Bell v BDO Spicers Manawatu Limited - [2013] NZHC 2272

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2012-485-166 [2013] NZHC 2272

BETWEEN ROBERT ARTHUR BELL Appellant

ANDBDO SPICERS MANAWATU LIMITED Respondent

Hearing: On the papers

Counsel: W Bevan for Appellant
A Darroch for Respondent

Judgment: 3 September 2013

JUDGMENT OF WILLIAMS J

[1] This is a further application for recall and a judgment as to costs. The appellant Mr Bell was the defendant in the original District Court proceedings. The respondent BDO Spicer Manawatu, an accounting practice.

[2] Before proceeding I am troubled to note that this matter has been with registry since both parties filed memoranda in late June of this year. It was only brought to my attention very recently. I apologise to both parties for the delay in dealing with this matter.

Background

[3] The appellant engaged the respondent in June 2008 and, over the next few months, the respondent produced several pieces of work. The appellant paid the first three of the invoices he received from the respondent but refused to pay the remaining two. The respondent claimed against the appellant for the balances owing
under these invoices, as well as interest at 2 per cent per month (pursuant to the letter

ROBERT ARTHUR BELL v BDO SPICERS MANAWATU LIMITED [2013] NZHC 2272 [3 September 2013]

of engagement)1 and reasonable solicitor-client costs (pursuant to cl 11(c) of the appendix to the letter of engagement).2

[4] On 9 December 2011, Judge Tuohy issued a decision finding the appellant liable to pay $10,793.71 in damages (the amounts owing), $11,554.59 in interest and costs of $38,877.58.

[5] The appellant appealed. On 11 July 2012, I dismissed the appeal for the most part, but I found in favour of the appellant on the issue of interest. The appellant argued that the interest clause in the letter of engagement imposing interest of 2 per cent per month was so excessive as to be unenforceable as a penalty. I agreed that the interest clause was excessive and determined that 15 per cent per annum was a fair substitution.3 That finding is relevant to the appellant’s most recent submission on the rate of interest.

[6] The appellant applied for that judgment to be recalled. On 31 May 2013, I granted this application on the basis that new evidence adduced by the appellant reduced the amount owing under each invoice. I recalculated the judgment sum and ordered the appellant to pay the respondent $6,580. This meant that the respondent had successfully claimed slightly under half of the sum it originally sought.

[7] With that result in mind, I ordered the appellant to pay half of the respondent’s legal costs for the appeal judgment, a total of $7,010.69. I invited the parties to file memoranda if they considered that costs should be dealt with on some other basis. I reserved costs on the recall application itself.

Recall

[8] The appellant now applies for further recall on the ground that the court

“seems unaware” of the definition of “accounting records” contained in the

1…

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.

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Details

Case: [2013] NZHC 2272
Decision Date: 3 September 2013

CaseChat Overview and Summary

In the High Court of New Zealand, Williams J heard an application for recall and a determination of costs in the case of Bell v BDO Spicers Manawatu Limited. The appellant, Mr Bell, had previously engaged the respondent, an accounting practice, to provide services and had refused to pay the balance on two invoices. The respondent had successfully claimed the outstanding amounts, interest, and costs in the District Court, and the appellant's appeal was dismissed, except for the issue of the interest rate. Following an application for recall based on new evidence, the court recalculated the judgment sum and ordered the appellant to pay half of the respondent's legal costs for the appeal. The appellant now sought further recall and a re-examination of the costs order.

The legal issues before the court included whether the judgment should be recalled based on a definition of "accounting records" and whether the description of the appellant's engagement with the respondent was accurate. The court also had to determine the appropriate costs to be awarded to the respondent and the correct interest rate and period for the judgment sum.

Williams J found that the definition of "accounting records" was not a legislative provision and thus not binding. The court also determined that the description of the appellant's engagement with the respondent was correct. The further application for recall was dismissed. Regarding costs, the court found that the appellant was not entitled to costs as the respondent had made a Calderbank offer, which the appellant did not accept. The court awarded increased costs of $1,000 to the respondent to account for the offer. Lastly, the court recalculated the interest on the judgment sum, finding that the prescribed interest rate for the period should be applied, resulting in a total interest owing of $1363.996.

The final orders of the court were that the further application for recall was dismissed, the appellant was to pay the respondent $8,010.89 in costs in relation to the appeal proceeding, and the recalculated judgment sum was $5,596.70.

Orders