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Beattie v Mason

Beattie v Mason

Case [2024] NZHC 1099 6 May 2024

Costs

Indemnity Costs

Reasonable Costs

Contractual Interpretation

Admissibility of Evidence

Civil Litigation & Procedure

Property Law

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IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE

CIV-2023-406-15

[2024] NZHC 1099

UNDER the Property Law Act 2007

IN THE MATTER

of an application for an order for possession of land comprised in a lease

BETWEEN

NICHOLAS COLVIN BEATTIE AND MARAMA CONNIE BEATTIE

Applicants

AND

CONSTANCE MASON

Respondent

Further submissions:

On the Papers

9 April 2024 and 17 April 2024

Counsel:

M J Radich for Applicants D J Clark for Respondent

Judgment:

6 May 2024

JUDGMENT OF ISAC J

[Costs]

[1] On 11 December 2023, I declined the respondent’s application for relief against forfeiture and made orders bringing to an end a lease agreement between the parties.1

[2]In relation to costs, I made the following order:2

The applicants are entitled to contractual indemnity costs being their actual and reasonable costs in relation to this proceeding. If the parties are unable to agree they may file memoranda, but that comes with a warning: I am likely to

1 Beattie v Mason [2023] NZHC 3613.
2 At [63(d)].

BEATTIE v MASON [2024] NZHC 1099 [6 May 2024]

order costs on the determination of costs and on an indemnity basis against the unsuccessful party.

[3] The parties could not agree on costs. In a memorandum of 1 March 2024, counsel for the applicants submitted that, pursuant to the Lease terms, the applicants were entitled to costs of $35,328 on an indemnity basis. Additionally, the applicants sought $956 for the costs they have incurred in making submissions on costs. In response, counsel for the respondents submitted that costs must be “actual and reasonable”, which requires proof of the costs incurred. Given the absence of any breakdown in costs, Mr Clark submitted the respondent does not have to “blindly pay” the costs sought.

[4] On 28 March 2024 I issued a minute asking the applicants to provide the hourly rates charged by their lawyers, the total number of hours charged and copies of the relevant invoices. The applicant filed a memorandum providing this information on 9 April 2024, to which the respondent replied on 17 April 2024.

Indemnity costs

Legal Principles

[5] The court may order a party to pay indemnity costs if they are entitled to them under a contract.3 Whether such an entitlement arises is a matter of contractual interpretation.4 The entitlement must be “plainly and unambiguously expressed”.5

[6] However, an order for indemnity costs is limited to the “actual” costs “reasonably incurred” by a party.6 The leading case on the reasonableness of indemnity costs claimed under a contract is the Court of Appeal’s decision in Black v ASB Bank Ltd.7 The position is different from orders under either of r 14.6(4)(a) or (b), which concern indemnity costs imposed for a party’s bad behaviour.

3      High Court Rules 2016, r 14.6(4)(e).
4      Synlait Milk Ltd v New Zealand Industrial Park Ltd [2020] NZSC 157; [2020] 1 NZLR 657 at [192].
5      Newfoundworld Site 2 (Hotel) Ltd v Air New Zealand…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Beattie v Mason

Details

AGLC: Beattie v Mason [2024] NZHC 1099
Case: [2024] NZHC 1099
Decision Date: 6 May 2024

CaseChat Overview and Summary

The High Court of New Zealand, Blenheim Registry, considered the dispute between Nicholas Colvin Beattie and Marama Connie Beattie, who were the applicants, and Constance Mason, the respondent, in relation to the enforcement of a lease agreement under the Property Law Act 2007. The applicants sought an order for possession of the leased land and costs associated with this proceeding. The court had previously declined the respondent's application for relief against forfeiture and had ordered the end of the lease agreement. The current focus was on determining the costs the applicants could claim under the lease terms.

The primary legal issue before the court was whether the applicants were entitled to indemnity costs under the lease agreement and, if so, whether these costs were reasonable. The court had to interpret the lease agreement to determine the applicants' entitlement to indemnity costs, then assess if the costs claimed were reasonable. The court was also required to decide on the additional costs the applicants sought for preparing the memorandum on costs.

The court found that the lease agreement plainly provided for indemnity costs for the applicants, which included all actual costs incurred by them in enforcing the lease or their rights under it. The court then assessed the reasonableness of the costs claimed by the applicants. Considering the factors relevant to determining the reasonableness of legal fees, such as the complexity of the matter and the results achieved, the court concluded that the total claimed fee of $35,328 was not unreasonable. The court also awarded the applicants costs on costs for the preparation of the costs memorandum, given the respondent's obstructive conduct in addressing the parties' personal affairs and the issue of costs.

In conclusion, the court ordered the respondent to pay the applicants $36,284, which included the reasonable legal costs incurred and scale costs on a 2B basis in relation to the costs application.

Orders