SEAVIEW HP LTD v NZ TUBE MILLS LTD [2018] NZHC 1611

SEAVIEW HP LTD v NZ TUBE MILLS LTD [2018] NZHC 1611 [2 July 2018]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-Ā-TARA ROHECIV 2018-485-125[2018] NZHC 1611BETWEEN SEAVIEW HP LIMITEDAppellantAND NZ TUBE MILLS LIMITEDRespondentHearing: 7 June 2018Counsel: R C Laurenson for AppellantN L Smith and E M S Cox for RespondentJudgment: 2 July 2018JUDGMENT OF SIMON FRANCE J[1] This is an appeal from an arbitral award. Such appeals are limited to questionsof law arising out of an award.1 The appellant says the arbitrator has misinterpretedthe deed of lease between the parties. That would be a question of law. The respondentsays the arbitrator has not so erred, but also that there are factual conclusions that aredeterminative of the matter and concerning which Seaview HP Ltd (Seaview) cannotappeal. I consider the respondent is correct.[2] The respondent, NZ Tube Mills Ltd (NZTM) leases a building on a site ownedby Seaview. Power to the whole site is provided by Meridian. Since 2010, Seaviewhas paid Meridian, and has then apportioned the costs as an outgoing under the lease.It transpires that in August 2014, unknown to NZTM, Seaview added an uplift to thesum billed by Meridian before apportioning the total amongst the tenants. Incorrespondence Seaview has explained it is doing this to recover the administrative1 Arbitration Act 1996, art 5, sch 2.cost of calculating and issuing invoices, participating in the bulk purchase scheme andthe overall handling supervision and administration of the electricity supply.[3] Under the standard lease agreement between the parties, electricity is a namedoutgoing. Further, and importantly, management expenses are expressly deleted as arecoverable outgoing. It is therefore common ground between the parties that, underthe lease, Seaview cannot add on a margin to Meridian's charge.[4] Seaview's answer to this is that it is not invoicing NZTM under the lease aslessor. Rather, it is invoicing NZTM as an independent electricity retailer and so theamount it charges is not constricted by the outgoings provision of the lease (other thanthe need to be reasonable and fair). This proposition was rejected by the arbitrator. Inthis case that is a determination on a question of fact – was there an agreement betweenthe parties whereby Seaview would supply electricity to NZTM as NZTM's electricityretailer? If not, Seaview can only be invoicing NZTM in its capacity as landlord. Theterms on which it does so are governed by the lease.[5] The arbitrator held that Seaview was not NZTM's electricity retailer. Giventhe parties agree that there is no power to add administration costs under the lease, thatis the end of the matter. It is a determination of fact not capable of appeal. I note forcompleteness that art 5(10) of the Second Schedule to the Arbitration Act expresslyexcludes sufficiency of evidence and the drawing of inferences as questions of law forthe purposes of the appeal.[6] I observe that on the evidence the proposition that the parties had agreed toSeaview supplying NZTM its electricity as a retailer seems optimistic. It was anagreement unknown to NZTM which is not a promising start, and would be anunwritten agreement. For three years the invoices were assessed on the basis ofpassing on Meridian's charges. The alteration to this arrangement was not advised toNZTM who are meant to be the other party to the electricity supply contract.Conclusion[7] The appeal is dismissed. The questions of law on which the appeal is advanceddo not arise for determination. The key finding is that Seaview was not supplyingelectricity to NZTM in its capacity of retailer. That finding is determinative of theissue between the parties. It would not be an appropriate use of the limited appealpower to determine questions of interpretation that do not arise.[8] Subject to any matter being drawn to my attention, the respondent is entitledto scale costs for a standard appeal, and reasonable disbursements to be fixed by theRegistrar if necessary.__________________________Simon France J