Triastra Limited v The Proprietors of Taharoa “C” Block [2019] NZHC 2230

Triastra Limited v The Proprietors of Taharoa "C" Block [2019] NZHC 2230 [6 September 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2015-419-318[2019] NZHC 2230BETWEEN TRIASTRA LIMITEDPlaintiffAND THE PROPRIETORS OF TAHAROA "C"BLOCKDefendantHearing: 8 to 12 April 2019Counsel: BD Gustafson and FD Porteous for plaintiffAJ Horne and JJK Spring for defendantJudgment: 6 September 2019JUDGMENT OF FITZGERALD JThis judgment was delivered by me on 6 September 2019 at 10:30 am,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate7Solicitors: Rainey Law, Auckland (G Grant)MinterEllisonRuddWatts, AucklandContentsIntroduction [1]The pleaded claims [7]Observations on the evidence [12]Factual background – more detailThe wind farm project [18]The contractual arrangements with Triastra [20]Agreements with potential joint venture partners [27]Taharoa's letter of 26 July 2012 and ensuing correspondence [30]Triastra's work after 18 October 2012 [38]Developments in first half of 2013 [47]Taharoa's second purported termination [51]Events in the second half of 2013 [61]Triastra claims payment for the period June to November 2013 [63]Did Taharoa validly terminate the Final Agreement as of 18 October 2012?Introduction [65]Interpretation of termination clause [66]Did the July Letter give three months' notice of termination? [71]The parties' relationship from 18 October 2012 to June 2013The parties' submissions [81]Discussion [84]Termination of the Ad Hoc ContractShould a term be implied that the Ad Hoc Contract was terminable onreasonable notice? [89]What was a reasonable notice period? [91]Triastra's estoppel claimLegal principles [103]Discussion [104]Result and next steps [113]Costs [117]Introduction[1] The plaintiff (Triastra) and the defendant (Taharoa) were parties to a contractpursuant to which Triastra provided consultancy services to Taharoa. The servicesrelated to the investigation and pursuit of a wind farm by Taharoa on land it ownednear the Kawhia Harbour.[2] The parties had been in a contractual relationship since 2005. This compriseda series of written agreements which were extended by mutual agreement from timeto time. Under those arrangements, there was the potential for Triastra to earn asubstantial success fee in connection with the wind farm project.[3] But in July 2012, Taharoa purported to terminate the contractual arrangements,by giving Triastra three month's written notice (such that the arrangements came to anend in October 2012). A key issue for determination in these proceedings is whetherTaharoa was entitled to give such notice, and even if so, whether its July 2012 letterwas effective in doing so.[4] Irrespective of the resolution of the above issue, there is no dispute Triastracontinued to provide consulting services to Taharoa after October 2012 and thatTaharoa continued to pay for them. This gives rise to subsidiary issues as to the basisupon which those services were provided and paid for, and whether a later letter sentby Taharoa in May 2013 was effective in bringing to an end whatever arrangementswere then in place.[5] When Triastra first filed its claim, it sought some $2 million by way of damagesfor what it said was Taharoa's unlawful repudiation of the contractual arrangements.By the time of the hearing before me, however, the issues had narrowed and Triastra'sclaim had reduced to approximately $155,000.[6] Before setting out the factual background to the claim in more detail, and toput that background into its proper context, it is helpful first to summarise Triastra'spleaded claims.The pleaded claims[7] There is no dispute a contractual arrangement existed between the parties overthe period 25 February 2008 to 18 October 2012 (the "Final Agreement"). Taharoasays it was entitled to terminate the Final Agreement by giving three months' notice,and that it gave such notice by way of a letter dated 26 July 2012. It therefore says theFinal Agreement came to an end in October 2012.[8] Triastra does not agree. It first argues that the Final Agreement does not permit(unilateral) termination on three months' notice. It further says that Taharoa's July2012 letter, properly construed, was intended to vary the terms of the Final Agreementonly, rather than to terminate it.[9] Triastra's first cause of action for breach of contract is therefore predicated onthe Final Agreement remaining in force until three months after receipt by it of a letterfrom Taharoa's solicitors dated 3 December 2013 (which it accepts did give notice oftermination of the agreement). Triastra claims approximately $155,000, beingamounts it says ought to have been paid to it under the Final Agreement over the periodJune 2013 to March 2014.[10] In the alternative, if the Final Agreement was validly terminated by Taharoa'sJuly 2012 letter (and thus came to an end on 18 October 2012), Triastra says that anunwritten agreement came into force at that point, which contained an implied termthat it could only be terminated by giving three months' prior notice.1 In purportingto give two weeks' notice of termination in May 2013, Triastra says Taharoa breachedthe implied term and the (unwritten) agreement therefore remained in force (until thethree months' notice of termination referred to at [7] above). Taharoa, on the otherhand, says that after 18 October 2012, no contract existed between the parties. It saysthat on 21 May 2013, it validly gave two weeks' notice of termination of allarrangements between the parties, with those arrangements terminating on 4 June2013.1 I granted Triastra leave to amend its claim during the hearing to include this alternative cause ofaction.[11] Finally, Triastra pleads in the alternative that if Taharoa is not contractuallyobliged to pay Triastra's outstanding invoices, it nevertheless gave instructions toTriastra over the period June to 30 November 2013 to continue to carry out work onthe wind farm project (for which Triastra would be paid). Triastra says it reasonablyrelied on those instructions and carried out the requested work. It therefore says itwould be unconscionable for Taharoa to act in a manner contrary to its representations.The same sum is sought by way of damages on this cause of action as on thecontractual causes of action.Observations on the evidence[12] Before turning to the factual background, I first make some brief observationson the evidence generally.[13] The issues in this case are relatively narrow, focussing primarily on contractualinterpretation, and the proper interpretation and effect of certain correspondence whichpassed between the parties. Those are objective inquiries. Despite this, however, therewas considerable (inadmissible) evidence of witnesses' subjective views and opinionson the interpretation and effect of various contracts and items of correspondence.[14] Triastra's evidence was largely given by its sole shareholder and director,Mr Adam Poulopoulos. I do not rely solely on Mr Poulopoulos' evidence on contestedfactual matters, unless corroborated by other parties' evidence or contemporaneousmaterials. While I do not intend any direct criticism of Mr Poulopoulos in this context,he had in my view a natural tendency to "talk up" the contents of documents andfactual matters. That is perhaps understandable, given his long-standing work on thewind farm project and his inevitable disappointment when the project was abandoned.But by way of example only, Mr Poulopoulos said in evidence that his contract withTaharoa: provided that Triastra would not charge Taharoa its standard hourly rate of$250 per hour plus GST but instead would reduce that hourly by 50 per centto $125 per hour plus GST for hours incurred after May 2015.[15] The contract does not, however, say anything to that effect. It simply providesthat Triastra will bill Taharoa $16,000 (plus GST) a month, plus expenses. WhileMr Poulopoulos said the $16,000 per month did in fact reflect a reduced fee on hispart, that is quite different to a contractual term to that effect.[16] Similarly, Mr Poulopoulos said his contract with Taharoa provided that"Triastra would receive a success fee when it had completed its part in the project".Again, however, that is not what the contract says. It instead states "should a successfee be payable to Triastra". A further example is Mr Poulopoulos' evidence of ANZBank's willingness to fund the wind farm project. The overall impression he gave,both in contemporaneous documents and in his evidence, was that ANZ had agreed toprovide funding of approximately $70 million,2 subject to certain conditions precedentbeing satisfied. However, there was no documentary evidence of any formal fundingoffers or agreements to lend on ANZ's part.[17] A further issue was that a number of persons who represented Taharoa in itsdealings with Triastra were either unavailable or not called to give evidence. Thismeant that witnesses who were called on behalf of Taharoa were often giving evidenceon matters in respect of which they did not have any personal involvement orknowledge. There was also a lot of evidence about the overall viability of the windfarm project and Taharoa's ability to finance it. However, little, if any, of that evidenceis relevant to the issues I must determine. For that reason, I have not addressed thatevidence in any detail in the following factual background section of this judgment.Factual background – more detailThe wind farm project[18] Taharoa is a Māori incorporation which owns land near the Kawhia Harbour(known as the "Taharoa C Block"). The land is known for its iron sands miningoperation, for which Taharoa has received a royalty. Since 2018, it has been themajority owner of the current iron sands mining company.[19] In 2004, Taharoa began investigating the possibility of utilising land it ownedin the region for a wind farm. Taharoa is governed by a Committee of Management2 Which he described as "the largest loan negotiation in New Zealand at that time".(CoM). Recognising that it did not have the internal skills to consider and advancesuch a project, Taharoa engaged several consultants to work with it on the wind farmproject. One of them was Triastra. As noted, Triastra's sole shareholder and directoris Mr Poulopoulos. He is the driving force behind the company.The contractual arrangements with Triastra[20] In early 2005, the parties entered into an arrangement pursuant to whichTriastra provided consultancy services to Taharoa in relation to the proposed windfarm. The terms of the arrangement were recorded in an (unsigned) document titled"Proposal for Advisory Services" and numbered 095/2004 (First Agreement).3[21] The First Agreement envisaged that Mr Poulopoulos would spend one day aweek at Taharoa's offices in Hamilton. The consulting work was to include"assist[ing] where necessary to co-ordinate negotiations with funders, suppliers,advisors, joint venture parties, legal and specialist advisers and any other interestedparties who could be required." For this work, Triastra was to be paid a monthly feeof $6,500 plus GST. In addition, the First Agreement provided that:Should a success fee be payable to Triastra for the raising of capital then thiswill be split on a 50/50 basis with Taharoa C less any direct expenses whichmay arise as a result of the payment of such fee.[22] The First Agreement's duration was stated to be a period of 14 months from 1March 2005 until 30 April 2006, after which "a further term can be arranged by theparties, the duration of which will be subject to a separate agreement".[23] The First Agreement was replaced in March 2006 by a second (unsigned)agreement titled "Proposal for Advisory Services" and numbered 217/2006 (SecondAgreement). The Second Agreement noted that after full investigation of the land atTaharoa as a potential wind farm site, an application for resource consent was to bemade. Triastra's work was to include "ensuring the renewable energy project [was]commercially viable", and "looking for satisfactory funding arrangements should the3 This and the second and final agreements (discussed below) were all unsigned. There is nodispute, however, that they were legally binding as between the parties.project prove financially viable". Mr Poulopoulos was to spend four days per weekin Taharoa's Hamilton office.[24] The Second Agreement's duration was stated to be from 1 May 2006 to31 March 2008, again after which the parties could, by separate agreement, arrange afurther term. Given the increase in work to be carried out by Triastra, its fee was raisedto $16,000 per month (plus GST). Mr Poulopoulos explained this was around half his"normal" fee.4 He said the reason he was prepared to contract on a reduced hourlyrate was the possibility of earning a success fee. The Second Agreement's provisionon the success fee was the same as in the First Agreement (see [21] above).[25] The Second Agreement also contained a termination provision, which is ofcentral importance to the issues to be determined in this judgment. It said as follows:While we both reserve the right to terminate this agreement prior tocompletion, on 3 months' notice, the arrangements outlined will continue ineffect unless we mutually agree in writing to vary them.5[26] On 25 February 2008, Mr Poulopoulos wrote to the Chairman of Taharoa,noting that the Second Agreement's term was about to expire. The letter noted thatTriastra was happy to provide ongoing services until March 2011 on the same terms,but with two minor changes (which are not relevant for present purposes). I will referto the Second Agreement, as amended and extended by the 25 February 2008 letter, asthe Final Agreement. While the Final Agreement was stated to have effect until March2011, the parties agree it continued to govern the relationship between them after thatdate.Agreements with potential joint venture partners[27] Progress on the wind farm project continued. On or around 29 June 2012,Taharoa entered into a Limited Partnership Agreement with the Australian subsidiary4 When broken down into an hourly rate across 32 hours per week, giving an hourly rate of $125per hour, rather than $250 per hour.5 The reference to "completion" is unclear; it could refer to refer to the (then) contractual expirydate, being 31 March 2008, or the completion of the wind farm project (though none of theagreements referred to any specific project milestones). I do not, however, need to resolve thisissue, given Taharoa's (purported) notice of termination was given before "completion" of eitherthe contract term (as later extended) or the wind farm project.of a Chinese turbine manufacturer, Goldwind. Goldwind had been identified as apotential joint venture partner in the wind farm project. On the same day, the partiesto the Limited Partnership Agreement entered into a project subscription agreement(PSA). In the PSA, Taharoa agreed that it would not, prior to the Completion Date (asdefined in the PSA):6Hire, terminate or vary the terms of employment or engagement of anyemployee, agent, distributor or independent contractor who is materiallyinvolved in the Project, or agree to do any of those things.[28] Goldwind had a right to terminate the PSA should Taharoa breach this clause.7[29] Despite referring to these aspects of Taharoa's arrangements with Goldwind inargument, Mr Gustafson, counsel for Triastra, confirmed that Triastra did not seek toenforce or otherwise rely on these clauses by way of a privity of contract argument.Taharoa's letter of 26 July 2012 and ensuing correspondence[30] On 26 July 2012, Taharoa wrote a letter to Triastra (the July Letter) which isalso of central importance to this case. Given its importance, its full text is set outbelow:8For the last three weeks we have been discussing your continued services toTaharoa C Block. Thank you for your time and openness during our meetings.As such, to initiate the next phase, please accept this as our formal writtennotice to conclude your current contract. Your services under the currentarrangements shall cease on 18 October 2012, being the three-month noticerequired.I ask that we meet before 31 August 2012 to complete the negotiationsregarding your services in terms of:• The needs of our organisation• An update of the current projects you are working on and theirviability• Transfer of those projects to our organisation• Your services regarding the Taharoa Wind Farm during construction6 PSA, cl 6.2(b)(v).7 PSA, cl 9.8 Grammatical and typographical errors in the quoted correspondence in this judgment are from theoriginal.Once our discussions are complete a new contract for services will be drawnup to commence on 18 October 2012. Please contact me to arrange a suitabletime for us to meet here at the office.[31] As outlined in the introductory section of this judgment, a key issue is whetherthis letter validly terminated the Final Agreement on three months' notice (Taharoa'sposition), or merely sought to vary the Final Agreement (Triastra's position).[32] For completeness, I also note that the July Letter was sent by Charles Willison,who was Taharoa's appointed Manager. Although in his evidence Mr Poulopoulosmade several references to and in effect queried Mr Willison's authority to send theletter, there is no formal pleading by Taharoa that he lacked actual or ostensibleauthority to act on Taharoa's behalf. Nor was any argument to that effect advanced byMr Gustafson in his submissions. Other than to record that it is tolerably clear fromthe evidence that Mr Willison would have had the requisite authority, I say nothingfurther on this topic.[33] Returning to the chronology, Triastra responded to the July Letter by way of aletter dated of 29 August 2012. It said the following:Thank you for your letter dated 26 July 2012.We would like to highlight that the Triastra contract for services (TRI 2902008) is to be novated by the Taharoa Windfarm partnership (LP).As a consequence, early termination would not be prudent in the interest ofTaharoa C (TAH C) as by novating TRI 290-2008 the success fee payable toTriastra would become the responsibility of the LP. If on the other handTR1290-2008 should be terminated prior to novation, the success fee wouldbecome the responsibility of TAH C. The contract TRI 290-2008 once novatedand paid out would then be terminated by the LP.At present, the full time work on the Taharoa Windfarm will continue intoNovember or December. This is being driven by delays arising as a result ofGoldwind's inaction in completing the commercial, legal and corporaterequirements necessary to finalise the establishment of the LimitedPartnership and the resultant holdup in the work required to complete theplanning phase of the Windfarm project, prior to handing over to the EPCcontractor for the start of construction.There is little doubt that there are between 60 and 90 days of work required tofinalise this first phase. The exact length of time required, will be determinedby how smooth the hand over process is managed.[34] As can be seen, Triastra did not (expressly at least) dispute Taharoa's right toterminate the Final Agreement; rather it sought to persuade Taharoa not to terminate.[35] Taharoa responded on 31 August 2012, stating the following:Thank you for your letters dated 29 and 30 August 2012 and for identifyingtasks for the Windfarm.9However as per my letter dated 26 July 2012 and our discussions duringAugust 2012, we need to identify specific timeframes, lead responsibilityholder(s) for the respective Windfarm finalisation tasks. This will avoid anyunnecessary duplication of our resources.New Service Contract for Taharoa C – to negotiateFurthermore, in terms of your comments regarding early termination of theTriastra contract (ref: TRI 290-2008 & 217-2006), please note that thesecontracts will be replaced by the new contract scheduled to begin on18 October 2012. This contract will be for services to Taharoa C Block andnot necessarily the Windfarm,As previously advised, I would like the opportunity to discuss this further toconfirm how you can assist with other projects from October 2012. Duringour trip to Australia this coming week, we will discuss this matter.Our requirements - Taharoa Windfarm projectI do ask that you work on the Taharoa Windfarm project only, by providingthe aforementioned Taharoa Windfarm Project plan and to report directly tome on a weekly basis. Therefore we will need you to be at our office two daysper week.Therefore, for the period 10 September to 18 October 2012, you will not berequired to assist with the rollout of nominated energy related projects or tolook for other renewable energy projects. Please prepare a written update onthese other projects and the handover of the information and resources to theIncorporation.Payments to Triastra Limited to 18 October 2012I confirm that we will continue to pay you to 18 October 2012 on your currentrates.[Emphasis in original]9 The 30 August 2012 letter was not produced in evidence.[36] A meeting of the CoM was also held on 31 August 2012. Mr Poulopoulosattended the meeting for a time and gave a general update on the wind farm project.The minutes indicate there was a general level of concern expressed by CoM membersat the progress (or lack thereof) on the wind farm project and the ongoing negotiationswith Goldwind. After external consultants had in all likelihood left the meeting,10 theminutes record the following report from Mr Willison in relation to the consultants:Linda has the accounts process sorted, therefore Murray works on theWindfarm.We are at a critical time as we need our consultants in order to progress andcomplete the Wind Farm, engāri at times I am not sure what our consultantsare doing?With Adam, Ken & Murray, I have am repeatedly requested tasks &timeframes, before being authorized. My concern is we have noweekly/monthly tasks to measure performance against, only target is tobuild a windfarm! My concern is the repetition and duplication of work!Murray has been given notice, finish 2 Sept — he can work from the Officefor one day per week and the rest he works from Auckland. This is not yetimplemented. Adam determines the majority of Murrays work i.e. Windfarm financials. We are not there yet re: contracts.Maxine Moana-TuwhangaiThe issue is, he has no contract, he only has one day, and find out what taskhe is doing, he needs a contract and he needs to know why we areemploying him. We do need someone who has an indepth historicalknowledge. Linda's role was to do the day to day things that Murray didn'tneed to do and therefore cut down costs.Actions:➢ Peter Bowker Finish 30 Sept No Renewal➢ Ken Hulls Finish 30 Sept New 1 Oct➢ Murray Phillip Finish 2 Sept New 3 & 10 Sept or 1 Oct➢ Adam Poulopoulos Finish 18 Oct Renew 19 Oct[37] Mr Willison and Mr Poulopoulos (and another consultant) met again on18 October 2012 to discuss contracting arrangements. Mr Willison's email of thatevening reported on the discussions as follows:10 Mr Poulopoulos confirmed that from time to time, the consultants would be asked to leave CoMmeetings.Triastra & Clansman. Formalise and update consulting contractsThank you for your time this afternoon to progress your consulting contractswith Taharoa C BlockThe purpose of the meetingThe purpose of this meeting was to formalise and update consulting contractsgoing forward.BackgroundThese consulting contracts discussions commenced in late July 2012, and havebeen on-going through August and September 2012. Terminations letters havebeen set to Clansman and Triastra respectively. The consulting contractspertain to the Taharoa Wind Farm Project, in principle.Taharoa C GOALS to formalise and update consulting contractsI. Commence the construction phase of the Taharoa Wind Farm by 30November 2012II. Management/staff succession planning beyond projectcommissioning when consultants have finisheda. For Best Practice, Linda (Accountant) needs to control Xero,and in order qualify all accounting transactions for 2013 Auditb. Costs. Linda is cheaper than Murray to produce financialinformation of the Group, excludes Wind Farm modellingc. Security & duplication of the records -for future use.III. Minimise resource duplication and overlay (Efficiencies)IV. Isolate the Taharoa Group financials from the Taharoa Wind FarmprojectReview of today's discussionsAs discussions have been on-going since late July 2012, I ask for feedback onprevious and todays discussion by no later than 5pm Thursday 25 October.Draft contracts will be forward in the next few days.Triastra's work after 18 October 2012[38] From 18 October 2012 to 4 June 2013, there is no dispute Triastra continuedto provide consultancy services to Taharoa and that Taharoa paid for them (being$16,000 per month, plus GST, i.e. the same amount as under the Final Agreement).[39] On or around 26 October 2012, Taharoa sent Triastra a draft contractor'sagreement. It is common ground this was never executed or agreed to by Triastra. Itwas for a proposed term of one month only, from 29 October 2012 to 30 November2012, though somewhat curiously given that term, provided that either party couldterminate the agreement on one month's notice.[40] Mr Willison, Mr Poulopoulos (and Taharoa's legal counsel) met on 30 October2012 to continue discussions on the contractual arrangements. Mr Willison sent aletter to Triastra later that day, summarising the discussion at the meeting. The letterrecorded Mr Poulopoulos' rejection (on behalf of Triastra) of the draft consultancyagreement sent to him on 26 October. It also recorded "your request to continue yourrole to the end of December 2012 (under terms prior to October 2012) is not accepted".The letter went on to state:On July 2012 Taharoa C gave Triastra three months' notice advising that yourrole would cease on 18 October 2012. Therefore Taharoa C has met thisrequirement.Going forward I reiterate that we want you to continue to work with Tahroa CBlock to bring the Taharoa Windfarm to fruition. However, this cannot occurunless a written Service Agreement between Taharoa C Block and TriastraLimited is in place by the end of this week.Therefore I request that we meet here on Thursday morning [2 November2012], to discuss this matter to confirm the terms of engagement and to finalisea Signed Service Agreement beginning 29 October 2012. This will be myfinal proposal to Triastra Limited.[41] It appears a meeting was held on 2 November 2012 and some form ofagreement was reached that Triastra would continue to work on the wind farm projectuntil 12 December 2012. In this context, Mr Willison send Mr Poulopoulos (andothers) an email on 2 November (bearing the subject line "Taharoa Windfarm –Deadline Wed, 12 December 2012) stating:Our target!!This email is to confirm the date of Wednesday, 12 December 2012 for all preconstruction work and agreements to be completed, and the Project handoverto the EPC Contractor. I attach the Pre Construction Project Milestonesprovided by Triastra that need to completed by 12 December 2012.Charles InvolvementI advise that I will be taking a more active role within this project, therefore Iexpect;1. Weekly written updates- Friday at 4pm. Please send these to me via emaildetailing what has been achieved during the week and what needs to bedone the week coming.2. All Agreements are to be in final form by this date (if not alreadycompleted) so that our Committee can sign them off on Friday,14 December being their last meeting of the year.3. All communications (including emails} are to be sent to our office.Therefore please include myself and Delia (email: deliaw@taharoa-c.co.nz)4. All original documents are to be sent to and stored at our office.I am attending the FoMA conference this weekend. Have a great weekend.And see you Monday.[42] A later email sent by Mr Willison to Mr Poulopoulos on 18 December 2012 isalso consistent with an agreement to continue to work with Triastra until 12 December2012. It recorded:As per on-going consulting contract negotiations, the completion of the WindFarm in to construction is imperative. HOWEVER this does not mean thereis no budget, no timeframe and no consulting contracts. At your respectiverequest I have rolled through work from the October 2012 notices, through tothe 12 December 2012 deadline. The deadline has passed, and I need tocomplete consulting contracts with you respectively. Please note payment ofNovember invoices will be dependent on concluding consulting contracts.Progress (& lack of) of consulting contracts was raised at the Friday'sCommittee of Management. I have reiterated that the Tahroa C Block visionis to be "leaders in our businesses", therefore these consulting contracts areone of many functions we have to have in place.[Emphasis in original][43] The above email refers to a meeting of the CoM. That had been held on 16November 2012. Mr Poulopoulos had attended, at least to the extent of giving anupdate on the wind farm project. The minutes record that he reported:Final stages to bring to deal and hopefully will be done by 6-12 December, weneed to have most of it signed off by then to be able to produce power byDecember 2013.[44] A separate section of the minutes relating to consultants recorded:• The review of Consultant Contracts is to ensure we optimize their time andrelated resources• Do not want to jeopardize the Wind Farm Project just to save $50k• Currently in negotiations with Adam and Murray• Murrays verbal contract is terminated with agreed payment to 28 October• Adams written contract is terminated and paid up to 26 October• They both declined to sign a written contract with Taharoa C Block whichwas due to begin 29 October 2012• Reasons for refusing is the consultant has disclaimer on all work right fromthe beginning; Not wanting to sign into the ICA's; One does not believethat he is an Independent contractor; tried to use the PSA to bind Taharoa.C Block to their engagements to the end of the Windfarm construction -this was negated.• Between now and Christmas, we need banking arrangements confirmed, ifwe don't we will have no turbines turning before end of December 2014• Meet with Adam and Murray and we tie this down its costing lots of moneyand we are not there yet, it is the shareholders who are the ones missingout.[45] In the context of the continuing discussions on consultant contracts,Mr Willison sent a further email to Mr Poulopoulos on 18 December 2012 stating:1. TRI 290-2008 ceased on 18 October 20122. On-going work for Taharoa C Block post 18 October 2012 to30 November 2012 has been at the managers discretion3. A new agreement needs to be negotiated from 1 December goingforward to handover to the EPC contractor.[46] Mr Poulopoulos responded the next day. He did not respond to or specificallychallenge the contents of Mr Willison's email, but noted he looked forward to meetingthe following day. Mr Poulopoulos said that as matters transpired, no meeting tookplace the following day, and no further meetings or discussions occurred until earlythe following year.Developments in first half of 2013[47] Unfortunately, the wind farm project did not progress as expected in 2013.Goldwind was to provide certification of the proposed turbines by the end of March2013. This was a necessary pre-condition for any bank funding of the project.[48] On 10 April 2013, Mr Poulopoulos wrote to Taharoa informing it thatGoldwind had not satisfied the certification requirement and that without it, ANZwould not provide funding. He also advised that Genesis Energy (who was to take theelectricity generated by the wind farm) had advised that they did not intend to extendtheir power purchase agreement to buy power from the wind farm. Mr Poulopoulosadvised that Taharoa would have to contribute $26 million of equity to a scaled downproject if it was to retain its 50 per cent shareholding. Taharoa's financial accountsfor 30 June 2013 recorded net assets of $11.825 million. While Mr Poulopouloschallenged the basis for these accounts, on any view, funding the project would havebeen somewhat challenging for Taharoa.[49] In his 10 April letter, Mr Poulopoulos concluded:The reality is that the project as it stands at present belongs to Taharoa C. IfGoldwind for whatever reason are not prepared to fall into line with the MoUthey signed, then allowing for the need to follow legal protocols, maybe thebest outcome is for Goldwind to withdraw as an equity participant and forTaharoa to follow another course which in the longer term might prove to bemore beneficial.[50] In a CoM meeting held on 19 April 2013, Mr Willison reported that:• Goldwind cannot build the Windfarm by 31 December 2013• Genesis has formally terminated the PPSA. Therefore we do not havea secured Power Purchaser but options are there to go to Spot Market• Management recommendation is to stop our relationship withGoldwind in terms of equity and to terminate our Consultants currentcontracts.• We have asked them to review the project and to provide optionsgoing forward.Taharoa's second purported termination[51] On 21 May 2013, Mr Willison wrote to Triastra. Again, this is a key piece ofcorrespondence. His letter stated:As you know the Wind Farm Project has come under some scrutiny from theCommittee of Management (Committee) and therefore a review of the Projectand Project team was initiated in April 2013.Since the May Committee meeting last Friday, we have been directed toterminate your services and re-negotiate your contract going forward, on amilestone basis. Therefore please accept this as our formal termination of yourservices under the current arrangements which shall cease on 4 June 2013.I thank you for the work you have done over the last six weeks in assessingthe current project with Goldwind and to develop the framework for thesmaller 9 Turbine Wind Farm. We have a number of milestones to achieve andI would like to meet later this week to discuss your contract going forwardfrom 05 June 2013.Please let me know when you are available to meet to discuss the terms ofyour new contract.[52] As can be seen, the letter was somewhat vague (perhaps deliberately so) onwhat the "current arrangements" were which were being terminated.[53] The parties met on 4 June 2013 to discuss the possible scaled down wind farmproject. Mr Poulopoulos' notes of the meeting record that Mr Willison informed himthat Triastra's involvement was on hold until a new agreement was drawn up.[54] The following day, Mr Poulopoulos wrote to Taharoa recording that the partieswere at "an impasse". His letter stated that "as I have indicated in the past", Triastrahad a valid contract in place, namely the Final Agreement. He stated "I would like tohighlight that under the agreement both parties have the right to exit the agreement onthree months' notice." He confirmed Triastra did not accept the terms of a newagreement which had been provided by Taharoa in the interim (and presumablydiscussed at the meeting the previous day). He concluded that if matters could not beagreed, the alternative was for "Taharoa to exercise their right to give 90 days' noticeof termination".[55] I interpolate to note that this was the first time Triastra had disputed, in writingat least, that the Final Agreement had come to an end on 18 October 2012.Mr Poulopoulos said, however, that he had challenged Taharoa's position verbally onprior occasions. For the reasons set out at [14] above, however, I do not accept thatevidence. It would also be somewhat odd to have done so, but not to have alsorecorded that position in any of the many items of correspondence passing betweenthe parties in the intervening period.[56] Mr Willison replied to Triastra's letter the following day, 6 June 2013. Hestated:In response we advise that Taharoa C Block exercised our right to exit theformer arrangement with you in July 2012 and those arrangements ceased on18-October 2012. Since that time Taharoa C has engaged Triastra Limited ona fortnightly basis.In April 2013, the Committee of Management (CoM) were informed that the40MW Windfarm project could not be completed and the loss of the PowerPurchase Service Agreement with Genesis Energy. The Committee ofManagement then demanded;1. A full review of the 40MW Windfarm project and reasons it had failedand;2. That Management and the Windfarm team identify what can besalvaged from the 40MW Windfarm project and whether a newWindfarm project would be viable and economic for Taharoa. C.3. That Management seek legal advice in terms of our obligations interms of the 40MW Windfarm Project.4. That all of the Consultants arrangements be terminated and;5. That Taharoa C negotiates with you a new Independent ContractorsAgreement for services going forward. Such an agreement to bespecific in purpose and timeframe.As a result of the numbers 1 to 5 above, on 21 May 2013 Taharoa C gaveTriastra Limited two weeks, notice and offered Triastra a new IndependentContract agreement to be negotiated.Further, we advised that such an agreement needed to be in place by 4.00pm,yesterday 05 June 2013. Your letter received last night declined our offer dated21 May 2013 and terms.Therefore, I formally advise that your services are no longer required. Today,we will inform all of our Energy Project partners and service providers of yourdeparture from the Project and wish you well in your future endeavours.[57] The same day, Mr Willison reported to the CoM by email, noting that Triastra(and another consultant) "were given current contract (two weeks) termination noticeson 21 May 2013".[58] On 17 June 2013, Triastra wrote to Taharoa summarising its view of the statusof the wind farm project and concluded:We would like to thank you for your past instruction and take this opportunityto wish the incorporation all the best for the future.[59] There is no dispute Taharoa paid Triastra's invoices up to 6 June 2013.[60] Mr Willison resigned as Manager and a member of the Taharoa CoM at the endof June 2013 (due to ill health).Events in the second half of 2013[61] Mr Poulopoulos says that after June 2013, he was instructed to continue workin Auckland to produce a scaled down version of the wind farm project, and to try andlocate a new entity to replace Goldwind. Mr Poulopoulos says those instructions camefrom three named individuals, being Mr Peter Bowker, Ms Pet Martin and Mr JohnForbes, and that the instructions were conveyed in meetings and telephone calls.Mr Bowker and Ms Martin are both deceased. Mr Forbes was called by Taharoa togive evidence and denied giving Mr Poulopoulos any such instructions. I addressthese competing positions later in this judgment.[62] A Mr Wayne Coffey was appointed Taharoa's Chief Executive Officer inSeptember 2013. Mr Coffey also gave evidence for Taharoa at the hearing. While heclearly held strong views and opinions about the role of and work the consultants hadprovided to Taharoa over the preceding years, given he was only employed by Taharoain September 2013, he could not give any admissible evidence on those matters. Heexplained, however, that very soon after his appointment, he conducted a full reviewof the wind farm project and on 13 September 2013, recommended to the CoM thatthe project should be abandoned altogether. The CoM accepted that recommendationat its meeting on 20 September 2013.Triastra claims payment for the period June to November 2013[63] Triastra did not send any invoices to Taharoa over the period June 2013 toNovember 2013. But on 6 November 2013, Triastra wrote to Taharoa giving detailsof what it said were its unpaid fees for that period.11 Taharoa, by its solicitors,responded on 3 December 2013. They rejected Triastra's claim. They said:There is no ongoing contractual relationship between Taharoa C and Triastra.There has been no contractual relationship between the two entities at all since5 June 2013. Furthermore, the relationship has effectively been in afortnightly holding pattern from October 2012 to June 2013 following thetermination (in July 2012) of the previous long term contractual relationshipbetween the parties by Taharoa C.A review of correspondence sent by you to Taharoa C throughout the lasttwelve months suggests that either you do not understand Taharoa C's positionin this regard, or for some reason you choose to ignore it, or disagree with it.For example, in your most recent letter (6 November 2013) you confirm yourrejection of terms recently proposed by Taharoa C for a new agreement, andthen make the observation that "[a]s a result, the original Triastra proposalfor Advisory Services dated 27 January 2008 (Tri 290-2008) Still remainsvalid."With respect, and in light of the history outlined above, that cannot be correct.Taharoa C has clearly elected to terminate both the earlier ongoing contractwith you effective 18 October 2012 and now also the ongoing fortnightlycontract effective 5 June 2013. There is now no ongoing contractualrelationship between the parties.[64] Triastra says this letter was effective in giving it three months' notice oftermination of the Final Agreement.Did Taharoa validly terminate the Final Agreement as of 18 October 2012?Introduction[65] Mr Gustafson advanced two primary arguments under this issue:(a) First, properly interpreted, the termination clause in the FinalAgreement did not provide a "clean" right of termination on threemonths' notice; rather the agreement could only be terminated once theparties had reached an agreement on alternative terms.11 There is a dispute as to whether Triastra enclosed its invoices for that period with its letter, or onlya schedule of them.(b) Second, even if the Final Agreement could be (unilaterally) terminatedon three months' notice, Taharoa's July Letter was not a clear andequivocal notice of termination. Rather, Triastra's position is that theletter sought to vary the Final Agreement's terms only.Interpretation of termination clause[66] For ease of reference, cl 3 of the Final Agreement is repeated here:3. GeneralWhile we both reserve the right to terminate this agreement prior tocompletion, on three months' notice, the arrangements outlined will continuein effect unless we mutually agree in writing to vary them.[67] Mr Gustafson submits that cl 3: is not termination of that contract as opposed to variation, unless there ismutual agreement in writing to that effect. Put another way, it is an arguableinterpretation of clause 3 that notice by itself under clause 3 does not terminateall rights and obligations under [the final agreement].[68] Mr Gustafson submits that in the context the parties were operating at the time,the above is a fair interpretation of the clause. He says the success fee was potentiallyworth $600,000 to Triastra, and if that right could otherwise be extinguished byTaharoa giving notice of termination three months and one day before the "completionpoint", it is understandable that Triastra would want to agree the terms of exit and toprotect the ability to claim the success fee.[69] I am unable to accept the interpretation advanced by Triastra. While cl 3 issomewhat inelegant in its terms, it is nevertheless clear in its meaning. I acceptTaharoa's submission that the word "While" before "we both reserve the right" makesit clear that the reference which follows, i.e. that the arrangements were to continue ineffect unless varied by mutual agreement, was subject to the right of termination. Inthis way, cl 3 simply combined two standard contractual provisions; one being theright to terminate on the giving of a certain period of notice; the other being thatagreement in writing was required in order to vary the agreement's terms.[70] I accordingly proceed on the basis the Final Agreement could be terminated onthe giving of three months' prior notice. This brings me to the second issue, namelywhether the July Letter was effective in doing so.Did the July Letter give three months' notice of termination?[71] Mr Gustafson submits that "termination, or the threat of it, was simply a meansto obtain the [CoM's] intended goal of a varied contract with Triastra more favourableto Taharoa". He says the July Letter was not a clear and ambiguous communicationof termination, given it invited negotiations on a varied arrangement, which was neveragreed. He says the Court ought not to consider the July Letter in isolation. Rather,and with reference to Morris v Baron and Sookraj v Samaroo, Mr Gustafson says thereal issue for determination is that if, on 19 October 2012, there was some informal adhoc arrangement in place, was that intended to rescind the Final Agreement, or merelyvary it?12 He says the text of the July Letter, coupled with the correspondence andarrangements in place as of 18 October 2012, evince an intention to vary the FinalAgreement only, rather than terminate it.[72] Despite Mr Gustafson's comprehensive submissions on behalf of Triastra, I donot accept these arguments.[73] Morris v Baron and Sookraj v Samaroo do not assist Triastra's case. Theyboth concern factual scenarios in which there was an existing contract (contract A),but the parties subsequently entered into a second contract (contract B). The issue ineach case was whether contract B merely varied contract A's terms, or operated torescind contract A altogether. Having referred to Morris v Baron & Co, Lord Scott inSookraj v Samaroo identified the determining factor as being the parties' intention atthe time the second agreement is made.13 He went on to state:The question whether in signing the 23 February 1981 agreement Mr Ramuteand Mr Samaroo intended to discharge the 3 November 1980 agreement is aquestion of fact to be decided by inference from the surrounding circumstancesand the contents of the two agreements.[Emphasis added]12 Morris v Baron & Co [1918] AC 1; Sookraj v Samaroo [2004] UKPC 50.13 At [21].[74] Mr Gustafson said that the highlighted text above permits evidence of theparties' subjective intentions, and criticised Taharoa for not calling Mr Willison to giveevidence on that point. He invited me to draw adverse inferences against Taharoa asa result.14 But Lord Scott's comments do not sanction the subjective inquiryMr Gustafson suggests. The effect one contractual arrangement has on an earliercontractual arrangement is an objective inquiry, as Lord Scott's observations makeclear. The same approach is to be taken to the proper interpretation and effect of anotice of termination; i.e. what meaning do the words used convey to a reasonableperson in the recipient's position?[75] Further, neither Morris v Baron nor Sookraj v Samaroo involved a party havingsought to terminate the first contract, but also invited negotiations on a new,replacement contract. This fact alone distinguishes those authorities from the presentcase.[76] Turning to the proper interpretation and effect of the July Letter itself,15 I amsatisfied it clearly communicated Taharoa's intention to give three months' notice oftermination of the Final Agreement. While it is correct Taharoa also expressed a desireto enter into negotiations on a new agreement, that does not displace the clearlyexpressed intention to terminate the Final Agreement.[77] Mr Gustafson submits that termination of the Final Agreement was notTaharoa's intended result in the negotiations with Triastra in the second half of 2012.But even if Taharoa's subjective intention was relevant, I disagree. Taharoa'scorrespondence over the second half of 2012 was clear that it viewed the FinalAgreement as having come to an end on 18 October 2012. There was no attempt byTaharoa to revoke its notice of termination. On the contrary, it regularly repeated itsposition that the Final Agreement had ceased to exist, hence the need to agree newterms with Triastra. Mr Gustafson is right that Taharoa did not intend to "get rid of"the consultants altogether. It needed them to help complete the wind farm project. Butit clearly expressed its intention to "get rid of" the Final Agreement.14 Perry Corporation v Ithaca (Custodians) Ltd [2004] 1 NZLR 731 at [153]-[155].15 The full text of which is set out at [30] above.[78] In terminating the Final Agreement, Taharoa left itself in a somewhatvulnerable position, given its reliance on Triastra. That was no doubt the reason why,despite the Final Agreement having been terminated and Triastra refusing to agree newterms, Taharoa continued to involve Triastra in the wind farm project and to pay forits services in doing so. The situation also gave rise to risk on Triastra's part; it nolonger had a formal contract with Taharoa, or any express agreement concerning thesuccess fee. Further, the basis upon which Taharoa could bring the arrangements toan end was at large.[79] I am accordingly satisfied Taharoa gave three months' notice of termination ofthe Final Agreement. The Final Agreement accordingly came to an end on 18 October2012.[80] This brings me to what I consider the more difficult issue, namely what werethe arrangements between Triastra and Taharoa after 18 October 2012, and how couldthey be brought to an end?The parties' relationship from 18 October 2012 to June 2013The parties' submissions[81] After 18 October 2012, there were essentially two "streams" of communicationbetween the parties; one in which Taharoa sought to engage in negotiations on newterms to replace the Final Agreement; and second, one in which Triastra continued toprovide consulting services to Taharoa and Taharoa continued to pay for them.[82] Mr Gustafson says that by the parties' conduct, an "ad hoc" contract came intoexistence on the following terms:(a) Triastra would provide consultancy services to Taharoa on the windfarm project;(b) Triastra would bill $16,000 per month, plus GST, for its services,invoiced in advance on the first of the month and on the 15th of thatmonth, and Taharoa would pay Triastra on that basis; and(c) Taharoa would pay Triastra a success fee as agreed in the FinalAgreement.[83] Taharoa, on the other hand, says no contractual arrangement came into effect,16and that by paying Triastra on a fortnightly basis, the ad hoc arrangement could validlybe brought to an end on two weeks' notice.Discussion[84] There is no doubt a contract can be inferred from the totality of parties'conduct, in particular words and documents that have passed between them, i.e. ratherthan searching for a discrete offer and acceptance in the traditional way. The formerapproach is sometimes referred to as the "global" or "objective" approach to contractformation.17 As the authors of The Law of Contract in New Zealand explain:the court is not concerned to discover the objective effect of individualcommunications between the parties but rather to ascertain whether thecumulative effect of these communications has led to a situation where anobjective bystander would consider that the parties must each have consideredthat some contractual nexus had been established.[85] I also agree with the authors' comments that what a court seeks to do in mostcases is to determine whether there is an appearance of mutual agreement.18[86] In the present case, it is clear there was no meeting of the minds on acomprehensive contractual agreement. But I am satisfied the parties' communicationsand, importantly, conduct, evidence the appearance of mutual agreement to a basiccontractual arrangement from 18 October 2012 to 12 December 2012, with thatarrangement then extended for an indefinite period. That basic contractualarrangement was limited, however, to terms that Triastra would continue to provideconsultancy services in relation to the potential wind farm project, and Taharoa wouldcontinue to pay for those services at a rate of $16,000 per month plus GST (plusservices). I do not consider the parties' divergent views on entry into new, formal and16 And presumably that if Triastra had provided services for which Taharoa did not pay, a claim inquantum meruit would have been available. Mr Gustafson confirmed that Triastra did not pursuesuch a claim (and none was pleaded in any event).17 Jeremy Finn, Stephen Todd and Matthew Barber The Law of Contract in New Zealand, (6th ed,LexisNexis, Wellington, 2018) at [3.2.1].18 At [3.3.1].comprehensive contractual arrangement prevented a shorter-term ad hoc contractualarrangement coming into effect between them. I will refer to this arrangement as the"Ad Hoc Contract".[87] I am not satisfied, however, that the Ad Hoc Contract included any terms as tothe success fee. It is simply not possible to infer from the parties' communications orconduct just what the agreement on a success fee would have been. Further, significantmatters such as that were plainly contemplated as being the subject of a written, formalagreement. In addition, given Taharoa's termination of the Final Agreement and itsclearly communicated position from October 2012 that it considered that agreementto have come to an end, it cannot be the case that a contractual arrangement whichmirrored the Final Agreement came into force as of 18 October 2012.19 WhileTriastra's present claim does not relate to the success fee, whether the Ad Hoc Contractcontained terms relating to the success fee is relevant to the basis upon which thatcontract could be terminated.[88] I accordingly turn to the next question for determination, namely whether theAd Hoc Contract was terminable on reasonable notice, and if so, what period of noticewas reasonable.Termination of the Ad Hoc ContractShould a term be implied that the Ad Hoc Contract was terminable on reasonablenotice?[89] There was no suggestion by either party that whatever contractual arrangementwas in place from 18 October 2012 was not terminable on reasonable notice. Rather,the key issue was what period of notice was reasonable in all the circumstances.[90] I agree that a term is properly implied into the Ad Hoc Contract that it couldbe terminated upon the giving of a reasonable period of notice. Particularly given theongoing correspondence and communications regarding a longer-term formalcontract, it would be quite wrong to impress upon the parties a mutual intention that19 See Transpower New Zealand Ltd v Meridian Energy Ltd [2001] 3 NZLR 700 (HC) (and inparticular, at [42], [43], [50]) in which a similar scenario arose).the Ad Hoc Contract would continue indefinitely, terminable only upon repudiation bythe other party.20 The implication of a provision for termination on reasonable noticeis also consistent with the contractual arrangements between the parties to that point,which all contained provisions for termination on the giving of a certain period ofnotice.What was a reasonable notice period?[91] It is well settled that the length of the notice period is to be determined in lightof the circumstances existing at the time notice of termination is given, rather than atthe time the contract was entered into.21 The leading New Zealand decision on how acourt should approach the determination of a reasonable notice period is the SupremeCourt's decision in Paper Reclaim Ltd v Aotearoa International Ltd.22[92] In Paper Reclaim, the parties had been in a contractual relationship for some16 years, at which point one party attempted to terminate it. The High Court held thatthe contract was terminable on eight years' notice. The Court of Appeal reduced thisto 12 months. The Supreme Court agreed with the Court of Appeal. In doing so,Blanchard J (delivering the judgment of the Court), noted that a reasonable period ofnotice does not need to be sufficient for the recipient to be able to build up a businesscomparable to that which it enjoyed under the contract or before the contract wasentered into. His Honour stated:23If that was what had been desired, Aotearoa should have taken steps at theoutset to obtain express contractual protection by the stipulation of a fixedterm or a fixed period of notice. Instead, by making an informal arrangementof a kind which can only sensibly be understood as being terminable onreasonable notice, it took the risk that it might be disadvantaged to some extentwhen and if notice were given. It is, in the words of McHugh JA in CrawfordFitting Co v Sydney Valve & Fitting Pty Ltd, quoted by the Court of Appeal, arisk which someone who enters into an agreement terminable at any time"inevitably runs". The courts do not effectively rewrite such contracts byrequiring an extended period of notice merely because the recipient of thenotice may be deprived of the advantages it was enjoying under the terminablecontract.20 Contract and Commercial Law Act 2017, s 36.21 Australian Blue Metal Ltd v Hughes [1963] AC 74 at 99.22 Paper Reclaim Ltd v Aotearoa International Ltd [2007] NZSC 26, [2007] 3 NZLR 169.23 At [8], footnotes omitted.[93] The Supreme Court also adopted and applied the following summary fromMcHugh JA's judgment in Crawford as to the principles applicable to determining areasonable period of notice:24The chief purpose of a notice for a reasonable period, therefore, is to enablethe parties to bring to an end in an orderly way a relationship which, exhypothesi, has existed for a reasonable period so that they will have areasonable opportunity to enter into alternative arrangements and to wind upmatters which arise out of their relationship. Matters to be wound up willinclude carrying out existing commitments, bringing current negotiations tofruition, and, where appropriate, obtaining the fruits of any extraordinaryexpenditure or effort carried out within the scope of the agreement. The linebetween ordinary recurrent expenditure and effort and extraordinaryexpenditure and effort will not always be easy to draw. But in general it willbe determined by what the parties would reasonably have contemplated wasextraordinary effort or expenditure.[94] On the facts before the Supreme Court, Blanchard J concluded as follows:25In our opinion, a period of 12 months would have given Aotearoa sufficientbreathing space in which to take stock of its situation, complete ongoing workunder the contract and to explore any opportunities which might exist for it inthe waste paper market or another line of business. For its part, Paper Reclaimwas entitled to bring the contract to an end after such a period of notice,thereby making a clean break from an arrangement that was no longersatisfactory to it. It could not be expected to have to remain in the relationshipfor a longer period simply because Aotearoa might be disadvantaged by itstermination.[95] I was taken by counsel to several other authorities in which a reasonable periodof notice has been considered.26 I have not found those other authorities of any realguidance; other than the principles set out by the Supreme Court in Paper ReclaimLtd, it is clear that each case will be extremely fact specific.[96] The parties in this case had been in a long-term relationship; Triastra had beenworking with Taharoa on a possible wind farm for some eight years, since 2005.Despite that longevity, however, they had agreed (in the Final Agreement) thatarrangements between them could come to an end on the giving of three months'24 Crawford Fitting Co v Sydney Valve & Fitting Pty Ltd (1988) 14 NSWLR 438 at 448 (CA).25 Paper Reclaim Ltd v Aotearoa International Ltd, above n 22, at [11].26 Including Andrews v Parceline Express Ltd [1994] 2 ERNZ 385; Corporate Transport Ltd vFletcher Challenge Forests Ltd HC Auckland CP358/98, 20 November 1998; SilhouetteInternational Gesellschaft mbH v OHL Corporation HC Auckland CP1090/90, 27 June 1991;Mercurius Ventures Ltd v Waitakere City Council [1996] 2 NZLR 495.notice. On an objective basis, the parties must have considered this a reasonableperiod within which to bring their relationship to an end.[97] What then, was the position by the time notice of termination was given in May2013? At that point, the Final Agreement had come to an end several months earlier,and the parties were operating under the Ad Hoc Contract – being an unwritten,informal arrangement. Both parties must, or ought, to have recognised the risks in thatcontext. In the absence of a formal, longer-term written contract, something less thanthree months' notice must be considered reasonable in the circumstances.[98] Also by that time, the main wind farm project was on hold (given the Goldwindissues), and Taharoa was just starting to investigate a scaled down version of it. This,in my view, represented a significant "re-set" of the parties' relationship. Nor wasthere any evidence of Triastra having invested heavily in any capital outlay orextraordinary expenditure in reliance on its contractual arrangements. And whileTriastra may have been relatively dependent on work from Taharoa (in recent yearshaving devoted four days per week to the project), both parties contemplated thatTriastra's involvement would reduce quite markedly after the end of 2012 (evenassuming the main project had gone ahead). Finally, but importantly, Triastra had beenforewarned as of July 2012 that its long-term contractual arrangements were notguaranteed to continue.[99] In all the circumstances, I am satisfied a relatively short notice period wasreasonable. But in the context of the parties' long-term relationship and the possibilityof a scaled down wind farm project continuing, two weeks' notice was too short. Inmy view, a period of about a month would have been sufficient to give Triastrasufficient time to "take stock", consider other opportunities in the market, and perhapsengage on the scaled down project to a sufficient degree to try to persuade Taharoathat it was viable, and Triastra should be involved on an ongoing basis. I also takeinto account Taharoa's own proposal of a one month notice period in the draft (shortterm) contract it provided to Triastra in October 2012.2727 See [39] above.[100] It follows that the two weeks' notice given by Taharoa in May 2013 wasinadequate. But the Supreme Court's judgment in Paper Reclaim makes it clear thatwhere a party gives notice of an intention to bring a contractual arrangement to an end,but does not give what the Court subsequently determines to have been the appropriateperiod of notice, damages for that breach will be assessed on the assumption theterminating party would have determined the contract at the earliest date at which itcould properly do so.28 In Paper Reclaim, where 12 months' notice was required,Blanchard J explained the application of this principle as follows:29So Paper Reclaim could have met its contractual obligations, and thereby fullyperformed the contract, by giving Aotearoa 12 months' notice of terminationand continuing to abide by its contract with Aotearoa during that time. Inaccordance with principle, therefore, damages for Paper Reclaim'srepudiatory breach of contract should be assessed on the assumption that, if ithad adhered to the contract, it would have chosen to give 12 months' noticeon 2 February 2001, and that the contract would have terminated upon expiryof that period.[101] Damages for Taharoa's repudiatory breach of the Ad Hoc Contract areaccordingly to be calculated on the basis of an assumption that, if it had adhered to theterms of the contract, it would have chosen to give one month's notice on 26 May2013, such that the contract would have terminated on 26 June 2013. As Taharoapurported to bring the Ad Hoc Contract to an end on 4 June 2013, Triastra is entitledto damages for the period 5 June 2013 to 26 June 2013 (a period of a little under threeweeks). Triastra's damages will therefore be relatively minor, being in the region of alittle over $8,000 (plus GST), plus a proportionate share of service charges.[102] Triastra's contractual claims for payment of $99,268 (fees for work it claimsto have performed from June 2013 to December 2013), and $55,200 for three monthsconsultancy services from 3 December 2013 to 3 March 2014, are accordinglydismissed.28 Paper Reclaim Ltd v Aotearoa International Ltd, above n 22, at [22]-[24], citing Gunton vRichmond-upon-Thames London Borough Council [1981] Ch 448 at 469.29 Paper Reclaim Ltd v Aotearoa International Ltd, above n 22, at [25].Triastra's estoppel claimLegal principles[103] There was no dispute between the parties as to the applicable legal principles.As the Court of Appeal stated in Wilson Parking New Zealand Ltd v Fanshawe 136Ltd, to successfully claim in estoppel, a plaintiff will need to demonstrate:30(a) the creation or encouragement of a belief or expectation (almost alwaysby way of a written or verbal representation);(b) reasonable reliance by it on that representation;(c) detriment suffered by it as a result of that reliance; and(d) that it would be unconscionable in all the circumstances for the partyagainst whom the estoppel is alleged to go back on its word.Discussion[104] I am wholly unpersuaded that Triastra has made out its claim on this cause ofaction. It has failed to demonstrate any written or verbal representations after June2013 to the effect that it should keep working on the project (and, inherent in its claim,that it would get paid its usual rates for doing so), or that it was reasonable for it torely on any such representations in any event.[105] Mr Poulopoulos gave evidence of what he said were many discussions andtelephone calls between himself and certain members of Taharoa's CoM, which hesays gave him the "green light" to continue work on the (scaled down) wind farmproject. His evidence was, however, lacking in any detail or specificity as to the actualinstructions given, or, importantly, that it was made clear to him by those giving theinstructions that Triastra could be expected to be paid $16,000 per month plus GSTfor doing so.30 Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] NZCA 407, [2014] 3 NZLR 567 at[44].[106] Triastra's statement of claim alleges that the instructions given were tocontinue to work in Auckland, providing consultancy service to produce a scaled downversion of the wind farm project, and to try and locate a new investor or purchaser forthe wind farm. It is alleged that such instructions came from Peter Bowker, Pet Martinand John Forbes.[107] As noted earlier, both Mr Bowker and Ms Martin are deceased. For the reasonsset out at [14] above, I am not prepared to rely on Mr Poulopoulos' evidence alone asto what he says they told him. Further, Mr Forbes strongly denied givingMr Poulopoulos any such instructions. He accepted he had encounteredMr Poulopoulos from time-to-time after June 2013, and that Mr Poulopoulos raisedwith him the issue of the wind farm project. Mr Forbes said that "it was[Mr Poulopoulos'] passion, of course he bought that subject up whenever he could, ofcourse". He also acknowledged meeting with Mr Poulopoulos during 2013 anddiscussing the wind farm project. But I consider it wrong for Mr Poulopoulos to seekto characterise that as some kind of formal meeting in which Mr Forbes instructedMr Poulopoulos on behalf of Taharoa to continue work on the wind farm project.Mr Forbes said the following in relation to that meeting:Q. Mr Poulopoulos has given evidence, and this is at 8(d), that there wasa face to face meeting between you, him, and Peter Bowker.A. That's correct.Q. Do you recall that?A. Yes I do. I was in Peter – I had a meeting with Peter Bowker on apersonal matter, personal matter that involved myself, nothing to dowith C Block, it was actually a personal request I asked of Peter to dofor me which as a family member, a family friend, he did. And whileI was in the office, he invited, he asked if he can invite Adam in, Icouldn't see anything wrong with that at that stage.Q. And that was because – was Adam at that stage still working in theoffice of Peter Bowker?A. Well he was at the office, at that stage. Whether he was, what he wasdoing I'm not too sure but he was at the office and I know that he wasstill pursuing the ones of the wind farm to do with that second,investigating that second option. Not the Goldwind one, theGoldwind one was down the road.Q. So he was still investigating the second option?A. I guess he was, 'cos I think that is why Peter asked him to come in'cos he was, 'cos they were trying, he was trying to drum up interestwith us on the Committee, the board, individually.Q. So did you have – you discussed the second option?A. Well I can't remember exactly what was said, obviously it was, youknow, it was about that subject. But what was said, I really don'tknow, I can't remember.[108] I have no reason to doubt Mr Forbes' evidence, or his characterisation of thesteps being taken by Mr Poulopoulos for Triastra in the second half of 2013. It has thering of truth about it. I also have no reason to doubt that Mr Poulopoulos was incontact from time-to-time with members of the CoM in the second half of 2013. Butmy clear impression from the evidence is that Mr Poulopoulos was indeed trying to"drum up" support from CoM members to continue the wind farm project, and thatTriastra should be involved going forward. This is also consistent withMr Poulopoulos' own evidence that some CoM members told him in the second halfof 2013 to "be patient", while the CoM decided on the scale and future of the windfarm. Mr Poulopoulos no doubt hoped that when a new CEO was appointed, he wouldbe able to persuade him or her to pick up the wind farm project again, with Triastra'sassistance. But as noted at [62] above, on the new CEO's recommendation, the CoMresolved in September 2013 to abandon the wind farm project altogether.[109] Accordingly, while there was nothing wrong with Triastra proactively takingsteps in the second half of 2013 to seek to preserve its position, the evidence falls wellshort of demonstrating representations made to it to continue working on the project,and that it would continue to be paid for any work it might have done. In thecircumstances then existing, it would have been wholly unreasonable for Triastra tohave believed it would continue to be paid $16,000 plus GST per month by Taharoaafter June 2013.[110] Nor do I consider Triastra genuinely believed that at the time in any event.Triastra had clearly taken care to invoice Taharoa for its services on a regular twice-monthly basis. But from 4 June to 6 November 2013, Triastra did not issue anyinvoices to Taharoa. Mr Poulopoulos' explanation for this (because he was not atTaharoa's Hamilton offices, and thus not a position to hand deliver the invoices, whichwas necessary to ensure prompt payment) was unconvincing. Obviously withoutdelivering an invoice, there was no basis upon which to be paid, promptly or otherwise.[111] Further, I am far from satisfied Triastra carried out any significant work on thewind farm project in the second half of 2013 in any event. There was no cleardocumentary evidence of the work Triastra is said to have done during this period. Inaddition, Mr Poulopoulos was a prolific note-taker of his engagements on the windfarm project. His diary notes were produced in evidence, and showed that from atleast 2010, he had created about a page of diary notes per working day each year. Yetafter June 2013, there are only two very brief notes connected to the wind farm project.Again, Mr Poulopoulos' explanation for this was unconvincing. He said that while hedid take notes, this was only in relation to relevant matters, and some stages of theproject gave rise to more notes than others. But for a prolific note-taker such asMr Poulopoulos, the almost complete absence of any notes after June 2013 isinconsistent with Triastra having carried out substantial work on the project duringthat period.[112] For these reasons, Triastra's estoppel claim must also fail.Result and next steps[113] I have found that Taharoa breached the Ad Hoc Contract by giving two weeks'notice of termination in May 2013, rather than one month's notice. While damagesfor that breach will obviously be minimal, Triastra is nevertheless entitled to damages.[114] I have dismissed Triastra's claim in estoppel.[115] I do not propose to calculate in this judgment the damages arising on Triastra'scontract claim. The parties ought to be given the opportunity first to calculate theamount, based on those principles set out at [100]-[101] above. With input from seniorand responsible counsel, the amount should be able to be readily agreed. Further,given the limited amount in issue, and the need to avoid further unnecessary legal costsbeing incurred, the parties will no doubt take a pragmatic approach to doing so.[116] Should, however, the parties be unable to agree on the quantification ofdamages, Triastra may file a memorandum setting out its approach and quantificationwithin 20 working days of the date of this judgment. Taharoa may then file amemorandum in response within a further 10 working days. Unless either partyrequests a hearing, I will then proceed to finalise the quantum of damages on thepapers.Costs[117] There is also the question of costs. The parties are encouraged to seek to agreecosts. At least on the basis of the materials presently before the Court, and in light ofthe principles set out in decisions such as Water Guard NZ Ltd v Midgen EnterprisesLtd, an initial and non-binding view is that an appropriate outcome may be that costsare to lie where they fall.31[118] If the parties cannot agree costs, then the above memoranda are also to addresseach party's position on costs.[119] No memorandum on damages and/or costs is to be longer than 10 pages inlength.____________________Fitzgerald J31 Water Guard NZ Ltd v Midgen Enterprises Ltd [2017] NZCA 36.