Auckland-based
Steel Co Ltd is liable to pay some $416,500 damages for supplying faulty steel
pipes sourced from China, the Court of Appeal ruled.
The court was told New Plymouth company
Pipes NZ Ltd struck trouble with Steel Co’s product imported as penstock piping
for installation at two hydroelectric schemes: Trustpower’s Esk Valley project
in Hawke’s Bay and Westpower’s amethyst project at Harihari on the West Coast. Some pipes were rejected, others
repaired. Some of the resupplied pipes also
required repair. Steel Co said the pipes
had been inspected and approved prior to shipment from China. Pipes NZ Ltd paid compensation to both
electricty companies for delays in commissioning each project.
The Court of Appeal upheld a High Court
ruling that Steel Co was liable to compensate Pipes NZ for both the cost of
repairing damaged pipes and the compensation paid to Trustpower and Westpower. It said Steel Co knew when the order was
placed that the pipes were for hydroelectric schemes and there were strict
timelimits for delivery.
An exclusion clause in Steel Co’s
standard terms and conditions did not apply.
These contract terms applied to a predecessor company of Pipes NZ, but were
not included in contracts with Pipes NZ itself.
Steel
Co v. Pipes NZ – Court of Appeal (5.05.16)
16.073