TVBI COMPANY LTD v WORLD TV LTD [2019] NZHC 246

TVBI COMPANY LTD v WORLD TV LTD [2019] NZHC 246 [25 February 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2017-404-2935[2019] NZHC 246BETWEEN TVBI COMPANY LIMITEDPlaintiffAND WORLD TV LIMITEDDefendantHearing:Furthersubmissions:2 July 201825 September 2018 and 3 October 2018Appearances S Wroe and E Hong for the PlaintiffM Keall for the DefendantJudgment: 25 February 2019RESERVED JUDGMENT OF ASSOCIATE JUDGE SMITHThis judgment was delivered by me on 25 February 2019 at 2.00pm,pursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors / Counsel:Prestige Lawyers, AucklandS Wroe, AucklandFyers Joyce, AucklandM Keall, AucklandTABLE OF CONTENTSBackground [5]TVBI's claim and World TV's defence [11]TVBI's reply [22]The need for leave to apply for summary judgment [27]Applications for summary judgment – legal principles [34]The evidence for TVBI [38]Ms Wan [38]Supplementary affidavit by Ms Wan [40]Mr Ho [43]Ms Wan's affidavit in opposition to World TV's third party joinder application [60]The evidence for World TV [67]First affidavit by Mr Gary Chang [68]Ms Shilei Wu [100]Jody Chang [107]Second affidavit by Mr Gary Chang [113]The issues [118]Issue (1) – Should leave be granted to TVBI to apply for summaryjudgment? [120]Issue (2) – Is it reasonably arguable for World TV that Mr Ho did not haveauthority to bind World TV when he signed the 2016 Agreements? [124]Ms Wroe's submissions [125]Mr Keall's submissions [142]Mr Keall's additional submissions on the Bishop Warden case [151]Ms Wroe's reply submissions on the Bishop Warden case [156]Discussion and conclusions on Issue (2) [158]Issue (3) – If the 2016 Agreements are binding on World TV, has TVBIsufficiently proved that World TV has no arguable defence as to the amountclaimed? [208]Ms Wroe's submissions [208]Mr Keall's submissions [210]Discussion and conclusion on Issue (3) [212]Issue (4) — should the Court exercise its discretion against the entry ofsummary judgment? [217]Result [218][1] The plaintiff (TVBI) seeks leave to apply for summary judgment, and asks foran order for summary judgment on its claims. Those applications are opposed by thedefendant (World TV).[2] World TV also applied for leave to join its former chief executive, Mr HenrySiu Shun Ho (Mr Ho), as a third party in the proceeding, on the basis that Mr Ho hadpurported to enter into certain contracts on World TV's behalf when he had noauthority to do so. The third party joinder application was argued with the summaryjudgment applications, and I reserved my decision on all three applications.[3] Mr Keall has since advised that Mr Ho was adjudicated bankrupt on 24 August2018. In those circumstances World TV has abandoned its application to join Mr Hoas a third party.[4] I now give judgment on TVBI's summary judgment applications.Background[5] The parties began a commercial relationship in or around 2000, when WorldTV offered SKY subscription services to subscribers in New Zealand. Mr Ho, whowas then a director of World TV and its Chief Executive Officer and chairman, wasresponsible for purchasing broadcasting contents, and managing the relationship withTVBI.[6] On 24 July 2012, Mr Ho negotiated three agreements with TVBI, grantingWorld TV the right to broadcast TVBI's content free-to-air. The three agreements(collectively, "the 2012 Agreements") comprised a Programme Licence Agreement, aMaterials Supply Agreement, and a Channels Supply Agreement.[7] The parties signed three supplemental agreements on 27 May 2015, withMr Ho again negotiating and signing the agreements on World TV's behalf.[8] On 15 August 2015, the 2012 Agreements and the 2015 supplementalagreements expired.[9] On 7 September 2016, three further agreements were signed (collectively, "the2016 Agreements").[10] TVBI says in its statement of claim that the 2016 Agreements included thefollowing terms:(a) TVBI to license certain TVBI programmes to World TV for broadcast,transmission and distribution on designated World TV channels;(b) TVBI to carry designated World TV channels on TVBI's OTT ("overthe top" streaming) services;(c) World TV to act as an authorised agent to sell subscription packagesoffered by TVBI;(d) World TV to pay the respective fees listed in the 2016 Agreements. Thefees comprised a monthly payment of carriage fee, customer servicesupport fee and marketing fee, monthly transmission fees, monthlylicence fees, and a yearly payment reflecting agreed revenue sharingbetween the parties;(e) any fees payable by World TV not paid within 14 days after due datewould accrue interest at the rate of 1.5 per cent per month, compoundedmonthly, from due date until payment;(f) TVBI was to arrange delivery of the OTT boxes to World TV at WorldTV's cost; and(g) World TV was to reimburse TVBI for any expenditure paid by it onbehalf of World TV.TVBI's claim and World TV's defence[11] TVBI alleges that although it has performed all of its obligations, andinstructed its representative to pay for certain materials delivery costs payable byWorld TV under the 2016 Agreements, World TV has failed to pay fees and has failedto reimburse TVBI for the costs of delivering the materials.[12] TVBI made demand on World TV for the sum of NZ$878,297 on 21 July 2017.It says that Mr Ho then made several payment proposals, purportedly acting in hiscapacity as a director or World TV. TVBI says that as a result of the settlementnegotiations that followed, World TV agreed to settle one third of the outstandingamount by 10 September 2017. That arrangement was confirmed by letter dated6 September 2017. By then, it says that the total outstanding amount wasNZ$1,006,897. TVBI demanded payment of NZ$335,632 by no later than10 September 2017.[13] TVBI says that World TV failed to make the agreed payment by 10 September2017. On 3 October 2017, it gave notice that the 2016 Agreements would beterminated on 5 October 2017 as a result of World TV's failure to remedy the allegedbreaches.[14] At the hearing, Ms Wroe calculated TVBI's claim at $1,342,907.22, made upas follows:(a) Outstanding fees and disbursements $1,012,471.00(b) Interest at the contractual rate of 1.5 per centcompounded monthly on the principal sum,calculated to 2 July 2018$295,173.78(c) Pre-litigation costs, claimable by TVBI undercl. 16(b)(xi) of the 2016 Agreements$8,218.50(d) Costs (on a 2B basis) and disbursements $27,043.94[15] In addition, TVBI asks for an inquiry into further damages arising from WorldTV's alleged breach of contract.[16] In its statement of defence, World TV denies that it entered into the 2016Agreements. It says that Mr Ho lacked actual or ostensible authority to enter into the2016 Agreements on its behalf, and TVBI knew or ought to have known that that wasthe case. It says that the board of World TV did not become aware of the terms of the2016 Agreements until Mr Ho ceased operating as its Chief Executive Officer inmid-2017.[17] World TV admits that it has not paid the various fees and disbursementsclaimed by TVBI, and contends that it has no obligation to pay those amounts. In thealternative, it says that it has insufficient knowledge and particulars of the extent towhich the fees and disbursements claimed relate to the alleged delivery of materialsby TVBI in relation to the 2016 Agreements, or the extent of the alleged deliveries. Itputs TVBI to proof in relation to those allegations.[18] World TV also denies that Mr Ho had any authority to negotiate the settlementalleged by TVBI. TVBI knew or ought to have known that Mr Ho ceased being theCEO of World TV in mid-2017, and ceased being a director of World TV on 12 July2017. It says that it only learned of the purported settlement arrangements when itreceived a letter from TVBI on 6 September 2017. It denies that it authorised orapproved any of the 2016 Agreements, or any settlement.[19] As for TVBI's purported cancellation of the 2016 Agreements, World TV saysthat the termination notice was of no consequence in circumstances where there wereno valid agreements to terminate. But if (contrary to that contention) valid contractsbetween TVBI and World TV did exist in early October 2017, it accepts that TVBI'sletter of 3 October 2017 was effective to terminate the 2016 Agreements, with effectfrom 5 October 2017.[20] World TV pleads the following particulars in support of its contention thatTVBI knew or ought to have known that Mr Ho did not have the requisite authority toenter into the 2016 Agreements:(a) At material times, it was objectively inconceivable that a majority ofWorld TV's directors or shareholders would have approved the terms ofthe 2016 Agreements. Those terms were patently uneconomic forWorld TV, in that they required it to pay onerous fixed monthlypayments for the duration of a three-year term for rights that entailedminimal commercial value.(b) The contents of the 2016 Agreements were in the nature of a majortransaction requiring board approval and/or a special resolution of theshareholders of World TV.(c) The signing of the 2016 Agreements was not preceded by negotiationsinvolving World TV's board or any of its shareholders, other thanMr Ho. There were no communications of any kind between TVBI andWorld TV's Board.(d) There is no evidence that at any time World TV's board or any of itsshareholders had approved the 2016 Agreements by way of minute,special resolution, or otherwise.[21] World TV says that similar considerations apply to the purported settlementnegotiations in or around July and August 2017: there were no negotiations involvingthe board of World TV or any of its shareholders (other than Mr Ho), and indeed nocommunications between TVBI and anyone but Mr Ho.TVBI's reply[22] TVBI repeated its assertion that Mr Ho had actual or ostensible authority toenter into the 2016 Agreements on behalf of World TV. It referred to the history ofdealings between the parties going back more than 10 years, in which multipleagreements had been entered into, with Mr Ho representing World TV. It said that the2016 Agreements were entered into in the usual course of dealing between the parties,and that it had a reasonable basis to believe that Mr Ho had actual authority to enterinto the 2016 Agreements: he was the CEO and a director of World TV, and therelevant dealings which he conducted fell within the usual authority of those roles.[23] TVBI said that Mr Ho used World TV's email at all material times whencommunicating with it. Also, in performing its obligations under the 2016Agreements, it communicated with other staff members at World TV who did not raiseany issue about the existence or validity of the 2016 Agreements.[24] TVBI said that its programmes were broadcast on World TV's designatedchannels, and advertised on World TV's website. TVBI arranged delivery of the OTTboxes to World TV, and World TV duly accepted delivery. There were alsocommunications between TVBI and World TV's accounts department in relation to thepayments to be made by World TV under the 2016 Agreements. The validity of the2016 Agreements was not disputed until the commencement of this proceeding.[25] With reference to the negotiations with Mr Ho in July and August 2017, TVBIsaid that it was never aware during the negotiations that Mr Ho had ceased being CEOand a director of World TV.[26] TVBI generally denied the affirmative allegations in World TV's statement ofdefence.The need for leave to apply for summary judgment[27] Rule 12.4(2) of the High Court Rules 2016 provides that an application by aplaintiff for summary judgment may be made at the time the statement of claim isserved on the defendant, or later with the leave of the Court. In this case, TVBI didnot apply for summary judgment when it filed its claim, so it is necessary for it toobtain leave.[28] The learned authors of McGechan on Procedure note that no guidelines havebeen laid down for granting leave under r 12.4(2). They note that the question isclearly discretionary, and that the onus is on the party applying for leave to show whyit should be granted. They suggest that if the absence of a defence has only becomeapparent after discovery or the exchange of briefs, that might well be an adequatereason for granting leave. They note that in many cases the leave question will bebound up with the merits, and that it may be difficult to determine the leave questionwithout some consideration of the merits.11 McGechan on Procedure (looseleaf ed, Thomson Reuters), at HR 12.4.01A.[29] The Court of Appeal has held that the granting of leave under r 12.4(2) shouldnot be treated as a formality, and that the leave application should be heard as aseparate application.2[30] In her submissions, Ms Wroe advised that no application for summaryjudgment was made at the outset because it was not then clear exactly what WorldTV's position was in relation to the outstanding fees. Several concerns had been raisedin discussions before the proceeding commenced, without any clarity as to World TV'sreasons for refusing to pay. The prospect of a successful summary judgmentapplication only became apparent after World TV's position had been clarified in theproceeding (including by the filing of its statement of defence). TVBI concluded fromWorld TV's documents that the principal issue (Mr Ho's authority to bind World TV)was capable of being dealt with on a summary judgment application.[31] TVBI has also obtained further evidence. It obtained an affidavit from Mr Ho,in which he has said that he had authority to enter into the 2016 Agreements on behalfof World TV. The affidavit covers the procedures which took place before the 2016Agreements were signed, and World TV's knowledge of its obligations to pay theoutstanding fees. It also asserts that Mr Ho had authority to negotiate the settlementin 2017.[32] Ms Wroe submitted that, given the further evidence TVBI has obtained, thereis no real question to be tried, and the merits of TVBI's claim are clear: there is no realdefence.[33] In its notice of opposition, World TV opposed both the application for leave toapply for summary judgment, and the application for summary judgment itself, on thegrounds set out in World TV's statement of defence and in its various affidavits filedin opposition to TVBI's applications.Applications for summary judgment – legal principles[34] Rule 12.2 of the High Court Rules materially provides:2 Stephens v Barron [2014] NZCA 82.12.2 Judgment when there is no defence or when no cause of action cansucceed(1) The court may give judgment against a defendant if the plaintiffsatisfies the court that the defendant has no defence to a cause ofaction in the statement of claim or to a particular part of any suchcause of action.[35] The proper approach to be taken to such applications was considered by theCourt of Appeal in Krukziener v Hanover Finance Ltd, where the Court said:3The question on a summary judgment application is whether the defendant hasno defence to the claim; that is, that there is no real question to be tried:Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). The Court must be leftwithout any real doubt or uncertainty. The onus is on the plaintiff, but whereits evidence is sufficient to show there is no defence, the defendant will haveto respond if the application is to be defeated: MacLean v Stewart (1997) 11PRNZ 66 (CA). The Court will not normally resolve material conflicts ofevidence or assess the credibility of deponents. But it need not acceptuncritically evidence that is inherently lacking in credibility, as for examplewhere the evidence is inconsistent with undisputed contemporary documentsor other statements by the same deponent, or is inherently improbable: EngMee Young v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court'sassessment of the evidence is a matter of judgment. The Court may take arobust and realistic approach where the facts warrant it: Bilbie Dymock CorpLtd v Patel (1987) 1 PRNZ 84 (CA).[36] The Supreme Court has held fairly recently that the fact that the Court may berequired to determine questions of law does not preclude summary judgment. InZurich Australian Insurance Ltd v Cognition Education Ltd, the Court said:4 in other situations falling within the broad test (that is, the "no arguabledefence" test applied on summary judgment), there will be what can properlybe described as "disputes" even though they are ultimately capable of beingdetermined by a summary process.[37] To explain, it has been well established in New Zealand sincePemberton v Chappell that a court can properly determine questions of law ona summary judgment application, and that this includes issues of contractualinterpretation. The Court of Appeal has accepted that such a determinationmay be made even though the question of law is difficult and requiresargument (including reference to authority). In International Ore & FertilizerCorp v East Coast Fertiliser Co Ltd, a case under the old bill writ procedure,Cooke P, by analogy with the summary judgment procedure which had justbeen introduced in New Zealand, said that where the facts were adequately3 Krukziener v Hanover Finance Ltd [2008] NZCA 187 at [26].4 Zurich Australian Insurance Ltd v Cognition Education Ltd [2014] NZSC 188, [2015] 1 NZLR383 (footnotes omitted).ascertained and the Court could be confident that the point at issue turned onpure questions of law or interpretation, it should be prepared "to determine,on adequate argument, even difficult legal questions". Similarly, in JowadaHoldings Ltd v Cullen Investments Ltd, McGrath J, delivering the judgment ofthe Court of Appeal, said that a court should be prepared to grant summaryjudgment "even if legal arguments must be ruled on to reach the decision".[37] In the recent judgment of Associate Judge Osborne in McGuire v New ZealandLaw Society, the Court noted that it will not attempt to resolve genuine conflicts ofevidence or assess the credibility of statements in affidavits on a summary judgmentapplication, but it will not hesitate to decide questions of law where appropriate.5 Inassessing a defence, the Court will look for appropriate particulars and a reasonablelevel of detailed substantiation – the defendant is under an obligation to lay a properfoundation for the defence in the affidavits filed in support of its notice of opposition.The Court will take a robust approach, and enter judgment even where there may bedifferences on certain factual matters, as long as the lack of a tenable defence is plainon the material before the Court.6The evidence for TVBIMs Wan[38] The principal affidavit in support of the summary applications was that of PoYee Karen Wan, assistant general counsel at TVBI.[39] Ms Wan provided copies of the 2016 Agreements, and also provided copies ofcorrespondence between TVBI and World TV in the period between 7 July 2017 and12 October 2017. She confirmed that, despite repeated attempts to seek payment,World TV has not paid the sum claimed.Supplementary affidavit by Ms Wan[40] Ms Wan omitted from her February 2018 affidavit certain statements that arerequired of a party applying for summary judgment, namely a statement verifying the5 McGuire v New Zealand Law Society [2018] NZHC 983 at [34].6 At [34].statement of claim, a statement that the plaintiff believes the defendant has no defenceto the plaintiff's claim, and statements setting out the grounds for that belief.7[41] When Ms Wroe was instructed for TVBI, she filed a memorandum dated14 June 2018 seeking leave to file a further affidavit correcting the deficiencies. Withthe memorandum, she filed a further affidavit by Ms Wan verifying the contents ofTVBI's statement of claim and deposing to TVBI's belief that World TV has no defenceto its claims. Ms Wan's supplementary affidavit then set out the grounds for that beliefas follows:(a) Mr Ho signed the 2016 Agreements as Chief Executive Officer onbehalf of World TV.(b) Mr Ho was a director of World TV when he signed the 2016Agreements.(c) TVBI had a long-standing business relationship with World TV.(d) TVBI had negotiated and dealt with Mr Ho over a 16 year period up tothe date the 2016 Agreements were signed.(e) TVBI had no reason to believe or suspect that Mr Ho was notauthorised to enter into the 2016 Agreements on TVBI's behalf.(f) TVBI performed all its obligations under the 2016 Agreements.(g) In breach of the 2016 Agreements, World TV failed to pay the overduefees and disbursements as claimed in TVBI's claim.[42] Mr Keall did not consent to the leave sought by TVBI to file the supplementaryaffidavit. However, it seemed to me that the deficiencies in the original affidavit wentonly to matters of form, and that World TV could not contend that it would be7 High Court Rules 2016, r 12.4(5)(b).prejudiced if the affidavit were accepted. At the hearing on 2 July 2018, I accordinglygranted leave to TVBI to file Ms Wan's supplementary affidavit.Mr Ho[43] Mr Ho became a director of World TV in 1998. He said that during his time atWorld TV he was tasked with the responsibility of purchasing broadcasting contentfrom TVBI, and managing World TV's relationship with TVBI as a business partner.He said that World TV's board of directors was fully aware of this.[44] He confirmed that he entered into the 2012 Agreements on behalf of World TV,and also the supplemental agreements entered into in May 2015.[45] Mr Ho said that the 2016 Agreements were the direct result of World TV'smove from using the SKY digital platform to using TVBI's OTT platform, in March2016. He said that was a major change for World TV, and public announcements weremade about it.[46] Mr Ho produced copies of a media kit issued in March 2016 by AsianCommunications Media House Limited (ACom), which described ACom as "TheMarketing Arm for [World TV]". The media kit described World TV as providingAsian immigrants with high-quality programmes through a multi-dimensional mediamix of radio and tv broadcasts, the internet, and point-of-purchase digital screens.There were also locally produced news and public affairs programmes, which weresaid to serve as a bridge between New Zealand mainstream society and Asiancommunities.[47] The media kit advised that World TV had moved its pay tv channels from SKYdigital to TVBI's OTT platform, commencing 1 March 2016. The new technologywould offer more channels to World TV's subscribers.[48] Mr Ho said that the 2016 Agreements, when signed, were kept in World TV'saccounts department, where other directors had access to them. He said that, giventhe fact that World TV broadcast content created by TVBI, and the longstandingrelationship between the two companies, the management of World TV was well awareof the existence of the 2016 Agreements, and the payment obligations thereunder.[49] In support of his evidence that World TV's management was aware of itspayment obligations under the 2016 Agreements, Mr Ho produced a copy of an emaildated 12 September 2016 sent to TVBI by Shilei Wu of World TV's financedepartment. The email advised TVBI that World TV would be paying $58,300 thatday, for services provided in March of 2016. The email described the payment as"Instalment No 1", corresponding to four identified invoices from TVBI. Mr Hoconfirmed that the payment referred to in the email was made.[50] Mr Ho said that World TV had some cashflow problems, and was not able tomake timely payments under the 2016 Agreements. Because of the longstandingrelationship between the companies, TVBI did not immediately threaten to terminatethe 2016 Agreements, but it sent regular requests for payment of the outstandingamounts. The demands became more regular and intense from April 2017. Mr Hosaid that World TV was aware of these demands at the time.[51] TVBI made a formal written demand for payment on 7 July 2017.[52] Mr Ho confirmed that he ceased acting as a director of World TV, and as WorldTV's CEO, on 12 July 2017. But given his longstanding relationship with TVBI, andgiven the fact that he still held nearly 15 per cent of World TV's shares, World TV'sMr Gary Chang asked him to help negotiate a settlement of TVBI's fees claim.8[53] Mr Ho's evidence was that, having received instructions from Mr Gary Chang,he made a payment proposal to TVBI on behalf of World TV on 20 July 2017. Hesent an email that day to Mandy Yip at TVBI, advising that he was organising directors'guarantees, and that he would then contact the bank to arrange drawdown of a loanwhich would cover half of the amount outstanding. He proposed that, after that,8 Mr Chang's evidence is described later in this judgment. He deposed that he was one of theoriginal founding directors of World TV in 1998, but ceased being a director (and Chief OperationsOfficer) on 15 April 2016. He was reappointed as Chief Operations Officer in October 2017, butwas not a director of World TV in July – August of 2017, and is not currently a director.World TV would carry on to pay the balance on a monthly basis of $53,000, until thefull amount was paid.[54] TVBI rejected the proposal by email dated 21 July 2017. TVBI's concernswere that there was no payment date commitment in Mr Ho's proposal, and that averbal proposal Mr Ho had made earlier for payment of 50 per cent of the debt by30 August was not acceptable to TVBI.[55] Mr Ho made another proposal on 25 July 2017. Again, he said that he actedon instructions from Mr Gary Chang. Mr Ho's 25 July proposal involved clearing theamount owing by instalments of various amounts to be paid on or before 28 July [sic]2018, 11 August 2017, 31 August 2017, and 30 September 2017. Thereafter,$116,600 would be paid on or before the end of every month until the debt wascleared.[56] TVBI responded with a counter-proposal on 30 August 2017. It is apparentfrom Ms Yip's email of that date that there had been some communications (includingtelephone discussions) since Mr Ho's 25 July email. Ms Yip's 30 August emailattached a proposal for settlement of the outstanding amount claimed by TVBI, andmajor terms for a new contract between the parties. The outstanding amount as at30 September 2017 was said to be NZ$1,003,897, and TVBI proposed payment of thatamount by three equal instalments, on 10 September 2017, 10 November 2017, and10 January 2018.[57] Mr Ho's evidence was that he told Mr Gary Chang about this counter-proposal,and Mr Gary Chang initially agreed to it. However, about 10 days later Mr Chang toldhim that World TV would not be able to go forward with the payment plan. Mr Hosaid that Mr Gary Chang asked him to speak to TVBI about that, and Mr Ho said thatwould be difficult, as TVBI had already approved the payment plan. Mr Ho said thathe asked Mr Chang about when World TV would be able to make the first paymentand Mr Chang said that it might be able to make the first payment in October 2017.[58] Mr Ho said that he pressed Mr Gary Chang for an exact first payment date, butMr Chang refused to commit to any firm date. He said that he conveyed Mr Chang'sposition to TVBI, but TVBI rejected it.[59] After that, Mr Ho said that he was no longer engaged in any negotiations onbehalf of World TV. Mr Gary Chang took over the negotiating.Ms Wan's affidavit in opposition to World TV's third party joinder application[60] Ms Wan said that TVBI did agree to provide a price concession to World TV,considering the latter company's financial difficulties in or around 2015, and havingregard to the companies' long-standing relationship. Ms Wan described thatconcession as a one-off, which was never intended to affect future contracts betweenthe parties. The concession was reflected in the supplementary agreements signed inMay of 2015, and Ms Wan said it had little or no impact on the negotiations forsubsequent contracts between the parties because the negotiations in September 2016involved a new business model.[61] Ms Wan produced with her affidavit copies of email correspondence betweenthe parties in June 2016. In an email dated 6 June 2016, Ms Reginau Yu of TVBI'sfinance department told Mr Ho and Ms Nancy Cao (an assistant accountant at WorldTV before Shilei Wu took over that role in August 2016) that the amount for WorldTV to settle for the period December 2015 to May 2016 was $575,628. At the date ofthe email, Ms Yu said that TVBI had only received $275,788. Payment of the balancewas sought immediately.[62] In a second email from Ms Yu dated 14 June 2016, Ms Yu referred Mr Ho andMs Cao to her email of 6 June 2016 and noted that no payment or response had beenreceived. She asked for advice of payment status by return email.[63] There was a further email dated 22 June 2016 from Mr Nic Cheung of TVBIto Ms Cao and Mr Ho, which referred to a meeting with Mr Ho and advice from himthat a payment would be made within the week. Ms Cao replied on 23 June 2016advising that two payments had been made to TVBI that day.[64] Ms Wan also said that between September 2016 and 7 July 2017, TVBI madetelephone calls to Mr Ho demanding payments. Her evidence was that there were alsoregular operations meetings between the companies, held by telephone conference.She said that, in the course of those meetings, TVBI made demand for payment, butWorld TV continuously sought extensions of time to make payment. Those extensionswere granted (because of the long-standing business relationship between the partiesand because World TV had made partial payments following the extensions), andTVBI did not see the need to make a formal demand before it made the 7 July 2017demand.[65] Finally, Ms Wan referred to a letter dated 14 November 2017 from TVBI'ssolicitors to World TV's solicitors. The letter denied the existence of any "sideagreements" between TVBI and Mr Ho, and specifically said that TVBI never enteredinto any agreement with World TV or Mr Ho regarding the payment of licensing feesand facility fees only when World TV made a profit. The solicitors suggested that thatcontention (later referred to in Ms Wu's evidence) was an internal matter betweenWorld TV and Mr Ho. They said that TVBI had never entered into any additionalagreements contrary to the 2016 Agreements.[66] On the amount payable by World TV, TVBI's solicitors said that they couldprovide copies of invoices supporting the outstanding claims, but an itemisedaccounting of the amount owed would not be provided. They referred to the threelicence agreements constituting the 2016 Agreements, which provided comprehensivedetails of the fees payable.The evidence for World TV[67] There were four affidavits in support of World TV's opposition, two byMr Gary Chang, one by Ms Shilei Wu, and one by Mr Jody Su-Hao Chang (a directorof World TV from 12 July 2017).First affidavit by Mr Gary Chang[68] Mr Chang set out details of the shareholding of World TV. At the date of hisaffidavit, 18.48 per cent of World TV was held by Fu-nu Tsai, and Mr Ho held14.46 per cent. Mr Chang held the next largest parcel of shares, at 12.15 per cent.There were nine other shareholders holding various smaller percentages of the totalshareholding.[69] Mr Chang said that there are four current directors of World TV, includingJody Chang. A table produced by Mr Gary Chang shows that a number of directorseither resigned or were removed on 15 April 2016, and others resigned or wereremoved on 12 July 2017. In addition to Mr Ho, Paul Liu and Mr Yau ceased beingdirectors on 12 July 2017.[70] Mr Chang referred to World TV's operations in New Zealand. From thebeginning, it has purchased and broadcast in New Zealand Chinese language contentfrom broadcasters on the Chinese mainland. At the time of his affidavit, the televisedcontent provided by World TV was mainly free-to-air broadcasts. Between 2000 and2017 World TV offered Pay TV subscriptions, mainly via SKY. Initially, TVBI wasone of the channels offered to World TV subscribers.[71] The annual cost of accessing the SKY digital platform was justified in the earlydays by the large numbers of subscribers, but by 2012 the financial viability of pay tvservices was being steadily eroded by the growing quantity of screening contentavailable on the internet, and competition from free-to-air Asian channels broadcastingvia satellite. The impact of declining subscriber revenues was aggravated by the fixedcosts to World TV of accessing SKY's digital platform: subscribers and revenuedeclined, while costs remained constant.[72] The 2012 Agreements and the May 2015 supplemental agreements were signedat a time when Mr Ho was a trusted member of World TV's board, and its ChiefExecutive Officer. Mr Chang said that, at that time, World TV had no issue withMr Ho negotiating contracts with TVBI: he kept the directors informed about hisnegotiations with TVBI, and the World TV board knew what the cost of the TVBIlicences would be before the contracts were signed. The board was advised of thegeneral nature of the contracts, and of the specific costs involved.[73] The annual licensing fees payable over the three year term of the 2012Agreements, combined with other costs payable under the 2012 Agreements, came to$2,460,000 over the three year contact terms. World TV struggled to keep up withthose payments, and Mr Chang said that Mr Ho was tasked with negotiating morelenient terms with TVBI and other providers.[74] Against that background, Mr Ho advocated that World TV enter into directlicensing contracts with TVBI that would give World TV the right to broadcast TVBIcontent free-to-air. Mr Ho argued that the cost of those licences, which exceeded$800,000 per year, would be justified as a way to promote World TV's pay tv servicesto new subscribers, and as a source of additional advertising revenue.[75] Mr Chang said that Mr Ho reported to World TV's board on his efforts tonegotiate fee reductions, on 26 June 2014. Those efforts eventually led to the threesupplemental agreements signed by Mr Ho on World TV's behalf in May 2015. Themain concession in the supplemental agreements made with TVBI was a $380,000concession in relation to a sum of $840,000 due under one of the agreementscomprised in the 2012 Agreements. That concession reduced the overall cost of thethree TVBI contracts scheduled to finish in July 2015, from $2,460,000 to $2,000,080.[76] Mr Chang said that, despite that concession, World TV's financial woescontinued. He produced copies of World TV's financial statements for the years ended31 March 2015, 2016, and 2017, showing that World TV made a loss of $139,905 inthe year ended 31 March 2014, a loss $56,776 in the year ended 31 March 2015, aprofit of $52,004 in the year ended 31 March 2016, and a loss of $2,822,378 in theyear ended 31 March 2017.[77] From about June 2015, Mr Ho began promoting the idea of transferring WorldTV's paying subscribers from SKY TV's digital platform to TVBI's digital platform.World TV subscribers would relinquish their SKY receivers, and use TVBI's OTT box.Mr Chang said that a number of the World TV board, including himself, becameconcerned about the proposal, as it would involve World TV handing over control ofits valuable subscriber base to TVBI.[78] By October 2015 World TV's pay tv business, which at the time included bothSKY and TVBI content, was running at a big loss. However, Mr Ho advised on 30October 2015 that the on-going costs of content had fallen dramatically since 30 Juneof that year. At a board meeting on 26 November 2015, Mr Ho advised that World TVwould begin sending OTT boxes to customers for a one and a half month trial period.Mr Chang and a co-director, Mr Tai-sheng Lien, expressed concern that World TVwould be reliant on TVBI's goodwill, as TVBI could easily decide to take overproviding content to those World TV clients. Mr Ho's response was that the risk ofthat happening was not greater than with SKY, and that the OTT boxes would allowWorld TV to regain lost subscribers and stop losing money on pay-for-view channels.Mr Chang said that he strongly disagreed. World TV had contractual arrangementswith SKY, but the TVBI contracts had expired and Mr Ho did not explain how theOTT boxes would allow World TV to regain lost subscribers.[79] Mr Chang said that he eventually joined the other directors in approving theproposal, but continued to harbour misgivings about it.[80] At the end of the meeting of 26 November 2015, Mr Ho advised the board thatit would also be necessary to reduce operating expenses.[81] In spite of the continuing concerns of Mr Chang and Mr Lien, and alsoco-director Fu-nu Tsai, World TV subscribers were transferred to TVBI's OTTplatform from 1 March 2016. By 2017, when World TV ceased using TVBI's OTTplatform, World TV had lost over 1,000 subscribers to TVBI.[82] Mr Chang said that matters came to a head on 15 April 2016 when Mr Hopersuaded a majority of directors and shareholders to remove Mr Chang, Mr Lien, andFu-nu Tsai as directors of World TV. The removal of those directors left the followingdirectors comprising the board of World TV:(a) Mr Ho;(b) Paul Liu; and(c) Sui-Kwong Samson Yau (who had been appointed on 13 September2013).These were the directors holding office when Mr Ho signed the 2016 Agreements.[83] The 2016 Agreements obliged World TV to pay at least $2,268,000 over threeyears. That total sum was close to the $2,460,000 payable under the 2012 Agreements,but that had proved too much for World TV, and Mr Ho had ultimately been obligedto negotiate the $380,000 reduction agreed in May 2015. World TV's longstandingfinancial difficulties had not improved after May 2015, and losses increaseddramatically in the financial year after Mr Ho signed the 2016 Agreements.[84] Mr Chang said that World TV could find no evidence on its files that Mr Ho oranyone else at World TV conducted any kind of due diligence before the 2016Agreements were signed on 7 September 2016. Also, the 2016 Agreements includeda backdating element – Mr Ho was agreeing to pay eight months of arrears for TVBIproducts or services going back to February 2016. There was no suggestion thatMr Ho attempted to negotiate any of the terms of the 2016 Agreements.[85] And nor is there evidence on World TV's files that Mr Ho discussed the 2016Agreements formally or informally with the other two directors, Mr Liu and Mr Yau,before they were signed. The only directors' minute from 2016 appears to be the15 April 2016 minute that detailed the expulsion of the directors who opposed Mr Ho(one of whom was Mr Chang). World TV's shareholders were not approached aboutthe 2016 Agreements before they were signed, and there was no board resolution orshareholders' resolution approving the signing. Mr Chang compared this with thesituation back in early 2009, when the minutes of board meetings showed that Mr Honotified the board about the state of negotiations.[86] Mr Chang said that the 2016 Agreements were not kept on file, and there is norecord of any communication from TVBI about the 2016 Agreements before it madedemand on 7 July 2017. No copies of the 2016 Agreements have been located inWorld TV's accounts department. Copies were only located, after TVBI made itspayment demand in July 2017, attached to an email TVBI had sent to Mr Ho at hisWorld TV email address.[87] By the middle of 2017, several of the shareholders were becoming concernedabout the worsening financial position at World TV. Their concern resulted in achallenge to the leadership of Mr Ho and Mr Samson Yau. Four shareholders, whocontrolled over 50 per cent of World TV's shareholding,9 moved to have Mr Ho,Mr Liu and Mr Yau removed as directors. That occurred on 12 July 2017.[88] Mr Chang said that TVBI's demand of 7 July 2017 came as a bolt from theblue. However, events unfolded rapidly, and the board was required to respondquickly to legal action Mr Ho took in an effort to regain a management and governancerole at World TV. (Holding orders were made in this Court on 20 July 2017, pendingthe hearing of an application for an interim injunction on 3 August 2017. Mr Hosubsequently withdrew this proceeding).[89] Specially in response to Mr Ho's affidavit, Mr Chang denied that Mr Ho hadautonomy to contract with TVBI as he saw fit, without the knowledge and approval ofWorld TV's board. Mr Ho was not authorised to sign the 2016 Agreements, and he didso without the knowledge or consent of World TV. Nor did World TV subsequentlyratify or approve of those documents after they were signed.[90] Mr Chang accepted that a decision to move from the SKY digital platform toTVBI's OTT platform was made on 1 March 2016, but at that time there was nocontract between World TV and TVBI, and there was no indication from Mr Ho thathe was intending to negotiate further TVBI contracts. He did not sign the 2016Agreements until six months later.[91] In response to Mr Ho's evidence about the public announcements and theWorld TV media kit, Mr Chang maintained the position that World TV was not awareof the 2016 Agreements. As far as World TV was concerned, the arrangements withTVBI had come to an end in July 2015 when the 2012 Agreements, as modified by theMay 2015 supplemental agreements, expired.9 Fu-nu Tsai, CTA Limited (Wan Hsu), Tony Kiam and Mr Chang.[92] Mr Chang emphasised that, while the 2012 Agreements and the 2015supplemental agreements had been concluded with the knowledge and approval of theWorld TV board, by the end of 2015 Mr Ho knew that Mr Chang and other directorsand shareholders were uneasy, if not outright opposed, to shifting clients to TVBI'sOTT platform.[93] While Mr Ho said that World TV was experiencing cashflow problems after hesigned the 2016 Agreements, Mr Chang's evidence was that Mr Ho was well aware ofthe existence of those difficulties long before the 2016 Agreements were signed.[94] Mr Chang did not accept that the email of 12 September 2016, referring to the$58,300 payment "for period of March", meant that World TV was somehow aware ofthe 2016 Agreements Mr Ho had signed, or that the payment related to the 2016Agreements. The first demand for payment from TVBI that World TV is aware of wasthe 7 July 2017 demand.[95] On the issue of the July/August 2017 negotiations, Mr Chang denied that heasked Mr Ho to help negotiate a settlement with TVBI. He pointed out that he wasnot re-appointed chief operations officer of World TV until October 2017, and he hadceased being a director of World TV in April 2016. Also, he and Mr Ho were heavilyinvolved on opposite sides of the High Court litigation Mr Ho had commenced in2017. Mr Chang said World TV was not aware of the settlement communicationsbetween Mr Ho and TVBI; they were undertaken without Mr Chang's knowledge orauthority.[96] Mr Chang acknowledged that World TV received the letter dated 3 October2017 from TVBI giving notice of termination of the 2016 Agreements. He said thatthis was the first communication received by World TV from TVBI after the 7 July2017 demand. World TV's director, Jody Chang, replied the same day to TVBI.Jody Chang advised that the current board of World TV had agreed to pay for all ofthe outstanding amounts since World TV's new management took over. That meantall outstanding amounts since August 2017. As for amounts outstanding before August2017, he told TVBI that World TV needed to investigate and look into all thecommunications between TVBI and Mr Ho before it could make any decisions.[97] Jody Chang's letter of 3 October 2017 raised concerns about the involvementof a private company owned by Mr Ho called International View Limited (IVL). Theletter alleged that TVBI had paid $1,000,000 to IVL, and that Mr Ho had admitted thatpayment was made. However, Mr Ho had never explained the purpose of thepayments. The letter expressed the view that any transactions between Mr Ho andTVBI would seem to be a direct conflict of interest (having regard to Mr Ho's positionat World TV). The current board of World TV wanted an explanation for thesepayments.[98] Jody Chang's letter of 3 October 2017 also pointed out that TVBI appeared tohave allowed Mr Ho not to pay the amounts claimed to be due to TVBI for over a year,but as soon as the new management stepped in at World TV, TVBI immediately startedtaking drastic actions to chase World TV for the outstanding bills.[99] Mr Gary Chang provided with his affidavit correspondence between thesolicitors in the period 26 October 2017 to 21 November 2017.Ms Shilei Wu[100] Ms Wu said that she had been working at World TV for about three years. Shebecame an assistant accountant in about August 2016. She said that she had read theaffidavits of Ms Wan and Mr Ho.[101] Ms Wu said that she had not previously seen any of the documents providedwith Mr Ho's affidavit, other than the 13 September 2016 email written by her, inwhich she advised TVBI that World TV would be paying $58,300 to it that day.[102] With regard to that email, she said that on 12 September 2016 Mr Ho asked herto pay an invoice from TVBI. She recalled that the invoice had arrived the previousmonth. Once she had paid the invoice, Mr Ho asked her to send an email to TVBIconfirming payment. That is the email she sent on 12 September 2016. She said therewas no other discussion about the invoice.[103] Ms Wu said that she did not have any discussions about TVBI with anyoneother than Mr Ho at World TV, and she did not recall Mr Ho talking to anyone elseabout TVBI. As far she knew, no one else at World TV knew about the payment madeto TVBI in September 2016, other than Mr Ho and herself.[104] Mr Ho told Ms Wu that World TV had contracts with TVBI, but she never sawany of those contracts. However she did recall Mr Ho giving her an envelope to filethat he said contained the TVBI contracts. She filed the envelope, but did not open itor examine its contents.[105] Ms Wu referred to a discussion with Mr Ho in early 2017, in which he told herthere was an annual licensing fee of $400,000 payable to TVBI and an annual facilityfee of $300,000. She said that Mr Ho asked her to exclude the licensing fees fromWorld TV's accounts, as they were not payable until there was a profit from that partof the business. Ms Wu said that she complied with that request, as she had no reasonto question what Mr Ho was telling her.[106] Ms Wu said that she had not seen any of the documents attached to Ms Wan'saffidavits (which included email correspondence between Mr Ho and TVBI) until sheread that affidavit.Jody Chang[107] Jody Chang was one of the directors appointed to the board of World TV on12 July 2017.[108] Jody Chang confirmed the contents of the affidavit of Mr Gary Chang, and thatthe only copies of the 2016 Agreements that the board of World TV was able to locatewere those attached to an email sent to Mr Ho at his World TV email address.[109] Jody Chang also confirmed that the demand for payment made by TVBI inJuly 2017 came as a surprise to World TV – they had not found any communicationsbetween TVBI and World TV before that time.[110] When Jody Chang sent the letter of 3 October 2017 to TVBI, the new board atWorld TV was still going through the process of working out how the 2016Agreements had come into existence, why Mr Ho had signed them, and why it hadtaken TVBI so long to demand payment. World TV was also looking at the nature ofthe dealings between TVBI, Mr Ho, and companies controlled by Mr Ho.[111] Jody Chang confirmed that Mr Ho had no authority from anyone at World TVto communicate with TVBI or undertake the negotiations on behalf of World TV after12 July 2017. World TV had no idea what Mr Ho was purporting to represent onbehalf of World TV after that date.[112] Jody Chang's understanding is that the debt claimed by TVBI was included inWorld TV's 31 March 2017 financial statements for accounting purposes. World TV'sadvice was that that position would be reversed or altered in the 31 March 2018financial statements if the Court determined that the sum is not due and payable, orthat a different amount is due and payable.Second affidavit by Mr Gary Chang[113] Mr Chang provided a second affidavit, sworn in reply on World TV'sapplication to join Mr Ho as a third party.[114] Mr Chang said that the fees concession granted in the May 2015 supplementalagreements was the direct result of long-standing financial difficulties at World TVthat carried on throughout 2016 and 2017. He took Ms Wan's reference to a "newbusiness model" to be a reference to the use of TVBI's OTT set-top boxes in place ofthe digital SKY platform, and said that if that was the "new business model" it did notalter the extent of World TV's on-going financial difficulties in September 2016 or atany other time.[115] Mr Chang noted that the communications between the parties in June 2016 pre-dated the 2016 Agreements. Also, the evidence of payments attached to the last of theemails (showing payments to TVBI of NZ$46,000 and $6,083.30), was not referableto any known contract between World TV and TVBI. In Mr Chang's view, the June2016 communications showed that TVBI and Mr Ho were very much aware thatWorld TV was unable to keep up with TVBI's demands for payment, just a few monthsbefore the 2016 Agreements were signed.[116] Mr Chang did not accept that the telephone calls Ms Wan referred to in theperiod September 2016–7 July 2017 actually occurred, particularly as Ms Wanprovided no information as to who made the alleged calls on behalf of TVBI, whenthey were made, or whether there is any record of what was discussed.[117] Finally, Mr Chang did not accept that the letter from TVBI's solicitors dated14 November 2017 constituted evidence of alleged communications between theparties that pre-dated the letter.The issues[118] The following issues are to be determined:(1) Should leave be granted to TVBI to apply for summary judgment?(2) (If leave is granted) is it reasonably arguable for World TV that Mr Hodid not have authority to bind World TV when he signed the 2016Agreements?(3) If the 2016 Agreements are binding on World TV, has TVBI sufficientlyproved that World TV has no arguable defence as to the amount claimed?(4) Should the Court exercise its discretion against the entry of summaryjudgment?[119] I will address each of those issues in turn.Issue (1) – Should leave be granted to TVBI to apply for summary judgment?[120] I am satisfied that this is a proper case for leave to be granted.[121] For the reasons set out under Issue (2) below, I consider that TVBI has a strongcase on the merits, and the interests of justice require that it be permitted to proceedon a summary basis.[122] Ms Wroe submitted that at the time the proceeding was filed it was not clearwhat World TV's position would be in relation to the outstanding fees, and that theprospect of a successful summary judgment application only became apparent afterWorld TV had filed its defence. That defence showed that the principal issue wouldbe Mr Ho's authority to bind World TV, and TVBI concluded that that issue wassuitable for determination on a summary judgment application. TVBI also obtainedan affidavit from Mr Ho. The application for summary judgment was filed promptly,and within one month after World TV filed its statement of defence (and within threemonths, including the Christmas holiday period, after the statement of claim wasfiled).[123] The objective of the High Court Rules being to secure the just, speedy, andinexpensive determination of any proceeding, I conclude that granting leave isappropriate in this case. I make an order accordingly.Issue (2) – Is it reasonably arguable for World TV that Mr Ho did not haveauthority to bind World TV when he signed the 2016 Agreements?[124] After the hearing, the Court of Appeal gave its decision in Bishop WardenProperty Holdings Ltd v Autumn Tree Ltd.10 I granted counsel leave to file writtensubmissions directed to the effect of that case, and both counsel filed submissions.Those submissions are summarised below.Ms Wroe's submissions[125] Ms Wroe relied on both implied authority11 and, alternatively, on the doctrineof apparent, or ostensible authority. On the issue of implied authority, she submittedthat the necessary authority may be inferred from the appointment of the agent to aparticular position, or the usages or custom practised in any applicable market or trade,provided the practices are certain, notorious, and reasonable.12 With particularreference to contracts entered into by a company's chief executive, she referred toHely-Hutchinson v Brayhead Ltd, where the company was held to be bound bycontracts entered into on its behalf by its chairperson, chief executive, and de facto10 Bishop Warden Property Holdings Ltd v Autumn Tree Ltd [2018] NZCA 285.11 She did not suggest the evidence would support a finding that Mr Ho had express authority.12 Cunliffe v Teather & Greenwood [1967] 3 All ER 561.managing director. Express authority did not exist, but on the facts the directorpossessed implied authority to bind the company.13[126] Applying those principles to this case, Ms Wroe referred to the fact that Mr Howas a director, CEO, and chairman of World TV's board until he was removed in July2017. From the beginning of the parties' relationship, he had authority to purchasebroadcasting content on behalf of World TV, and to maintain World TV's relationshipwith TVBI. He was always the point of contact. Occasionally World TV's assistantaccountant would contact TVBI, but that was restricted to confirming payment ofoutstanding fees.[127] Ms Wroe submitted that the minutes of World TV board meetings show thatMr Ho was required to obtain consent for matters such as obtaining bank loans, signingcontracts with SKY TV, or renewing the office lease. But nowhere in the minutes wasthere any form of consent to Mr Ho negotiating or signing either the 2012 Agreementsor the supplementary agreements made in 2015. Nor do the minutes record thegranting of consent for any other matters concerning TVBI. The pattern of conductshows that Mr Ho was not required to obtain approval of World TV's board beforesigning agreements on World TV's behalf.[128] On 26 June 2014, Mr Ho did inform World TV's board that he had reached anagreement with TVBI to reduce the content fees by 15 per cent, but his advice was inthe nature of an announcement to the board rather than a discussion with a view toobtaining the board's consent.[129] From mid-2015 Mr Ho began consulting with the board in relation to movingfrom the original SKY TV digital platform to TVBI's OTT platform. Multiple emailswere exchanged between the directors, and there was a formal proposal to the boardmeeting of 26 November 2015. The evidence shows that implementation of theproposal would bring about a major change for World TV, and because of that, theproposal was heavily discussed over several months. It was not a unilateral decisionmade by Mr Ho. At the 26 November 2015 board meeting, the directors approved13 Hely-Hutchinson v Brayhead Ltd [1968[ 1 QBD 549.Mr Ho's proposal to move to the OTT platform. It was confirmed that that would beimplemented from 18 January 2016.[130] Ms Wroe submitted that the following conduct after the November 2015 boardmeeting confirms that Mr Ho had actual (implied) authority to finalise matters withTVBI in terms of implementing the OTT platform arrangements:(a) In early 2016, World TV began advertising to the public that it wouldbe moving to the OTT platform. Subscribers were informed that theywould need to change to OTT boxes from 1 March 2016.(b) The OTT box platform was launched on 18 January 2016 forsubscribers to trial.(c) Prior to the 2016 Agreements being signed, World TV began receivingOTT boxes from TVBI and distributing them to its subscribers.(d) World TV made part payment for outstanding fees for the servicescovered by the 2016 Agreements.(e) World TV continued to broadcast, transmit, and distribute TVBI'scontents, despite the 2012 Agreements and the supplementaryagreements made in 2015 expiring on 15 August 2015.[131] On the alternative basis of apparent authority, Ms Wroe noted that the authorityis created by the actions of the principal, who by words or conduct allows anotherperson to appear to the outside world as his or her agent. The principal in such a casecannot afterwards repudiate the apparent authority if to do so would injure otherparties.14 Ms Wroe submitted that the required appearance of authority commonlyresults from the appointing of a person to a job or office. That is because a personappointed to a particular position is thereby clothed with the appearance of authorityto do the normal acts which pertain to the position. The appointment itself amountsto a representation to other people that such authority exists.14 Referring to Pole v Leask (1863) 8 LT 645.[132] Ms Wroe submitted that apparent authority is almost always general incharacter. And if the relationship between principal and agent has been altered, thatwill not alter or withdraw the representation previously made by the agent if thealteration of the relationship has not been communicated to the third party.[133] Ms Wroe relied on the longstanding commercial relationship between theparties, and the role Mr Ho had taken in that relationship. She submitted that TVBIwas entitled to assume that the appearance that Mr Ho had the necessary authorityreflected the reality at World TV.[134] Ms Wroe submitted that TVBI altered its position in reliance on its belief thatMr Ho had the necessary authority: it supplied the OTT boxes, as well as content forWorld TV to broadcast, transmit and distribute. It did so based on the representationthat World TV would pay its fees.[135] In addition, the public implementation of the OTT platform by World TVshows there was no reason for TVBI to question to Mr Ho's authority to enter into the2016 Agreements. World TV had represented to it by its conduct that Mr Ho hadWorld TV's authority to enter the transaction. World TV is therefore estopped by itsactions from asserting the contrary.[136] Ms Wroe submitted that World TV's relationship with Mr Ho was altered whenMr Ho was removed as a director, CEO, and Chairman in July 2017. However, thatremoval was never communicated to TVBI. TVBI continued to believe on reasonablegrounds that Mr Ho had authority to negotiate payment proposals. The appearance ofsuch authority remained unaltered to the eyes of TVBI.[137] In any event, if Mr Ho's removal as a director and CEO on 12 July 2017 hadthe effect of removing his authority, that would not affect the validity of the 2016Agreements, which were signed when Mr Ho had full authority. Any lack of authorityon his part after 12 July 2017 would simply mean that full payment was due as per the2016 Agreements.[138] Ms Wroe also referred to the doctrine of ratification by a principal of an agent'sunauthorised act. Ratification may be by express words of the principal, or impliedfrom the principal's conduct (eg where the principal takes advantage of the agent'sunauthorised act).15 Any ratification must be with knowledge of all materialcircumstances, and ratification must relate to the entirety of the unauthorised act andnot just part of it.[139] Ms Wroe submitted that it does not make sense for World TV to accept that itapproved the decision to move platforms (SKY digital to TVBI's OTT platform), whileat the same time contending that there was no subsisting contract between World TVand TVBI. Nor does it make sense for World TV to contend that it was not aware ofany indication that there would be further contracts with TVBI, when World TV waspublicly advertising its big change, receiving and distributing OTT boxes, andbroadcasting TVBI's material. No reasonable person in the market would haveassumed that TVBI was providing its services for nothing.[140] World TV continued to broadcast TVBI's material after August 2015, and ithad ample time in that period to question and investigate why TVBI's materialcontinued to be broadcast, why it was receiving OTT boxes from TVBI, and why theOTT boxes were being distributed to its subscribers. There appears to have been noquestioning or investigation of any of those matters, or as to what financialarrangements had been made with TVBI.[141] Further in support of the ratification claim, Ms Wroe referred to the partialpayment made by World TV, referred to in Ms Wu's email, and to the fact that WorldTV included a liability to TVBI in its financial statements for the year to 31 March2017.Mr Keall's submissions[142] Mr Keall first pointed out that, at the time of the publicity relating to WorldTV's move to the OTT platform, the 2016 Agreements had not been signed. The15 Smith v Henniker-Major [2002] 3 Weekly Reports 1848.publicity was in March 2016, and the 2016 Agreements were not signed untilSeptember of that year.[143] He submitted that the facts that World TV's directors may have had access tocopies of the 2016 Agreements (in World TV's accounts department) and knowledgeof World TV's long-standing relationship with TVBI and the ongoing broadcasting ofTVBI's content, could not impute actual knowledge of specific agreements or theircontents to the board of World TV. There is no evidence that they were actuallyadvised of these matters. Mr Ho's evidence of disclosure does not extend beyond theaccounts department, as confirmed by the tenor of Ms Wu's affidavit. Further, the onlycopies of the 2016 Agreements the directors have been able to find were the electroniccopies attached to an email addressed to Mr Ho.[144] Mr Ho's intermittent knowledge of World TV's financial woes, combined withthe sheer magnitude of the financial obligations entailed by the 2016 Agreements,means that the 2016 Agreements would have been major transactions, requiring boardapproval and very probably a special resolution of shareholders under s 129 of theCompanies Act 1993 (the Act). In the absence of any board minutes relating to thetransactions, there is a strong inference that Mr Ho knew that the board andshareholders of World TV would not have approved the proposed transaction.[145] Mr Keall acknowledged that Mr Ho had a long-standing responsibility fordealing with TVBI, but submitted that concluding the 2016 Agreements withoutreverting to the board represented a significant departure from Mr Ho's own pastpractice, in which he had disclosed to the board contract negotiations with variousparties, borrowing arrangements, and the fee reduction negotiations referred to in theminutes of the directors' meeting of 26 June 2014.[146] Mr Keall then submitted that TVBI knew that Mr Ho was signing agreementsthat submitted World TV to a level of expenditure it plainly could not pay.16 TVBIdirected a demand to Mr Ho in June 2016 that World TV pay $299,840, and in response16 World TV had been unable to comply with similar commitments under the 2012 Agreements,resulting in TVBI agreeing to reduce those payments by $548,000 in mid-2015. Mr Ho had playeda central role in that outcome.Mr Ho arranged a total payment of a little over $52,000. Also, TVBI has not contestedWorld TV's contention that Mr Ho simply capitulated to TVBI's terms, and agreed tobackdate the 2016 Agreements by six months, without negotiation. TVBI must haverealised that Mr Ho could not have obtained authority from his board to proceed withthose arrangements. At very least, there are genuine concerns over Mr Ho's behaviourwhich cannot be resolved on an interlocutory application such as this.[147] Nor is there any evidence from the person who signed the 2016 Agreements onbehalf of TVBI. If the 2016 Agreements were preceded by any communications, theyhave not been disclosed.[148] Mr Keall referred to the proviso to s 18 of the Act, submitting that World TVwill be able to prove at trial that TVBI knew Mr Ho lacked the authority to sign the2016 Agreements.[149] On the matter of alleged uncontested irregular conduct, Mr Keall referred toMs Wu's affidavit, and in particular her evidence of Mr Ho's request that the annuallicence fee of $400,000 payable to TVBI be excluded from World TV's accounts (onthe basis that they were said to be not payable until there was a profit from that part ofthe business). TVBI had the opportunity to contest that evidence, but it did not do so.The evidence therefore suggests that Mr Ho negotiated alterations to the 2016Agreements that reduced, or at least suspended, the full impact of their terms. WorldTV must be entitled to explore those arrangements via discovery, other interlocutorysteps as appropriate, and cross-examination. The need for further exploration ofMr Ho's conduct is reinforced by the fact that he held a lucrative contract with TVBIthrough one of his own companies (IVL), while he was a director and shareholder ofWorld TV. TVBI has acknowledged the existence of its arrangements with IVL incorrespondence between the parties.1717 In a letter from TVBI's solicitors dated 12 October 2017, responding to Jody Chang's letter of3 October 2017, TVBI denied that there were any "under the table" deals between it and Mr Ho.The solicitors explained that TVBI had formally engaged the services of IVL for investigation andmonitoring services against infringing websites, and other illegal activities. TVBI and IVL hadentered into an agreement under which TVBI agreed to pay NZ$825,000 for IVL's services. Thesolicitors said that no further payments were made as TVBI no longer required IVL's services.[150] Mr Keall submitted that Mr Ho's claim that, after he was removed as a directorand CEO of World TV on 12 July 2017 Gary Chang authorised him to negotiate termsof settlement with TVBI, is extraordinary. The allegation is denied by Mr Chang, whopoints out that he held no position at World TV at the time that could have entitled himto authorise Mr Ho to do anything on behalf of World TV.Mr Keall's additional submissions on the Bishop Warden case[151] The brief facts of the case were as follows. On the morning of 3 August 2017,Xiaoyuan Niu (Tina) was the sole director of Autumn Tree. But around lunchtime thatday, papers were filed with the Companies Office appointing an additional director(Lanhua Zhang – "Anna"). Notwithstanding the appointment of Anna as an additionaldirector, in the early evening of 3 August Tina purported to sell a property, being amajor asset of Autumn Tree, to Bishop Warden. Mr Blomfield of Bishop Warden metTina for the first time on the afternoon of 3 August, and the purchase price representedapproximately one-third of the value of the property at the time. Settlement was alsodeferred for one year. Bishop Warden lodged a caveat on the title to the property, andAutumn Tree applied to this Court to have it removed. Autumn Tree contended thatthe purported agreement was invalid, as Tina did not have authority to enter into it onbehalf of Autumn Tree. Hinton J discharged the caveat on the basis that BishopWarden had no reasonably arguable case for an equitable interest in the property. Herdecision was upheld on appeal.[152] Mr Keall submitted that three relevant propositions can be distilled fromBishop Warden:(i) A director cannot be authorised by a company to enter into a majortransaction18 in the absence of a special resolution.19(ii) The customary authority of one director of a board acting alone is verylimited. In the absence of some representation made by the company,18 As defined in s 129 of the Act.19 Bishop Warden Property Holdings Ltd v Autumn Tree Ltd, above n 10, at [31], [36] and [49].a director acting alone from other directors has no ostensible authorityto bind it,20 and s 18 of the Act will not save the contract.(iii) Awareness of suspicious circumstances surrounding entry into anagreement, such as an obvious undervalue, is arguably inconsistentwith any apparent authority to enter into the agreement.21[153] In this case, Mr Keall submitted that the 2016 Agreements arguably didconstitute a major transaction, and there was no special resolution of World TV'sshareholders approving the transaction.[154] Mr Ho's customary authority as a director did not carry with it any apparent orostensible authority to act on behalf of World TV, and there is no evidence that WorldTV made any sort of representation to TVBI about Mr Ho's authority to contract on itsbehalf. Nor is there any evidence of any authority customarily enjoyed by the CEOof a media company such as World TV (Mr Ho signed the 2016 Agreements as "CEO",not as "executive director", or "chairman", or any other expression that might haveconveyed the meaning that he was acting for World TV's board).[155] TVBI was or ought to have been aware of suspicious circumstances22surrounding World TV's entry into the 2016 Agreements, and those circumstanceswere arguably inconsistent with the apparent authority for which TVBI contends.Ms Wroe's reply submissions on the Bishop Warden case[156] Ms Wroe summarised her submissions in response as follows:(i) Section 129 of the Act does not provide an arguable defence as thesummary judgment application relies on the CEO's actual impliedauthority or apparent authority. The Court does not need to exploreexpress authority. In any event there is no evidence to show this was amajor transaction. References to parts of World TV's financial20 At [27].21 At [42], [70] and [71].22 Being the circumstances referred to at para [143] of this judgment.statements are insufficient to show that s 129 of the Act provides anarguable defence.(ii) The customary authority of one of a number of directors is irrelevantwhen the Court is concerned with the actions of a CEO who contractedon behalf of World TV as CEO, and not as a director. That is a keydifference between Bishop Warden and this case.(iii) Bishop Warden does not change the law in relation to s 18 of the Actand the proviso concerning constructive knowledge.Subsection 18(1)(c) or (d) applies. Evidence of the customaryauthority of a CEO of a media company such as World TV was notnecessary in circumstances where entering into contracts such as the2016 Agreements was part of World TV's ordinary course of business.23(iv) Bishop Warden is readily distinguishable. The buyer in Bishop Wardenmet the director once, the day the contract was signed, and the sale tookplace at a significant undervalue. In this case, TVBI's prior relationshipwith World TV had been successful for many years, and includedprevious similar contracts. This is not a case where it was arguablyunreasonable for TVBI to rely on Mr Ho as having apparent authorityto enter into the 2016 Agreements, or where the proviso to s 18(1) ofthe Act might apply.24[157] As for the operation of the proviso, World TV's own internal difficulties couldnot have put TVBI on notice of a potential lack of authority. World TV's difficultiesin paying invoices and the renegotiation of terms occurred prior to World TV's moveto the new (OTT) platform, and in any event it was not for TVBI to enquire intowhether this was a good bargain for World TV.23 Referring to Levin Meats Ltd v Perfect Packaging Ltd (2011) 10 NZCLC 264 (HC).24 The proviso to s 18(1) of the Act states that the various protections available to a third party dealingwith a company (as set out in s 18(1)) are to apply "unless the person has, or ought to have, byvirtue of his or her position with or relationship to the company, knowledge of the matters referredto in [any of the subparagraphs of s 18(1)]."Discussion and conclusions on Issue (2)[158] There was little difference between counsel on the law affecting Mr Ho'sability to bind World TV when he signed the 2016 Agreements. Both counsel werecontent to argue the matter based on New Zealand law, notwithstanding the existenceof provisions in the 2016 Agreements which provided that the applicable law wouldbe that of the Hong Kong Special Administrative Region of China. I raised the pointwith counsel at the hearing, but neither sought leave to file further evidence orsubmissions based on the law of the Hong Kong SAR. I think TVBI was entitled torely on the 2016 Agreements themselves, and if World TV wished to contend that therelevant law of the Hong Kong SAR differed in some material respect from thecommon law of the United Kingdom and New Zealand, it was for World TV to pleadand provide evidence of the relevant foreign law. As it did not do that, I approach thematter on the basis that, on the issue of apparent or ostensible authority in particular,there is no material difference between the relevant laws of the two jurisdictions.[159] The relevant statutory provisions in New Zealand appear to be ss 180 and 18of the Act. Those sections materially provide as follows:180 Method of contracting(1) A contract or other enforceable obligation may be entered into by acompany as follows:(c) an obligation which, if entered into by a natural person, is not,by law, required to be in writing, may be entered into onbehalf of the company in writing or orally by a person actingunder the company's express or implied authority.18 Dealings between company and other persons(1) A company or a guarantor of an obligation of a company may notassert against a person dealing with the company or with a person whohas acquired property, rights, or interests from the company that—(a) this Act or the constitution of the company has not beencomplied with:(b) a person named as a director of the company in the mostrecent notice received by the Registrar under section 159—(i) is not a director of a company; or(ii) has not been duly appointed; or(iii) does not have authority to exercise a power which adirector of a company carrying on business of thekind carried on by the company customarily hasauthority to exercise:(c) a person held out by the company as a director, employee, oragent of the company—(i) has not been duly appointed; or(ii) does not have authority to exercise a power which adirector, employee, or agent of a company carryingon business of the kind carried on by the companycustomarily has authority to exercise:(d) a person held out by the company as a director, employee, oragent of the company with authority to exercise a powerwhich a director, employee, or agent of a company carryingon business of the kind carried on by the company does notcustomarily have authority to exercise, does not haveauthority to exercise that power:(e) a document issued on behalf of a company by a director,employee, or agent of the company with actual or usualauthority to issue the document is not valid or not genuine—unless the person has, or ought to have, by virtue of his or her positionwith or relationship to the company, knowledge of the matters referredto in any of paragraphs (a), (b), (c), (d), or (e), as the case may be.[160] The law relating to a company's contracts with third parties was helpfullysummarised in the Bishop Warden case.25 The Court of Appeal noted that authority tobind a company to contracts is primarily reserved to the board of directors.26 Whetheran agreement entered into by a director is valid depends upon whether the director hadactual or apparent authority to enter into the agreement on behalf of the company. Thecustomary authority of one director of a board acting alone (as opposed to a soledirector) is very limited, and the position of a director does not carry with it anyostensible authority to act on behalf of the company. Directors can act only25 Bishop Warden Property Holdings Ltd v Autumn Tree Ltd, above n 10 at [26] to [33].26 Companies Act 1993, s 128.collectively as a board, and the function of an individual director is to participate indecisions of the board.27[161] In Bishop Warden, the Court of Appeal noted that one form of implied authorityis the authority the law regards as existing by reference to the position held by theagent vis-à-vis the principal. In the corporate arena, the role performed by the servantor agent in the corporate structure will influence the extent of that person's impliedauthority. In general terms the more senior the role the greater the person's impliedauthority is likely to be.28[162] As for apparent authority, the Court noted that the agent must be held out ashaving authority to enter into a transaction of the kind made, the holding out must bedone by the principal or someone with actual authority, the third party must know ofthe principal's holding out and rely on it, and the third party's reliance must bereasonable. The onus of proof is on the third party. If there is no actual benefit to acompany, it may not be reasonable to rely on any holding out or apparent authority.29[163] The Court of Appeal in Bishop Warden noted30 that a transaction might beinvalid where the transaction was a major transaction requiring a special resolution ofshareholders, and no such resolution had been passed.31 However, those dealing withthe company in such a case are provided with legislative protection by s 18 of the Act.[164] In this case, Mr Keall does rely on alleged failure to comply with s 129. Hesubmitted that the 2016 Agreements constituted major transactions for World TVwhich were not approved by any special resolution. He referred in support to the27 Bishop Warden, above n 10, at [27] referring to Northside Developments Pty Ltd vRegistrar-General (1990) 170 CLR 146 (HCA) at 205.28 Bishop Warden Property Holdings Ltd v Autumn Tree Ltd, above n 10, at [28], referring to GiltrapCity Ltd v Commerce Commission [2004] 1 NZLR 608 (CA) at [40].29 Bishop Warden, above n 10, at [30].30 At [31].31 A "major transaction" of a company is defined by s 129(2) of the Act. Broadly, a major transactionwill occur when the company acquires or agrees to acquire assets the value of which is more thanhalf of the value of the company's assets before the acquisition, where the company disposes of,or agrees to dispose of, assets the value of which is more than half of the value of the company'sassets before the disposition, or where the transaction would be likely to have the effect of thecompany acquiring rights or interests or incurring obligations or liabilities the value of whichwould be more than half of the value of the company's assets before the transaction. Unders 129(1), the company must not enter into any such transaction unless the transaction has beenapproved by special resolution of the company, or is contingent on approval by such a resolution.financial statements for World TV that Mr Gary Chang produced, and to the fact thatthe 2016 Agreements would commit World TV to expenditure, over the three yearterms of the 2016 Agreements, to expenditure of approximately $2,270,000.[165] I will deal with the s 129 point briefly. If the 2016 Agreements did constitutemajor transactions under s 129 (a point I do not need to decide), the situation wouldbe covered by s 18(1)(a) of the Act: a section of the Act would not have been compliedwith. The effect of s 18 is that World TV could not rely on the breach (at least asagainst TVBI), unless it could bring itself within the proviso to s 18 by showing thatTVBI had, or ought to have had, by virtue of its position with or relationship to WorldTV, knowledge of the fact that Mr Ho had purported to sign the 2016 Agreements inbreach of s 129 of the Act.[166] I do not think there is a sufficient evidential foundation for this submission.There was no evidence to suggest that TVBI's position with or relationship to WorldTV should have put it on notice that the 2016 Agreements might be major transactionsfor World TV, and even less to suggest that, if that was the case, TVBI was or shouldhave been aware that World TV had not passed a special resolution approving the 2016Agreements.[167] That view is of course concerned only with the issue of apparent, or ostensible,authority. I think it would clearly be arguable for World TV that Mr Ho could not havehad implied authority to enter into a transaction on behalf of World TV that wouldbreach s 129 of the Act.[168] In her submissions, Ms Wroe emphasised that Mr Ho was not just the chairmanof World TV's board, he was, and had been from a time pre-dating the 2012Agreements, World TV's CEO.[169] On the authority of a CEO to bind his or her company, Ms Wroe reliedprimarily on the decision of the UK Court of Appeal in Hely-Hutchinson v BrayheadLtd, a case in which Mr Richards, the chairman and de facto managing director ofBrayhead, was held to have had authority to enter into certain contracts on Brayhead'sbehalf.32 At first instance, Roskill J found that Mr Richards was "at all times its chiefexecutive in addition to being chairman."33 The Judge was satisfied that on numerousoccasions in the past Mr Richards had entered into contracts on behalf of Brayheadwithout prior authority from the board. The board allowed him to do this, andacquiesced in his doing it. Roskill J concluded that Mr Richards was clearly allowedby Brayhead to hold himself out as having ostensible or apparent authority to enterinto commitments of the kind with which the case was concerned.34[170] In the Court of Appeal, Lord Denning MR discussed the nature of impliedauthority and apparent, or ostensible, authority. As to implied authority, the Master ofthe Rolls said that the authority is implied when it is inferred from the conduct of theparties and the circumstances of the case, such as when the board of directors appointone of their number to be managing director. They thereby impliedly authorise him todo all such things as fall within the usual scope of that office.[171] Lord Denning noted that ostensible or apparent authority often coincides withactual authority, but on occasion may exceed the agent's actual authority (as forexample where the board has placed limits on the authority of the managing director,but those limits have not been communicated to a third party dealing with themanaging director (in a transaction that would normally be regarded as within thescope of a managing director's authority) — in such a case the company will be boundby the managing director's ostensible authority). In such circumstances, the managingdirector may, himself or herself, do the "holding-out" that is required to establishapparent or ostensible authority.35[172] Lord Denning considered that Mr Richards' appointment as chairman ofBrayhead did not carry with it authority to enter into the relevant contracts without thesanction of the board. But he considered that Mr Richards had authority implied fromthe conduct of the parties and the circumstances of the case: he was the de factomanaging director and chief executive, who made the final decision on any matterconcerning finance. And by its conduct over many months the board had acquiesced32 Hely-Hutchinson v Brayhead Ltd [1968] 1 QBD 549.33 At 560.34 At 561-562.35 At 583.in Mr Richards acting as their chief executive and committing Brayhead to contractswithout the necessity of sanction from the board.36[173] The other judgments in the Court of Appeal were to similar effect. LordWilberforce agreed that Mr Richards could not have had the necessary implied orapparent authority merely by virtue of his position as chairman, but he had impliedauthority on the facts of the case.[174] Lord Pearson agreed that Mr Richards had implied authority from the board tobind Brayhead. On the question of ostensible authority, His Lordship noted that theauthority does not usually involve any direct communication between the board of acompany and the outside contractor — the communication is typically madeimmediately and directly by the agent to the outside contractor. It is thereforenecessary in order to make a case of ostensible authority, to show in some way thatsuch communication, which was made directly by the agent, is made ultimately by theboard. His Lordship considered that that could be shown by inference from theconduct of the board in the particular case, by (for instance) placing the agent in aposition where he could hold himself out as the company's agent, and acquiescing inhis activities, so that it could be said that the board had in effect caused therepresentation to be made. In those circumstances, the board is considered to beresponsible for, and to have made, the representation to the outside contractor.[175] Ms Wroe also referred to the decision of the New Zealand Court of Appeal inPascoe Properties Ltd v Attorney-General, a case concerned with the authority of avaluer, who had been retained by the Ministry of Economic Development to negotiategenerally on its behalf, to commit the Ministry to the renewal of the term of a lease.37On the issue of ostensible authority, the Court referred to its judgment in New ZealandTenancy Bonds Ltd v Mooney, where the Court noted that a representation by the agentthat he has authority cannot create apparent authority unless the principal can beregarded as having in some way instigated or permitted it, or put the agent in a positionwhere he appears to be authorised to make it.3836 At 584.37 Pascoe Properties Ltd v Attorney-General [2014] NZCA 616 (CA).38 New Zealand Tenancy Bonds Ltd v Mooney, [1986] 1 NZLR 280 (CA), referred to in PascoeProperties Ltd v Attorney-General at [19].[176] The Court in Pascoe concluded that the representation of authority necessaryfor a finding of apparent authority can be effected through a course of dealing that issufficiently frequent and understood. It may also arise where an agent is vested witha particular office, and that office is of the kind that could reasonably be expected tocarry the authority to enter into the transaction. The perception of authority by theother party must be reasonable.39[177] Ms Wroe also relied on the judgment of French J in Levin Meats Ltd v PerfectPackaging Ltd.40 In that case, the Judge was concerned with whether the appellantcompany (Levin) was bound by a contract entered into by its general manager/chiefexecutive officer (Mr Grey) without the approval of Levin's board. The partiesaccepted that nothing turned on the question of whether Mr Grey's proper designationwas "general manager" or "chief executive officer". Mr Grey had assured therespondent (Perfect) that he had full signing authority, but that authority was laterdenied by Levin's board. Perfect's claim against Mr Grey was settled, and its caseproceeded against Levin. Mr Grey gave evidence for Perfect, contending that he hadacted within his authority as chief executive officer who controlled Levin's operations.One of Levin's directors gave evidence to the contrary, saying that Mr Grey did nothave authority to enter into contracts for the acquisition of the significant capital itemsof the kind with which the case was concerned, without board approval.[178] As in this case, there was no evidence as to the powers customarily exercisedby a general manager or chief executive officer of a company operating in the relevantindustry.[179] On appeal from the District Court judgment upholding Perfect's claim,French J noted that Mr Grey's actual authority was not in issue — the issue waswhether he had apparent authority, as represented by Levin. Her Honour accepted thatthe existence of other contracts signed by Mr Grey on behalf of Levin involving thepurchase of capital items was relevant to the issue of apparent authority, and it was notdisputed that Mr Grey had on occasion signed such contracts (being contracts ofsimilar importance to the one in issue). Levin's director accepted that in the other39 Pascoe Properties Ltd v Attorney-General, above n 37, at [21].40 Levin Meats Ltd v Perfect Packaging Ltd HC Christchurch CIV-2011-409-000018, 1 August 2011.cases where Mr Grey had signed, there was no way the other contracting party wouldhave known whether the board had approved the transaction or not.[180] Her Honour said that she would have been prepared to accept without evidencethat a chief executive officer of a company like Levin would normally have authorityto enter into contracts for the acquisition of capital items of the value of the contractat issue. She considered it significant that various authorities relied upon by counselfor Levin had related to contracts purportedly entered into by middle management, nota chief executive officer.41[181] Her Honour then addressed subsections 18(1)(c) and 18(1)(d) of the Act, whichtogether broadly encompass the common law concept of apparent, or ostensible,authority, subject to the "reliance/reasonableness" factors which are addressed (in anarguably narrower fashion) by the proviso to s 18(1). Her Honour noted first that thekey difference between s 18(1)(c) and s 18(1)(d) is that subsection (1)(d) involves anagent having apparent authority that would exceed his or her normal customaryauthority. The learned Judge went on to note that, on the assumption that it would nothave been common for a chief executive officer of a meat processing company thesize of Levin to enter into contracts of the type in issue, it followed that to satisfysubsection (1)(d) more than just the designation "chief executive officer" wasrequired.42[182] On the facts, Her Honour was satisfied that there was further evidence, and thats 18(1)(d) of the Act applied. She noted, for example, that Levin's directors did noteven know that Mr Grey's business card showed him as the CEO. When outsiderscontacted Levin's plant, Mr Grey was the only person available, and he appeared to bein complete control. Her Honour considered it "very significant" that Mr Grey hadpreviously negotiated and signed contracts for the purchase of valuable capital itemson behalf of Levin. Her Honour concluded that the combined effects of the furtherevidence was sufficient to establish that, whatever may have been the normal practicein meat processing companies, Levin held out or represented to the world at large, andin particular Perfect, that Mr Grey did have the authority to enter into a contract of the41 At [56].42 At [58]-[59].type at issue. Section 18(1) and the conditions of ostensible authority at common lawwere accordingly satisfied.[183] I think that must also be the case here. As in Levin Meats Ltd v PerfectPackaging Ltd, Mr Ho had previously negotiated and signed contracts of a very similarnature with TVBI, and he had done so with the apparent authority, acceptance, oracquiescence of the board of World TV.43 As Lord Pearson noted in Heli-Hutchinson,the required apparent authority can be inferred from the conduct of the board in aparticular case, for example by placing the agent in a position where he could holdhimself out as the company's agent, and in acquiescing in his activities. In my view,that is precisely what has happened here. By either approving Mr Ho's execution ofthe 2012 Agreements as its chief executive officer, or acquiescing in his action insigning the 2012 Agreements, the board in effect caused the later representations madeto the effect that Mr Ho had the same authority from World TV to sign the 2016Agreements as its agent.[184] That is consistent with the decision of the Court of Appeal in Pascoe, wherethe Court noted that the representation of authority necessary for a finding of apparentauthority can be effected through a course of dealing that is sufficiently frequent andunderstood.[185] All of those factors are present here, and in my view the absence of evidenceon what a chief executive officer/chairman in Mr Ho's position had customaryauthority to do on behalf of the company was unnecessary. Even if entering into the2016 Agreements would not have been within the customary authority of someone inMr Ho's position, the circumstances fell within s 18(1)(d) of the Act — World TV heldout Mr Ho as having authority to sign the 2016 Agreements on its behalf.[186] The case for World TV on Issue (2) must therefore turn on the operation of theproviso to s 18(1), and whether TVBI's reliance on the holding out of Mr Ho as havingthe necessary authority was reasonable.43 World TV could not reasonably suggest that it was unaware of the fact that Mr Ho had signed the2012 Agreements, or the 2015 supplementary agreements, and I did not understand Mr Keall tohave made any argument to that effect.[187] French J considered the operation of the proviso to s 18(1) in Levin Meats Ltd.It was common ground between counsel in that case that Perfect would not have beenentitled to rely on s 18(1)(d) if its representative knew or ought to have known thatMr Grey did not have authority to enter into the contract. It was also common groundthat "knowledge" for the purposes of the proviso was wider than actual knowledge,and would include imputed or deemed knowledge, such as wilfully shutting one's eyesto the obvious, wilfully and recklessly failing to make such enquiries as an honest andreasonable person would make, knowing of circumstances which would indicate thefacts to an honest and reasonable person, and knowing of circumstances which wouldput an honest and reasonable person on enquiry.44[188] Mr Keall submitted that TVBI ought to have known of a number of matterswhich should have put it on enquiry as to whether Mr Ho had authority to sign the2016 Agreements. He submitted first that the 2016 Agreements committed World TVto a level of expenditure it plainly could not pay. TVBI had directed a demand toMr Ho in June of that year for payment of $299,840, and in response Mr Ho arrangeda total payment of a little over $52,000. He submitted also that TVBI had not contestedWorld TV's contention that Mr Ho simply capitulated to TVBI's terms, and agreed tobackdate the 2016 Agreements by six months, without negotiation. He submitted thatTVBI must have realised that Mr Ho could not have obtained authority from his boardto proceed with those arrangements. At very least, he argued that there were genuineconcerns over Mr Ho's behaviour which could not be resolved on an interlocutoryapplication for summary judgment. He noted also that there was no evidence fromanyone who signed the 2016 Agreements on behalf of TVBI, nor evidence of anycommunications which may have preceded the signing of the 2016 Agreements.[189] Mr Keall also referred to the "irregular conduct" of Mr Ho, particularly inrespect of Ms Wu's evidence that Mr Ho asked to exclude a licence fee of $400,000payable to TVBI from World TV's accounts (on the basis that they were said to be notpayable until there was a profit from that part of the business). Mr Keall submittedthat the evidence suggests that Mr Ho must have negotiated alterations to the 2016Agreements that reduced, or at least suspended, the full impact of their terms. World44 Levin Meats Ltd v Perfect Packaging Ltd, above n 40, at [62]-[63], citing John Farrar (ed)Company & Securities Law in New Zealand (Brookers, Wellington, 2008) at 121-122.TV must be entitled to explore those arrangements via discovery and crossexamination.[190] In my view, World TV has not provided sufficient evidence to show an arguablecase that the proviso to s 18(1) applies.[191] First, I do not consider there is anything in Mr Keall's "backdating of theagreement" argument. While the supplementary agreements made in 2015 expired inmid-August of that year, it is clear from the email from Ms Yu of TVBI dated 6 June2016 that World TV had assumed ongoing obligations to TVBI on some basisthereafter.45 There appears to have been continuity of supply by TVBI through to thetime the 2016 Agreements were signed, with the supply switched to TVBI's OTTplatform from 1 March 2016. There must have been some understanding on the pricethat would be payable from 1 March 2016, and I do not consider it at all surprisingthat when the parties got round to documenting their understanding in the 2016Agreements, the terms were backdated to the date the (OTT) supplies commenced.[192] Turning to Mr Keall's argument that TVBI must have realised that the 2016Agreements would be uneconomic for World TV, I accept that TVBI must have knownthat World TV had run into financial difficulties over at least the two years or soleading up to the signing of the 2016 Agreements. More generally, it would have beenaware that the activities of consumers engaged in illegal live streaming had adverselyaffected the market for satellite and cable TV providers.[193] For example, on 26 June 2014 Mr Ho reported to his board that, due to lowersubscriber numbers, he had asked TVBI to reduce its content fees by 15 per cent, andthat TVBI agreed. And the impression from the minutes is that at its meeting of26 November 2015, the World TV board was under no illusions about the financialdifficulties in which it found itself. The minutes referred to a "need to retrench", andMr Ho told the board that he considered operating expenses would need to be reducedby negotiating reductions in content fees "in view of the decline in the company's45 According to that email, there was an "agreed payment schedule" under which World TV wouldpay TVBI a total of $575,628 during the period December 2015 to May 2016. The email said thatWorld TV had only paid $275,788, leaving a balance of $299,840.revenues". But it appears that World TV was by no means a "basket case" — at themeeting of 16 June 2015 the board unanimously agreed to authorise Mr Ho tonegotiate a $500,000 loan from the bank to cover certain capital expenditurerequirements, and World TV group's consolidated financial statements for the yearended 31 March 2016 did show a small profit.[194] At the board meeting of 26 November 2015, the board unanimously agreed toapprove Mr Ho's proposal to switch to the OTT platform, but some board members,including Mr Gary Chang, expressed serious doubts about moving to the OTTplatform with TVBI. Mr Ho is reported to have advised the board that, while the movecould not be assured of success, remaining with the SKY TV platform would surelyguarantee failure. Mr Ho expressed the view that the OTT platform was the way forthe company to retain lost subscribers and build its business for the future.[195] Against that background, I see nothing in the previous late payments ordefaults of World TV, or the costs involved for World TV under the 2016 Agreements,that should have put TVBI on notice that Mr Ho might not have the authority of hisboard when he entered into the 7 September 2016 Agreements. TVBI would haveassumed the World TV board was well aware of both the market difficulties thecompany had encountered in New Zealand, and its track record of late payments toTVBI. Against those negative considerations, the two companies had a relationship,with four years of history going back to 2012, and World TV was about to change itsoperations substantially by moving to internet streaming of its TV content, usingTVBI's OTT platform. While World TV would be paying a little more than it waspaying under the 2015 supplementary agreements, those agreements were concernedwith a different product, and they were only in place for a few months. And the feespayable under the 2016 Agreements (total $2,268,000 over three years) would still beless than the $2,460,000 payable under the 2012 Agreements for the same term. WorldTV would also be receiving marketing support from TVBI, and guaranteed access tomore extensive content for a three year period.[196] In all of those circumstances I do not think it is at all clear that TVBI must haveknown that the 2016 Agreements would be uneconomic for World TV. But even ifTVBI did think that might be the case, that would not provide a basis for it to inferthat Mr Ho did not or might not have his board's authority when he negotiated the2016 Agreements. The far greater likelihood is that TVBI would have assumed Mr Hohad the necessary authority, and that World TV was attempting to deal with itsdifficulties by moving to a new, arguably more attractive product. To the extent thatTVBI may have had concerns over World TV's ability to perform under the 2016Agreements it may also have had one eye on its ability to take over World TV'ssubscriber base if its relationship with World TV broke down.[197] There is no evidence of that, but it was a suspicion entertained by some onWorld TV's board at the November 2015 meeting, including Mr Gary Chang.[198] The point is that none of this provides any evidential foundation for anargument that TVBI had or should have had reason to believe that Mr Ho was notoperating with the approval of his board, as he had on previous occasions when henegotiated contracts with TVBI.[199] Mr Keall's argument that Mr Ho appears to have capitulated to TVBI's terms,and signed the 2016 Agreements without negotiation, may (if it is so) have simplyreflected the parties' respective negotiating strengths. The 2016 Agreements appear tobe largely standard form documents used by TVBI, and it is simply not plausible thatWorld TV's board members would not have been aware of how much the move toTVBI's OTT platform in early 2016 would be likely to cost it. Everyone knew aboutthe possible upside in moving to the OTT platform,46 and I think it inconceivable thatMr Gary Chang and the others then on the World TV board would not have enquiredabout the content cost (even if they did believe that providing a platform on whichtheir clients could watch more than 60 Chinese channels with a single subscriberpackage would result in significantly higher revenues).[200] World TV expresses some concern over Mr Ho's "irregular" behaviourgenerally, including his alleged discussion with Ms Wu in early 2017, when Mr Hotold her that there was an annual licensing fee payable to TVBI of $400,000 and an46 The media kit prepared in early 2016 announced the move away from the SKY TV network to "amore advanced internet-based OTT platform in association with TVB, the biggest TV station insouthern part of China".annual facility of $300,000. Mr Ho is said to have asked Ms Wu to exclude thelicensing fee ($400,000) from World TV's accounts, as they would not be payable untilthere was a profit from that part of the business.[201] In a reply affidavit on the third party joinder application, Ms Wan produced acopy of a letter dated 14 November 2017 from TVBI's solicitors to World TV'ssolicitors, in which TVBI's solicitors said that the three signed licence agreements(constituting the 2016 Agreements) clearly set out the payment terms, and that TVBIhas never entered into any additional agreements contrary to those agreements.Ms Wan said in this affidavit that between September 2016 and July 2017 TVBI madephone calls to Mr Ho demanding payments, and that during the period there wereregular operations meetings via teleconference, in the course of which TVBI madedemands for payments. She said that World TV continuously sought extensions tomake payments, and because of the longstanding business relationship thoseextensions were granted.47[202] I do not consider it reasonably arguable for World TV that there existed someside agreement between TVBI and Mr Ho, under which the licensing fees would notbe payable until that part of the business made a profit. First, when TVBI made itsdemand on World TV for payment on 7 July 2017, Mr Ho was still chief executive andchairman of World TV. TVBI made demand for the amount then said to be owing,including licensing fees. Mr Ho's response was not to deny that the licensing feeswere payable because World TV had not yet turned a profit on that part of the business— he simply replied (on 10 July 2017) that he had received the email, and was workingon a payment schedule that he would send as soon as it was finished. On 17 July 2017Mr Ho asked for more time to make a payment. He said: "I understand the urgencyto settle the outstanding amount with your company therefore I have chased them allthe time [an apparent reference to World TV's existing banker]." And on 20 July 2017,Mr Ho told TVBI that he was "organising director guarantees", and that when World47 The requests for extensions, and TVBI's agreement to those extensions, appear to be reflected inMs Wan's claim schedule, where arrears of $21,000 claimed to be outstanding for transmissionfees in respect of the period March to September of 2016 was said to be not due for payment until14 November 2016. Similarly, the arrears for the October 2016–February 2017 period were notsaid to be due until 18 May 2017.TV drew down on the loan it would pay half of the outstanding amount, and thebalance on a monthly basis at the rate of $53,000 until paid.[203] Mr Ho never mentioned any "side agreement", under which the full amountsstated in the 2016 Agreements would not be payable to TVBI, and the behaviour ofboth TVBI and Mr Ho is in my view inconsistent with the existence of any side dealof the kind Ms Wu's affidavit appeared to suggest.[204] Nor does it seem plausible that a substantial commercial operator such as TVBIwould have agreed to continue supplying World TV, without being paid over 50 percent of its agreed fees, until some unspecified future point in time when the relevantpart of World TV's business might become profitable.[205] I do accept Mr Keall's broad submission that there appear to have beenconcerning "irregularities" in Mr Ho's behaviour, not least in continuing to purport toact as relationship manager with TVBI after he had been removed from the board anddismissed as World TV's CEO on 12 July 2017. While Mr Ho says that he continuedto negotiate with TVBI with Mr Gary Chang's express authority, I agree with WorldTV that that seems implausible in circumstances where Mr Ho had just been dismissedfrom the board (and from his role as CEO), and was then embroiled in litigation withWorld TV.[206] But I do not think such irregularities could be sufficient to fix TVBI with thekind of knowledge required by the proviso to s 18(1) of the Act. They are at bestoffered in support of speculation by World TV that TVBI might have had someknowledge that Mr Ho did not have authority, but I think his continuing to purport toact on World TV's behalf after he was dismissed as CEO tends if anything to supportthe view that when he signed the 2016 Agreements he probably led TVBI to believethat he had full authority to do so. And it is not enough for World TV to speculate thata defence might emerge if it is given the opportunity to further investigate the matter,at least where the circumstances do not suggest that an injustice might otherwiseoccur.48 In my view World TV has not put forward a sufficient evidential foundationto justify the refusal of summary judgment on the "no apparent authority" issue.48 Middleditch v New Zealand Hotel Investments Ltd (1992) 5 PRNZ 392 (CA), at 394-395.[207] I therefore conclude that World TV has not shown an arguable case that thecircumstances come within the proviso to s 18(1), or that it was not reasonable forTVBI to have relied on World TV's representations as to Mr Ho's authority. The 2016Agreements were therefore binding on World TV on that basis. Having regard to thatfinding, I do not need to make any finding on the issues of whether or not Mr Ho hadimplied authority to bind World TV when he signed the 2016 Agreements, and whetherthe 2016 Agreements were ratified by World TV.Issue (3) – If the 2016 Agreements are binding on World TV, has TVBI sufficientlyproved that World TV has no arguable defence as to the amount claimed?Ms Wroe's submissions[208] Ms Wroe submitted that TVBI's quantum evidence, in which Ms Wan deposedthat TVBI's records show that TVBI performed its licensing and OTT obligations, wassufficient. Ms Wan's supplementary evidence verified the statement of claim, andstated that TVBI performed all of its obligations under the 2016 Agreements.[209] World TV would have been fully aware of what it was providing its subscriberson the OTT platform, and it made partial payment of the fees claimed. It also includedthe amount of TVBI's claim in its financial statement for the year ended 31 March2017.Mr Keall's submissions[210] Mr Keall noted that TVBI's claim is founded on the assertion that it performedits own obligations under the 2016 Agreements. In its statement of defence, World TVsays that it has insufficient knowledge and particulars of that assertion.[211] Mr Keall submitted that TVBI has not established a prima facie case of supplyof the product and services for which it seeks payment. He accepted that TVBI hadsupplied a product and services to World TV to a degree, but the extent of that supplyrelative to the contractual terms was uncertain.Discussion and conclusion on Issue (3)[212] In my view, TVBI has sufficiently shown that World TV has no arguabledefence on this issue.[213] The carriage fees, customer support fees and marketing fees claimed by TVBIare all in the category where World TV must have known whether it had received theservices, and I think that must also be the case with a charge of $13,017 claimed byTVBI as the balance due on a talent fee for the 2015 Miss Chinese New Zealandpageant. World TV should not have been dependent at all on Mr Ho to work out whatcontent it had received over the relevant period, and what it had paid for that content.[214] That situation appears to be aptly covered by the requirement that, to defeat asummary judgment application, the defendant must provide sufficient particulars toshow that there is an issue worthy of trial.49 In my view World TV has not done that,and Ms Wan's evidence that TVBI performed all of its obligations, plus Mr Ho'sapparent acceptance of the amounts claimed, were together sufficient to require WorldTV to supply at least some particulars of any obligations TVBI may not havedischarged under the 2016 Agreements.[215] The same considerations apply to TVBI's claim for "121 program hours @NZ$80" — total $9,680. World TV must know what program hours it received that ithas not paid for at the agreed rate of NZ$80, and it was incumbent on it to put forwardat least something to show that there is an issue worthy of trial on this claim. It hasnot done so.[216] Likewise, World TV has not suggested it has not received the benefit of theunpaid transmission fees (total $21,000, payable at the rate of $3,000 per month underthe 2016 Agreements, plus arrears (total $36,000) unpaid for the period March 2016to February 2017). If these fees had been paid it was up to World TV to say so.49 Pemberton v Chappell [1987] 1 NZLR 1; (1986) 1 PRNZ 183 (CA), at 185.Issue (4) — should the Court exercise its discretion against the entry of summaryjudgment?[217] Particularly with the falling away of the third party claim against Mr Hofollowing the hearing, when he became bankrupt, I see no basis for exercising mydiscretion against an award of summary judgment in this case. The discretion is inany event a limited one, at least where the entry of judgment would not involve aninjustice, 50 and World TV has not advanced any arguable basis for a finding of possibleinjustice.Result[218] For all of the foregoing reasons, I conclude that TVBI has sufficiently shownthat World TV has no reasonably arguable defence to the claim, and that it is liable forthe $1,009,897 summarised in the schedule produced by Ms Wan as exhibit "O" to herfirst affidavit, together with the further sum of $3,000 representing transmission feesfor September 2017. There will accordingly be summary judgment for TVBI in thesum of $1,012,897 as claimed.[219] The 2016 Agreements each provided for interest compounding at 1.5 per centper month. A table was provided by Ms Wroe at the hearing, setting out the total claimof $295,173.78. The amount in the table appears to have been calculated to the dateof the hearing, notwithstanding the termination of the 2016 Agreements in earlyOctober 2017. Mr Keall did not take any point about that at the hearing, and it maybe that World TV accepts that the interest has been correctly calculated. However,Mr Keall may not have had time to consider the issue and if there is any dispute Iwould be assisted by further brief submissions from counsel. I accordingly direct thatWorld TV is to file a memorandum within 15 working days advising if the compoundinterest calculation provided by Ms Wroe is accepted (on the basis of the judgmentnow entered for the principal sum claimed). If it is not, the memorandum is to statethe respects in which the calculation is not accepted, and the grounds for that position.In the event the interest claim is disputed, TVBI may file a reply memorandum within10 working days of service of World TV's memorandum. I will then deliver a50 Berg v Anglo-Bank International Ltd, 1 PRNZ 713 (CA), referring to Sayles v Sayles (1986)1 PRNZ 95 (HC).supplementary judgment on the papers dealing with application for summaryjudgment on the interest claim.[220] TVBI had two other substantive claims. The first, for damages (additional tothe $1,012,897 for which I have entered judgment) "to be assessed", has not beenproved to the point where it is clear that World TV has no arguable defence. It willneed to go forward to trial in the usual way. The second claim was for the sum of$8,218.50 for pre-litigation costs under a particular provision in the licenceagreements which formed part of the 2016 Agreements. This claim was not clearlyand separately pleaded in TVBI's statement of claim, and details of it were onlypresented by Ms Wroe at the hearing. In those circumstances I do not consider itappropriate to enter summary judgment on this part of the claim. Like the claim for(additional) damages to be assessed, it will need to go forward to a trial on quantum ifthe parties are unable to agree on it.[221] Finally, TVBI is entitled to costs from the commencement of the proceeding.These are awarded on a 2B basis as requested by TVBI, with disbursements to be fixedby the Registrar.[222] The Registrar is directed to allocate a case management conference at whichdirections will be given for the disposal of TVBI's outstanding claims, on the firstpracticable date after 1 May 2019.Associate Judge Smith