Auckland Electrical Solutions Limited v The Warrington Group Limited

[2017] NZHC 55

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-001649 [2017] NZHC 55

BETWEEN

AUCKLAND ELECTRICAL

SOLUTIONS LIMITED Appellant

AND

THE WARRINGTON GROUP LIMITED Respondent

Hearing:	(On the papers)
Counsel:	N Tabb for the Appellant S Gazley for the Respondent
Judgment:	1 February 2017

COSTS JUDGMENT OF DOWNS J

This judgment was delivered by me on Wednesday, 1 February 2017 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel: N Tabb, Auckland.

Steindle Williams Legal, Auckland.

AUCKLAND ELECTRICAL SOLUTIONS LTD v THE WARRINGTON GROUP LTD [2017] NZHC 55 [1

February 2017]

[1]      On 22 September 2016 I dismissed an appeal against a refusal of the District Court to grant summary judgment.1   I invited the parties to reach agreement in relation to costs. They have not been able to do so. The respondent seeks costs. The appellant resists. The relevant facts can be stated briefly.

[2]      The  respondent  engaged  the  appellant  to  provide  electrical  works.    The appellant sent the respondent invoices totalling $83,599.57.  The respondent paid the appellant $62,214.39; it declined to pay five invoices.   Further payment by the respondent and credit notes in its favour left only $8,659.83 outstanding.  The case was originally before the Disputes Tribunal.   The appellant then sought summary judgment in the District Court.  The District Court declined summary judgment on the basis witness credibility was in issue.  The parties offered competing versions of what each said were the correct invoices: the appellant’s invoices referred to the Construction Contracts Act 2002 and the respondent’s did not.  That Act governed the dispute.  Invoice reference to the enactment may be determinative.  I upheld the District Court’s determination:2

Against this background, Judge Lovell-Smith was unquestionably correct to dismiss the summary judgment application insofar as it relied upon original service of the April, May and June invoices.  If Mr Mettam is correct, the invoices did contain reference to the Construction Contracts Act as required by that enactment.  But if Mr O’Connell is correct, the original invoices did not.  Moreover, there are two possibilities in relation to their evidence.  The first, and happy possibility, is that one of the men is mistaken.  The second, unhappy possibility is that one of the men has been other than candid in order to “win”.  These stark choices, which could only be resolved through cross-examination at trial, serve to highlight the unsuitability of this aspect of the claim to summary judgment.

[3]      I also concluded the evidence implied other invoices were provided as copies of an antecedent payment claim rather than a fresh claim under the Act, which entitled the respondent to a further 20-working day period for a payment schedule.

[4]      The respondent’s actual costs were $8,752.42, a smaller sum than 2B scale costs: $9,366.   It, however, seeks $10,865.55 on the basis increased costs are warranted under r 14.6 of the High Court Rules.  The appellant resists costs as the

“respondent appears to have succeeded on a technical argument”.

1      Auckland Electrical Solutions Ltd v The Warrington Group Ltd [2016] NZHC 2245.

2 At [16].

[5]      Costs in a summary judgment context are normally fixed after trial but the rule  is  not  immutable.3  Costs—and  modestly  increased  costs  to  a  total  of

$10,865.55—are proper here because:

(a)       The respondent succeeded.

(b)The case ought to have been determined in the Disputes Tribunal, a point foreshadowed in my original judgment:4

Events subject to the August meeting need not be recorded here.    It  is  sufficient  to  observe  common  sense  did  not prevail:  a modest dispute which should have been resolved in the Disputes Tribunal—if not settled outright—resulted in summary judgment proceedings in the District Court and this appeal when that application was dismissed.

It follows the appellant pursued an unnecessary step in instituting summary  judgment  proceedings  in  the  District  Court  and  then pursuing those on appeal.5

(c)      Credibility  was  always  going  to  be  an  impediment  to  summary judgment.  So, contrary to the appellant’s submission, that application and the associated appeal lacked merit.6

(d)      As observed in the original judgment, the case ought to have settled.

On 16 August 2016, and hence approximately five weeks before the hearing of the appeal, the respondent offered to pay $4,500 to the appellant  in  full  and  final  settlement.    The  amount  in  issue  was

$8,659.83.   There is no evidence as to why the appellant did not accept the offer.   It is difficult to conceive a reasonable justification for its stance.7

[6]      The respondent also sought an order that costs be awarded against a non- party,  Mr  John  Campbell  of  Law  Debt  Collection  Ltd,  on  the  basis  he  was

3      NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA).

4      Auckland Electrical Solutions Ltd v The Warrington Group Ltd, above n 1, at [14].

5      High Court Rules, r 14.6(3)(b)(ii).

6      High Court Rules, r 14.6(3)(b)(ii).

7      High Court Rules, r 14.6(3)(b)(v).

responsible for the appellant’s conduct (in prosecuting meritless proceedings).  I am not satisfied that is so on the evidence, or that the case is sufficiently exceptional to warrant a non-party costs order.8

[7]      The appellant engaged Mr Campbell’s company to pursue the respondent for its debt, but that without does not establish he was behind this action.  Nor does the mere fact Mr Campbell swore an affidavit in support of the proceedings.   In any event, while the proceedings involved “overkill”, they did not involve bad faith or impropriety.

[8]      The appellant must pay the respondent (increased) costs of $10,865.55.

……………………………..

Downs J

8      Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) [2004] UKPC 39, [2005] 1 NZLR

145.