IN THE Court of appeal OF new Zealand
	
CA42/2015
[2015] NZCA 242

BETWEEN	
GREGORY DAVID DURRANT
Applicant	

AND	
CRANE DISTRIBUTION (NZ) LIMITED
Respondent	

Hearing:	
28 May 2015	

Court:	
Ellen France P, White and Miller JJ	

Counsel:	
J B Samuel for Applicant
R J Connell for Respondent	

Judgment:	
12 June 2015 at 2:30 pm	

JUDGMENT OF THE COURT
A	The application for special leave to appeal is declined.
B	The applicant must pay the respondent costs for a standard application for leave on a band A basis together with usual disbursements.  
____________________________________________________________________

REASONS OF THE COURT

(Given by Ellen France P)

Introduction
[1]	Gregory Durrant, the applicant, seeks special leave to appeal to this Court under cl 5(6) of sch 2 to the Arbitration Act 1996 against the decision of Keane J refusing to grant leave to appeal against an arbitration award.  Keane J subsequently declined to grant Mr Durrant leave to appeal to this Court against the refusal of leave.  
[2]	The arbitrator’s award at the centre of these applications determined that Mr Durrant was liable as guarantor to recompense the respondent, Crane Distributors (NZ) Ltd (Crane), for plumbing supplies made on credit to a company called Insight Plumbing North Harbour Ltd (Insight Plumbing) of which Mr Durrant is the principal shareholder.  
Background
[3]	In mid-November 2011, Insight Plumbing opened a credit account with Crane.  Insight Plumbing is a plumbing and drainage company.  It was formed in November 2011 apparently due to trading problems experienced by another company operated by Mr Durrant called Insight Plumbing (NZ) Ltd.  
[4]	Crane supplies goods and materials to tradespeople.  To obtain credit from Crane, Insight Plumbing had to sign up to Crane’s terms and conditions of sale and Mr Durrant guaranteed due and punctual payment of sums owing.
[5]	Because of concerns about the level of debt in Insight Plumbing’s trade account, in April 2012 Crane refused to advance Insight Plumbing any more credit.  After unsuccessful discussions between the parties, in November that year Crane sought summary judgment in the High Court against Mr Durrant, as guarantor, for sums outstanding of over $135,000.  Mr Durrant filed a protest to jurisdiction.  He said he had a defence and that, in any event, the terms of sale required the dispute to go to arbitration.  
[6]	Summary judgment for nearly $9,000 was entered on 5 July 2013 but Crane’s application for summary judgment for the balance was stayed.
[7]	The dispute over the balance outstanding proceeded to arbitration before Mr A M R Dean, a quantity surveyor.  After a hearing of just over two days, on 24 January 2014 Mr Dean issued a partial award finding Mr Durrant liable for most of the invoiced supplies.  In his final award of 31 March 2013 Mr Durrant was held liable to pay a further $113,744 plus interest of $66,917.  Mr Durrant was also required to pay Crane’s costs and those of the arbitrator.
[8]	Mr Durrant filed an application for leave to appeal the arbitrator’s award on the basis it demonstrated a number of errors of law sufficiently arguable and significant to merit leave.  As we have noted, Keane J declined Mr Durrant’s application and subsequently declined leave to appeal that decision to this Court.  
[9]	Mr Durrant now seeks special leave to appeal to this Court.  The application is opposed.  
The application for special leave
[10]	Appeals on questions of law from an arbitrator’s award are dealt with in cl 5 of sch 2 to the Arbitration Act.  The clause relevantly provides that a party may appeal to the High Court on any question of law arising out of an award with the leave of the High Court.  Clause 5(2) states that the High Court shall not grant leave “unless it considers that, having regard to all the circumstances, the determination of the question of law concerned could substantially affect the rights of 1 or more of the parties”.
[11]	Clause 5(5) provides that, with the leave of the High Court, a party may appeal to this Court from the High Court’s refusal to grant leave.  Under cl 5(6), if

the High Court refuses to grant leave to appeal under cl 5(5), this Court may grant special leave to appeal.
[12]	To succeed in this application for special leave, Mr Durrant must show that there is a question of law capable of serious argument in a case involving public or private interest of sufficient importance to outweigh the cost and delay of a further appeal.
[13]	In seeking special leave, Mr Durrant wants to challenge the High Court’s determination his proposed appeal did not raise any seriously arguable error of law and the Judge’s approach to the discretion to refuse leave.  Mr Samuel for Mr Durrant says two questions of law arise.  The first relates to Mr Durrant’s submission he has been found to be liable for supplies resulting from orders placed by tradespeople who did not have authority from Insight Plumbing to make the orders.  The proposed question on this point is whether the undisputed facts give rise to an ostensible authority.  A similar issue is said to arise in relation to the delivery address because it is said that Crane did not prove delivery to the address nominated in the parties’ terms and conditions.  
Discussion
[14]	We are satisfied no seriously arguable questions of law arise.  We can explain our reasons briefly.
[15]	On the first proposed question relating to the authority to order supplies, Mr Durrant said Crane knew that Insight Plumbing had limited any agent’s authority to that given by the company itself or by either one or other of its two directors.  Absent a written representation from the company itself or one of the directors, there was no basis to conclude there was ostensible authority.  
[16]	The difficulty with this submission is that the arbitrator found as a matter of fact there was actual authority.  Keane J cited a passage from the award where the arbitrator stated:
… the evidence did show that there was a list of names entered into the Crane computer system, and these names were printed on the delivery dockets and shown on the Tax Invoices, above the “delivery address”.  This strongly suggests to me that these people were authorised by [Insight Plumbing] to place orders for materials against the [Insight Plumbing] credit account.  I have received no evidence to indicate that [Insight Plumbing] protested about these names shown on the invoices, which suggests that the directors (or management) approved of these persons making purchases on the company account.  I will consider the matter of Purchase Orders separately.  
…
I am satisfied that the list of names entered into the Crane computer was done with the knowledge and approval of one of the directors of [Insight Plumbing].  These people on the list had authority to purchase materials on the company’s account. 
[17]	In concluding that there was no seriously arguable point of law on this issue, Keane J noted that Mr Durrant accepted that Insight Plumbing’s tradespeople were entitled to order goods on the company’s behalf “as long as they completed its order form, as they did in the case of many of the invoices disputed”.   The Judge stated that Mr Durrant took issue with those supplies in which the form was not used.  
[18]	In this context, Mr Samuel submits Keane J was wrong to state that “this concession begs the question, however, with what authority they used the form. It points rather to a more flexible trade practice in which [Insight Plumbing] acquiesced.”  We do not see the reference to acquiescence as undermining the conclusion the company had actually authorised the practice.  At best, Mr Durrant may have an argument about satisfaction of the requirement for the authorisation to be in writing.  But that issue does not give rise to any question of law.  We agree with Keane J that there was no seriously arguable error on this point.  As the Judge said, the arbitrator:
 … was alert to the point taken by Mr Durrant as to whether the tradesmen had actual or ostensible authority and was entitled on the evidence to conclude that they did.  In the absence of any error of law his findings of fact were for him alone to make.
[19]	Similar issues arise in relation to the second proposed question relating to delivery.  The terms and conditions of sale referred to delivery to an Albany address.  Mr Durrant argued Crane was obliged to deliver to that address and had not proved it had done so.  Mr Durrant wants to argue actual authority had to be considered in each case with respect to the delivery instructions.  
[20]	Again, we are satisfied the only issues raised in relation to this aspect are differences as to matters of fact.  Mr Durrant accepted a purchase order, properly signed and drawn, could designate a different place of delivery so the question was as to what had occurred in relation to the various deliveries.  On this point, the arbitrator found that the Albany address was, as a matter of fact, a default address.  That was because “most goods were either collected from the Crane depots, or delivered to specific building sites”.  Accordingly, Crane did not have to prove delivery to the Albany address.
[21]	It is not suggested there was no evidential basis for either finding.  No seriously arguable questions of law arise.
[22]	Finally, we address briefly Mr Samuel’s submissions that Keane J did not apply the correct test.  The submission is the Judge did not make a finding that the determination of the question of law could substantially affect the rights of one or more of the parties.  Further it is said that, because the Judge did not make it clear there was no question of law, he was bound to consider the factors as to the exercise of the discretion to grant leave as set out in Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd.  
[23]	Keane J set out the relevant test from Gold and Resource Developments.  It is plain that, having applied the correct test, his Honour did not consider the statutory threshold was met.  No error of law arises.
Result
[24]	For these reasons the application for special leave to appeal is declined.  Costs should follow the event.  The applicant must pay the respondent costs for a standard application for leave on a band A basis together with usual disbursements.  

Solicitors: 
Jennifer G Connell & Associates, Auckland for Applicant
Connell & Connell, Auckland for Respondent