Attfield v NZLF Limited

[2016] NZHC 189

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2015-412-000058 [2016] NZHC 189

UNDER

the Land Transfer Act 1952

IN THE MATTER OF

of an application pursuant to s 143

Land Transfer Act 1952 for an order that caveat be removed

BETWEEN

SYDNEY EARL ATTFIELD Applicant

AND

NZLF LIMITED Respondent

Appearances:

A J Logan for the Applicant

D J Ballantyne, instructed for Respondent in opposition but not instructed in relation to costs

Judgment:

17 February 2016

(Determined on the papers)

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

as to costs

[1]      By a judgment dated 18 December 2015, I ordered the removal of a caveat lodged by the respondent and ordered the respondent to pay the costs and disbursements of the application. 1    I reserved for further determination the amount of costs and disbursements.

[2]      In his application, the applicant had sought costs on a solicitor/client basis together with disbursements.

1      Attfield v NZLF Ltd [2015] NZHC 3308.

ATTFIELD v NZLF LIMITED [2016] NZHC 189 [16 February 2016]

Submissions filed

[3]      The applicant has filed submissions as to costs.   The respondent has filed none, Mr Ballantyne notifying the Court that he had not received instructions to file any submissions in response.

Costs on a 2B basis

[4]      Mr Logan has provided a calculation of the costs payable if the proceeding

was categorised “2” and in band B.  The calculation which I accept as accurate is

$11,785.  Disbursements in the normal sense of that word total $1,735.90.  Mr Logan in his calculations includes an additional “disbursement” of $2,300 being the fee paid by the applicant to his solicitor, Gillian Clarke.  She was a necessary deponent for the applicant by reason of the grounds of opposition advanced (ultimately unsuccessfully) by the respondent.  She attended Court for the hearing as she was required for cross-examination by the respondent.  She was the initial solicitor on the record for the applicant but was replaced by Mr Logan when it became apparent she would have to give evidence.  Her fee is accordingly not strictly that of an expert witness and is not recoverable as such.  I return to consider her fee at [18] to [21] below.

Application for increased costs

[5]      Mr Logan has, by his memorandum, not pursued the recovery of actual costs and disbursements.  Rather, he has submitted that the applicant should recover the standard two-thirds of actual legal costs together with a full indemnity for disbursements.

Discussion

[6]      I have already awarded the applicant the costs and disbursements of this application upon the basis that costs appropriately followed the event.2

2      High Court Rules r 14.2(a).

[7]      In support of the applicant’s request for increased costs, Mr Logan invokes the provisions of r 14.6(3)(b) and (d).  Those provisions allow the Court to order a party to pay increased costs if:

(b)       the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)        failing to comply with these rules or with a direction of the court; or

(ii)      taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii)     failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

(iv)      failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or

(v)       failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or…

…

(d)       some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.

[8]      I am satisfied that by application of both r 14.6(3)(b) and r 14.6(3)(d) an award of increased costs is justified in this case.   The respondent mounted its opposition  on  a  number  of  grounds,  none  of  which  established  that  it  had  a reasonably arguable case for the interest claimed in its caveat.

[9]      My judgment of 18 December 2015 speaks for itself in relation to the reasons why the respondent’s asserted grounds of opposition failed.  On the evidence, it was clear that the fundamental reason which had precluded the respondent from being in a position to complete its purchase was its failure, through its director Geoffrey Day, to arrange finance.  The respondent’s various grounds of opposition failed both on the evidence and the law, namely:

(a)       the evidence did not support the respondent’s allegation that a “side-

agreement” had been reached varying the requirements of settlement;

(b)the  evidence  did  not  support  the  respondent’s  contention  that  the applicant himself had failed to cooperate in relation to access to the property and other matters and was accordingly in breach of the settlement agreement.  Mr Day’s own evidence in Court reinforced, to the  contrary,  that  it  was  Mr  Day who  failed  to  carry through  on agreement reached with the applicant and his surveyor, Geoffrey Weller;  and

(c)      the respondent’s third ground of opposition failed as a matter of straightforward contractual interpretation, the Court applying the natural  meaning  of  an  agreement  reached  between  the  parties  by which the applicant extended the date for settlement when the respondent had earlier been unable to settle.

[10]     Ultimately, each of the grounds of opposition raised by the respondent lacked merit.  In several regards, the grounds of opposition were doomed to fail when Mr Day  in  his  cross-examination  departed  so  substantially  from  matters  stated  or implied in his affidavit evidence.   His oral evidence reinforced and confirmed the accuracy of what the witnesses for the applicant had deposed on material matters. For instance, I found that key evidence in Mr Day’s affidavit had been “unreliable and misleading”, meaning the Court could place no reliance on (at least) that aspect

of his evidence.3

[11]     The unsustainable arguments of the respondent contributed unnecessarily to the time and expense of the proceeding.  The respondent’s two affidavits contained irrelevant  material,  considerable  repetition  and  strayed  into  argument.     This inevitably  complicated  the  way  in  which  the  applicant  needed  to  handle  the evidence, including evidence in reply and the focussing of submissions.

[12]   The time constraints and pressure placed upon the applicant were also aggravated by the respondent’s failure to comply with timetable directions. Submissions which were required to be filed and served by 30 October 2015 were not so filed.  The single explanation offered for late filing (that the respondent did not expect the case to proceed because of discussions going on between the parties) did not justify breach of the timetable.

[13]     In the written submissions served by the respondent on 7 December 2015 (ahead of the hearing on 9 December 2015) the issue turning on contractual interpretation was raised for the first time.  Mr Logan responsibly (in protection of his client’s position) elected not to pursue an adjournment to allow further time to meet the additional ground.  But in the period immediately before the hearing he was faced with urgent (and ultimately unnecessary) needs of research and additional preparation.   In effect, Mr Logan was forced to prepare two sets of submissions rather than the one set involved if the respondent had complied with the timetable.

[14]      I am satisfied in terms of 14.6(3)(d) that there is further reason to justify the Court making an order for increased costs.  It lies in the respondent’s approach to the evidence of the applicant.   I found the evidence for the applicant to be straightforward, reliable and to the point.  First, the respondent (before the hearing) signalled a collateral attack on the integrity and reliability of Mr Weller’s evidence upon the basis of a conflict of interest. Although the attack was sustained at the start

of the hearing, any criticism of Mr Weller fell away as I recorded in my judgment.4

Mr Day’s own concessions in cross-examination were inconsistent with the criticism of Mr Weller.   That  led Mr Ballantyne  in  closing submissions  to  appropriately indicate that he was not taking his submissions in relation to Mr Weller’s conduct any further.   However,  the applicant, until that point, needed to meet  the issue including by, I infer, briefing Mr Weller further.

[15]     The applicant also had to incur additional cost in relation to the attendance of Ms Clarke as required for cross-examination.  As she was not giving evidence as an expert but had to devote additional time required by the litigation, the applicant has

understandably found it appropriate to accept an additional fee-note from her and to meet her reasonable costs.

[16]     The cross-examination of both Mrs Clarke and Mr Weller served only to

reinforce and confirm the invalidity of the respondent’s claims.

Appropriate outcome

[17]     I begin with disbursements.  It is just and appropriate that the respondent pay all the applicant’s conventional disbursements, totalling $1,735.90.

[18]     In relation to the fee paid to Ms Clarke, whose role later was as a witness of fact but commenced as solicitor for the applicant, I find it more appropriate to take the unnecessary cost caused in relation to her into account in the fixing of costs.

[19]     Although Mr Logan has invited an approach to costs based on actual costs (suggesting that they be set at two-thirds of actual costs), I consider it appropriate to approach the matter of a just award by an increase above what would be a 2B award. Frequently, the Court grants an increase by an uplift of 50 per cent over a 2B award (having regard to the concept that such an uplift may take the recovery from the assumed  two-thirds  recovery to  100  per  cent  recovery).    There  were,  however, factors  in  this  case,  including  in  relation  to  the  extent  of  evidence  which  was required and the calling of witnesses (including Ms Clarke), which mean that a 2B recovery in this case would not equate to a two-thirds recovery of a normal fee for the attendances involved.

[20]     In my judgment, the just outcome is that the respondent pay increased costs on the basis of a 2B calculation and approximately 80 per cent uplift.  On a rounded approach, the just sum is $21,000 (rounded from the totals of $11,785 and $9,428).  I note that on the information provided by Mr Logan, the awarded figure remains below the actual fees incurred by the applicant.

Order

[21]     I order:

(a)       The respondent is to pay to the applicant the costs of the application which I fix at $21,000, together with disbursements in the sum of

$1,735.90.

Associate Judge Osborne

Solicitors:

Ross Dowling Marquet Griffin, Dunedin.

Canterbury Legal, Christchurch.