Mapua Landscapes (15 Warren Place, Mapua) Tribunal Decision: ‘Engaged in Conduct That Was Likely to Mislead and Deceive, Breached The Fair Trading Act and Consumer Guarantees Act’
- Mapua Landscapes Ltd breached s 9 of the Fair Trading Act because it engaged in conduct that was misleading or deceptive, or likely to mislead or deceive
- Mapua Landscapes Ltd breached the Consumer Guarantees Act failing to carry out the services with reasonable care and skill.
- Mapua Landscapes Ltd’s delay in commencing the job impacted on when the job finished, and this resulted in The Client losing the sale agreement
- The price Mapua Landscapes Ltd charged was not reasonable
- The Client did not do anything that was intended or likely to induce Mapua Landscapes Ltd to believe that the proceedings were not within the jurisdiction of the Tribunal.
ORDER OF DISPUTES TRIBUNAL
District Court: Nelson Case number: CIV-2018–042–000400
APPLICANT Mapua Landscapes Limited
15 Warren Place
Mapua
7005
RESPONDENT (The Client)
Facts
In 2017, The clients were developing a small subdivision at their property. The subdivision consisted of three worker’s cottages (Lots 1 to 3) and a separate building section (Lot 4). (Other Operator) was the project manager for the subdivision.
As part of the subdivision, The client needed to have three short sealed driveways built to Lots 1 to 3. As the driveways were on Council-owned road reserve, the Council required that any contractor completing the work had current Council-approved tickets.
The client pre-sold Lots 1 to 3. Each sale agreement contained a sunset clause whereby a new title for the Lot had to be available by 31 March or the agreement would come to an end. The three driveways had to be built by a contractor in time for other contractors to complete their work on the driveways (such as sealing) before the final survey and council submissions could be completed to ensure that the new titles could be obtained by The client in time to meet the sunset clauses.
On 22 November, The client held an onsite meeting with Mr Broderick and Ms Kemp of Mapua Landscapes Limited and (Other Contractor) to discuss the work required to build the driveways on Lots 1 to 3 and to determine whether Mapua Landscapes Ltd could do that work (‘the Meeting”). The work involved forming the driveways on Lots 1 to 3 on a labour-only basis, and did not include materials, traffic management or sealing. Mapua Landscapes Ltd did not have the required Council-approved tickets to do the work, but Other Operator suggested that Mapua Landscapes Ltd carry out the work under its tickets. At the Meeting, it was agreed that Mapua Landscapes Ltd would build driveways on Lots 1 to 3, using Other Contractor’s tickets. (Note: Other contractor was too busy to do the work and meed the deadlines)
Mapua Landscapes Ltd commenced the job on 8 February . On 14 February, Mapua Landscapes Ltd had to stop working because a Chorus cable needed to be moved from across the driveway of Lot 2 before work could continue. Moving the cable took around three weeks to complete. Mapua Landscapes Ltd returned to the job on 5 March and completed the job on 7 March .
On 7 March , Mapua Landscapes Ltd sent an invoice to The client for $8,327.50 (excluding GST) for ($9,576.64 (including GST)) (“the Invoice”).
Follow-on contractors then completed their work on Lots 1 to 3, but the titles were not obtained in time for The client to meet the sunset clauses in the sale agreements for Lots 1 to 3.
The buyers of Lots 1 and 2 each agreed to an extension of the sunset clause in their sale agreement, and those sales went through once the titles were available. However, the buyer of Lot 3 did not agree to an extension of the sunset clause and the sale agreement came to an end. While The client anticipated losses as a result, these losses did not eventuate because they were able to sell Lot 3 again at a higher price.
On 13 April , Mapua Landscapes Ltd sent a formal letter via their solicitor Yvanca Clarisse Pitt and Moore to The client demanding payment of the Invoice. As the Invoice was not paid, Mapua Landscapes Ltd commenced proceedings in the District Court. During the District Court proceedings, Mapua Landscapes Ltd paid over $10,000.00 in legal costs, and The client paid over $12,000.00 in legal costs.
The District Court transferred the proceedings to the Tribunal at The client’s request. In the Tribunal, Mapua Landscapes Ltd claims damages of $9,576.64 from The client, being the amount of the Invoice, plus interest. Mapua Landscapes Ltd also seeks legal costs under s 43 of the Disputes Tribunal Act 1988 (“the DT Act’). The Client defended Mapua Landscapes Ltd’s claim, and counterclaimed against Mapua Landscapes Ltd seeking damages of $15,000.00, as a contribution to their legal costs (which they say will amount to $15,000.00); their expenses of dealing with the District Court ($8,000.00); and stress ($10,000.00).
Mr Broderick and Ms Kemp are the directors and shareholders of Mapua Landscapes Ltd and were appointed to represent Mapua Landscapes Ltd at the first hearing. They attended both hearings on Mapua Landscapes Ltd’s behalf. The client attended both hearings.
The parties have presented a large amount of evidence to the Tribunal. This decision only refers to the evidence which is relevant to the Tribunal’s decision on the issues.
Issues
The questions for the Tribunal to determine in relation to Mapua Landscapes Ltd’s claim, and The client counter-claim, are:
- (a) Was there a contract between Mapua Landscapes Ltd and The client and, if so, has either party breached a term or terms of that contract?
- (b) Are the amounts claimed by Mapua Landscapes Ltd proved and reasonable and is Mapua Landscapes Ltd entitled to claim interest?
- © Did Mapua Landscapes Ltd complete the services it provided to The client with reasonable care and skill? If not, are The Clients entitled to damages from Mapua Landscapes Ltd and are the amounts claimed proved and reasonable?
- (d) Did Mapua Landscapes Ltd engage in conduct, in trade, that was misleading or deceptive or likely to mislead or deceive? If so, are The Clients entitled to damages from Mapua Landscapes Ltd and are the amounts claimed proved and reasonable?
- (e) Did Mapua Landscapes Ltd misrepresent the timing of the job to The Client? If so, are The Clients entitled to damages from Mapua Landscapes Ltd and are the amounts claimed proved and reasonable?
- (f) Is either party entitled to legal costs from the other party under s 43 of the DT Act?
Was there a contract between Mapua Landscapes Ltd and The Client and, if so, has either party breached a term or terms of that contract?
The parties to a contract agree the terms that apply to their contractual relationship, and a contract may be written or oral.
Once parties have formed a contract, they must comply with the terms of that contract. A contract is likely to be enforceable even where the parties have not turned their minds to all the detail of the contract’s terms. If there is a contract between parties and one party breaches a term of that contract, he or she is in breach of contract and the other party may have a legal remedy. The usual remedy for a breach of contract is damages which are designed to put the injured party in the position he or she would have been in had the breach of contract not occurred. The injured party must prove that he or she has suffered a loss because of the breach, and that loss must be quantified.
The Client suggested at the second hearing that there was no contract, either written or oral, made at the Meeting. However, I am satisfied that there was an oral contract between the parties which was made between The Client and Mr Broderick at the Meeting, despite the parties now disagreeing about the precise terms of that contract. All the elements of a contract were present, and I am satisfied that Mapua Landscapes Ltd would not have commenced the work had Mr Broderick believed there was no contract to provide the services.
The Client and Mr Broderick confirmed at the first hearing that the contract included the following terms: that Mapua Landscapes Ltd was to build the driveways on Lots 1 to 3 on a labour-only basis using Other Operator’s Council-approved tickets; Mapua Landscapes Ltd was to obtain all materials from Other Operator and pick up those materials; and there was about one week’s worth of work needed to complete the three driveways. However, they disagreed about other terms, in particular, regarding the price and timing.
I prefer The Client’s recollection that price was discussed at the Meeting and that Mr Broderick agreed that the whole job would cost no more than $5,000.00.
Mr Broderick says he never discussed pricing with The Client at the Meeting and does not recall The Client ever asking for a written quotation, estimate or contract. He says he had no idea how much the job would cost, so did not discuss it. However, on balance, I prefer The Client’s recollection that price was discussed at the Meeting and that Mr Broderick agreed that the whole job would cost no more than $5,000.00. The Client had already obtained quotations from other contractors for the job, so it is reasonable to assume that The Client would discuss price with Mr Broderick. The Client says that, although the other quotations he had for the job were on a labour plus materials basis, he knew that the labour component of the quotations was around $5,000.00. I am therefore satisfied that he had an idea of how much Mapua Landscapes Ltd’s labour- only job ought to cost and would therefore have discussed this with Mr Broderick. Also, I do not accept that an experienced landscaper such as Mr Broderick would not discuss pricing with a client for a commercial job such as building driveways before taking on the job. I am therefore satisfied that the oral contract between the parties included a term that the job would cost no more than $5,000.00. As it is usual in the building industry to discuss pricing on a GST exclusive basis, I am satisfied that this cost was intended to be exclusive of GST, bringing the top-end of the agreed cost to $5,750.00 (including GST).
I accept The Client’s evidence that it was essential to him that Mapua Landscapes Ltd was able to complete the driveways quickly and begin as soon as possible.
I consider it more likely than not that, had Mapua Landscapes Ltd not agreed to complete the job quickly and begin in January , it would not have got the job.
I accept The Client’s evidence that it was essential to him that Mapua Landscapes Ltd was able to complete the driveways quickly and begin as soon as possible, that he made this clear to Mr Broderick at the Meeting, and that Mr Broderick confirmed that Mapua Landscapes Ltd could do the job quickly. I also accept The Client’s evidence that he only contacted Mapua Landscapes Ltd to quote for the job when he realised that his preferred contractors could not get the job done in time to meet the sunset clauses because they could not begin work until February. Therefore, I consider it more likely than not that, had Mapua Landscapes Ltd not agreed to complete the job quickly and begin in January , it would not have got the job.
It seems there was confusion between the parties regarding when Mapua Landscapes Ltd would start and finish the job, and the parties disagreed about this at the hearings. The Client says that Mr Broderick understood the urgency of the job when they discussed it at the Meeting, and that Mr Broderick agreed to begin the work on the driveways as soon as possible and would do his best to start before Christmas but that he had two floor jobs to complete so he would begin on 8 January at the latest. I accept The Client’s evidence that they believed the start- date was to be 8 January , as they instructed Other Operator to book the required Council traffic management for that day. However, Mr Broderick recalls the discussion differently and says that no specific start date was discussed at the Meeting, rather, he told The Client that he had two floor jobs to complete when he got back to work on 8 January and that The Client’s job would be the next in line. He therefore believed that he was to start the job as soon as he could after 8 January .
Although the parties were at cross-purposes regarding the start-date, I am satisfied that it is more likely than not that the parties agreed that the job would begin as soon as possible, during January at the latest, and would take one week to complete, and that this formed a term of the oral contract between the parties.
I find that The Client breached the contract by failing to pay for the work done. Mapua Landscapes Ltd built the driveways and The Client is therefore contractually obliged to pay it for that work. During the hearings, The Client stated on more than one occasion that he has never said he refused to pay the Invoice. However, The Client has failed to pay the Invoice for over 12 months because he disputes the amount of that Invoice and I consider this to amount to a refusal to pay.
Mapua Landscapes Ltd has also breached the contract by charging more than the agreed cost. It has also breached the contract by starting the job late.
Mapua Landscapes Ltd has also breached the contract by charging more than the agreed cost. It has also breached the contract by starting the job late (in February ), but I have dealt with this failure under the Consumer Guarantees Act (as explained below) rather than as a breach of contract. In any event, the outcome would be the same in terms of the damages payable to The Client.
Are the amounts claimed by Mapua Landscapes Ltd proved and reasonable and is Mapua Landscapes Ltd entitled to claim interest?
For the reasons outlined above, I find that the amount payable by The Client to Mapua Landscapes Ltd on the Invoice is $5,750.00 (including GST) and I award damages to Mapua Landscapes Ltd of $5,750.00. The sum of $750.00 is deducted from these damages, being damages awarded to The Client on their counterclaim (as explained below).
Mapua Landscapes Ltd seeks interest on the Invoice as part of its claim. Interest may be payable on a debt, as of right, if there was an agreement between the two parties about interest being payable in the event of late payment of an invoice. The Tribunal also has discretion to award interest on an any amount it awards (s 20(1) of the DT Act). However, interest is not a common feature of Tribunal orders and is unlikely to be awarded where there is a genuine dispute between the parties.
While I acknowledge that The Client has failed to pay for the work for a lengthy period, I am satisfied that this delay has arisen because of a genuine dispute between the parties
I am satisfied that the contract between the parties did not include any term regarding the payment of interest in the event of late payment, nor did the contract incorporate any standard terms that Mapua Landscapes Ltd had regarding interest or otherwise. While I acknowledge that The Client has failed to pay for the work for a lengthy period, I am satisfied that this delay has arisen because of a genuine dispute between the parties regarding the amount of the Invoice and certain aspects of the services provided by Mapua Landscapes Ltd, which The Client made known to Mapua Landscapes Ltd as soon as they received the Invoice. The District Court proceedings have exacerbated that delay. Mapua Landscapes Ltd’s claim for interest under s 20(1) of the DT Act is therefore dismissed.
Did Mapua Landscapes Ltd complete the services it provided to The Client with reasonable care and skill? If not, are The Clients entitled to damages from Mapua Landscapes Ltd and are the amounts claimed proved and reasonable?
The Client’s counterclaim against Mapua Landscapes Ltd on the basis that they have suffered consequential loss through Mapua Landscapes Ltd’s actions, seeking damages of $15,000.00. They seek damages for the following costs (reduced to $15,000.00 in total to fall within the Tribunal’s jurisdiction):
- $8,000.00 for dealing with the District Court (80 hours @ $100.00 per hour)
- $15,000.00 Legal costs
- $10,000.00 Stress.
The Client stated at the hearings that the counterclaim was based on misrepresentation under the Contractual Remedies Act (now the Contract and Commercial Law Act 2017 (“the CCLA”)). However, I consider it appropriate to also consider The Client’s counterclaim under the Consumer Guarantees Act.
The Consumer Guarantees Act implies various guarantees into a contract between a supplier and a consumer and applies to the contract between Mapua Landscapes Ltd and The Client. The guarantees implied by the Consumer Guarantees Act are assessed on an objective standard, that is, what a reasonable client would expect from a reasonably competent supplier. Section 28 of the Consumer Guarantees Act implies a guarantee that the services will be carried out with reasonable care and skill. The services to which s 28 refers includes all aspects of the services provided to the customer, not just the physical work, and includes communicating and informing the client and meeting expectations regarding timing and pricing. While The Client was satisfied with the physical work carried out by Mapua Landscapes Ltd on the driveways, he was not satisfied with various other aspects of the services provided to them by Mapua Landscapes Ltd.
I find that Mapua Landscapes Ltd breached s 28 of the Consumer Guarantees Act by failing to carry out the services with reasonable care and skill.
This is so for the following reasons:
(a) Mapua Landscapes Ltd failed to provide a written quotation, estimate, standard terms of trade or written contract to The Client. Rather, Mapua Landscapes Ltd relied on the oral contract made at the Meeting. Mr Broderick says he never discussed pricing with The Client and does not recall The Client ever asking him for a written quotation.
However, I prefer the evidence of The Client that he did request a written quotation from Mr Broderick on more than one occasion.
In this regard, I note that there was an email from The Client to Mapua Landscapes Ltd dated 13 December which states: “Please could we have the quote you have (sic) said you would do today by tomorrow morning”.
This is consistent with The Client’s usual practice because he obtained written quotations from the other contractors who had quoted for the job and I see no reason to suppose that he chose not to obtain a written quotation from Mr Broderick. When a written quotation was not forthcoming, it is more likely than not that The Client felt he had no choice but to allow Mapua Landscapes Ltd to do the work anyway because it was so important to him that the job was done as soon as possible (so that the sunset clauses in the sale agreements he had on Lots 1 to 3 could be met). It is usual practice in the landscaping industry to provide written quotations or estimates to clients as this ensures that both parties understand the pricing of the work. While it is understandable that a landscaper might not always prepare an estimate, quotation and/or contract for a small domestic job, it is reasonable for clients to expect such things from a landscaper for complicated, lengthy jobs which are more commercial in nature. I see The Client’s job as falling within the latter category.
(b) Mapua Landscapes Ltd should have made the start and finish dates of the job clear to its clients and its failure to do so caused confusion and does not meet the required standard of care and skill.
Mr Broderick says he had two floor jobs to complete when he commenced back at work on 8 January which would each take 1.5 weeks to complete. However, it seems unlikely that he advised The Client about this at the Meeting because it means that, if Mapua Landscapes Ltd was to start the floor jobs on 8 January, it could not have begun the driveway job until late in January, which was too late for The Client. Rather, he allowed The Client to continue to believe that the job would begin on 8 January or soon after, and take a week to complete, so The Client expected the job to be completed by mid January , which met their timing requirements.
it seems that they failed to inform The Client each time they were unable to meet an agreed start date, and this lack of communication does not meet the required standard of reasonable care and skill.
© In evidence, Mr Broderick and Ms Kemp did not fully explain why Mapua Landscapes Ltd did not begin the driveways until 8 February , nor why Mapua Landscapes Ltd missed various earlier start dates. They stated in evidence that it took until 8 February to complete the house-pads due to storms along with other urgent jobs. However, it seems that they failed to inform The Client each time they were unable to meet an agreed start date, and this lack of communication does not meet the required standard of reasonable care and skill.
Mapua Landscapes Ltd’s delay in commencing the job impacted on when the job finished, and I am satisfied that this resulted in The Client losing the sale agreement.
(d) Mapua Landscapes Ltd did not begin the job until 8 February which was four weeks after the date that The Client expected the job to start, and the job was not finished until 7 March. Follow-on contractors then completed their work on the driveways, but the titles did not come through in time to meet the sunset clauses in the sale agreements. Mapua Landscapes Ltd’s delay in commencing the job impacted on when the job finished, and I am satisfied that this resulted in The Client losing the sale agreement for Lot 3.
(e) By failing to start the job promptly, Mapua Landscapes Ltd was unable to manage any unexpected contingencies. As it happened, a problem did arise which meant that Mapua Landscapes Ltd could not work for three weeks from 14 February, that is, a Chorus cable needed to be moved from across the driveway area of Lot 2 before work could continue. Mapua Landscapes Ltd returned to the job on March and the job was completed on 7 March. The Client says that the cable was discussed at the Meeting and that Mr Broderick, as the contractor, knew that he was “absolutely responsible for ensuring all cables were moved from any dig site”. However, Mr Broderick says that he believed that The Client or Other Operator were to move the cable. I note that Mr Broderick received a letter from Other Operator dated 2 May which stated that “The Client (sic) had the responsibility for requesting the location of the telecom cable by Chorus.” I am satisfied that there was confusion between the parties regarding who was responsible for moving the cable and it was this confusion that caused the delay due to the cable being moved, rather than Mapua Landscapes Ltd being to blame. However, I am also satisfied that the consequences of the delay caused by the cable move would not have had the same serious impact had Mapua Landscapes Ltd started the job earlier.
Mapua Landscapes Ltd therefore let down its clients by failing to start and finish the job quickly, and by failing to treat the situation as urgent and acting accordingly.
(f) Mr Broderick says the job was completed by 7 March which should have been enough time for The Client to get everything done in time to meet the sunset clauses. However, it seems that Mr Broderick did not fully appreciate what The Client needed to do to meet the sunset clauses after Mapua Landscapes Ltd completed its work. Mapua Landscapes Ltd therefore let down its clients by failing to start and finish the job quickly, and by failing to treat the situation as urgent and acting accordingly.
(g) I have considered The Client’s view that Mapua Landscapes Ltd fudged and falsified hours on the Invoice, however, I am satisfied that he has not proved this and any discrepancies of this nature are accounted for in the amount I have ordered The Client to pay for the job.
Section 30 of the Consumer Guarantees Act implies a guarantee that the services will be completed within a reasonable time in any case where the time for the service to be carried out is not fixed by the contract; nor left to be fixed in a manner agreed by the contract; nor left to be determined by the course of dealing between the parties. I am satisfied that the guarantee implied by s 30 of the Consumer Guarantees Act does not apply to the contract between Mapua Landscapes Ltd and The Client because a term was agreed between the parties regarding when the job would start and that it would take about one week to complete. In any event, I consider a reasonable time for completion of the job to be early February at the latest, based on the job taking around one week to complete and starting at some point in January.
Under s 31 of the Consumer Guarantees Act, The Client is not liable to pay Mapua Landscapes Ltd more than a reasonable price for the job
Section 31(1) of the Consumer Guarantees Act provides that a consumer is not liable to pay to a supplier more than a reasonable price for the services provided where the price is not determined by the contract, nor left to be determined in a manner agreed by the contract, nor left to be determined by the course of dealing between the parties. However, s 31(1) does not apply to the contract between Mapua Landscapes Ltd and The Client because I have found that it did contain a term regarding the price. Even if there was no contract between the parties, or that contract did not include a term regarding the price, I am satisfied that, under s 31 of the Consumer Guarantees Act, The Client is not liable to pay Mapua Landscapes Ltd more than a reasonable price for the job. I assess that price as being $5,750.00 (including GST).
I have noted The Client’s view that he was not told by Mr Broderick that there would be two people doing the work, so he believed that the one-week completion estimate he was given at the Meeting related to price, however, I prefer Mr Broderick’s explanation of why he mentioned one week at the Meeting, that is, to assure The Client that he could complete the work quickly, rather than with regard to price.
However, I am not convinced that the price Mapua Landscapes Ltd charged was a reasonable one
I have had regard for Mr Broderick and Ms Kemp’s evidence that Mapua Landscapes Ltd only charged for the actual time it took Mapua Landscapes Ltd to complete the job, and that they charged a reasonable price. However, I am not convinced that the price Mapua Landscapes Ltd charged was a reasonable one. This is because I accept the evidence of The Client that when they received the Invoice they were shocked as they had to add the cost of materials and sealing on top of the Invoice which meant that the total cost of the three driveways was over $15,000.00 (excluding GST). This was much higher than the labour, materials and sealing quotations that The Client had received from other suppliers. For instance, the Other Operator quotation dated 30 November 2017 was for $12,000.00 excluding GST), and included labour, materials and sealing.
I have had regard for the spreadsheet that Ms Kemp presented to the Tribunal which shows that, had Mapua Landscapes Ltd supplied the materials (which she says would have been at a cheaper price than Other Operator supplied them), the cost of the job for labour and materials and sealing would have been within the same range as the other quotations Mapua Landscapes Ltd obtained from other contractors. However, I consider it immaterial how much Mapua Landscapes Ltd would have charged for materials because the job was always labour only and the materials were to come from Other Operator. I also note that Mapua Landscapes Ltd obtained an estimate from On Grade Earthmoving Ltd on 3 December regarding the cost of the job carried out on Lots 1 to 3 which amounted to $10,700.00 (excluding GST). However, I consider this estimate to be of little evidential value given that it was prepared for the purposes of the hearings.
The Client says that a competent contractor could do the work in 25 hours, yet Mapua Landscapes Ltd took 80 hours.
The Client says that a competent contractor could do the work in 25 hours, yet Mapua Landscapes Ltd took 80 hours. At the second hearing, The Client presented written evidence from other contractors estimating that the job would take one day per driveway, so three days in total. However, The Client was prepared to accept that the work on Lot 2 was a bit more involved so might have reasonably taken two days to compete, so a reasonable time to complete the whole job was four days, which comes to around $3,000.00 (excluding GST). However, I consider this immaterial because I prefer The Client’s earlier evidence which was that he expected the job to cost ‘no more than $5,000.00’ and he accepted that $5,000.00 was consistent with the quotations he had received from other contractors. He also accepted during the hearings that it had been discussed at the Meeting that the job would take one week to complete which, at $95.00 for 40 hours, is more than $3,000.00.
I have had regard for the evidence presented by The Client regarding a fourth driveway (for Lot 4) which was completed by Another Contractor. The Client says that the work was like the work carried out by Mapua Landscapes Ltd on Lots 1 to 3, but the total cost charged by Another Contractor was $1,765.17 (excluding GST) for labour and materials. The Client says this is substantially less than Mapua Landscapes Ltd’s charge for Lots 1 to 3 and he has calculated that, had Another Contractor completed the driveways for Lots 1 to 3 (based on the cost of Lot 4), the job would have cost $2,249.50 (excluding GST). However, I consider this of limited evidential value given that this calculation is based on the cost of building a different driveway. In any event, The Client accepted at the first hearing that he agreed to pay no more than $5,000.00 to Mapua Landscapes Ltd for building the three driveways, and I am satisfied that it is acceptable for Mapua Landscapes Ltd to charge at the top-end of the agreed range given that they recorded the time the job took, and it is clear that it took much longer than the cost that Mapua Landscapes Ltd had agreed to do the job for. Also, that price is consistent with the quotations that The Client had received from other contractors for the job.
The Client says he is not aware of any extra work that Mapua Landscapes Ltd had to carry out during the job. However, I accept Mr Broderick’s evidence that he had to carry out extra digging on Lot 1 beyond the plans, at the surveyor’s request, to bring the driveway to the road-edge, and that this increased the time the job took. While the extra cost may not have been great, it is a further reason for The Client to pay for the work at the top-end of the agreed range.
Where a supplier fails to comply with a guarantee implied by the Consumer Guarantees Act, and the failure cannot be remedied or is of a substantial character, the consumer is entitled to damages in compensation for any reduction in value of the product or service below the charge paid or payable by the consumer for the service (s 32(b)(ii) of the Consumer Guarantees Act) and obtain damages for any loss or damage to the consumer resulting from the failure which was reasonably foreseeable as liable to result from the failure (s32(c) of the Consumer Guarantees Act). The Tribunal awards damages for actual losses.
Mapua Landscapes Ltd’s failure to meet s 28 of the Consumer Guarantees Act cannot be remedied, so s 32(b)(ii) and s 32(c) apply. The Client has counterclaimed for damages for costs they incurred in dealing with the District Court, along with legal costs and stress. However, the Tribunal does not have jurisdiction to award damages under the Consumer Guarantees Act for the time spent by a party in legal proceedings or for stress. I therefore dismiss this part of The Client’s counterclaim.
Any reduction in value of Mapua Landscapes Ltd’s services due to its breach of s 28 of the Consumer Guarantees Act has been dealt with as part of the reduced amount Mapua Landscapes Ltd is to pay for the job compared with the actual time Mapua Landscapes Ltd spent completing the job, so no additional amount is awarded under s 32(b)(ii) of the Consumer Guarantees Act.
I am satisfied that The Client’s failure to meet the sunset clauses in the sale agreements for Lots 1 to 3 were a consequence of Mapua Landscapes Ltd’s failures
However, I am satisfied that The Client’s failure to meet the sunset clauses in the sale agreements for Lots 1 to 3 were a consequence of Mapua Landscapes Ltd’s failures under s 28 of the Consumer Guarantees Act and resulted in The Client incurring additional legal costs. That is, there would have been additional legal costs incurred to extend the sale agreements for Lots 1 and 2, and to prepare a new sale agreement for Lot 3. In the absence of any evidence about the actual additional legal costs incurred by The Client, these are estimated at $750.00 (including GST), being a reasonable amount in the circumstances. I therefore award The Client damages of $750.00 on their counterclaim under s 32(c) of the Consumer Guarantees Act, which is deducted from the damages awarded to Mapua Landscapes Ltd on its claim.
Did Mapua Landscapes Ltd engage in conduct, in trade, that was misleading or deceptive or likely to mislead or deceive? If so, are The Client entitled to damages from Mapua Landscapes Ltd and are the amounts claimed proved and reasonable?
Under the Fair Trading Act, no person shall, in trade, engage in conduct that is misleading or deceptive or likely to mislead or deceive (s9 of the Fair Trading Act). Conduct cannot be ‘misleading’ under the Fair Trading Act even if it is done innocently because the Fair Trading Act does not require any knowledge or intention on the part of the person who engages in conduct, or makes representations, which breach the Fair Trading Act.
I find that Mapua Landscapes Ltd breached s 9 of the Fair Trading Act because it engaged in conduct that was misleading or deceptive, or likely to mislead or deceive
I find that Mapua Landscapes Ltd breached s 9 of the Fair Trading Act because it engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, about the timing of the work on the driveways. This is so for the same reasons as I have found that Mapua Landscapes Ltd breached the Consumer Guarantees Act about timing. However, it is unnecessary for me to consider the effect of a breach of the Fair Trading Act because the outcome would be the same as under the Consumer Guarantees Act which I have dealt with above.
Did Mapua Landscapes Ltd misrepresent the timing of the job to The Client? If so, are The Clients entitled to damages from Mapua Landscapes Ltd and are the amounts claimed proved and reasonable?
The Client stated at the second hearing that the counterclaim was based on misrepresentation. Under the CCLA, if a party to a contract (A) has been induced to enter the contract by a misrepresentation, whether innocent or fraudulent, made by the other party (B), A is entitled to damages from B in the same manner and to the same extent as if the representation were a term of the contract that has been breached (s 35 of the CCLA). A misrepresentation is an untrue or misleading statement of current fact rather than of opinion, intention or future fact.
The Client says that Mapua Landscapes Ltd misrepresented the start date of the job, and this induced them to engage Mapua Landscapes Ltd to do the job. However, although I have found that Mapua Landscapes Ltd breached the Consumer Guarantees Act and Fair Trading Act regarding the timing of the job and that this caused its clients to be confused and mislead, I am not satisfied that this conduct amounts to a clear misrepresentation. However, it is unnecessary for me to determine whether Mapua Landscapes Ltd breached s 35 of the CCLA because the outcome would be the same as under the Consumer Guarantees Act which I have dealt with above.
Is either party entitled to legal costs from the other party under s 43 of the DT Act?
Costs are not usually awarded in the Tribunal, however, the Tribunal has a limited discretion to award costs on a claim or counter-claim under s 43 of the DT Act regarding frivolous and vexatious claims: claims lodged with knowledge that they are not within the jurisdiction of the Tribunal: where a party has unnecessarily prolonged proceedings by engaging in conduct intended to impede the prompt resolution of the proceedings; and in limited circumstances where the proceedings were commenced in the District Court and transferred to the Tribunal.
Section 43(4) provides that, where any proceedings within the jurisdiction of the Tribunal have been commenced in the District Court; and those proceedings have been transferred to the Tribunal and the Tribunal is satisfied that those proceedings were commenced in the District Court and not in the Tribunal on account of any act or omission of any party to those proceedings that was intended or likely to induce the party who commenced those proceedings to believe that the proceedings were not within the jurisdiction of the Tribunal, the Tribunal may order the other party to pay to the party who commenced the proceedings the District Court the filing fee and any solicitor’s costs incurred (calculated in accordance with the District Courts Act 2016).
Mapua Landscapes Ltd has applied for costs under s 43(4) of the DT Act, seeking the sum of $4,816.00 (calculated in accordance with the District Courts Act 2016). Mapua Landscapes Ltd says that it commenced proceedings in the District Court, rather than the Tribunal, due to The Client’s email to Mapua Landscapes Ltd’s solicitor Yvanca Clarisse Pitt and Moore Nelson dated 18 April which set out his complaints against Mapua Landscapes Ltd and stated:
“There are two direct consequences of Mapua Landscapes actions for us:
We have incurred almost three months interest payments due to the delays, some $15,000 (final figure to be determined) It was impossible to meet the sunset clause and one buyer decided not to extend their contract. As a direct result of Mapua Landscapes incompetence, we have lost a sale for $525,000.”
When Mapua Landscapes Ltd’s solicitor filed the proceedings on behalf of Mapua Landscapes Ltd in the District Court on 3 May, she attached a letter to the Registrar which stated:
“The writer acknowledges that the Judgment sum sought by the plaintiff falls within the jurisdiction of the Disputes Tribunal and should be brought within that forum for determination. In anticipation of the defendant’s counter claim, however — which will be refuted — the dispute between the parties will fall within the jurisdiction of the District Court. Accordingly, with the Court’s permission, the statement of claim is filed within this Court.”
I am therefore not satisfied that The Client did anything that was intended or likely to induce Mapua Landscapes Ltd to believe that the proceedings were not within the jurisdiction of the Tribunal.
Mapua Landscapes Ltd’s claim was a straight-forward one regarding the payment of an invoice that was within the Tribunal’s jurisdiction. In this regard, I note that The Client’s letter of 18 April did not state that he would lodge a counterclaim, rather, it pointed out the losses he had incurred due to Mapua Landscapes Ltd’s conduct. I am therefore not satisfied that The Client did anything that was intended or likely to induce Mapua Landscapes Ltd to believe that the proceedings were not within the jurisdiction of the Tribunal. Rather, it was Mapua Landscapes Ltd’s choice to begin proceedings in the District Court rather than the Tribunal.
As it turned out, The Client did file a counter-claim as part of their Statement of Defence dated 27 June claiming losses of over $28,000.00, which exceeds the Tribunal’s jurisdiction. Eventually, the counter-claim was withdrawn (and replaced with a different counter-claim in the Tribunal) because Lot 3 was resold at a higher price and The Client therefore did not suffer any losses due to losing the first conditional sale of Lot 3. In late , the proceedings were transferred to the Tribunal at the request of The Client. I therefore decline Mapua Landscapes Ltd’s application for costs under s 43(4).
As noted above, The Client applied for legal costs as part of their counter-claim. It was not clear during the hearings whether they also applied under s 43 of the DT Act for legal costs relating to the proceedings. If The Client did intend to also make an application for costs under s 43, I decline that application on the basis that I am satisfied that it does not meet any of the criteria set out in s 43. It is understandable that this dispute has been very stressful and frustrating for all concerned. It is unfortunate that the dispute has been complicated by the animosity between the parties and delayed by the District Court proceedings. While the proceedings remained in the District Court, the legal costs mounted up for both parties to such an extent that each party’s legal costs now amount to more than the amount of the Invoice which the initial dispute was about. Given the circumstances, I am satisfied that it is fair for the legal costs incurred by the parties to remain where they have fallen.
Referee: D. Brennan
