Network integrator Datacraft has failed in an initial bid to sue ISP Compass Communications for payment of more than $400,000 for telecommunications equipment.
Datacraft alleged in the Auckland High Court that it sold the telecommunications equipment to Compass, but as far as Compass was concerned it had been leasing the gear.
The case harks back to mid-1998 when Compass sent out a request for proposal seeking tenders for the supply of telecommunications equipment. Datacraft put forward a proposal for renting the equipment through its finance company, Leasetec NZ.
Compass decided to take out a 36-month operating lease. Compass says it understood further equipment relating to the tender would be added to the schedule and would be subject to the same terms and conditions, including a refresh option.
In March 2000 Compass set up a free internet service, FreeNet, and wanted to lease new gear which Datacraft delivered between March and November 2000. However, in May Compass advised that it was not in a position to accept a new lease and all the equipment as intended in earlier discussions.
Datacraft claimed that Compass had bought the equipment but Compass denied this, saying it only had an agreement to rent.
Datacraft’s claim was dismissed in the High Court. In a summary judgement Master Faire found it would be wrong to conclude that there was a contract for the sale but said Datacraft may want to amend its claim.