Barfoot and Thompson Limited v Real Estate Agents Authority

[2015] NZHC 658

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-001786 [2015] NZHC 658

IN THE MATTER

of an appeal under s 116 Real Estate

Agents Act 2008

BETWEEN

BARFOOT AND THOMPSON LIMITED Appellant

AND

REAL ESTATE AGENTS AUTHORITY Respondent

Hearing:	On the papers
Judgment:	2 April 2015

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 2 April 2015 at 2.00 pm

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

BARFOOT AND THOMPSON LTD v REAL ESTATE AGENTS AUTHORITY [2015] NZHC 658 [2 April

2015]

[1]      In my decision dated 18 December 2014 I dismissed Barfoot & Thompson’s (B&T) appeal and invited counsel to address the issue of costs by memoranda, which they have done.

[2]      The REAA seeks costs on a 2B basis, which it calculates at $9,552.   B&T suggests that costs lie where they fall or alternatively, that the usual 2B costs be reduced.

[3]      In the usual course costs should follow the event.  An important principle of the costs regime is that costs be predictable and one aspect of predictability is that, absent any reason to the contrary, they should be awarded to the party that prevails. However, under r 14.7 the Court may refuse an order for costs or reduce costs otherwise payable in certain circumstances, including:

(d)       Although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs; or

(e)       The proceeding concerned a matter of public interest and the party opposing costs acted reasonably in the conduct of the proceeding;

[4]      The first reason advanced by B&T for either not allowing or reducing costs in this case is that the issue was one of importance to the real estate industry generally rather than a contest between two commercial parties.  The second was that although the REAA had succeeded overall, it failed on the important issue of whether the Tribunal was entitled to impose a blanket restriction on the conduct of licensed real estate agents faced with a conflict of interest. The two points are intertwined.

[5]      Although the conduct of B&T agents as a result of B&T’s internal policy is no doubt of interest to the public this is not, in itself, a reason not to allow costs. The REAA was  exercising  a statutory function and  B&T’s  interest was commercial. Both are reasons to allow costs in favour of the REAA in the usual way.  I accept that there was a point of general interest at stake which, if not corrected, had the potential to result in cost and inconvenience to both agents and vendors.  Had the Tribunal’s decision stood the industry would have proceeded under a misunderstanding as to the proper obligations of agents in these circumstances and agents would have been required to step aside unnecessarily.

[6]      In these circumstances a reduction in costs is justified.  I make an allowance of 25 per cent from the 2B costs.

[7]      The final point raised is whether costs are permitted for items 10 and 11, which relate to the preparation for the first case management conference and filing of a memorandum for the first case management conference.  This memorandum was drafted and filed by B&T’s solicitor.  Whilst I accept that there was some element of preparation required by the REAA’s counsel in reviewing the memorandum no claim can properly be made for the filing of it so the claim for item 11 (0.4 of a day) is

therefore disallowed.

P Courtney J