SCC (NZ) LTD v SAMSUNG ELECTRONIC NEW ZEALAND LTD [2018] NZHC 2780

SCC (NZ) LTD v SAMSUNG ELECTRONIC NEW ZEALAND LTD [2018] NZHC 2780 [26 October 2018]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2014-404-2552[2018] NZHC 2780BETWEEN SCC (NZ) LIMITEDPlaintiffAND SAMSUNG ELECTRONIC NEWZEALAND LIMITEDDefendantHearing: 13-16, 20-24, 27 and 29-31 August 2018Appearances: R M Dillon and T A Hwang for the PlaintiffM Kersey, J Edwards and R Langdana for the DefendantJudgment: 26 October 2018JUDGMENT OF JAGOSE JThis judgment was delivered by me on 26 October 2018 at 2:00 p.m.pursuant to r 11.5 of the High Court Rules 2016.Registrar/Deputy RegistrarSolicitors:Queen City Law, Solicitors, AucklandRussell McVeagh, Solicitors, AucklandContentsIntroduction ..................................................................................................... [1]Background ...................................................................................................... [6]Applicable legal principles ............................................................................ [22]Outbound calling ........................................................................................... [23]Warranty process ........................................................................................... [48]Thompson wage recovery .............................................................................. [69]Support emails ............................................................................................... [85]Continuing calls ............................................................................................. [96]Relocation costs ........................................................................................... [106]Remuneration for additional services .......................................................... [120]Business exit plan ........................................................................................ [136]Use and occupation of SCC's premises ....................................................... [147]Repudiation of second Agreement ............................................................... [159]Fair Trading Act ........................................................................................... [185]Counterclaims for 'mute' / 'hold' damages ................................................. [188]Result ........................................................................................................... [198]Costs ............................................................................................................ [199]Postscript ..................................................................................................... [201]Introduction[1] This proceeding principally concerns the scope of compensable services –either in contractual terms, or under claims in quantum meruit – provided by theplaintiff ("SCC") to the defendant ("Samsung NZ") during the term of two contracts.A significant aspect of SCC's claims in the proceeding is SCC's characterisation ofthe contracts as providing for 'piecework', meaning payment for each aspect of SCC'sdiverse services for Samsung. At the parties' request, in this judgment, I onlydetermine liability (and not quantum) on the various claims and counterclaims.[2] SCC is a call centre operator, which provided services to Samsung NZ, adistributor of electronic goods. They were party to contracts dated 31 July 2007 and28 February 2012, each styled an "Authorized Call Centre Service Agreement". Underthe contracts, in which SCC is referred to as the "Contractor", SCC acted as customers'conduit to Samsung, and appeared to customers to be Samsung.[3] Upon Samsung NZ reaching the view SCC had manipulated processes toinflate its invoices, it gave SCC notice, by letter of 24 July 2014, to terminate the latterAgreement. SCC made claim on Samsung NZ in the ensuing negotiations, whicheventually gave rise to the present litigation.[4] SCC disputes Samsung NZ was entitled to terminate the Agreement, and raisesclaims against Samsung NZ for resulting damages (alternatively, under s 9 of theContractual Remedies Act 1979, now s 43 of the Commercial and Contract Law Act2017), as well as on eleven contended contractual breaches during the agreements'course (on three of which it alternatively claims to recover in quantum meruit). And itsays Samsung NZ's conduct in trade – including the alleged contractual breaches –was misleading and deceptive in terms of s 9 of the Fair Trading Act 1986, for whichit also seeks damages.[5] Samsung NZ denies any such liability. It raises counterclaims against SCC torecover contended overpayments made under the agreements, allegedly obtained bySCC's own misleading and deceptive conduct under s 9, on which it alternativelyseeks damages.Background1—SCC is formed[6] The Korean conglomerate, Samsung (of which Samsung NZ is a subsidiary),originally operated in New Zealand through its Australian subsidiary, SamsungElectronic Australia Pty Limited (Samsung Australia). By 2007 it became apparentSamsung's New Zealand operation – in which Samsung products were distributed bylocal companies, which also provided warranty service – required local support forcustomers.[7] To this end, Samsung made contact with SCC's current sole director, Jang-ShikYoon. Mr Yoon previously worked for Samsung in Korea, including by sellingSamsung products into Australia and New Zealand. In that capacity, he met SCC'sother original director, David Thompson, who at that time was importing Samsungproducts into New Zealand. Mr Yoon and Mr Thompson became friends, and whenMr Yoon later immigrated to New Zealand they continued to work together.1 In this judgment, for reasons I explain at [201] and following, I distinguish witnesses' evidence-in-chief (given by reading, or having taken as read, their written statements at trial) from their oralevidence in response to questions from counsel (whether given in chief, under cross-examination,or on re-examination). For the same reasons, I have left the judgment's recitation of documentarymaterial, and the oral evidence, without editorial correction.[8] After Samsung's contact, Mr Yoon joined up with Mr Thompson to offer callcentre services to Samsung. Mr Yoon took up shares in a pre-existing shelf companyowned by Mr Thompson, which was renamed SCC for the purposes of providing callcentre services to Samsung. Mr Yoon, Mr Thompson and SCC's initial employeesundertook some training in Australia to familiarise themselves with the Samsungbusiness operation.—first Agreement[9] After the training, Samsung Australia entered into a contract dated 1 July 2007with SCC (the "first Agreement"). The first Agreement recited:Samsung is a manufacturer and/or importer and wholesale distributor ofcertain electronic Products under the brand name "Samsung" in Australia andNew Zealand.Samsung has requested the Contractor and the Contractor has agreed toservice the needs of an inbound and outbound call centre for Samsung andsupply pre-sales, service and technical information of the Products underSamsung range and scope of products distributed throughout New Zealand.To offer warranty assistance to Mobile Phone and I.T product and ensure thesuccessful transfer of Audio Visual and White Goods related calls to RadiolaNew Zealand for the consideration and on the terms and conditions containedin this Agreement.The Contractor also agrees to perform out bound calls and Customer followup in relation to all escalated issues to ensure a resolution that is both agreeableto Samsung and to the Customer within the bounds of the Samsung way ofworking and internal control framework.[10] The contracted services were particularised in the body of the first Agreement– subject to specified key performance indicators ("KPIs") which, if not met, couldescalate to the contract's termination. In return for these services, the first Agreement'sSchedule 2 provided:A Service Fee shall be payable of NZD 43,018 plus NZ GST per month basedon a minimum of 5250 calls per month, based on an average talking time of 5minutes per call.Any additional payments must be agreed to in advanced by Samsung and thismust be in relation to call volume, or service improvement.The rates will be for the term of the Agreement. Any increase on rates must beagreed to by Samsung and these reasons must be raised in monthly operationalmeetings and be fully justified and have documented support.[11] The 'Service Fee' was drawn from calculations set out in a spreadsheetsubmitted to Samsung by SCC as its "Offer to Samsung". It is unclear if thespreadsheet is formally part of the first Agreement (the version in evidence being dated5 July 2007, after the parties' entry into the first Agreement). Handwritten annotationsin both English and Korean appear to have been added subsequently by Mr Yoon. Still,the spreadsheet plainly endorses the first Agreement's calculation of the Service Fee.I take the view the spreadsheet is informative of the foundation for the Service Fee setout in the first Agreement, rather than being part of the agreement itself.2[12] The spreadsheet begins with a monthly operational budget for SCC (includingpremises rental, wages, and other costs) in the amount of the Service Fee. Thespreadsheet then identifies the Service Fee to be equivalent to $1.60 per minute for a"minimum of 5250 calls per month, based on an average talking time of 5 minutes percall". The relevance of that divisor is in the spreadsheet's Note 4:This offer is based on SAMSUNG Guarantee minimum rate ofNZD 43,018 / month. That is 5,000 calls, 5.0 min average talk time,inbound/outbound incl. email. Above minimum rate, extra charges based onNZD 1.60 / min for call/e-mail.[13] In fact, the 'minimum' number of calls was soon exceeded, and SCC invoiced(and Samsung Australia paid) in accordance with those "extra charges" for everyincoming and outgoing call (at actual average talk times) and email. Despite schedule2's specified Service Fee, and the anticipation any additional payment "must be agreedto in advanced by Samsung" (of which there is no evidence), no issue was or is takenwith those 'extra charges'. From the financial year ending 31 March 2009, SCCannually invoiced Samsung Australia in the order of $1 million, being roughly twicethe stipulated Service Fee.—second Agreement[14] Although the first Agreement was for a three-year term, "automaticallyrenewed for subsequent One (1) year periods unless otherwise terminated in2 The document evidenced as the first Agreement includes two pages after what appears to be thefinal page of the contract: the spreadsheet, and an annotated copy of page 13 of the first Agreement(which is the first page of its Schedule 1, specifying KPIs). I find the latter also is not directly partof the first Agreement, but an annotated copy of one of its pages (the annotations being to circleeach KPI's percentage requirement).accordance with this Agreement", Samsung Australia entered into a second contractwith SCC dated 1 March 2012 (the "second Agreement").3 The second Agreementrecited:Samsung is a manufacturer and/or importer and wholesale distributor ofcertain electronic products under the brand name "Samsung" in New Zealand.As part of Samsung's operations, Samsung requires the provision of variousinbound and outbound call centre services together with the operation of aweb self-service and web chat service and the management of Samsung socialmedia portals.The Contractor specialises in the provision of inbound and outbound callcentre services and has agreed to operate and provide for the benefit ofSamsung and Samsung's clients the web self-service and web chat service andthe management of Samsung social media portals.The parties wish to record in this agreement the basis on which the Contractorwill:(i) provide inbound and outbound call centre services for Samsung;(ii) respond to all online Customer enquiries;(iii) create and manage a Samsung Web Self-Service and Web Chatservice; and(iv) manage Samsung Social Media Portals.The second Agreement was also for a three-year term, with a one-year extension,unless otherwise terminated. It made no reference to the first Agreement.[15] Again, the contracted services were particularised in the body of the secondAgreement – and again subject to specified KPIs, now primarily disciplined byincentive payments and penalty deductions, rather than by escalation to termination.A variable monthly Service Fee was payable for such services, based on inbound andoutbound calling, inbound emails, and back office functions performed during themonth in issue. The Service Fee was principally to "be calculated in accordance withthe 'Pricing' table as adjusted in accordance with the Incentive/PenaltyProgramme ". The pricing table provided in part:3 The document evidenced as the second Agreement also included, between its Schedules 1 and 2,an annotated copy of pages 14 and 15 of the first Agreement (which are the second and last pagesof that Agreement's Schedule 1, specifying KPIs). As with the annotated copy of page 13 includedwith the document evidenced as the first Agreement, the annotations were to circle each KPI'spercentage requirement. I find these pages are not part of the second Agreement at all.Activity Logic Cost RemarksInbound Inbound Calls xATT x minuterate$1.73 perminuteSENZ paysbuilding costsIn-sourcesolutionOutbound Happy Calls $6.20 per call Based on BIDataEmail Number of E-Mails inboundas registered byERMS$5.20 peremailBased onreported ERMSinboundvolumeBack Office Number ofFTE's requiredto perform backoffice functions$3,750 perFTE2 FTERequiredWhile not defined in the second Agreement, 'ATT' is accepted to mean 'averagetalk[ing] time' (although what that itself may mean is not agreed). 'BI Data' is definedin the second Agreement as "the Samsung nominated Business Intelligence System";and "ERMS" as "the email reply management system of Customer emails sent fromthe Samsung website". (And 'FTE' means 'full time equivalent'.)[16] The second Agreement was amended twice, first by an "Addendum" dated 18April 2013 to include inbound webchat activity as contributing to calculation of theService Fee, and then in March 2014 seemingly in ratification of the parties' informalagreement with effect from July 2013 to adjust contracted services and applicable fees.[17] Under the second Agreement, SCC's annual invoices to Samsung Australiacontinued to grow, from nearly $1.3 million for the financial year ending 31 March2013, to over $1.7 million for the financial year ending 31 March 2014.—novation and termination[18] In late 2013, Samsung decided formally to establish a New Zealand subsidiary,Samsung NZ. Although the novation agreement itself was not in evidence, it appearsagreed all Samsung Australia's "rights, benefits, obligations and liabilities" under thetwo Agreements were transferred to Samsung NZ under a novation agreement dated13 December 2013, signed by Samsung Australia, Samsung NZ, and SCC. Thisproceeding has continued against Samsung NZ alone, on that basis. (Reference in thisjudgment to 'Samsung' alone refers to either Samsung Australia or Samsung NZ,depending on the date of the event.)[19] After internal concerns were raised, Samsung NZ investigated aspects ofSCC's services and invoices. As part of that investigation, Mr Yoon met at least twiceover the period of a week with a Samsung NZ senior manager, Woo Suk (William)Choi, and a senior executive attending from Samsung's headquarters in Korea, GiYoung Lee. In the last meeting, on 23 July 2014, Mr Lee advised Mr Yoon the secondAgreement would be terminated. By letter of 24 July 2014, Samsung NZ formallyconcluded SCC falsely created entries in ERMS (used to quantify in part the feepayable to SCC), and otherwise manipulated systems and processes to inflate itsinvoices to Samsung. Samsung NZ took the view such was in irremediable breach ofthe second Agreement, entitling Samsung NZ to terminate it.[20] Terms for SCC's exit were discussed before and after issue of the 24 July 2014letter. SCC sought to negotiate a compensated exit; Samsung NZ sought SCC's"business exit plan" to transition to a new service provider, including finalisation ofSCC's invoicing. Ultimately Mr Yoon made a claim on Samsung NZ which largelyprovides the foundation for this proceeding (although Samsung NZ also counterclaimsin reliance on contended manipulation by SCC of call durations).[21] Samsung NZ made arrangements for a staged transition from SCC toTranscom, intended to commence from 6 October 2014. SCC disputed Samsung NZwas entitled to terminate the second Agreement, and the transition arrangements didnot proceed. After some initial position-taking and negotiations, SCC issued thisproceeding, including an application for an interlocutory injunction against SamsungNZ. The application was dismissed on 31 October 2014.4 Samsung NZ terminated itsrelationship with SCC on 4 November 2014.4 SCC (NZ) Ltd v Samsung Electronics New Zealand Ltd [2014] NZHC 2692, [2015] NZCCLR 1.Applicable legal principles[22] There is no material dispute about the principles applicable to contractualinterpretation. They are generally to determine from construction of the agreements:5 what a reasonable and properly informed third party would consider theparties intended the words of their contract to mean[,] aware of thecommercial or other context in which the contract was made and of all thefacts and circumstances known to and likely to be operating on the parties'minds.I now turn to address the claims and counterclaims in this proceeding.Outbound calling[23] This is SCC's first cause of action, claiming an entitlement under the secondAgreement to be paid for every outbound call.—contractual provisions[24] Under clause 4.1 of the second Agreement, SCC was to: provide the Services from the Agreed Location at all times during theAgreed Hours in accordance with Samsung's Warranty Process for WarrantyClaims in a timely, efficient, proper and workmanlike manner usingreasonable care, skill and diligence: Clause 1.1 defined 'Services' as meaning: the services in relation to the Products to be provided by the Contractor toSamsung as set out in schedule 6 and includes any additional services agreedas part of any Statement of Work; Schedule 6 in turn provides:The Contractor will provide the following supported channels; voice, email,online messaging via Web Chat, ERMS, Web Self-Service and Social MediaPortals. Both Inbound and outbound Services are to be provided. OutboundServices mean voicemail call-backs, follow-up call-backs, emails andmessaging to identified Samsung Customers or other Individuals.5 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444 at [19] per TippingJ.[25] Clause 8.1 of the second Agreement then provided, "Samsung will pay theContractor the Service Fee for the provision of the Services", which is defined atclause 1.1 as "the service fee specified in schedule 3 or any other service fee agreedbetween the parties from time to time, expressed in New Zealand Dollars (NZD) andexclusive of GST". Schedule 3 contained the Pricing Table set out in part at [15] above.[26] The table relevantly provided:Activity Logic Cost Remarks Outbound Happy Calls (see note below)* $6.20 per call Based on BI Data*Outbound Happy calls Formula:(Execution ratio(%) x Target Count) plus (40% of Unable to progress ratio xTarget Count).The maximum chargeable number of calls in any monthly period is 30% ofthe warranty target count.[27] 'Happy Calls' are not defined precisely in the second Agreement, but they werea carry-over from the first Agreement, which required as one of the KPIs "[a]swarranty jobs are completed, the following month 25% of these need to be surveyed".They are, in essence, follow-up contact with a proportion of customers, to check ontheir satisfaction with warranty services provided. The second Agreement's Schedule2 also specified a KPI "Happy Call Execution Ratio", to: measure the volume of customer satisfaction surveys undertaken by theCall Centre where Happy Call surveys will be automatically generated bySamsung's system and the Contractor will be responsible for contacting thatnumber of customers and conducting a telephone survey and accuratelyrecording the Customers response to the Happy Call survey.That Schedule also required SCC monthly:To have obtained a response from at least 15% of all customers who havereceived a Happy Call survey from Samsung and to accurately record thoseresponses.[28] 'Happy Calls' transpired to be difficult to meet in those terms, seeminglybecause customers were hard to contact, or resistant to providing the necessary degreeof response. SCC's monthly reports to Samsung illustrated increasing number of'Happy Calls' were unable to be progressed, while the number of responsive 'HappyCalls' reduced well below the desired 15 per cent. Ultimately, Samsung relieved SCCof 'Happy Calls'; the March 2014 amendment to the second Agreement provided:The execution of the 'Happy Call Calling' function is removed from SCCNZto become the responsibility of Samsung. All reference to 'Happy CallCalling' in the Services Agreement is deleted from [Schedules 2, 3, and 4].—SCC's argument[29] SCC's contention is it was to be paid $6.20 for every outbound call made underthe second Agreement. It says that is the plain meaning to be taken from the PricingTable, which only expressed a formula limiting the maximum chargeable number of'Happy Calls' in any month.[30] SCC observes 'Happy Calls' are just one sort of outbound service. Another is'Exchange Customer Satisfaction Calling', for which there is no specified charge (orother mention in the second Agreement), but of which SCC was also relieved by theMarch 2014 amendment, which acknowledged such was "currently provided inrelation to the Services Agreement by SCCNZ". And there are other forms of outboundcalling: any "voicemail call-backs [and] follow-up call-backs to identified SamsungCustomers or other Individuals".[31] Further, the March 2014's exclusion of reference to "Happy Call Calling" wassaid to leave the pricing table to read:Activity Logic Cost Remarks Outbound $6.20 per call Based on BI Data[32] By SCC's assessment, it made some 170,000 outbound calls under the secondAgreement, for which it was paid only for some 25,000 'Happy Calls', and thereforeclaims $890,946.57 (exclusive of GST) for the balance.—analysis[33] For the reasons I explain below, I construe the column "Logic" in the pricingtable at Schedule 3 to the second Agreement to mean 'how the relevant component ofthe Service Fee is to be calculated'. Construed in context, the second Agreement doesnot require payment for all outbound calling.[34] First, despite SCC's monthly Service Fee under the first Agreement beingcalculated by reference to every incoming and outgoing call and email, SCC appearsto have ceased calculating the Service Fee to be invoiced to Samsung by reference tooutgoing calls other than 'Happy Calls' from the time the second Agreement came intoforce. Clause 8.4 of the second Agreement required SCC to "prepare and provide toSamsung on a monthly basis an invoice for all of the Services provided by theContractor to Samsung during the previous month". Clause 8.5(a) required eachinvoice to "contain sufficient information to enable Samsung to establish the accuracyof the invoice, including a breakdown of the Services provided and the Service Feepayable". The few SCC invoices under the second Agreement in evidence illustrate itscalculation of the Service Fee to be invoiced to Samsung by reference to outgoing'Happy Calls' only.[35] Mr Yoon contended in his written statement in reply:SCC has always maintained that call-backs are payable. Since or on around2012 as the number of call-backs escalated and SCC was performing call-backs as additional services for the benefit of Samsung, I requested Samsungto pay for these services.The documentary evidence, however, showed Mr Yoon did not raise payment for otheroutgoing calls until after the second Agreement's first year. On 9 April 2013, Mr Yoonemailed Samsung NZ's Head of Service, Naveen Dowlath, copied to Mr Choi, to say:During the first year in the contract terms, we found that with the increasingsales of complicated smart mobile phone and Smart TV series there has beenan increasing number of Call Back work from CCC to customers most of themare required by customers to provide with technical assistance which is set as"call back" in G-CIC and booked by General agents in case they can not assistcustomers with technical issues.Samsung does not allow us to Transfer call to Tech advisor. As soon astransferred, talk time is not valid for those technical calls. Also volume of NZCCC it is hard to set dedicated Call Back agents (Tier 2 Support) and so wehave been provided Call back work to customers during last year at no cost,but call back is getting important and it is now at the time of requiring almostone manpower work.As explained previously, we would like Samsung review our Call Back workfor the claim from March 2013.("CCC" is an occasional reference to SCC used by Mr Yoon.)[36] Mr Choi responded:If you need to invoice with amended amount. You should discuss in advance.That is proper manner in business.I was very disppointed that you invoice the outbound call withoutconfirmation with Samsung.Who decide outbound call price? Who confirmed that you invoice theoutbound call?And also, Samsung never asked you that below blue color. Please don't makeany misunderstanding."Samsung does not allow us to Transfer call to Tech advisor."Samsung will verify your request again and let you know asap.(Mr Choi's reference to "that below blue color" appears to refer to that following thequoted text from Mr Yoon's email set out at [35] above, and seems to refer to the "Tier2 Support". That is a separate – but, as will be seen, related6 – issue to that of outboundcalls, raised on another of SCC's claims in this proceeding.)[37] Mr Yoon pursued Samsung NZ for its response. By email of 27 May 2013,Mr Choi advised:Basically, Samsung encourage first time fix call which means that Agents arefixed issues when customer call immediately.To do that, I would like to reinforce to transfer function from your 1st tierAgents to 2nd tier Agents rather than call back customers.You are able to charge us to include into in-bound call talking time.6 At [96]-[105] below.[38] After Mr Yoon continued to pursue the issue "for more than 40 minutes" inwhat was intended to be a "quick meeting" with Mr Dowlath, Mr Dowlath explainedhe needed until early June 2013 to discuss the issue with Samsung NZ's managingdirector. When Mr Yoon threatened to go over Mr Dowlath's head to Samsung NZ'sboard members, Mr Dowlath endorsed Mr Choi's position, and added in his email of5 June 2013:I have therefore made a decision under duressWith the information at hand, from discussing with you and Andrew, fromdiscussing SENZ position with William & from my many years of experiencesetting up and managing a call centre & technical helpdesk,I cannot agree for SENZ to pay for outbound calling at this stage.[39] In email response the same day, Mr Yoon accepted Mr Choi's andMr Dowlath's positions, saying:As Samsung does not want to support the technical call back outbound, CCCwill consider to form Tier 2 staff (in the beginning one or two) who will taketransfer calls from General agent and support General agents while on the callwhere technical assistance required.[40] Also of note is Mr Yoon's acknowledgement in that last email, "[c]urrent tier2 agents also take inbound general calls as we are get paid mostly with inbound calls".That supports an inference SCC accepted the Service Fee was not to be calculated byreference generally to outbound calls (which, on the evidence of invoices under thesecond Agreement, would have increased the Service Fee by about a third).[41] Second, under this head of claim and others, SCC's counsel, Ross Dillon,sought to characterise the two Agreements as "piecework" contracts: that is, theyspecified a rate for each and every activity to be carried out under them. That is not asustainable characterisation of the Agreements, which instead expressly provide forSCC's remuneration for provision of the Services by payment of a monthly "ServiceFee". Clause 8.1 of the second Agreement makes that plain: "Samsung will pay theContractor the Service Fee for the provision of the Services". 'Services' is defined asmeaning: the services in relation to the Products to be provided by the Contractor toSamsung as set out in schedule 6 and includes any additional services agreedas part of any Statement of Work.(For completeness, 'Product' means "a product sold under the brand name "Samsung"falling within the Product categories specified in schedule 1", which non-exclusivelycategorises audio-visual products, white goods, IT products, and others included "asrequired by Samsung in its absolute discretion", as well as "general calls".)[42] Schedule 6 to the second Agreement required SCC to provide specified pre-sales, post-sales and general support "for enquiries received" from Samsung'scustomers through "voice, email, online messaging via WebChat, ERMS, Web Self-Service and Social Media portals", in which "[b]oth inbound and outbound Servicesare to be provided". Those 'channels' self-evidently are broader than the initial fouractivities by which the Service Fee is to be calculated. An obvious omission is the on-line services, despite their prominence in the second Agreement's recitals, and expressinclusion in clause 4's articulation of the "Contractor's services".7[43] The April 2013 addendum included some of that on-line activity for calculationof the Service Fee, additionally stipulating:Activity Logic Cost RemarksInbound 1 on 1 LiveChat(80% of the inbound per minuterate)*(Average Inbound Talktime per Mthly Invoice)*(Qtyof Live Chats)Qty is basedon Live ChatSystem.ExcludesGSTThe presence of the Addendum illustrates the pricing table in its original incarnationdid not provide a rate for every activity, without some explanation for SCC'sagreement to reduce its entitlement (to 80 per cent) for these inbound calls.7 Clause 4 provides:The Contractor will at all times during the Term:4.13 create and or manage a Web Chat service for Customer enquiries on the Samsungwebsite, as agreed by the parties;4.14 manage any Social Media Portals as agreed by the parties;4.15 create and or manage a Web Self-Service facility, as agreed by the parties [44] Third, the March 2014 deletion of "All reference to 'Happy Call Calling'" fromthe second Agreement's Schedules 2, 3, and 4 is not happy contractual drafting. Thewords 'Happy Call Calling' appear nowhere in those schedules (or elsewhere in thesecond Agreement). Instead, Schedule 2 provides a "Happy Call Execution Ratio"KPI; Schedule 3 stipulates "Happy Calls" in relation to outbound 'Logic' and KPIincentive payments and penalty deductions; and Schedule 4 exemplifies calculation ofthe monthly KPI evaluation score by reference in part to "Happy Call". Deletion of'all reference' to 'Happy Calls' is to delete the whole of its reference, meaning theentirety of the applicable KPI (rather than to leave it as an 'Execution Ratio' KPI), thewhole of the outbound activity row in Schedule 3, and the whole of the 'Happy Call'row in Schedule 4.[45] For these reasons, although Mr Dillon colourfully denied the column displayedany logic at all, on the face of the pricing table, the 'logic' is of its identification of thecomponents going to make up the monthly Service Fee. Construed in context, thesecond Agreement does not require payment for all outbound calling.[46] The point is emphasised by the provision in Schedule 3's provisions forcalculation of incentive payments and penalty deductions. The former articulates thecalculation as a percentage of "the amount payable to the Contractor for the relevantmonth for any Inbound and Email Handling plus charges invoiced for successfulHappy Calls as per the Pricing Table in this Schedule"; the latter as "the amountpayable in respect of any inbound and E-Mail Handling transactions and anysuccessful Happy Calls as per the Pricing Table in this Schedule". There is no rationalefor omitting from those calculations a significant portion of payments due to SCC.Notably, when the second Agreement added '1 on 1 Live Chat' to the Service Feecalculation, that activity is categorised as "Inbound" transactions, bringing it withinthe incentive payment and penalty deduction regime.[47] This head of claim fails.Warranty process[48] This is SCC's second cause of action, claiming Samsung's actions to havediverted work which otherwise would have given rise to compensable calls to SCC.—contractual provisions[49] As has been seen,8 clause 4.1 of the second Agreement referred to "Samsung'sWarranty Process". That phrase is defined at clause 1.1 as meaning: the process to be followed in relation to any warranty claim received fromany Customer as set out in schedule 9 or such other process as notified inwriting by Samsung to the Contractor from time to time.Schedule 9 sets out the detailed steps SCC is required to take "[u]pon a request froma Customer to service or repair a Product", leading to SCC's determination whetherthe sought activity is "a Warranty Service or non-Warranty Service", and – if theformer – to authorise such service and "arrange the relevant repair process, includingbooking the service with the authorised service centre".[50] Schedule 6, to which the definition of Services refers,9 specified:Provide pre-sale andpost-sale support (clause4.5)• If required by Samsung, the Contractor will providepre-sales and post-sales support for:o Brown Goods, White Goods, IT Goods and HHPGoods and B2B Goods to all CustomersIncluding Samsung Business Customers.• The Contractor will provide the following supportservices for enquiries received via all agreedmediums in clause 4 in accordance with clause 4:Pre-Sales Supporto Provide Samsung Customer with pre-salesinformation with regard to the Products.Post-Sales Supporto Handling Customer enquiries with regard toProducts with Defects.o Support of the Customer Products returnsprocess.o Diagnosing the Customer complaint to confirmProduct has a Defect.o If the Product has a Detect, the Contractor willuse the Samsung systems to Identify the mostappropriate authorised service centre and arrangethe relevant repair process, including bookingthe service with the authorised service centre.o Firmware and software distribution andadministration support.General Supporto Handling both general and technical Customerqueries.8 At [24] above.9 At [24] above.[51] Clause 4.5, referred to in the left-hand column above, required SCC to: provide the Services in a manner that promotes the goodwill and reputationof Samsung and will bring to the attention of Samsung on a timely basis, anyincident or circumstance which will or may affect the goodwill or reputationof Samsung with a view to ensuring:(a) the needs of Callers and Customers, dealers and any other Individualsare dealt in a timely and professional manner with via aninbound/outbound call centre;(b) the needs of Customers, dealers and any other Individuals are dealtwith in a timely manner via the Samsung Web Self-Service and WebChat service, Samsung Social Media Portals and emails;(c) pre-sales information is provided in respect to the Products;(d) post-sales service is provided in respect of the Products;(e) all Callers' and Customers' questions and complaints are followed upand responded to appropriately; and(f) the presence and service performance of Samsung within NewZealand is improved; [52] The second Agreement, in these respects, echoes the first Agreement'srequirements of SCC, "[u]pon a request from a Customer to service or repair aProduct", to determine and authorise (but not expressly to arrange) Warranty Service.10[53] Significantly, clause 2.1 of the first Agreement appointed SCC "an Exclusive(Mobile Phone and I.T) product Authorized Call Centre". (That determinedly was notthe position under the second Agreement, Samsung resisting Mr Yoon's wish for suchcontinued express exclusivity, although Mr Yoon argued in cross-examination suchcould be implied from the second Agreement's lack of reference to 'non-exclusivity').—SCC's argument[54] SCC's complaint under this head relates to Samsung's arrangements to collectcustomers' products from retailers and deliver them to authorised repair or servicecentres (predominantly as Warranty Service), referred to by the parties as the 'milkrun'. It appears New Zealand customers saw the retailer, rather than the manufacturer,10 Although 'Warranty Service' is defined in both Agreements as meaning "service which iscompleted subject and pursuant to and strictly in accordance with the terms of the Warranty Card"(emphasis added).as the first port of call for service or repair of their products (at least while underwarranty). Retailers would either book the service with SCC and dispatch the productsto the repair or service centre, or go directly to the centre without reference to SCC.[55] Samsung made these arrangements to address customer concerns about thetime taken to repair or service their products, which were reflected in customer(dis)satisfaction surveys. Samsung is strongly motivated to meet customer concerns,as reflected by a variety of provisions in the Agreements, including for 'Happy Calls',and express reservation to Samsung to "take whatever action is required in order toprotect the Samsung brand name, level of service or service perception during theTerm". Under the first Agreement, but not the second, that reservation was exercisable"[b]y agreement"; under the second Agreement, that action was to be "reasonablyrequired".[56] SCC initially had no retailer-centric channel; its channels were customer-centric, and anticipated provision of specific customer detail, including name andcontacts, for entry and tracking in Samsung's Global Customer Interaction Centre("G-CIC"). Customers were required to enter such detail to make email contact viaSamsung's website (that is, ERMS), which automatically was recorded in G-CIC.11Later, retailers could email customer information directly to SCC (using an "info.nz"email address established for the purpose), which SCC then entered into G-CIC.Clause 4.9 of the second Agreement in part required SCC to "update the G-CIC andCMS systems accurately with all Customer information, including new enquiries andnew information on old enquiries". That detail permitted Samsung to document itsinteractions with customers, but only if both customer and retailer used the samedetails to identify the unique customer.[57] Samsung apprehended the delays were contributed by retailer behaviour, intheir bulk dealing with customer service or repair requirements, both in their contactwith SCC and in dispatch to repair or service centres, rather than on each individualcustomer contact (as would be the case if customers directly contacted SCC). Thisbehaviour led to heavy and lumpy demand on SCC, particularly at the beginning of11 At [15] above.the week, when it was confronted with retailers' weekend communications (SCC onlybeing required under the first Agreement to operate "Working Hours" – circularlydefined as those SCC "is open for business" – and under the second Agreement tooperate weekdays from 8:30am to 5:30pm, and Saturdays from 9:00am to 1:00pm).12[58] Samsung sought to overcome these issues. When SCC declined to extend itsoperating hours under the second Agreement, Samsung secured an after-hours callcentre service from Transcom, in the Philippines. The March 2014 amendments to thesecond Agreement included payment for calls made by SCC in response to customerenquiries Transcom was unable to resolve. Samsung also paid for retailers' couriercosts incurred in dispatch to repair or service centres (to incentivise individual, ratherthan bulk, dispatch). When the latter did not have the desired effect, Samsungintroduced the 'milk run'. There is disagreement as to when that process commenced:Samsung says it was "around January 2013"; SCC harbours suspicions it was initiatedas early as 2010, and expanded and formalised over time.[59] SCC contends, under the first Agreement, it had "the exclusive rights to bookthe Samsung warranty job", and Samsung's 'deliberate diversion' of warrantybookings away from SCC was an unnotified and unagreed change to the WarrantyService Process, in breach of at least the second Agreement. Mr Dillon expresslysubmitted Samsung had no "unilateral right to remove or reduce a revenue source"from SCC.[60] SCC says there have been 62,348 warranty service bookings made over thecourse of the first and second Agreements, without reference to SCC, for which itclaims damages in the amount of $324,209.60 (exclusive of GST), calculated at $5.20for inbound emails as set out in the second Agreement's schedule 3.1312 The first Agreement specifies the same hours under a heading "Working Days and Hours" atSchedule 1, "Key Performance Indicators of the Call Centre", but without other reference to thatspecification.13 At [15] above.—analysis[61] Properly construed, the first and second Agreements do not entitle SCCexclusively to book Samsung warranty repair and service work.[62] The 'exclusivity' conferred by the first Agreement is not the subject of anymore detailed explanation. On its face, SCC's appointment is as Samsung's exclusive'Authorized Call Centre', which is defined as meaning: an entity approved by Samsung for the needs of consumers via an inbound/ outbound call centre as well as dealers, and any interested party that may callin order to assist in the post sales service of Samsung Products and pre salesinformation, follow up and resolution of consumer complaints, monitorservice providers, and resolve escalated issues and improve the presence andservice performance of Samsung within New Zealand.[63] The definition makes it plain such exclusivity is only as the "entity approvedby Samsung for the needs of consumers via an inbound / outbound call centre within New Zealand". The definition anticipates performance of SCC's role would beinitiated externally, by "consumers as well as dealers, and any interested party thatmay call", SCC's role being "to assist" in the specified ways. Nothing in Samsung'sexclusive appointment of SCC confers any monopoly on SCC so to assist. The naturalmeaning of 'exclusivity' in the circumstances is to disentitle Samsung fromestablishing any other inbound/outbound call centre focused on New Zealandconsumer needs. That is further indicated by the first Agreement's clause 2.3, whichreserves rights to Samsung "in its absolute discretion" to approve another entity "tobe an Authorized Call Centre", "[b]y agreement" (inferentially, with SCC).[64] Further, any such exclusivity is only in relation to Samsung's "Mobile Phoneand I.T" products. The reference to "Mobile Phone and I.T" is picked up in the firstAgreement's Recital B, where SCC is "[t]o offer warranty assistance" to thoseproducts only, while transferring "Audio Visual and White Goods related calls" toRadiola New Zealand, Samsung's distributor, also acting as a service centre. Mr Yooncontended the first Agreement made provision for SCC's retention of the latter callsafter six months of operation, but was unable to identify such provision. Rather itappeared from his evidence under cross-examination SCC agreed with Samsung toretain calls previously destined for Radiola. But nothing in the arrangements for suchretention extended to any contractual grant of exclusivity for those 'products'.[65] SCC's lack of monopoly, otherwise than as a consumer call centre for mobilephone and IT products, is reinforced by the first Agreement's clause 3.1, whichidentifies the services are to be provided "at the request of Samsung or the Caller"('Caller' being defined as including "a Customer, dealer or a member of the public").Expressly, under the first Agreement, SCC's provision of 'warranty assistance' isinitiated by "a request from a Customer to service or repair a Product under clause3.1". SCC cannot insist, for example, a customer or dealer make such a request of it;much less that Samsung not meet its warranty obligations to customers, unless requestfor the same is made through SCC.[66] The second Agreement's Schedule 9 maintained the same responsive role forSCC under the more formalised 'Samsung Warranty Process'.14 SCC's lack ofmonopoly also is emphasised by the second Agreement's Schedule 6, which addressedSCC's continuing 'warranty assistance' then in terms of 'post-sales service'.15 Suchwas to be provided "[i]f required by Samsung" in relation to specified products; thenby SCC "for enquiries received via all agreed mediums" (meaning not exclusively byinbound emails registered by ERMS, which is the calculation of SCC's claim, but alsoas a Back Office function – "Email booking from ASCs, Retailers, Customers" – asSchedule 6 provides).16[67] SCC's post-sales service is not expressed by reference to the 'SamsungWarranty Process'; rather, following such enquiry, SCC's role principally is indetermining if the particular product is defective in its materials or workmanship, thento "use the Samsung systems to identify the most appropriate authorised service centreand arrange the relevant repair process, including booking the service with theauthorised service centre". Only if it transpires, "[u]pon a request from a Customer toservice or repair a Product", the request is for a "Warranty Service", does the balanceof the 'Samsung Warranty Process' apply. Again, SCC cannot insist Samsung's14 At [49] above.15 At [50] above.16 At [87] below.customers only seek warranty service through it, or Samsung only perform thoseobligations on reference by SCC.[68] It is impossible to construe the second Agreement as conferring on SCCeffectively control of the gateway to performance of Samsung's warranty obligationsto its customers. SCC's argument clause 23 of the Agreement prevents Samsung fromaltering the warranty process significantly exceeds its reach for three reasons. First,SCC does not (and cannot) point to any aspect of the documented Samsung WarrantyProcess altered by Samsung's introduction of the 'milk run' or comparable'diversions'. Next, the very definition of the process incorporates Samsung'sentitlement to change it.17 And last, clause 23 is an 'entire agreement' provision,18which prevents any implied term to the effect the warranty process is only accessiblethrough SCC.Thompson wage recovery[69] This is SCC's third cause of action, seeking to recover deductions made inSCC's invoices on account of the 'wage' payable to SCC's shareholder, Mr Thompson.—contractual provisions[70] Clause 4.2 of the first Agreement relevantly provided:Samsung shall use its best endeavors to make the payments referred inSchedule 2 to the Contractor within [indecipherable] days after the end of themonth in which the invoice supported by all underpinning attachments issubmitted to Samsung by the Contractor.Schedule 2, as has been seen, required payment of a "Service Fee of NZD 43,018plus NZ GST per month".1917 At [49] above.18 Clause 23 of the second Agreement provided:This agreement incorporates the entire terms and conditions agreed between the parties withrespect to the subject matter dealt with and all other warranties, representations or impliedterms are expressly excluded to the extent permissible by law. No variation to any of the termsor conditions of this agreement shall be effective unless it Is made in writing and executed byor on behalf of all parties.19 At [10] above.—SCC's argument[71] As previously outlined, the first Agreement's 'Service Fee' was founded onSCC's proposed budget.20 Included in the budget was "[w]ages" for two "[g]eneralmanagers", understood to be Mr Yoon and Mr Thompson, at an annual expense of$200,004 between them. After Mr Thompson ceased to have an active role in SCC, byabout October 2008 – SCC pleads, "in breach of the first [Agreement] and/or inunlawful interference with the contractual relationship between SCC andMr Thompson" – Samsung required SCC's monthly invoices to be reduced by anamount equivalent to Mr Thompson's 'wage', and SCC complied. SCC seeks now torecover those reductions from Samsung NZ, in the amount of $316,666.00 (exclusiveof GST).—analysis[72] There is no evidence of the contractual relationship between SCC andMr Thompson, or any evidence from Mr Thompson. SCC's claim turns almost entirelyon a Korean language narrative dated 31 July 2014, authored by Mr Yoon andtranslated by him into English.21 The narrative covers events from 2007 to 2012,purports to record verbatim statements by various Samsung representatives andMr Yoon's responses over that period, and is in part rhetoric, in part hearsay, andgenerally a work of advocacy.[73] So far as the present claim is concerned, Mr Yoon wrote, Samsung "asked me'Dismiss business partner 'David' from the call centre'" in March 2008. In his firstwritten statement, he said the request "was made to me several times in person duringmeetings in Auckland, mostly in Samsung's offices". Mr Yoon's note records, in replyto his opposition, "Samsung pushed again with reason 'at small company two directorsare not ecomonical and so one should go'". Then, in December 2008:20 At [12] above.21 As with other of Mr Yoon's translations (see [131] below), the document in evidence waspresented under cover of a registered "Notarial Certificate", issued by the Consulate of theRepublic of Korea, attesting to Mr Yoon's confirmation to a consular official "the attachedtranslation is true to the original". But that was not universally correct: see note 45 below.Mr C. G. Kim from [Samsung Australia] visited NZ and asked a meeting withme where he decided Samsung will not pay Dave's salary as he no longer workat contact centre. This is part of HQ mission that Samsung has to cut 30% ofcost in every field.Me: We are not a part of Samsung, just outsourcing company to provideservice and get paid by rate that we work[74] Those exchanges are against the backdrop of Mr Yoon and Mr Thompson,shortly after establishing SCC, also briefly operating a Samsung retail store inAuckland's Newmarket, allegedly at Samsung's insistence, which Mr Thompsonmanaged instead of acting as SCC's general manager. Mr Yoon's written statementsays "David did not return to work at SCC after the shop had closed". The store's lackof success is blamed on Samsung's refusal to supply its product (but after its contendedinsistence Mr Yoon and Mr Thompson secure an eight-year lease "in the heart ofexpensive Newmarket").[75] Mr Yoon's written statement adds Mr Kim's demand in October 2008 forMr Thompson's exit, saying Samsung would not continue to work with SCC whileMr Thompson remained. Further:Samsung was no longer prepared to pay SCC the set rates per call because thishad originally been set based on a calculated budget that included a salary forDavid, but now that David was no longer working for SCC, Samsung wouldnot pay the set rate.Fearing Samsung "would find a way to terminate the first [Agreement]", Mr Yoonstarted negotiations in October 2008 to buy Mr Thompson out of SCC. Thenegotiations concluded successfully in October 2009, when Mr Thompson resignedfrom SCC. Meanwhile, Mr Yoon's written statement said "[a]t the request of Samsung,I reduced each monthly invoice by $8,333 because Samsung confirmed that if thiswere not done, they would simply not pay SCC".[76] Strikingly, Samsung raises no evidence in response to those contentions, suchas they are. Instead, in submission, it developed its own conspiracy theory: Mr Yoonsought to remove Mr Thompson as SCC's co-owner, and secured that exit for a bargainbasement price, so as to be able to claim all SCC's profit for himself.[77] If any of these contretemps mattered, I may not have been able to draw anyconclusion from the evidence. However, it is clear not only Samsung contracted to paySCC $43,018 per month, but also did not demur from payment of the 'extra charges'levied during the term of the first Agreement.22 If the first Agreement only establishedSCC's right to be paid $43,018 per month, clause 4.2's requirement for "the invoicesupported by all underpinning attachments" would be otiose. Purposively construed,the first Agreement intended monthly payment of at least $43,018 per month, but suchlarger sum as may be justified on invoice by reference to the per call/email rate. Thefirst Agreement embodies Samsung's obligation to pay accordingly on invoice.[78] From January 2009 until commencement of the second Agreement in March2012, SCC's monthly invoices to Samsung recorded two lines:1. Flat Fee (for 5,250 calls) : IT Monitor/Printer, Mobile- $8,333 (David)2. Extra Fee (Inbound + Outbound) : incl CE ProductsThe commencement date for the "(David)" deduction, coming ten months afterSamsung first raised the issue, is not explained. There is no contemporaneous evidenceof any express protest or reservation on SCC's part, but clause 15.3 of the firstAgreement provided:The rights of any party shall not be prejudiced or restricted by any indulgenceor forbearance extended to any other party and no waiver by any party inrespect of any breach shall operate as a waiver in respect of any subsequentbreach.[79] Samsung's counsel, Matthew Kersey, argues seriatim:(a) "Samsung should not have needed to pay the salary of someone whono longer worked at SCC";(b) Mr Thompson's departure "was a valid variation to the [f]irstAgreement"; and(c) the invoiced "(David)" deductions constituted SCC's waiver of anyclaim for their payment.22 At [13] above.[80] The first argument mischaracterises the spreadsheet's foundational budget asbeing Samsung's obligation to meet. Instead, Samsung's obligation was to makepayments of at least $43,018 per month, and such larger sums as may be justified oninvoice by reference to the per call/email rate.[81] The second submission overlooks nothing in the first Agreement committedSCC to making Mr Thompson available to it. Instead the definition of 'Key Person'meant: the primary contact or representative of the Contractor being at the time ofthe Commencement Date as detailed in schedule 5 or such other person asapproved by Samsung from time to time;And Schedule 5 only identified Mr Yoon as SCC's "Managing Director" and AndrewMacDonald as SCC's "Call Centre Manager". There was no evidence of any otherperson being approved by Samsung. SCC continued to pay Mr Thompson his 'wage'after Mr Thompson ceased working at SCC to manage the Samsung retail store inNewmarket from February 2008, and after SCC commenced the monthly "(David)"deductions, until Mr Thompson sold out of SCC in October 2009.[82] On the third submission, waiver requires:23 one party, by his conduct, [to lead] another to believe that the strict rightsarising under the contract will not be insisted upon, intending the other shouldact on that belief.But there is no evidence either Samsung believed SCC had abandoned its entitlementto the whole of the contractual 'flat fee', or SCC intended Samsung to act on such abelief. At best SCC's intention was only Samsung pay on invoices, which is notdependent on Samsung's belief as to their foundation. Given clause 15.3's referenceto 'indulgence or forbearance', waiver cannot lightly be inferred here. The invoice'sexplicit deduction, alongside identification of the full 'Flat Fee', is at least asconsistent with reservation of the deduction for later argument as it is withabandonment of any hope for its payment.23 W J Alan & Co Ltd v El Nasr Export Co [1972] 2 QB 189 (CA) cited in Bell v BDO SpicersManawatu Ltd [2012] NZHC 1598 at [45].[83] However, Mr Yoon's oral evidence under cross-examination was he had raisedthe "(David)" deductions to secure the second Agreement's one-year extension:24Q. So when you negotiated the second agreement in 2012, you didn'traise the issue with Mr Thompson, Mr Thompson's salary, did you?A. I, as I indicate in the brief, I had a meeting from (inaudible 10:39:55)from Samsung, Mr Lee. I had a contract to Samsung local company,Australia and New Zealand later, but all the negotiation was Samsungask, Samsung New Zealand ask Samsung Headquarter to come havea meeting because they can have I think, have a discussion with mebecause their approach to me is unacceptable. That is in the contract,you cannot, but it was more than three years keep pushing me so Icouldn't accept.Q. Sorry Mr Yoon, you're talking about the general negotiation on thesecond agreement aren't you, that you weren't happy with?A. I explained the process why (inaudible 10:40:40) I explain about thishappening, as I indicate when (inaudible 10:40:44) came becauseSamsung here asking to talk to me. I explain this is happening and Iindicate and he understand what happened. So I explain fully I was(inaudible 10:40:58) by this deduction, but contract is different, that'swhy Mr Lee said, in the contract he will provide three years plus oneyear more, (inaudible 10:41:11) achieve the KPI because tocompensate to my loss.Q. You're saying that the second agreement structure was to compensatefor loss because of Mr Thompson?A. Yeah, Samsung, no, no, no.Q. It's nothing to do with Thompson is it?A. No, 'cos Samsung my point is that Samsung (inaudible 10:41:38) Ithinks against the contract so I had this is loss to us and Mr Leeproposed three years, but I said because of (inaudible 10:41:44) beprovide three year first and extra one year. So second contract comesthat way.Q. But you didn't raise the issue in relation to Mr Thompson's paymentsagain when negotiating the second contract, did you?A. No, I told him and that's why he extend the one year.Q. Because of the Mr Thompson issue was why you extended one year?A. I explain again. Mr Lee, I explained the full story of what happened,then he accept my loss, which was Samsung didn't pay, didn't thinkthat amount for almost two or three years. So that's why then okay,we can discuss for changing for the second agreement, then how muchmake the (inaudible 10:42:38) and how much salaries, everything24 At [14] above.(inaudible 10:42:46) talking to the Auckland base. So then he offeredme three years, then I say, "Three years not enough," because heunderstand and then okay he will add one year, the automatic one yearto extend, to cover that cost, that's what agreed.The transcript's "inaudible" is better understood as "incomprehensible". English is notMr Yoon's first language and, although he is expressive and unrestrained in it, he wasoften difficult to understand. Mr Yoon's oral evidence also was discursive, and he tookevery opportunity under cross-examination to narrate his broader dissatisfaction withSamsung. But I took the essence of the above exchange to be the second Agreement'sone-year extension was negotiated to compensate for SCC's earlier "(David)"deductions, made at Samsung's insistence.[84] It cannot be said the negotiations themselves constituted an accord andsatisfaction, effective to discharge Samsung's liability. Instead, the parties' entry intothe second Agreement containing the one-year extension gave the negotiations thateffect, as an "accord executory". In Humphries v Carr, the Court of Appeal acceptedthe Victorian Court of Appeal's explanation in Osborn v McDermott as an 'adequatesummary' of the relevant principles:25First, there is the mere accord executory which, on the authorities, does notconstitute a contract and which is altogether unenforceable, giving rise to nonew rights and obligations pending performance and under which, when thereis performance (but only when there is performance), the plaintiff's existingcause of action is discharged. Secondly, at the other end of the scale is theaccord and satisfaction, under which there is an immediate and enforceableagreement once the compromise is agreed upon, the parties agreeing that theplaintiff takes in satisfaction of his existing claim against the defendant thenew promise by the defendant in substitution for any existing obligation.Somewhere between the two, there is the accord and conditional satisfaction,which exists where the compromise amounts to an existing and enforceableagreement between the parties for performance according to its tenor butwhich does not operate to discharge any existing cause of action unless anduntil there has been performance.Although nothing in the negotiations itself constituted any separately enforceableagreement, the foundation for the one-year extension to the second Agreement meansSamsung's entry into it fully compromised SCC's claim under this head. The claimfails.25 Humphries v Carr [2012] 1 NZLR 742, [2012] 1 NZLR 742 (CA) at [20] citing Osborn vMcDermott [1998] 3 VR 1 (CA) at 10.Support emails[85] On this fourth cause of action, SCC claimed payment at $5.20 per email inrespect of 26,795 incoming emails, and to recover a similarly calculated $89,320 forsome 17,100 emails deducted by Samsung from SCC's August 2014 invoice. (Thededuction relates to Samsung's grounds ultimately to terminate the secondAgreement.26)[86] In response to my questioning, Mr Dillon accepted in his closing submissionsthe $5.20 per email claim was untenable and was not to be pursued, but sought toamend the claim to engage instead the relevant aspect of the Service Fee reflected byBack Office activity as set out in the second Agreement's Schedule 3. The proposedamended claim was to read:By clause 8.1 of the second [Agreement], [Samsung] was required to pay SCCfor Back office function email as set out in Schedule 3 of the agreement.Pursuant to clause 4.6 of the Second Schedule of the second [Agreement],between 1 March 2012 and October 2014 SCC has dealt with 26,795 email,for which it has not been paid, in breach of the terms of the second[Agreement] and the novation. A further amount of $89320.00 of such emailwork was unilaterally deducted from SCC's tax invoice dated 8 August 2014,representing a further 17,100 email.[87] As has been seen, clause 8.1 required Samsung to "pay the Contractor theService Fee for the provision of the Services".27 The relevant row of Schedule 3provided:Activity Logic Cost Remarks BackOfficeNumber of FTE's required to perform backoffice functions as detailed in Table BackOffice Functions in Schedule 6.$3,750per FTE2 FTERequiredAnd Schedule 6 provided:Table: Back Office Functions:The functions listed below are to be carried out by the Call Centre:Email booking from ASCs, Retailers, CustomersWeekly Mobile OBF from Telegistics and Bright Point and OCLMaking weekly and monthly report26 At [19] above.27 At [25] above.HR and PayrollInternal TrainingInternal IT ManagementCustomer Refund ProcessMeeting attendances with SamsungService Job Tracking if required by Samsung (To be discussed)[88] Clause 4.6, referred to in the proposed amended claim, is SCC's generalobligation to: provide professional, helpful and informative assistance to Customers,including providing general and technical advice and handling customercomplaints from Customers calling via the inbound call centre or makingonline enquiries via the Samsung Web Chat service, Social Media Portals,Web Self-Service, ERMS, other emails and any other agreed online format, inaccordance with the best practice policies in the KMS system and Samsung'spolicies and procedures.[89] The emails at issue are those stipulated at the first row of Schedule 6's table. Iunderstand SCC's proposed amended claim to be for an increased number of FTE saidto be required to perform the additional 26,795 (and 17,100) email bookings. So far asthe proposed amendment otherwise is concerned, I required SCC formally to seekleave to make it.[90] SCC's application for such leave says the substance of the issue between theparties "has always been [SCC] was being required to perform excess work, withoutpayment from [Samsung], in breach of the terms of the relevant contracts". It concedesthe $5.20 calculation is "incorrect", and contends the "correct" calculation is "the'FTE' for back office function". The proposed amendment does not quantify theamended claim, or identify how it should be calculated. Both will require furtherevidence, at least for any quantum hearing.[91] SCC requires leave to amend, because HCR 7.7(1) prohibits amendment "afterthe close of pleadings date without the leave of a Judge". It is common ground leaverequires an applicant to cross the "three formidable hurdles" of establishing leave isin the interests of justice, will not significantly prejudice other parties, or causesignificant delay.28 Those are weighed against the principle "parties should have every28 Elders Pastoral v Marr (1987) 2 PRNZ 383 (CA) at 385. Relevantly, the successful leaveapplication was made on the 63rd day of a civil trial, also in the course of the plaintiffs' closingaddresses, although by arrangement most of the defendants' closings had yet to be given.opportunity to ensure that the real controversy goes to trial so as to secure the justdetermination of the proceeding".29 That principle was articulated in terms of theformer HCR 187, which permitted filing of an amended pleading "at any time beforetrial" (with leave, if after the setting down date). Here, of course, the amendmentwas sought about as late as could possibly be countenanced, in SCC's closingsubmissions, after all the evidence had been heard, and Samsung's closingsubmissions had been made.[92] More significantly, the proposed amendment seeks, at this latest of hours, torecast SCC's claim under this head on a different basis, imposing a "heavy burden" onSCC in discharging the onus for leave.30 Even if SCC is content to rely on its presentevidence for liability alone, and more so if SCC seeks to give further evidence,Samsung is entitled to avoid inevitable prejudice by further testing SCC's witnessesin cross-examination, and leading its own evidence on the new threshold. This wouldnecessitate delay in determination of what already has been a three-week hearing, fouryears after the proceeding initially was filed. Such may be addressed between theparties by a substantial wasted costs order in Samsung's favour. But there is still theuncompensable drag on scarce Court and judicial resources, particularly if required toreturn months later to the dispute, and at the expense of other proceedings affected bythe need to make more time for determination of this proceeding.[93] SCC's claim for payment here is another example of Mr Dillon's 'piecework'characterisation: that every aspect of SCC's activities under the second Agreementstands individually to be counted and paid. As I have said (and will later exemplify),31that is not a sound submission. The claim can only be made here by disregarding the'Back Office' row's remark "2 FTE Required", in favour of some determination (if notby agreement) of the number of FTEs "required to perform back office functions" inSchedule 3.29 Shanton Apparel Ltd v Thornton Hall Manufacturing Ltd [1989] 3 NZLR 304 (CA) at 309.30 Body Corporate 325261 v McDonough [2014] NZHC 1821 at [13] citing Swain-Mason & Ors vMills & Reeve [2011] EWCA Civ 14 (citing Worldwide Corporation Ltd v GPT Ltd & Anor [1998]EWCA Civ 1894).31 At [41] above (and [133] below).[94] I doubt that is a tenable interpretation of the second Agreement, given clause8.1's "Samsung will pay the Contractor the Service Fee for the provision of theServices", and Schedule 3's "The Service Fee payable by Samsung to the Contractorwill be calculated in accordance with the following 'Pricing' table ". The claim'sindeterminable nature is illustrated by SCC's proposed amendment not particularisingeither the amount sought to be recovered in damages, or the means for its calculation.Given the proposed amendment's inevitable prejudice and consequential delay, it isnot in the interests of justice to permit SCC to argue for an alternative course to thesame characterisation in respect of this aspect of its claim.[95] SCC's application for leave to amend its claim is dismissed. Its claim underthis head, conceded by SCC to be 'incorrect', also is dismissed.Continuing calls[96] This is SCC's fifth cause of action, claiming to include time spent on internallytransferred calls, for calculation of that portion of the Service Fee based on 'Inbound'activity under the second Agreement.—contractual provisions[97] Again, I lay out the applicable row from the pricing table in the secondAgreement's Schedule 3:Activity Logic Cost RemarksInbound Inbound Callsx ATT xminute rate$1.73 perminuteSENZ paysbuilding costsIn-sourcesolutionAs previously noted, it is accepted 'ATT' means 'average talk[ing] time'.32 As hasbeen seen, the longer 'talking' phrase was used in the first Agreement, and the shorter'talk' phrase in the spreadsheet underpinning calculation of the first Agreement'smonthly Service Fee.3332 At [15] above.33 At [10]-[12] above.[98] Also material is the "Average handling time" KPI, set out in the secondAgreement's Schedule 2:KPI Average handling time. (AHT)Definition Average time to handle calls(AHT = Talk time + Hold time + ACW time)KPI Standard The handling time of all calls taken on a monthly basismust not exceed an average ofAV: 245 secs.WG: 245 secsIT: 300 secsHHP: 300 secsGeneral: 160 secsMeasurement Period Measured monthlySource Document Average handling time will be evidenced by CMS."ACW" is accepted to mean 'after call work': some seconds of administrative workbefore the call centre worker returns (or, after a longer period, is returned) to the queueto receive incoming calls. The acronyms in the third row refer to some of the productcategories referred to in the second Agreement's Schedule 1: Audio Visual, WhiteGoods, Information Technology, and Hand Held Products; and CMS is defined tomean "the Samsung nominated Content Management System". That system was theAvaya CMS. "Average Talk Time", "Average Hold Time", "Average ACW Time", and"Average Handling Time" are all metrics drawn from Avaya.[99] Finally, the March 2014 amendment included:2.2 Samsung will pay for 'Extension in Calls' based on the actual systemcount, at the rate of [($1.73 x Average Talk Time) x Total CallsReceived] for this function, calculated monthly. Samsung will carryout random call monitoring on these calls to verify they are for thepurpose of:a) Transferring customers to tier 2 skilled agents; orb) The extension of calls transferred for non English speakingcustomers."[N]on English speaking" predominantly meant Korean language, although doubtlessothers could be accommodated.—SCC's argument[100] SCC's argument is the second Agreement, properly construed, always providedfor 'Extension in' calls to be included as part of "ATT". It says there is no justificationfor 'stopping the clock' on internal reference of an incoming call from one customerservice agent to another. On recalculating ATT to include time incurred on 'Extensionin' calls, SCC claims $25,615.92 (exclusive of GST) under this head. (Of course, if'ATT' is to have that meaning, then so too has the Average Handling Time KPI,meaning incentive payments and penalty deductions also may require recalculation.)—analysis[101] SCC's monthly reports depicted a screenshot of "Avaya CMS Stats" showingthe 'Average Talk Time' engaged in by call agents. Its monthly invoices under boththe first and second Agreements drew directly on Avaya's Average Talk Time statistic.(The statistics separately included "Ext In Call" and "Ext In Time" and "Average ExtIn Time", although whether the last was a subset of "Average Talk Time" is notdiscernible from the statistics themselves.)[102] However, at least by the time of the second Agreement, the parties would haverecognised 'ATT' was an acronym for that Avaya CMS statistic. In the secondAgreement, 'ATT' was a term of art, not susceptible to further interpretation. It meantwhat the Avaya statistic measured. Unless and until the parties provided an alternativedictionary, which they did not, they were bound by that measure.[103] Notwithstanding the substantial evidence addressed to the question, it isimmaterial whether SCC knew ATT ceased to be measured on internal transfer of acall. Also immaterial is whether such internal transfer was necessary or desirable, itsrepresentation and warranty under clause 9.1 of the second Agreement being "it, andits employees and agents, have all skills necessary to provide the Services".34 Properlyconstrued, the reference to 'ATT' in the pricing table was to the statistic measured by34 Clauses 4.10 and 4.11 of the second Agreement make it plain SCC's obligation was not just tohave the necessary skills within its customer service representatives group, but that its "suitablytrained, qualified and skilled CSRs" "all are trained and have a high level of knowledge withregard to Products, best practice processes and Samsung processes, relevant IT systems andcustomer service skills" (emphasis added).Avaya, relied on by SCC in raising its invoices under both the first and secondAgreements.[104] The March 2014 amendment to pay for 'Extension in calls', as if they wereinbound calls in themselves, similarly would have no foundation if ATT was alreadycalculated as including those transferred calls. But the amendment plainly conditionswhich transferred calls will be paid – namely, those to 'Tier 2' skilled, or Koreanlanguage, agents.[105] SCC's claim under this head fails.Relocation costs[106] This is SCC's sixth cause of action, to recover management costs and expensesincurred in relocating to new premises.[107] SCC's call centre originally was located in buildings shared with Samsung,initially in separately leased premises in Apollo Drive in Auckland's Mairangi Bay.They moved with Samsung into shared premises first in Orbit Drive in Mairangi Bay,and later in Warehouse Way in Auckland's Northcote. In April 2014, Samsung advisedSCC it wished to expand into the area occupied by SCC, and invited or directed SCCto find new premises, desirably on a 12-month lease. Ultimately SCC identifiedsuitable new premises, albeit on a two-year lease, at Piermark Drive in Auckland'sNorth Harbour, to which Samsung directed SCC relocate. After relocating, SCCsubmitted a claim for some $9,000 in relocation costs, which Samsung paid.—contractual provisions[108] Clause 6.2 of the second Agreement relevantly provided: Samsung will grant to the Contractor a limited non-exclusive licence to usethat part of Samsung's premises stipulated by Samsung from time to time freeof charge for the sole purpose of providing the Services (Limited Licence).The Contractor acknowledges that:(c) Samsung may at any time require the Contractor to provide theServices from an alternative location stipulated by Samsung, providedthat Samsung will meet the reasonable costs of the Contractor inmoving to the new location; [109] Somewhat contradictorily, Schedule 8 to the second Agreement provided:SCHEDULE 8 – GENERAL RESPONSIBLITIESFor the avoidance of doubt, the following table outlines the responsibilities ofeach party in relation to both transition and ongoing requirements:Description Included inCost perCallCost Owner Detail Costs associated withmoving the CallCentre operationNo The requestor Costs associated with achange in location of theCall Centre will be borneby the party requesting thechangeBuilding Costs –Rent, FacilityManagement,Parking, etcNo SAMSUNG As this is an in-sourceagreement, all relatedhousing costs will be metby Samsung.[110] SCC also relies on clause 7 of the second Agreement (which has no clause 7.1):7. STATEMENT OF WORK7.2 If at any time during the Term, Samsung requires additional services,Samsung will issue a Statement of Work to the Contractor setting outthe nature and extent of the additional services required by Samsung.7.3 Upon a Statement of Work having been issued, the Contractor willnotify Samsung in writing within 5 Working Days of whether it isprepared to provide the additional services specified in the Statement ofWork and the cost of providing those additional services (Contractors'Notice).7.4 Upon receipt of the Contractors' Notice, Samsung will notify theContractor of whether it accepts the terms set out in the Contractors'Notice and provided that nothing in this clause will require Samsung toaccept any terms or conditions set out in the Contractors' Notice.7.5 Upon acceptance of any Contractors' Notice by Samsung:(a) the Statement of Work and Contractors' Notice accepted bySamsung will constitute a binding amendment to this agreement,and(b) to the extent that there is a conflict or inconsistency betweenclauses of this agreement and any Statement of Work, the clausesof this agreement will prevail over the terms of any Statement ofWork to the extent of the conflict or inconsistency, unless andonly to the extent that the clauses of this agreement and/or theschedules to this agreement have been specifically referred to andexpressly amended by the provisions of the relevant Statementof Work.—SCC's argument[111] SCC now claims a further $9,940 (exclusive of GST) expenses incurred inrelocating to the new premises. This represents a sum equivalent to one month's rentof the new premises at $4,940 (said to reflect Samsung's saved expense in notengaging an agent to locate the new premises, and compensating Mr Yoon for his timeand effort in such location), and $5,000 for furniture and other outfitting of the newpremises. (SCC's second amended statement of claim also infers the former expensestands as damages for Samsung's alleged breach of clause 6.2(c) of the secondAgreement.) Mr Yoon raised these additional claims with Samsung's Mr Lee in thecontext of the second Agreement's termination, but Samsung did not pay them.—analysis[112] None of these expenses, including such as may be levied by an agent in locatingcommercial premises for lease, is evidenced beyond Mr Yoon's assertion of them.Mr Yoon's own assertion of incurring "over $5,000" in furniture and other outfittingcosts is not made out on his written statement, which comes to a lesser sum. Mr Yoon'swritten statement asserted his services in locating alternative premises "was treated bySamsung and SCC as a request by Samsung for services from SCC (clause 7 of thesecond [Agreement])", but there is no other evidence of that either.[113] I consider the evidence for SCC's claim under this head is simply too flimsy topermit my determination of it in SCC's favour.[114] First, it cannot be said Samsung was in breach of clause 6.2(c) of the secondAgreement at the time of the relocation. On SCC's own evidence, Samsung stipulatedthe alternative location from which it required SCC to provide the Services, and paidthe relocation costs claimed by SCC.[115] Next, even if Samsung's invitation or direction SCC find new premises was tobe regarded as a Statement of Work for the purposes of clause 7 of the secondAgreement, SCC's contractual response was to identify whether it was prepared toprovide those services, and at what price, with the contractual consequences ifaccepted by Samsung. There is no contention, or even suggestion, such occurred, orthat SCC wished to do so, but was deterred (whether or not by Samsung). SCC'scompliance with Samsung's invitation or direction thus was entirely voluntary.[116] Any saving Samsung may have enjoyed through SCC's voluntary location ofnew premises is not refundable to SCC, even had it adequately been evidenced.Neither is it a measure of Mr Yoon's "time and effort" in locating the new premises,even if that could be part of SCC's "reasonable costs in moving to the newlocation". For completeness, Mr Yoon's 'time and effort' was not a cost incurred bySCC in moving to the new location, because it is necessarily a cost arising in advanceof Samsung's stipulation of the alternative location from which it required SCC toprovide the Services.[117] Last, even if adequately evidenced, furniture and outfitting expenses are not acost incurred in moving to a new location. They may or may not be a cost incurred atthe new location, but that is not clause 6.2(c)'s provision. Mr Dillon says, as Samsungpaid for partitioning at the new location, so too should it pay for new furniture. Thereis no evidence of Samsung's prior payment, or the basis on which it was sought by orpaid to SCC. Mr Choi's written statement said, in March 2014, he and Mr Yoon"verbally agreed that Samsung would cover SCC's rental costs for the Piermark DriveLease as long as the Second Agreement was in existence". But he also said "[a]s faras I am aware Samsung never agreed to meet any of the other costs associated withthe Piermark Drive Lease".[118] In cross-examination, SCC's junior counsel, Tina Hwang, drew Mr Choi'sattention to Schedule 8 of the second Agreement, and obtained his agreement Samsungwas the 'requestor' in SCC's final move. But Schedule 8, which is not referred to inthe operative part of the second Agreement, was not the basis for SCC's claim. Thereis room to consider Schedule 8 relates principally to the transition from the first to thesecond Agreements, although it refers expressly also to "ongoing requirements". Thefinal column of the "Building Cost" row refers "an in-source agreement", similar tothe "In-source solution" appearing in the final column of the "Inbound" activity rowin Schedule 3's pricing table, alongside the remark "SENZ pays building costs".35Schedule 8 may not have application to SCC's relocation separately from Samsung'spremises. Mr Choi's 'verbal agreement' with Mr Yoon would have been unnecessaryif Schedule 8 had such application. But no more substantial evidence or any argumentwas addressed to Schedule 8.[119] This claim too fails.Remuneration for additional services[120] Under this head, I address SCC's seventh to ninth causes of action, eachseeking remuneration for particular aspects of SCC's services to Samsung, and eachbrought on the basis of a contended implied term for Samsung's payment to SCC of"a reasonable fee" for provision of those services. (Alternatively, the claims arebrought on the basis of a claim to quantum meruit in the same amount.)—contractual provisions[121] So far as implied terms are concerned, "the correct approach to the issue ofimplication is currently uncertain".36 The uncertainty is:37 whether the implication of a term is to be dealt with by applying the sametest and, perhaps, addressed as part of the same process as for theinterpretation of existing contractual terms.[122] The uncertainty is resolved in the United Kingdom,38 in favour of a returntowards the orthodox position set out in BP Refinery (Westernport) Pty Ltd, whichestablished the following conditions for implication of terms in a contract:39(1) it must be reasonable and equitable; (2) it must be necessary to givebusiness efficacy to the contract, so that no term will be implied if the contractis effective without it; (3) it must be so obvious that "it goes without saying";35 At [15] above.36 Ward Equipment Ltd v Preston [2017] NZCA 444, [2018] NZCCLR 15 at [46] citing Mobil OilNew Zealand Ltd v Development Auckland Ltd [2016] NZSC 89, [2017] 1 NZLR 48 at [81].37 Ward Equipment Ltd v Preston, above n 36, at [46] citing Attorney-General of Belize v BelizeTelecom Ltd [2009] UKPC 10, [2009] 1 WLR 1988.38 Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72,[2016] AC 742.39 At [18] citing BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of theShire of Hastings (1977) 52 ALJR 20 (PC) at 26.(4) it must be capable of clear expression; (5) it must not contradict anyexpress term of the contract.[123] As to those express terms, however, clause 3.1 of the first Agreement providedin part:The Contractor, at the request of Samsung or the Caller, [is to] provide aprofessional, helpful and informative assistance in relation to inbound enquiryfrom Callers within the Location during the Working Hours and otherwise inaccordance with the terms and conditions of this Agreement.Further the Contractor shall provide these additional services:(c) provide helpful professional and correct information to Callers.And clause 6.2 provided:Anything which must be done by the Contractor under this Agreement,whether or not at the request of Samsung, is to be done at the cost and expenseof the Contractor unless otherwise expressly provided in this Agreement.[124] Comparably, clause 4.4 of the second Agreement obliged SCC to "deal withSamsung in good faith, and do such things and sign such documents as are reasonablyrequired for the provision of the Services".—SCC's arguments[125] At Samsung's request (and expense), SCC:(a) during the life of the first Agreement:(i) replaced, or refunded the cost, of Samsung equipment acquiredby relevant customers; and(ii) provided relevant customers with replacement computermonitors while their Samsung computer monitors were beingrepaired under warranty; and(b) during the life of the second Agreement, provided relevant customerscontacting SCC with a USB memory stick containing a firmwareupdate for particular models of Samsung television.[126] Extraordinarily, for that is not the pleading, Mr Yoon's written statementrepeated in relation to each of the three services, "[t]he service was treated by Samsungand SCC as a request by Samsung for services from SCC (clause 7 of the second[Agreement])". In duplication of the second amended statement of claim, Mr Yoon'swritten statement followed that assertion with "[i]t was an implied term Samsungwould pay SCC a reasonable fee" for each service.[127] Mr Dillon argues none of those services is the function of a call centre, orcapable of being delivered by call or email (as he contends to be the limits of servicesprovided under the first Agreement). Only the second Agreement included "CustomerRefund Process" within SCC's "Back Office Functions".[128] Last, Mr Dillon says SCC's fulfilment of Samsung's requests is each "aseparate and standalone agreement", "ancillary" to the applicable first or secondAgreement. He relies on Seton Contracting Co Ltd v Attorney-General as authorityfor SCC's entitlement for payment.40 Alternatively, he claims for such in quantummeruit. In either respect, SCC claims $28,320 for the replacement/refund services,$24,210 for the USB firmware update services, and $9,720 for the monitor exchangeservices – all exclusive of GST.—analysis[129] As with Mr Yoon's previous assertion of precisely the same allegation inrelation to the claimed relocation costs,41 there is no evidence the parties treated therequests as Samsung's Statement of Work under clause 7 of the second Agreement. Itwould be surprising if there was any such evidence, because only the USB firmwareupdate service arose under the second Agreement.42 Even if Samsung's request for that40 Seton Contracting Co Ltd v Attorney-General [1982] 2 NZLR 368 at 376.41 At [112] above.42 SCC's claim pleads the service commenced "from July 2012". Under cross-examination, Mr Yoonagreed it started under the first Agreement, but that appears to be a reference to the timing ofSamsung's request.service was to be regarded as a Statement of Work for the purposes of clause 7 of thesecond Agreement, for the reasons I have earlier stated, SCC's compliance withSamsung's last request thus was entirely voluntary.43[130] Mr Dillon's interpretation of call centre functions also is too reductionist areading of the core services to be provided by SCC under the first and secondAgreements. As noted earlier,44 the essence of SCC's services under the firstAgreement is to provide, at Samsung's or a Caller's request, "a professional, helpfuland informative assistance in relation to inbound enquiry from Callers". Thatassistance is distinct from "further" provision of "helpful professional and correctinformation to Callers".[131] Recipients of the contended 'additional' services Samsung requested of SCCduring the term of the first Agreement appear to have initiated the same by inboundenquiry:(a) in relation to the replacement/refund services, Mr Yoon produced atwo-page Korean language email exchange with Samsung, initiated byhim. He also produced his translation of his own email – in which heasked "[d]id Samsung approve NZ Customer Exchange/Refundprocess?", observing "[w]e are receiving a few of Refund Request fromcustomers and so please advise me when to start this process" – andone line of Samsung's response: "Samsung will start NZ CustomerExchange/Refund Process from Monday 21 April 2008";45 and(b) in relation to the monitor replacement services, Mr Yoon produced aone-page Korean language email to SCC from Samsung, translated inwhole by him, which commenced, "[b]efore we start Product Exchange43 At [115] above.44 At [123] above.45 In response to my query of Mr Dillon as to the accuracy of the translation – especially ofSamsung's response, which ran for nearly a page in Korean language, incorporating a number ofEnglish words not replicated in Mr Yoon's translation – Mr Yoon gave evidence the reply"contains talking about many other things also regarding service", but was partly translated intoEnglish only to make the point of Samsung's request to its English-speaking staff in negotiatingSCC's compensated exit on termination of the Second Agreement. In those circumstances, I amnot prepared to infer anything from the untranslated balance of the Korean language email that isnot established by its translated sentence.(SWAP)", and attached customer requests for the service (as referred toin the body of the email).In relation to both services provided during the term of the first Agreement, Samsungclearly requested SCC provide that assistance in relation to inbound enquiries.(Initiation by inbound enquiry is expressly pleaded in relation to the USB firmwareupdates, although that is a service provided under the second Agreement.)[132] So far as SCC's provision of USB firmware updates is concerned, Schedule 6of the second Agreement expressly provided, under "Post-Sales support", the Servicesto be performed by SCC included, "[f]irmware and software distribution andadministration support" (which encompasses the USB firmware update service).46SCC's obligations in this respect are reinforced by clause 6.1 of the second Agreement,which provided "Samsung's obligations will be those set out in schedule 7". Thatschedule included under the heading "Firmware/software":Provide real time access to firmware/software updates and correspondingrelease notes for such software to the Contractor.Provide ongoing stock to allow firmware upgrades and other upgrades to besent out as and when needed.[133] All three services, the subject of SCC's seventh to ninth causes of action, areservices already required to be provided by SCC under the first or second Agreements.SCC's contention they are not again is founded in Mr Dillon's incorrectcharacterisation of those Agreements as providing for 'piecework'.47 They do not.Instead, the first and second Agreements required SCC to provide identified services,including those separately claimed for here, for which Samsung was to pay a monthlyService Fee.48 Otherwise (at least under the first Agreement) SCC was to bear the cost.It is not without irony Mr Dillon argues the first Agreement, not having beenterminated in accordance with its terms, continues in effect.49 The requirement under46 At [50] above.47 At [41] above.48 At [10] above.49 Clause 12 of the first Agreement provided for its termination by Samsung on notice. SCC'sargument for the Agreement's continuing operation was founded in its clause 15.10, headed "NoMerger", which provided:clause 4.4 of the second Agreement SCC "do such things as are reasonably requiredfor the provision of the Services" has similar effect.[134] So construed, there is "no room" to claim in relation to these services either animplied term for additional payment, or in quantum meruit. Seton Contracting Ltd,relied on by Mr Dillon as the sole authority in support of these causes of action, makesthat plain:50Quantum meruit is the generic term used to identify a right to reasonableremuneration for goods supplied or services rendered; the same expression isused irrespective of whether the right to remuneration is an incident attachedby implication to a contractual relationship or whether it arises independentlyof contract in one of the assortment of situations which are classified, for lackof a better term, as quasi contractual. This indiscriminate use of the expressioncan lead to confusion.The contractual kind of quantum meruit is no more than the effect of theimplication which the law makes when there is a contract for the supply ofgoods or services which the parties intend shall be paid for by the recipientbut in respect of which the contract does not fix the quantum of remuneration:in such a case, there is implied a term that the remuneration will be areasonable sum. The quasi contractual species of quantum meruit embraces anumber of situations which share, as do all quasi contractual situations, acommon denominator: they all seem to be traceable to the concept ofrestitution or undue enrichment. They are a heterogeneous collection, all withrespectable and recognised legal credentials. But none of them can be fittedinto the dichotomy of tort and contract. What has to be borne in mind is that,by definition, these are all cases in which there is no contractual basis for theplaintiff's claim. If, in relation to the relevant subject matter, there is a validand enforceable contract in force between the parties, then the contract andonly the contract can speak: the rights and liabilities of the parties areregulated only by the contract: there is no room for quasi contractual rights.Hence we find in the textbooks such statements as "Mere variations do notwarrant quantum meruit" - Smellie, Building Contracts and Practice in NewZealand (2nd ed, 1979) p 44.[135] Finally, Mr Kersey's cross-examination of Mr Yoon (replicated at [83] above)continued to query if Mr Yoon had raised these three services with Mr Lee at the timeof negotiation of the second Agreement. Mr Yoon's responses were typicallyNone of the provisions of this Agreement shall, except to the extent the same shall have beenobserved, performed or satisfied and discharged in full according to its terms, merge in or beextinguished on the occurrence of any other transaction hereby required or contemplated.The last four words make it plain the provision is addressing only any transaction arising from thefirst Agreement. The second Agreement was established independently of the first Agreement, andcannot be understood otherwise than as its comprehensive replacement, necessarily terminatingits operation from 1 March 2012, being the second Agreement's Commencement Date.50 Seton Contracting Co Ltd v Attorney-General, above n 40, at 376-377.discursive. Although he appeared to concede "when [he] agreed the new contract, thatwas to compensate for [his] concerns under the first contract", and "those otherconcerns include the refund exchange programme", I comprehended the totality of hisevidence to be, while these three services were concerns under the first Agreement,SCC's claims for them were not compromised by anything in the second Agreement.Business exit plan[136] This is SCC's tenth cause of action, to recover costs incurred in fulfillingSamsung's request for SCC's business exit plan. It is expressly pleaded to be a requestmade under clause 7 of the second Agreement, carrying an implied term for paymentof a reasonable fee. SCC claims $7,165 (exclusive of GST) as that fee.—contractual provisions[137] I earlier identified the second Agreement's clause 7,51 and discussed the law onimplied terms.52—SCC's arguments[138] Again, Mr Yoon's written statement contended "[t]he request by Samsung toprepare the business exit proposal was treated by Samsung and SCC as a request bySamsung for services from SCC (clause 7 of the second [Agreement])". SCC'spleading is SCC "accepted" the request. Mr Yoon said he arranged for SCC's staff towork overtime to meet the request, incurring additional expenses of $7,165. Mr Dillonsubmits SCC should be paid this sum.—Analysis[139] The evidence about the business exit plan is conflictual. Mr Yoon's writtenstatement said "on or about" 23 July 2014, Mr Lee asked him: to put together a proposal from SCC to Samsung for ending the second callagreement. Mr Lee asked me to include in the proposal all outstanding claimswhich I believed SCC had against Samsung.51 At [110] above.52 At [121]-[122] above.However, Mr Choi, while acknowledging he had met with Mr Yoon and Mr Lee thepreceding day, says he and a Samsung colleague delivered Samsung's terminationnotice to Mr Yoon on 24 July 2014. His written statement says, at this time, he: verbally requested that SCC prepare a business exit proposal in order to setout the terms on which it proposed to bring the services under the SecondAgreement to an end.The statement added:SCC did not have to provide a business exit plan, but it was in SCC's interestsdo so. This was largely for SCC's benefit. This would allow both parties totransition to a new call centre provider and give SCC's staff time to find newjobs. SCC could also issue invoices for outstanding amounts.[140] Despite recording the request as coming from Mr Lee, Mr Yoon's writtenstatement said he "arranged for SCC staff to prepare the information which Mr Choihad requested". The overtime claimed is evidenced in an email between an SCCemployee and Mr Yoon, adding up overtime worked and calculating it at an hourlyrate of $30 (as time and a half) to total $7,165. But the email is dated 22 July 2014,the day before Mr Lee is said to have directed SCC's preparation of a business exitplan, and accounts for overtime worked in the preceding seven days (that is, since 15July 2014). The email is annotated "(ERMS vs Email support job analysis) 2012.3 ~2014.6". That is consistent with Mr Choi's 15 July 2014 email to Mr Yoon, headed"Duplicate claim ERMS list" and attaching a spreadsheet named "ERMS Analysis(Mar '12 - May '14).xlsx". As will be seen,53 the duplicate claim analysis had nothingto do with preparation of the business exit plan, except that Samsung terminated thesecond Agreement in part on the basis of that contended duplication. So there is noreliable evidence to support the quantum of SCC's claim under this head.[141] However, this judgment relates only to liability. SCC could not 'accept'Samsung's request so as to engage clause 7. As I already have explained, clause 7anticipates SCC's proposal, for acceptance by Samsung.54 But Samsung's request fora business exit plan could not in any event constitute "additional services" to thoserequired by the second Agreement, because its clause 15.3(e) provides, "ontermination of this agreement for any reason":53 At [167] and [172] below.54 At [115] above. the Contractor must afford all reasonable assistance to Samsung, includingproviding all necessary documentation and assistance to ascertain the statusof the Services and the input required to provide and complete the Services inaccordance with the this agreement, reasonably required to transition to analternative supplier of the Services.[142] Despite Mr Choi's view "SCC did not have to provide a business exit plan",clause 15.3(e) obliged SCC to provide something essentially indistinguishable fromwhat Samsung sought: "reasonable assistance reasonably required to transition toan alternative supplier" (which includes identification of outstanding monies due tothe outgoing supplier in 'completion' of the services).[143] Further, clause 2.1 of the second Agreement records SCC's agreement toprovide the contracted Services "on the terms and conditions set out in thisAgreement", for which provision "Samsung will pay the Contractor the Service Fee".Even if clause 15.3(e)'s obligation is not part of the defined "Services", it is a term setout in the Agreement. And clause 8.3 provides:The Service Fee will be deemed to include all incidental expense anddisbursements incurred by the Contractor in providing the Services, except forany expenses or disbursements incurred by the Contractor in respect of whichSamsung has agreed that the Contractor will be separately reimbursed prior tosuch expense or disbursement being incurred.[144] SCC thus cannot recover the cost it incurred in providing the business exit plan,except on proof "Samsung has agreed [SCC] will be separately reimbursed prior tosuch expense or disbursement being incurred". Even if SCC could point to costsincurred after 23 or 24 July 2014, there is no evidence of Samsung's agreement fortheir reimbursement.[145] Given those contractual provisions, there is again "no room" to imply anyentitlement to a reasonable fee.[146] SCC's claim under this head also fails.Use and occupation of SCC's premises[147] This is SCC's eleventh cause of action, seeking to recover damages in theamount of a half-share of its rental and outgoings, and other expenses, incurred as aresult of Samsung's unilateral expansion from its adjoining first floor premises intoapproximately half SCC's leased ground floor premises at Apollo Drive in MairangiBay from June 2009 for some seven months.[148] Bizarrely, Mr Yoon's written statement yet again repeats the mantra "[t]heunilateral demand by Samsung for SCC to provide the use of half of its premise wastreated by Samsung and SCC as a request by Samsung for services from SCC (clause7 of the second [Agreement])". As previously indicated,55 if that was such a request,and Samsung's subsequent use and occupation of the premises was to be regarded asSCC's provision of the service, then – without responding to the request – SCC wouldbe taken to have provided the service free. However, in June 2009, the secondAgreement had yet even to be contemplated, let alone to come into force.[149] Samsung offers no responsive defence or evidence, other than to put SCC toproof by its defence's denial. Mr Choi's written statement expressed his expectation"if Mr Yoon believed he was entitled to these amounts, he would have sought to berepaid by Samsung at the time the costs were incurred".—factual background[150] Mr Yoon's written statement explained Samsung used approximately halfSCC's leased space for its own staff from 29 June 2009. It gave SCC one day's noticeof its intention to do so. Samsung's builders demolished the reception area SCC hadcreated, and removed SCC's reception area furnishings. The written statement said"SCC's staff had no choice, but to squeeze into the remaining space". SCC had tore-cable its power, telecommunications, and computer infrastructure. The writtenstatement explained further re-cabling work was required when SCC's staff returnedto SCC's full leased space on Samsung's exit in January 2010.[151] Ultimately, SCC claims $45,080 in damages (exclusive of GST) under thishead, but Mr Yoon said he longer had invoices for the re-cabling or furniture, as hebelieved Mr Thompson "attended to these". There are other difficulties with thecomputation of SCC's claim under this head, including the mathematical calculation55 At [115] above.of a half-share of the rental, but those would be matters for a subsequent quantumhearing.[152] Under cross-examination, Mr Yoon said his earlier evidence SCC relocated toOrbit Drive in April 2009 was wrong. His written statement provided "[o]n or about15 April 2009, after the term of the lease for 63 Apollo Drive expired, SCC moved itscall centre with Samsung's office to Orbit Drive". That plainly was narrativedrawn from the lease itself, which recorded the Apollo Drive lease's final expiry dateas "15 April 2009". Mr Yoon maintained Samsung entered SCC's Apollo Drivepremises in June 2009. The written statement of Andrew MacDonald, SCC's formercall centre manager, did not refer to the lease's expiry. Otherwise it was in identicalterms as to SCC's April 2009 move from Apollo Drive to Orbit Drive, and toSamsung's 29 June 2009 entry into the premises. Under cross-examination, he said thelatter date was wrong, but then agreed he could not recall the "precise date": "Iremember the incident but not the exact date".—SCC's argument[153] Mr Dillon submitted in opening, in reliance on Savvy Vineyards 3552 Ltd vKakara Estate Ltd,56 SCC's acceptance of Samsung's occupation and use of the ApolloDrive premises constituted an agreement between them by acquiescence. The contentof that agreement could be established by s 210 of the Property Law Act 2007 as aperiodic tenancy, terminable on notice, an implied term of which would require thetenant to pay rent.57Alternatively, damages could be recovered in tortious trespass.—analysis[154] Savvy Vineyards concerned the defendants' non-execution of deeds providingfor novation of vineyard agreements:58The issue comes down to whether, in all the circumstances, although Kakaraand Weta had neither executed the deeds that would effect novation norresponded to the invitation to do so, they had by their conduct given theirconsent or in some other way had become parties to the deeds, with the resultthat novation occurred.56 Savvy Vineyards 3552 Ltd v Kakara Estate Ltd [2014] NZSC 121, [2015] 1 NZLR 281.57 Property Law Act 2007, s 218 and Schedule 3, cl 4.58 Savvy Vineyards 3552 Ltd v Kakara Estate Ltd, above n 56, at [10].In the extract relied on by Mr Dillon, Elias CJ and McGrath J explain:59Whether or not novation of a contract has occurred must be decided onordinary contractual principles concerning formation of a contract. On that, asCooke J once put it:The acid test is whether, viewed as a whole and objectively fromthe point of view of reasonable persons on both sides, the dealingsshow a concluded bargain.In applying this test the background must be borne in mind. As well, whilethis is not determinative, difficulties in the traditional approach of analysingthe circumstances in terms of offer and acceptance may tell against a contract.[155] I cannot discern a 'concluded bargain' from Mr Yoon's evidence. He agreedwith Mr Kersey "there was no process to agree to use that part of the premises". Thebest that can be said is he was told of Samsung's intention to enter, to which heobjected but did nothing about, except to accommodate it. I cannot tell what theevidence as a whole objectively indicates had been offered, or accepted.[156] The evidence is at least as consistent with SCC's simple acquiescence toSamsung's use and occupation of its premises. Given SCC's rental and other outgoingswere covered by the Service Fee,60 it is conceivable Mr Yoon did not seek anycontribution from Samsung. Other contemporaneous evidence indicates SCC at thattime determinedly pursued payment for its services in replacing or refunding the costof Samsung equipment acquired by relevant customers. The evidence is SCC did notseek any contribution from Samsung for its use of SCC's premises until responding toSamsung's invitation to provide a business exit plan in July 2014, some five years afterthe incursion.[157] Such acquiescence also provides a defence to trespass, giving Samsungjustification to enter and remain, by reason of SCC's implied licence.61 There can beno suggestion SCC, and Mr Yoon in particular, was not aware of their legal right toexclusive possession of the premises. Under cross-examination, Mr Yoon affirmed59 At [29] (internal references omitted).60 At [11]-[12] above.61 Stephen Todd (ed) The Law of Torts in New Zealand (7th ed, Thomson Reuters, Wellington, 2016)at [9.2.06(1)]: "[a licence] may also be implied by acquiescence so long as the person alleged tohave acquiesced had 'full knowledge of their legal rights'".Samsung should have sublet the premises from him: that was a matter of "commonsense in New Zealand or other country":I explain, if you want to take trespass, some rules, if you want then they haveto negotiate, keep your subcontract or sublease. Even a small house I rent, oneroom, maybe $20 per week to have a sublease.[158] So viewed, SCC's acquiescence only illustrates SCC's informed consent toSamsung's presence on its premises. SCC's claim under this head fails.Repudiation of second Agreement[159] This is SCC's twelfth cause of action, seeking damages in the sum of $607,478as lost profits and continuing expenses for the balance of the second Agreement's termafter termination by Samsung on 4 November 2014. SCC alleges termination wasSamsung's repudiation of the second Agreement, accepted by SCC.[160] Alternatively, SCC claims – irrespective whether Samsung repudiated orvalidly terminated the second agreement – it is entitled to such relief on any validcancellation of the second Agreement under s 9 of the Contractual Remedies Act 1979(now, s 43 of the Contract and Commercial Law Act 2017, which applies to anycontract made on or after 1 April 1980).62—contractual provisions[161] Clause 15.1 of the second Agreement provided:In addition to any other right of termination or remedy conferred on the partiesunder this agreement or by law, either party (First Party) may terminate thisagreement at any time and with immediate effect by written notice to the otherparty (Second Party) if the Second Party:(b) has committed a material breach of this agreement, where that breachis not reasonably capable of being remedied by the Second Party within5 Working Days; 62 Contract and Commercial Law Act 2017, sch 1, cl 4.[162] In addition to various of its obligations identified earlier in this judgment,63clause 8.5(c) of the second Agreement provided each of SCC's invoices to Samsung"constitute[d] a certificate by the Contractor that all of the Services that are the subjectof that invoice have been performed in accordance with this agreement".—factual background[163] In May 2014, Samsung NZ issued SCC with a formal warning for"unprofessional call centre conduct". Samsung considered SCC used a 'Mute' functioninstead of a 'Hold' function, in addressing a customer's enquiry during a customer'scall other than directly with the customer. Samsung considered such was substandardcall centre practice, leaving the customer in silence for extended periods rather thanon informed hold (and consequent muzak). When Mr Dowlath raised the practice in ameeting with SCC, Mr MacDonald explained "that's because we don't get paid to putcustomers on hold". But it is also pertinent time on hold goes to measure the AverageHandling Time KPI.64[164] SCC's own manuals emphasised "never use mute":It is important that the customer is aware of what is happening throughout thecall.To achieve this effectively, the Agent needs to:Not put the customer on mute, instead using the correct holdprocedure .Nonetheless, some of SCC's internal communications dictated call centre operatorsuse 'mute', not 'hold', including Mr MacDonald's observation to some operators"your hold time for yesterday was to high once again. Plse use mute when you arereviewing the case, not hold", and Mr Yoon's direction to operators not to use 'hold'when making internal enquiries during a call, but to use 'mute', "as our talk time isshort".63 At [24], [51], [56], [88], and [124] above; and above n 34.64 At [98] above.[165] SCC paid close attention to 'talk time' in its internal operations, as apredominant factor for its revenues. Talk time was displayed live to each call centreoperative on their own equipment, and broadcast to the room on screens. Mr Yoonwould ring a small bell in front of operators' desks if their calls were running long.Although Mr Yoon staunchly resisted 'mute' could not professionally be used inparticular circumstances, he agreed it should not be used when operators were seekinginternal information or advice with the customer still on the line. After receipt ofSamsung's warning letter, he reinforced that point with call centre operators.[166] In June 2014, on being asked to approve SCC's May 2014 invoice for$148,600, Mr Dowlath asked a Samsung NZ assistant manager, Bridgette Nicholls, to"scrutinise CCC invoices.....please compare to previous 6 months. I am concerned atthe increase?". Mr Dowlath's written statement explained his concern was SCC'sinvoices had not decreased with the introduction of Transcom, handling over 2,000inbound calls a month.[167] Ms Nicholls advised Mr Dowlath explanations were required for "anomalies"she had identified in SCC's invoices. These included email job bookings to the info.nzemail address (a Back Office activity in terms of Schedule 3's pricing table, on whichSCC's Service Fee was in part calculated as a monthly sum) "being uploaded into theERMS system as inbound emails" (an Email activity in terms of Schedule 3's pricingtable, on which SCC's Service Fee also was in part calculated as a per email sum).65Ms Nicholls identified "this would be double paying the contact centre for eachtransaction".[168] Gwang Yong Yoon, Mr Yoon's younger brother, also worked for SCC. YongYoon initially had worked as a call centre operator in 2009, and then returned in 2013to upload into G-CIC email job bookings received by SCC. His written statements said"[w]e got an overwhelming number of enquiries to our email address":[A]lmost every night I would leave to go home and ask the remaining staffwho were working late such as Robbie to upload the rest of my jobs to theERMS System because I could not upload them all in time.65 At [15] above.and later clarified 'in reply':[A]t the end of each working day, the excess email bookings that we could notfinish as the back office staff were uploaded to the Samsung ERMS system byother SCC agents.Sometimes when I received large lists, and it was clear that I would not beable to attend to all of these the same day, I would forward the list to 3 to 4staff earlier during the day too. Almost all of the email booking jobs Iforwarded to other SCC agents were bulk lists from retailers. I requested theSCC agents to process the email bookings in the Samsung G-CIC System andthen upload these jobs for payment in the Samsung ERMS System. Unlikeme, their time and services were not paid for by Samsung.[169] Ultimately, Samsung identified over 17,000 email job bookings, uploaded intothe ERMS system as incoming emails. SCC had included them in the resultant inboundemail count in its invoices to Samsung, amounting to some $89,000 invoiced to andpaid by Samsung since commencement of the second Agreement in March 2012.[170] Distinctly from G-CIC, through which SCC interfaced with Samsung'sinformation systems, repair and service agents interfaced with Samsung's informationsystems through G-SPN. The latter was necessary, for example, to access a job bookedby SCC for the agent's attention, or to initiate a job referred directly to the agent byretailer or customer, such as would arise from the 'milk run'. During Samsung'sinvestigation into SCC, Samsung identified SCC had created ERMS website enquiriesfor jobs initiated by agents through G-SPN, and included the resultant inbound emailin its invoices' count of emails for calculation of the Service Fee.[171] Jang-Shik Yoon's written statement explained:SCC entered some of the service jobs that were diverted from SCC into theERMS system. These were not jobs that SCC had performed, but they werejobs that SCC were entitled to receive payment for. This was the first and onlytime SCC entered jobs it did not actually attend to, into the ERMS System.The total value of the jobs entered were approximately $2,000 and was doneto highlight to Samsung its major breach of the contract and get them to talk.The annual turnover by SCC from Samsung around this time was between$130,000 to $140,000 per month. Entering $2,000 of extra jobs was neverdone with the intent to actually receive $2,000. I was not after pecuniary gainin doing this. The amount was insignificant. It was done to try to get Samsungto come and talk to SCC as Samsung refused to discuss this and instead statedthat it would implement the milk run more aggressively.[172] Samsung NZ's 24 July 2014 notice provided:Recently it has come to the attention of Samsung Electronics New ZealandLimited ("Samsung") that SCC (NZ) Limited's ("SCC") service and invoicinghas a significant number of anomalies which Samsung believes go to the heartof the relationship between the two parties and constitute a material breach ofthe agreement between Samsung and SCC dated 28 February 2012("Agreement").Under clause 4.4 of the contract SCC has an obligation to act in good faith inits dealings with Samsung. SCC's action of falsely creating entries in ERMSfor services it did not provide Samsung demonstrate utter disregard of SCC'sobligation of good faith and has destroyed the trust that Samsung had withSCC.Under clause 4.3(a) of the Agreement, SCC has an obligation to apply the lawand any relevant legislation. Falsely claiming amounts for services notrendered on SCC's invoices is a breach of section 228 of the Crimes Act 1963for 'Dishonestly Using A Document' and may be punishable by imprisonmentfor up to seven (7) years.In addition to the above material breaches, SCC's manipulation of the systemsand processes to inflate invoices, such as the use of 'mute' by call centrerepresentatives when 'hold' should be used, breaches clauses 4.5 and 4.6 ofthe Agreement. These actions do no deal with customers in a timely orprofessional manner nor is it providing a professional service suitable forSamsung's brand.Under clause 15.1, Samsung may terminate the Agreement where SCCcommits a material breach of the Agreement which is not reasonably capableof being remedied by SCC within 5 Business Days. Unfortunately thedishonest practices utilised by SCC have caused a material breach that is notable to be remedied within 5 Business Days. SCC is unable to remedy thebreach of its obligation to act in the good faith and the destruction of trust thishas caused, nor is it able to remedy a breach of criminal law. As a result,Samsung has no option left but to terminate the Agreement.Samsung looks forward to working through the operational transition ofservices from SCC to a new provider and will discuss such details in person.Samsung reserves all rights to pursue SCC for losses suffered under theAgreement as a result of SCC's dishonest practices and breaches of theAgreement.—SCC's argument[173] Mr Dillon argues SCC was not in breach – let alone material breach – of thesecond Agreement such as would entitle Samsung to terminate it. Instead, he contendsSamsung was directed by its Korean head office to transfer the call centre's functionsto Transcom,66 and to that end, 'investigated' SCC to "manufacture a reason orreasons" for its termination. Alternatively, he says, the relief sought on validcancellation is within my discretion to order, having regard for the matters set out at s45 of the 2017 Act.—analysis[174] The 'irremediable' "material breach" claimed by Samsung NZ is SCC's breachof its clause 4.4 obligation to "deal with Samsung in good faith". The notice oftermination is clear what is contended to be irremediable is "the breach of [SCC's]obligation to act in the good faith and the destruction of trust this has caused". WhetherSCC's conduct otherwise was in material breach of the second Agreement, or"reasonably capable of being remedied by [SCC]", is irrelevant.[175] Notably, clause 4.4 is one-way: expressly, only SCC is liable to deal withSamsung in good faith. The fact of its unilateral nature illustrates its materiality. It isa positive obligation, more pronounced than any implied limitation to the exercise ofcontractual discretion.67 In a contract, 'good faith' is an obligation that "pose[s] somerestriction on the raw and undiluted pursuit of self-interest" beyond the restrictionsotherwise specified by the contract itself.68 Without mutuality, I doubt 'good faith'alone goes so far as to require unilateral loyalty to some contended common goal.69 Inthe context of the second Agreement, in which SCC's representation of its dealingswith Samsung's customers provided a calculation of its revenues, it is at least anobligation for SCC to deal honestly and reasonably with Samsung in its performanceof the contract.70[176] Mr Dowlath's written statement explained Samsung's reliance on SCC'sperformance:66 At [58] above.67 Vero Insurance New Zealand Ltd v Fleet Insurance & Risk Management Ltd HC Auckland CIV-2007-404-1438, 21 May 2007 at [37] and [46]-[47]; and Astrazeneca Ltd v PharmaceuticalManagement Agency HC Wellington CIV-2003-404-5056, 14 June 2005 at [81]-[82].68 New Zealand Licensed Rest Homes Association Incorporated v Midland Regional HealthAuthority HC Hamilton CP34/97, 15 June 1999 at [143].69 Compare Heli Holdings Ltd v The Helicopter Line [2016] NZHC 976 at [113].70 Bhasin v Hrynew 2014 SCC 71, [2014] 3 SCR 495 at [63]-[66] cited in Heli Holdings Ltd v TheHelicopter Line, above n 69, at [114]. See also Vero Insurance New Zealand Ltd v Fleet Insurance& Risk Management Ltd, above n 67, at [45].I felt so strongly about the falsifying of the invoices and the mute/hold issuethat I thought Samsung had no choice but to terminate the Second Agreementwith SCC. SCC's conduct went to the very heart of the parties' businessrelationship. Even if SCC had been able to repay the falsely invoiced amounts,the trust between the parties had been irrevocably destroyed.Samsung should not have to continually audit a call centre service providerand scrutinise a service provider's invoices. The nature of the service and thelevel of detail in the invoices means there is a huge amount of trust placed inthe service provider when it issues the invoices. From a practical perspective,Samsung has to rely on what it is invoiced.Even if Samsung had the resources for an employee to scrutinise each month'sinvoice, the employee would not know what to look for and it would be almostimpossible to identify issues of fraud or falsifying of invoices.[177] I have no hesitation in finding SCC's entry of 'milk run' jobs as ERMSenquiries to be a breach of good faith. SCC dishonestly represented those jobs as"Customer emails sent from the Samsung website" (being what ERMS is defined tomanage).71 Such misrepresentation was unreasonable on the express ground Mr Yoonseeks to justify it – "to highlight to Samsung its major breach of the contract and getthem to talk",72 especially given my finding he has no foundation for thatjustification73 – and SCC did not foreshadow or later identify the entries to Samsung.[178] I have no less hesitation in finding SCC's entry of email jobs as ERMSenquiries also to be a breach of good faith. Again dishonestly representing those emailsas "Customer emails sent from the Samsung website", the unreasonableness of theconduct is illustrated by SCC's forthright (if belated) abandonment of the originalfourth cause of action. If SCC's "2 FTEs" was inadequate resource to perform thecontract, its recourse lay in addressing that provision rather than subverting another(again, without indication to Samsung).[179] I do not overlook SCC's conduct in this respect commenced at the beginningof the second Agreement, immediately after the "2 FTE" level of resource wasnegotiated. I therefore do not accept SCC's conduct was to respond to any unforeseenor unforeseeable change in its operating environment, even if such a response wouldbe of mitigating value.71 At [15] above.72 At [171] above.73 At [61]-[68] above.[180] On a finer balance, I find SCC's use of 'mute' also to be a breach of good faith.Given SCC's manuals, the tipping point is Mr Yoon's and Mr MacDonald's 'short' and'too high' observations.74 They illustrate SCC's close regard for the KPIs, and theirpotential impact on SCC's revenues, the alternative 'mute' use not being known to ormeasured by Samsung. Again, SCC's conduct dishonestly represents SCC's timehandling enquiries from Samsung's customers was comprised by talk time, hold time,and after call work time alone,75 unreasonably acting contrary to SCC's own manual'spolicies.[181] In each of these respects, SCC exhibited no restraint on its 'raw and undilutedpursuit of self-interest'. The covert nature of SCC's conduct in these respects supportsthe 'irrevocability' of Samsung's loss of trust in SCC, making it impossible for SCCto remedy the breaches. Clause 15.2(b) required the breach be "not reasonably capableof being remedied by [SCC]" (emphasis added). The emphasised words are important,because a generally irremediable breach presents a higher threshold to satisfy. Here,the fact of Samsung's justified loss of trust in SCC is what makes the breaches notreasonably capable of remedy by SCC.[182] I hold Samsung validly to have terminated the second Agreement. Particularlygiven the absence of any express good faith obligation on its part, Samsung's allegedulterior motive in securing SCC's exit is immaterial.76 Even if substantiated beyondthe suspicions raised by SCC, it cannot be said SCC's breaches were in any sense'manufactured' by Samsung. The breaches each were duplicitous and unwarranted, inthe face of SCC's obligation to deal honestly and reasonably with Samsung in itsperformance of the contract.[183] So far as SCC's alternative claim for relief under the 2017 Act is concerned –having regard for the matters in s 45, and my findings under this head of SCC's claim– it is not just to make any order granting relief to SCC under s 43. There is nothingmeriting any result other than as arises directly from the terms of the contract. Even ifSamsung had ulterior motive for wishing SCC's exit (such as substituting Transcom,74 At [164] above.75 At [98] above.76 At [173] above.as SCC contends), SCC's conduct means Samsung's discretion to terminate the secondAgreement was not exercised "arbitrarily, capriciously or in bad faith, or unreasonablyin the sense that no reasonable contracting party could have so acted".77[184] SCC's claims under this head again fail.Fair Trading Act[185] This is SSC's thirteenth cause of action, claiming particular of Samsung'salleged actions within the three years before commencement of this proceeding to bemisleading or deceptive, or likely to mislead or deceive, in breach of s 9 of the FairTrading Act 1986 ("FTA"). Section 9 provides:No person shall, in trade, engage in conduct that is misleading or deceptive oris likely to mislead or deceive.[186] Although the point was not pressed in submission, any question about SamsungNZ's liability for "antecedent breaches" of the first and second Agreements bySamsung Australia, as contended to be represented by the novation agreement, doesnot strike me easily open to characterisation as Samsung's conduct "in trade". Iapprehend that aspect of SCC's claim is overcome by Samsung NZ'sacknowledgement it bears any liability found against Samsung Australia.78 Thebalance of SCC's grounds for claiming FTA breach are founded in its claims againstSamsung, all of which I have found not to be established.[187] SCC's claim under this head therefore also fails.Counterclaims for 'mute' / 'hold' damages[188] Samsung counterclaims, under each the first and second Agreements, fordamages arising from SCC's contended breaches of various express and implied termsto the effect SCC's invoices would not include extended periods of time during whichcustomers' calls were 'muted' (as I have outlined).79 Mr Dillon counters Samsung's77 Stephen Kós "Constraints on the Exercise of Contractual Powers" (2011) 42 VUWLR 17 at 20;see also the cases referred to at footnote [67] above.78 At [18] above.79 At [163]-[164] above.formulation of the obligation not to charge for "the time that customers were put on'mute', other than for very short period of time" illustrates the arbitrary and non-contractual specification.[189] As identified previously,80 SCC's obligations under the first Agreementincluded to "provide a professional, helpful and informative assistance in relation toinbound enquiry from Callers". SCC's manuals set out its "Call Quality EvaluationCriteria", at least embodying SCC's self-imposed criteria for such assistance, asincluding "Minimises Long Periods of Silence": to achieve this effectively, the Agent needs to [n]ot put the customer onmute instead using the correct hold procedure as detailed above .[190] Other than incidental resort to the 'mute' function was undesired, because "[i]tis important that the customer is aware of what is happening throughout the call".81Such incidental resort was explained by Mr MacDonald as being to cover a calloperator's involuntary sneeze, or for a quick discussion with a neighbouring operator,or to retrieve a sample from elsewhere in the call centre's room, while maintainingactive communication with a caller. The manuals reinforced "[u]se hold if the periodof silence it drawn out any longer than 30 seconds".[191] Additionally, the Service Fee set out in the first Agreement's Schedule 2 was"based on an average talking time of 5 minutes per call". It expressly is anticipatingpayment only for SCC's periods of active communication (or "talking") with callers.By the time of the second Agreement, Avaya's 'ATT' acronym is used, whatever thatmeasured.82 Mr Yoon preferred to be paid for all the time spent on a customer's behalf,but on re-examination he conceded that was not what the second Agreement provided:Q. Let's be very, very specific. Did you know that ATT did not count holdwhen you entered into the second call centre agreement?A. That time when entering to second agreement 2012, still Samsungwants to use the same formula of the pricing so they want to use theATT instead of AHT, even still they binding us for the minor KPIAHT. Still they insist to stay with the ATT.80 At [123] above.81 At [164] above.82 At [102] above.[192] In circumstances in which 'hold' rather than 'mute' option was practicallyavailable to SCC's call centre operators – that is, the customer should be apprised ofthe operator's intention to suspend active communication, rather than the customerwould not know of that suspension – the Average Handling Time KPI anticipated'hold' functionality would be used.83 Clause 4.2 of the second Agreement requiredSCC to "use its best efforts to provide the Services in accordance with the KPIs",which such use of 'mute' functionality would breach.[193] In those circumstances, SCC's use of the 'mute' function also breached otherof SCC's obligations under the first and second Agreements. Under the firstAgreement, it primarily breached SCC's "professional, helpful and informativeassistance" obligation.84 That same obligation appears at clause 4.6 of the secondAgreement, which the conduct continued to breach.85 I have also found the conduct tobreach SCC's 'good faith' obligation under the second Agreement.86[194] Mr Kersey argued the conduct also breached SCC's obligations to promote andimprove Samsung's reputation and performance,87 but the evidence is at bestspeculative (and at worst partial) as to whether the conduct risked either. Similarly, Icannot determine from the evidence if customers' enquiries otherwise generally werenot addressed by SCC's resort to the 'mute' function.88 SCC's 'mute' conduct came toSamsung's attention incidentally, in investigating a customer's unrelated complaint.[195] Last, Samsung alternatively claims SCC's 'mute' conduct is in breach of s 9 ofthe Fair Trading Act. Samsung relies particularly on the covert nature of the conduct,in the context of a contract in which Samsung is dependent on SCC for accuratecalculation of its Service Fee. Given SCC's contractual liability as I have found itabove,89 the alternative is not required to be determined.83 At [98] above.84 At [123] above.85 At [88] above.86 At [180] above.87 At [51] above.88 At [51] above.89 At [192]-[193] above.[196] However, if required to determine the issue, I would have held there was abreach of s 9.90 Under both Agreements, SCC's invoices represented "actual talkingtime" and "ATT" as including time not spent in active communication with the caller.This was misleading and deceptive to, or at least likely to mislead and deceive, therecipient of that representation in circumstances in which the duration of SCC's activecommunication was material. The first and second Agreements made the calls'duration material for part calculation of the Service Fee. Samsung was so misled,because the object of the representation was to extend 'talk[ing] time' and (at leastunder the second Agreement) to reduce hold time, both of which went to quantifyingSamsung's liability to pay the Service Fee.[197] I have some hesitation in applying the Fair Trading Act's provision to dealingsbetween commercial parties at arm's length, in which contracting parties should takereasonable steps to look after their own interests.91 Still, I would have held the 'mute'conduct's invisibility to Samsung made it reasonable for Samsung to be so misled, asthe evidence was 'mute' functionality was not an operation recorded in Avaya'sstatistics.Result[198] Each of SCC's causes of action against Samsung is dismissed. SCC is liable toSamsung on its first and second causes of action. Samsung's alternative Fair TradingAct cause of action also is dismissed.Costs[199] In my preliminary view, as the successful party, Samsung should be entitled toits 2B costs and disbursements from SCC.[200] If my preliminary view is not accepted by either party, and costs cannototherwise be agreed between them, costs are reserved for determination on shortmemoranda of no more than five pages – annexing a single-page table setting out any90 AMP Finance NZ Ltd v Heaven (1997) 8 TCLR 144 (CA) at 152; and Red Eagle Corp Ltd v Ellis[2010] NZSC 20, [2010] 2 NZLR 492 at [26].91 Des Forges v Wright [1996] 2 NZLR 758 (HC) at 765 citing Mills v United Building Society [1988]2 NZLR 392 (CA).contended allowable steps, time allocation, and daily recovery rate – to be filed andserved by:(a) Samsung within ten working days of the date of this judgment;(b) SCC within five working days of service of Samsung's memorandum;and(c) Samsung strictly in reply within five working days of service of theSCC's memorandum.Postscript[201] Some of the witnesses' written statements in the proceeding showed scantregard for the requirements of either s 83(2) of the Evidence Act 2006 or HCR 9.7.The former requires such written statements to be "the personal statement of the maker", and not to contain anything that is otherwise inadmissible. The latterrelevantly provides:9.7 Requirements in relation to briefs(1) In this subpart, brief, in relation to the evidence of a witness to be calledby a party, means a written statement setting out evidence proposed tobe given by that witness.(4) Every brief—(a) must be signed by the witness by whom the brief is provided:(b) must be in the words of the witness and not in the words of thelawyer involved in drafting the brief:(c) must not contain evidence that is inadmissible in the proceeding:(d) must not contain any material in the nature of a submission:(e) must avoid repetition:(f) must avoid the recital of the contents or a summary of documentsthat are to be produced in any event:(g) must be confined to the matters in issue.(5) If the brief does not comply with the requirements of subclause (4) thecourt, prior to or during the trial, may direct that it not be read in wholeor in part, and may make such order as to costs as the court sees fit.[202] Mr Yoon's 308-paragraph initial written statement, and 555-paragraph writtenstatement "in reply", in particular, complied only with HCR 9.7(4)'s requirements (a)and (f). Compared to the evidence of his own writing and speaking, as set outelsewhere in this judgment,92 his statements bore all the hallmarks of intensive legalauthorship, including substantial submission.[203] This is not just a matter of form (such that I required Mr Yoon not to read outpassages of his written statement simply repeating SCC's statement of claim). It is alsoa matter of substance, as illustrated by, for example, the author's error over the date ofSCC's relocation (apparently drawn from the date appearing on the lease).93 Preciserepetition of that error, and other content, in Mr MacDonald's written statementexacerbates the sense of legal authorship. Mr Choi's written statement also showedsigns of professional embellishment, distinct from the evidence of his own writing andspeaking,94 and the translator's assistance with his oral evidence.[204] SCC's 'reply' statements were particularly objectionable. If reply briefs arepermissible at all (for the High Court Rules make no express provision for them), theyare strictly to be in reply: responding only to relevant matters raised for the first timein the briefs to which they are replying. The analogy is to be with the constraintsapplicable to affidavits in reply, for which the High Court Rules do make provision.95[205] If permitted at all, reply briefs are not an opportunity to deny the truth of thedefendant's proposed evidence by restating or enlarging on facts already set out in theplaintiff's statements. That is repetitious and argumentative. Neither are they anopportunity for a plaintiff to keep its powder dry, by putting up a barebones case at theoutset, for the substance of its evidence 'in reply', after seeing the defendant'sproposed evidence.92 See, for example, at [35], [39], [40], [73], [83], [157], [191], and note 45 above.93 At [152] above.94 See, for example, at [36]-[37] above.95 HCR 7.26(2).[206] A plaintiff's proposed evidence should be everything on which it requires torely to make out its case against the defendant. Further oral evidence can be led at trialas may be necessary to amplify some newly-significant point in the plaintiff's case, orto patch some uncontemplated hole in that case, identified by the defendant's proposedevidence. Otherwise, a defendant's evidence is to be tested through cross-examination,and not by denial, argument, or repetition 'in reply' from the plaintiff's witnesses.[207] The perversity of any other approach arises when the court is confronted by aplaintiff's witnesses' oral evidence-in-chief including substantial rejoinders to adefendant's proposed evidence as yet unheard by the court. The problem iscompounded as briefs are not filed in advance, enabling a party not to put forwardsome intended witness, but presented at the time the witness is called to giveevidence.96 By analogy with HCR 9.13(1), the plaintiff should require leave for itswitnesses to refer to another party's briefs, yet to be given in evidence.[208] As myriad difficulties with Mr Yoon's written statements became manifest(including on Mr Kersey's generalised oral objection to much of the 'reply'statement's content), I gave serious consideration to not permit Mr Yoon's writtenstatements to be read (or taken as read, discretion to permit which McGechan onProcedure's commentary expresses doubt),97 and to require his evidence instead to beled. I did not do so partly because of the indeterminate consequences that may havefor conduct of this four-year-old proceeding's three-week hearing, then only in its firstday, but principally because any oral evidence direction is required to be given "beforethe giving of evidence".98 It is too late if the witness has commenced giving evidence.The only alternative may be a direction the brief "not be read in whole or in part".[209] The consequence is, if compliance with the Evidence Act and High Court Rulesis to be obtained in these respects, an obligation falls on counsel to raise any contendednon-compliance as conveniently in advance of the hearing as can be achieved.HCR 9.11 expressly anticipates such will first be raised between the parties within 20working days after receipt of the brief. If remaining unresolved, "notice that there is96 HCR 9.12 and 9.13. See also Andrew Beck and others McGechan on Procedure (looseleaf ed,Brookers) at [HR9.13.01].97 At [HR9.12.01].98 HCR 9.10(3).an admissibility issue must be given to the court by the challenging party" (emphasisadded). The remedial nature of the 2014 amendments to Part 9 of the Rules is noted.99—Jagose J99 Jarden v Earthquake Commission [2015] NZHC 204 following MacDonald v Tower InsuranceLtd [2014] NZHC 2876, (2014) 22 PRNZ 490 at [16] and [20]; and Parihoa Farms Ltd v RodneyDistrict Council (2010) 20 PRNZ 8. See also Gillian Combe QC "Witness statements in civil cases– show me the evidence" (paper presented at "Litigation Skills Masterclass" seminar, StamfordPlaza, Auckland, 25 November 2015) <www.gilliancoumbe.co.nz>.