues to dispute, as he did on the hearing of his appeal, the evidence provided by CCM's manager, Mr Martin Brice. His evidence was to the effect that he was confident the terms and conditions a tour operator would have signed in 2006, when he says he joined CCM, were the same as those which were in place when Mr McCarthy first became a "member" in 2002. Mr McCarthy has always disputed that this is the case. However, Mr McCarthy does not appear to appreciatethat the Court's findings regarding the applicable terms and conditions governing his contractual relationship with CCM at the time of his dispute in 2010 rested largely on his own evidence rather than that of Mr Brice.[22] A copy of the document which Mr McCarthy signed back in 2002 when he commenced his business relationship with CCM is no longer available. This is a matter which Mr McCarthy also takes issue with and to which I will return later in this judgment. Mr McCarthy's evidence was that when he entered into a contractualrelationship with CCM he signed what he referred to as, and which it is accepted by the parties was, a one-page membership form. This document required him to complete such details as contact telephone numbers, his address and the tours he was operating. His evidence was that the form stipulated the commission payable to CCM, and that he did not recall being handed any terms and conditions when he completed either that form in 2002 or similar one-page documents since.[23] The document which Mr Brice produced in his evidence is a copy of the terms and conditions which he believed were in place at the time Mr McCarthybegan using CCM's services. However, his evidence in that regard was essentially superseded by Mr McCarthy's own account of the one-page document that he signed from time to time since 2002. One of the documents Mr McCarthy was granted leave to produce on his appeal was an email of October 2010 from CCM requesting Mr McCarthy to complete an attached form in order to display a brochure for one of his tours. Mr McCarthy, on the hearing of his appeal, accepted this was the same type of form which he would have completed when he first signed up with CCM, and that he had signed "a couple of these" forms during the course of his relationshipwith CCM. The form provided for the signatory to agree terms and conditions of membership.[24] Mr McCarthy's position was twofold in relation to this form. First, that hewas never provided with a copy of the terms and conditions which are referred to in the document despite accepting in cross-examination before the District Court that atthe time he signed the "membership form" he was required to tick a box confirmingthat he accepted the terms and conditions of membership. This leads to Mr McCarthy's second and related position, that he considered the terms andconditions referred to on the document which he signed to be only those set out on the single page document which included the amount of commission to be paid to CCM.[25] Two issues therefore arose on the evidence. Firstly, a factual one regarding whether it was tenable for Mr McCarthy to believe that the terms and conditions of membership were limited to the bare details contained in the form. I considered Mr McCarthy's belief in that regard to be unrealistic. I did not consider Mr McCarthy would have been under a misapprehension that his membership would be subject to certain terms and conditions, as was apparent from the endorsement he was required to provide by ticking the box to show he agreed to be bound by such terms. That was a factual issue, the determination of which does not warrant a second appeal. It was a conclusion unrelated to Mr Brice's evidence regarding hisview of the terms and conditions that were in place at the time Mr McCarthy first engaged with CCM in 2002.[26] The second aspect of this issue was the legal consequences of Mr McCarthy ticking the box accepting that he had read and agreed the terms and conditions of membership. That issue was required to be examined on the basis of Mr McCarthy'sevidence that he had never sighted a copy of the terms and conditions which he said had not been made available to him. I proceeded to determine the point on the basis that Mr McCarthy was ignorant of those terms and conditions, but found that they remained binding on him as a result of his acceptance of them at the time he endorsed the membership form.[27] On his application for leave, Mr McCarthy sought to distinguish Ravensdown Fertiliser Co-operative Ltd v Eveleigh (Ravensdown) which is an authority I considered as part of my decision on this issue.6 Mr McCarthy noted the terms and conditions in that case were on the reverse side of the document in question which was different from the "membership" document he had completed and signed.However, that aspect of the case was expressly acknowledged and considered in my decision. It was a factual difference but one which I did not consider to be material to the effect of Mr McCarthy agreeing to be bound by the terms and conditions of membership on the form he endorsed. In Ravensdown it was uncontested that a failure to read the terms and conditions did not detract from their binding nature.Proof of losses[28] Mr McCarthy seeks to re-litigate the conclusions of the District Court and this Court on appeal that he had failed to discharge the onus upon him to show that his claimed loss occurred as a consequence of CCM refusing to display his brochures and terminating his membership, rather than the devastating effects of the February 2011 earthquakes. Mr McCarthy submits that no bookings were made by CCM for his benefit over a long period of time after the cancellation of his membership, and only then on a sporadic basis. He also submitted that CCM would be in possession of comparative figures relating to other operators' revenues post the earthquake and these had not been provided to him. He again referred to the evidence he provided in the District Court.[29] The fundamental difficulty for Mr McCarthy in relation to this issue is that Judge Kellar specifically asked him whilst he was giving evidence to provide an estimate in percentage terms of the impact of the earthquake on his tourism business in 2011 and 2012. When it was inquired of him as to whether it was more than 25 per cent or 50 per cent, Mr McCarthy replied "considerably more". Mr McCarthy advised there was nearly a collapse in the market with many operators going out of business and that it was very difficult. When that evidence is compared with the figures provided by Mr McCarthy as illustrated in a graph he produced in evidence6 Ravensdown Fetiliser Co-Operative v Eveleigh [2012] NZHC 660.regarding the downturn in his business, Mr McCarthy's estimate of the impact of theearthquake accounts for the significant loss of business.[30] On the evidence adduced before the District Court the downturn in Mr McCarthy's business was shown to have resulted from the impact of the earthquakes. Mr McCarthy carried the onus as the plaintiff seeking monetary compensation to prove his losses as a result of CCM's alleged contractual breach bycancelling his membership. Faced with the very significant impact of the earthquakes, this was a difficult task which Mr McCarthy did not discharge. There is therefore no basis upon which this issue is capable of bona fide and serious argument. Further muddying the waters is the fact that even after Mr McCarthy'smembership was cancelled, CCM continued to sell his tourist services on his behalf.Trust deed[31] Mr McCarthy submits this Court "wrongly dismissed the respondent's trustdeed in not upholding [CCM's] obligations" despite, as he acknowledges, that "it was a private company in the period leading up to and including the appellant'sclaim". Mr McCarthy must appreciate that the respondent is CCM and not the Destination Christchurch, Canterbury, New Zealand Trust which holds the shares in the company. Mr McCarthy maintains the cancellation of his membership is contrary to the objects of the trust. However, he provides no explanation for how the trust deed impacts on the contractual relationship between CCM and tourist operators which is regulated by its terms and conditions.[32] Mr McCarthy alleges that CCM was not entitled to cancel the contract, whereas CCM relied on the terms and conditions for its entitlement to do so. The trust deed gave effect to an initiative taken by the Christchurch City Council and local tourist interests to promote Christchurch as a tourist destination and to hold shares in CCM or at least its predecessor. It may inform and support Mr McCarthy'sviews about how the City Council is promoting tourism in Christchurch but it does not bear on the contractual dispute between himself and CCM.Allegations of improper conduct[33] On his appeal to this Court, Mr McCarthy sought to re-litigate issues relatingto CCM's concerns regarding the standard of his service, particularly as it related to the standard and accuracy of his brochures and his conduct when interacting with employees of CCM. Mr McCarthy maintained the District Court's findings, asaccepted by this Court, were clouded by negative comments made about him by Mr Brice and relied on hearsay to support allegations that Mr McCarthy had harassed staff.[34] Mr McCarthy seeks to continue to litigate these issues, particularly as it relates to Mr Brice who gave evidence on CCM's behalf in the District Court. In particular, Mr McCarthy objects to the evidence given by Mr Brice of his inquiries into Mr McCarthy's interactions with CCM staff. He continues to dispute the description of his actions as intimidating or aggressive, and maintains that Mr Brice's evidence amounted to hearsay.[35] These evidential issues were determined by Judge Kellar in the District Court and reviewed by me on the appeal. I do not consider the District Court to have taken into account hearsay evidence. Judge Kellar was at pains to ensure Mr Brice did not give objectionable evidence. Mr McCarthy may dispute the result of Mr Brice'sinquiries which led CCM to its view regarding the standard of Mr McCarthy'smarketing material, and in particular that its investigation found he was not transacting his business with CCM in a respectful manner, but the terms and conditions of membership reserved to CCM the right to make that assessment, and Mr Brice gave evidence on behalf of CCM of its position in that regard.[36] Mr McCarthy, by way of a second appeal, seeks to continue to disputeCCM's opinion regarding the standard of his brochures and his interaction with staff members. However, CCM's assessment of Mr McCarthy's brochures and the state of its relationship with Mr McCarthy do not raise questions of wider importance and are issues which have now been considered by two Courts. They are not of a type which warrant the cost and delay of a further appeal.The application to admit further evidence on the application for leave and for discovery of further documents[37] Mr McCarthy on his application for leave for a second appeal has sought to have admitted yet further documents which relate to inquiries he has made regardingCCM's evacuation of its premises in Cathedral Square after the earthquakes. This is linked with an issue which Mr McCarthy wishes to pursue regarding the availability of records at the time he commenced his contractual relationship with CCM. Mr McCarthy is of the view that Mr Brice misled the District Court regarding whether documents had been destroyed in the earthquake or were no longer available as a result of being damaged and subsequently disposed of. He maintains CCM usedthe earthquakes as a "convenient excuse to evade the truth and justify its actions innot being able to present the documents it had recovered".[38] Neither the introduction of this evidence nor the application for discovery, which is limited to seeking cartage contractors' invoices in respect of materialremoved from CCM's premises in Cathedral Square after the February earthquakes, advances Mr McCarthy's position. Whatever controversy there may be regarding theavailability of CCM's records in the wake of the February 2011 earthquakes,Mr McCarthy has not been able to explain how the material he alleges was still available to CCM notwithstanding the state of its premises and the condition of its documents would assist his case, and more specifically assist his application for leave.[39] Mr McCarthy accepted both in the District Court and before me on his appeal that he had, since 2002, periodically signed further one-page documents during the course of his business relationship with CCM, each of which made reference to terms and conditions. His argument, which I have earlier summarised, was that he maintained the terms and conditions were restricted only to the details contained on the document itself, and that he was never supplied with a copy of the terms and conditions and was not therefore bound by them.[40] While Mr Brice gave evidence in the District Court of his belief that the terms and conditions which applied when he was first employed by CCM would have been the same as at the time Mr McCarthy first became a member back in2002/2003, that evidence is not the basis upon which his appeal to this Court was determined. Both the further evidence sought to be introduced and the additional discovery are irrelevant to the way Mr McCarthy's appeal was decided.[41] Because of the very limited materiality and merits of Mr McCarthy'sapplications to obtain and adduce further evidence on this topic, the applications are declined. The need for proportionality in the proceeding and the costs involved in a second appeal cannot be justified on such a collateral basis.7Other issues[42] Mr McCarthy referred in his application for leave and his submissions in support to a number of subsidiary and secondary issues. These include the alleged identification of error by the District Court and this Court regarding when Mr McCarthy's membership with CCM first began, and other evidential issues including his compliance with directions he was given regarding the content of his brochures. Mr McCarthy cites the approach taken by both the District Court and this Court to these and other pieces of the narrative as exhibiting bias. The refusal to admit more evidence on his appeal to this Court is cited as another example.[43] Other alleged errors include disputes about the number of brochures Mr McCarthy inherited from a previous service provider, and whether he or CCM staff were responsible for their display at the visitor centre. Mr McCarthy is adamant that he was cooperative at all times with CCM and continues to stronglycontest CCM's assessment, and in particular that of Mr Brice regarding the nature of his relationship and interaction with CCM staff.[44] As is apparent from this description of the issues raised by Mr McCarthy, they are matters which have no application or wider public interest beyond this proceeding and are limited to evidential or factual topics which relate to Mr McCarthy's deep-seated sense of personal grievance rather than to an issue central to the determination of his contractual claim. These issues have now been aired on two separate occasions before two different Courts. They are of no wider7 Chief Executive of LINZ v Luke [2008] NZCA 43 at [18]; Downer Construction (New Zealand) v Silverfield Developments Ltd [2007] NZCA 355, [2008] 2 NZLR 591.importance beyond this proceeding and do not provide a proper basis to warrant a second appeal.Conclusion on application for leave to appeal[45] It follows from my review of the matters Mr McCarthy has raised that I am not satisfied the high threshold required to be granted leave for a second appeal has been met. Effectively, Mr McCarthy seeks a second rehearing of his dispute with CCM based on a reiteration of his arguments (supplemented by yet a further application to adduce more evidence) concerning disputed factual matters which are not central to the conclusions of this Court on his first appeal.[46] Mr McCarthy has not identified a discrete alleged error of law, let alone one of such importance either generally or to the parties to justify further litigation of a matter which has already twice been considered and ruled upon.8 His principal points on appeal relate to questions of fact and evidential disputes which have no significance beyond the parties themselves, and do not justify the burden of the further costs of a second appeal. Accordingly, Mr McCarthy's application for leaveis declined.Application for an interim stay of enforcement action in respect of costs[47] Costs were awarded against Mr McCarthy after his claim failed in the District Court and a further costs order was made when his appeal was dismissed. With Mr McCarthy's application for leave to appeal to the Court of Appeal having now been dismissed the main ground for Mr McCarthy's application for an interim order staying enforcement of the costs orders falls away. The only remaining basis upon which Mr McCarthy can base his application are the personal circumstances set out in his supporting affidavit.[48] Mr McCarthy has deposed to a number of challenges his tourist operations face as a result of the seasonal and cyclical nature of the tourist industry and the effects of the closure of State Highway 1 as a result of the Kaikoura earthquakes. Mr McCarthy refers to having greater cash flows and diversification of operations in8 Waller v Hider, above n 2, at 413.the summer season. He is concerned that enforcement action taken at this time may cause him undue and unnecessary hardship.[49] CCM's opposition to a stay is based both on the unmeritorious nature of Mr McCarthy's application for leave to appeal which is cited as a further example of the ongoing expense that CCM has been put to in defending the successive chapters of this litigation. It maintains it is entitled to costs in the ordinary way in order to recoup some of the substantial expense it has been put to as a result of the litigation initiated by Mr McCarthy.[50] With the dismissal of Mr McCarthy's application for leave which failed toidentify a question capable of bona fide and serious argument warranting a second appeal, there is no proper basis upon which CCM should be denied recovery of its costs. The circumstances of Mr McCarthy's tourism operations including his ability to meet his financial responsibilities in that regard, and the obligations he has incurred as a result of initiating and persevering with this litigation, were matters for his assessment. Having made those decisions he cannot avoid the ordinary consequential costs which litigants are required to accept in the event their claims are unsuccessful.[51] Accordingly, I decline Mr McCarthy's application for a stay of enforcement.The appropriate step would now be for Mr McCarthy and CCM to agree on some arrangement to meet the costs incurred as a result of this litigation.Outcome[52] Mr McCarthy's application to adduce further evidence on his application to bring a second appeal is declined, as is his application for discovery. Leave is declined to bring a further appeal. His application for an interim stay of the costs order made against him is also declined.Solicitors:Saunders & Co, ChristchurchCopy to:Robin McCarthy, Christchurch