Air
NZ sued to recover $1.4 million overpaid to Novotel Citygate Hotel in Hong Kong
for crew accommodation over two years from 2013. Extra charges for early check-in were wrongly
billed.
Airlines drive a hard
bargain when negotiating accommodation for crew on layover. The High Court was told Air New Zealand shopped
its accommodation needs around sixteen Hong Kong hotels in 2013 when an
existing Novotel contract came up for renegotiation. Novotel was signalling a large jump in room
rates. Occupancy in the 413 room Novotel
Citygate was running at 92 to 94 per cent.
During an earlier two-year Novotel contract, Air NZ had required between
20 and 30 rooms a night. It was flying
Auckland/Hong Kong/London. Early
check-ins were generally accommodated by having crew “hot-bed”; they moved
straight into a room vacated by another Air NZ crewmember. It hot-bedding was not possible, Air NZ paid
extra for holding a room for any early check-in. After detailed negotiations through 2013,
Novotel won the contract for a further two years. Only after that contract ended did Air NZ
raise the issue of extra charges paid for early check-ins.
The High Court ruled
the 2013 Novotel contract was a new contract on new terms. It was not a renewal of the earlier
contract. The 2013 contract contained
new terms such as an obligation on Novotel to report any inappropriate
behaviour by crew to Air NZ and a prohibition on Novotel disclosing room rates
to crew. The 2013 contract was silent on
the question of early check-in charges.
Changed flight schedules and cancellation of the Hong Kong/London route
meant hot-bedding was not possible.
Justice Wylie said Air NZ was careless in not properly checking Novotel
invoices prior to payment, but Novotel had no contractual right to payments for
early-check-in. It was ordered to refund
$HK7.6 million.
Air
NZ v. Newfoundworld – High Court (29.05.17)
17.057