Contract: Air NZ v. Newfoundworld

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

Fraud: Davidson v. R

Five months was deducted on appeal by Jenna Marie Davidson against a sentence of two years and nine months jail for fraud because post-traumatic stress caused by domestic violence amounted to “particular circumstances” making imprisonment disproportionately severe.

Davidson was convicted of defrauding two employers and then perverting the course of justice when she forged a character reference in an attempt to reduce the severity of her sentence.  In 2014, she fraudulently used a company credit card buying goods and services totalling $40,469 when employed as executive assistant to Wellington Airport’s chief executive.  While awaiting trial on that charge, she defrauded ACC of $39,732 with purchases from 43 different retailers misusing a corporate credit card issued to her as a staff member at the Accident Compensation Corporation.  She forged a character reference from ACC describing herself as “honest” and having a “flawless reputation” using this as mitigation when sentenced on the Wellington Airport fraud charge.  ACC discovered her prior offending only on reading news media reports of the Wellington Airport fraud.  A subsequent internal investigation uncovered the ACC fraud and the forged reference.   

On appeal to the High Court, there was psychiatric evidence that Davidson suffers post-traumatic stress disorder from a long-running abusive domestic relationship.  This can result in a form of help-seeking and distress behaviour, the report says.  Davidson had been referred to a forensic mental health clinic because of her behaviour in prison.  Justice Mallon ruled a discount on the term of imprisonment should be allowed.  Imprisonment for Davidson was more stressful than the norm. 

Davidson v. R. – High Court (26.05.17)

17.055

Business Visa: Ou v. Liang

The High Court ordered repayment of $250,000 lent interest free by a Chinese business student keen to convert his New Zealand student visa to permanent residence.  He was unaware the loan was never repayable and that he had no chance of getting residence through a business investment visa.

Bingqui Ou came to New Zealand in 2012 studying for a business diploma.  After expressing interest in getting permanent residence, a go-between introduced him to Wei Liang who had recently set up a media company called WOM Group Ltd.  At a meeting in a café on Auckland’s North Shore, Ms Liang suggested that an investment in her business and employment with her company would enhance his chances of permanent residence.

The High Court was told Mr Ou signed what was described as a term loan contract.   His $250,000 interest free loan was not repayable until he obtained an entrepreneurial work visa.  Successful visa applicants require prior business experience.  A qualifying point system looks at age, level of experience and ability to create new full-time employment.  Expert evidence from an immigration adviser stated it was never remotely feasible for Mr Ou to obtain an entrepreneur work visa under the arrangements made with Ms Liang.  He had no business experience whatever and was in effect “buying a job”.

Associate judge Bell said Ms Liang made an empty promise, promising to repay in circumstances which would never occur.  Having paid money under what amounted to a non-existent contract, Mr Ou was entitled to restitution of his $250,000.   

Ou v. Liang – High Court (26.05.17)

17.054