LG Electronics Australia was awarded $583,100 damages in a counter claim against Auckland air conditioning installer Oxygen Air Ltd after their distribution agreement ended acrimoniously. Oxygen Air failed in a claim against LG for $1.54 million damages with director Eddy Rotteveel alleging LG Electronics failed to perform its side of the distribution agreement.
Oxygen Air and LG Electronics joined forces in 2009 with Oxygen given exclusive distributorship rights for heat pumps and ducted air conditioning units within New Zealand and Pacific islands. The High Court was told of ongoing complaints by Oxygen about product supply and provision of technical support. Matters reached a head in February 2015; Mr Rotteveel made it clear Oxygen Air no longer wanted any dealings with the LG brand, current deliveries would not be paid for and stock in store would be sold with proceeds going towards legal action against LG Electronics.
Legal action centred on calculation of damages. Oxygen Air said its distribution agreement entitled it to damages for loss of profits. Justice Powell ruled this formula applied only if LG Electronics were in breach of contract. It wasn’t in breach, he said. Oxygen Air instead owed LG Electronics $583,100 for units delivered but unpaid.
Part of Oxygen Air’s claim for $1.54 million damages was an allegation that it was shut out of a distribution agreement held with LG Electronics for installation of solar panels. Evidence was given of Oxygen Air lobbying to get the distributorship and acting behind LG Electronics’ back in setting up a website claiming to be a distributor. There was no appointment. LG Electronics internal documents showed Oxygen Air had been considered as a distributor but rejected; it was proving a difficult customer over supply of air conditioning units and had no expertise in solar panel installation.
Oxygen Air Ltd v. LG Electronics Australia Pty Ltd – High Court (6.11.19)
19.182