Described as a Heartland Bank delaying tactic, its claim that a $2.77 million disputed invoice should be argued in the New Zealand courts rather than Australia was dismissed. IT company Internet Business Systems gets to have its claim heard in the state of Victoria.
The disputed invoice relates to an aborted Heartland project to set up a new online platform for its retail consumer car loan business. Its previous dealings with Internet Business Systems Australia Pty Ltd had been successful; delivering software tracking inventory for Heartland’s lending to car dealerships.
This initial project led to Heartland in 2021 issuing a ‘request for proposal’ to set up a retail platform. Internet Business was again engaged, but terms and extent of this engagement are disputed. Heartland cancelled the project expressing concerns whether Internet Business could deliver on time, or at all.
Internet Business sued in Australia for work done to date. Both sides agreed there had never been any formal contract signed; the disputed work had progressed in tandem with an initial scoping ‘discovery’ phase. Heartland paid an agreed $100,000 upfront for this discovery phase.
A preliminary legal issue arose; did New Zealand law or Australia law apply to their $2.77 million dispute?
The Trans-Tasman Proceedings Act governs jurisdictional disputes.
In the New Zealand High Court, Justice Andrew ruled Australia was the better jurisdiction. Internet Business will likely succeed in a claim for quantum meruit; compensation for work done in the absence of any contract.
Quantum meruit compensation is specifically demanded by Internet Business in its Australia claim. In New Zealand, Heartland is narrowly arguing no contract existed at all, ignoring any quantum meruit entitlement.
The High Court was told a Heartland executive emailed Internet Business at a time when the project was being put on hold, stating that Heartland would ‘mahi tika;’ do the right thing, paying for work done.
Heartland Bank Ltd v. Internet Business Systems Australia Pty Ltd – High Court (20.02.24)
24.061