IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE
CIV-2024-454-013
[2024] NZHC 2057
BETWEEN BARRY BUSTER BEATSON, MAURICE GEORGE BEATSON and PETER JOHN ROEBUCK
Appellant
AND
PROPERTY BROKERS LIMITED
Respondent
Hearing: On the papers Appearances:
M B Lawson for Appellants D I Sheppard for Respondent
Judgment:
26 July 2024
JUDGMENT OF CHURCHMAN J [COSTS]
Introduction
[1] On 16 May 2024 I dismissed an appeal against the District Court’s decision that the appellants were in breach of a real estate agency agreement between themselves and the respondent (the Agency Agreement) in failing to pay a commission to the respondent following the sale of Waiaruhe Station.1
[2] I invited the parties to settle costs between themselves and, in the absence of an agreement within 14 days, I directed the parties to file memoranda. The parties have been unable to agree as to costs and have filed memoranda.
1 Beatson v Property Brokers Ltd [2024] NZHC 1583.
BEATSON, BEATSON and ROEBUCK v PROPERTY BROKERS LIMITED [2024] NZHC 2057 [26 July 2024]
Submissions
Appellants’ submissions
[3]Mr Lawson for the appellants submits that:
(a)the entitlement to indemnity costs under cl 5.3.2 of the Agency Agreement only arises from failure to pay fees and expenses and does not relate to the commission;
(b)if the Court does find that cl 5.3.2 does apply, solicitor/client costs do not necessarily follow as the Court retains a discretion to deny recovery of indemnity costs where they are not objectively reasonable; and
(c)a general right to be indemnified for costs or even legal costs does not necessarily extend to an indemnity for solicitor/client costs, with the clause relied upon not “plainly and unambiguously expressed”.
[4] Mr Lawson argues that costs in the sum of $10,755, calculated on a category 2B basis, should be awarded.
Respondent’s submissions
[5] Mr Sheppard for the respondent submits that costs in the sum of $42,025.01 should be awarded against the appellants. He argues that:
(a)the costs sought do not exceed the actual costs incurred, with tax invoices provided to support the sum claimed;
(b)the Agency Agreement does entitle the respondent to recover solicitor/client costs for non-payment of the commission, as the clause regarding non-payment applies generally, whether calculated based on the standard percentage arrangement in the first part of cl 5.3, or the bespoke “fees and expenses” arrangement;
(c)an interpretation of cl 5.3 that indemnity costs only apply to the bespoke arrangement would largely thwart the purpose of the clause to enforce the client’s obligation to pay for the agent’s services;
(d)the consequences of non-payment of commission are also imported at cl 7 of the Agreement, so regardless of how the commission is calculated, the consequences of non-payment are the same; and
(e)the respondent’s claim is being sought under a specific clause for all expenses and legal costs, not in reliance of a general indemnity cause.
Does the Agency Agreement provide for indemnity costs?
[6] Under r 14.6(4)(e) of the High Court Rules 2016 (HCR),…
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- Case
- [2024] NZHC 2057
- Decision Date
CaseChat Overview and Summary
The court considered whether the agency agreement provided for indemnity costs. The court noted that under the High Court Rules, the court could order a party to pay indemnity costs if the party claiming costs was entitled to indemnity costs under a contract or deed. However, the entitlement must be plainly and unambiguously expressed. The court found that clause 5.3.2 of the agency agreement clearly provided for payment of all legal costs and was plainly and unambiguously expressed. The court rejected the contention that the wording of clause 5.3 provided that only where the commission was calculated from fees and expenses would the respondent be entitled to indemnity costs. The court found that clause 5.3.2 applied to the respondent’s claim for non-payment of the commission. The court also considered whether the costs claimed were reasonable. The court found that the charge rates set out in the respondent’s schedule of costs were in line with industry standards and that the time expenditure of around 79.7 hours was excessive. The court found that an award of reasonable actual costs required a reduction of 20 per cent to the adjusted claimed sum of $38,680.50, resulting in a costs award of $30,944.40 plus disbursements of $172.20.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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