Birnie v Outward Limited - [2024] NZHC 3219

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-759 [2024] NZHC 3219

BETWEEN
WILLIAM GEORGE PORTER BIRNIE

First Plaintiff

CHARLES GILBERT PEARCE

Second Plaintiff

AND

OUTWARD LIMITED

First Defendant

PRICEMAKER LIMITED

Second Defendant

ROB DARCE ROGERS

Third Defendant

PLAYMAKER LABS LIMITED

Fourth Defendant

Hearing: On the papers

Appearances:

R L Latton for Plaintiffs

P A Dowell, Director of the First, Second and Fourth Defendants R D Rogers, Third Defendant in person

Judgment:

31 October 2024

JUDGMENT OF McHERRON J
(Costs)

[1] In my judgment of 16 September 2024 I set out the following preliminary view in relation to costs:1
The plaintiffs seek costs on a 2B basis uplifted by 50 per cent to reflect breach of a reasonable settlement agreement. My preliminary view is that no uplift

1 Birnie v Outward Ltd [2024] NZHC 2665.

BIRNIE v OUTWARD LIMITED [2024] NZHC 3219 [31 October 2024]

is justifiable given the plaintiffs’ lack of success in respect of their primary arguments for damages in respect of the representations. However, if necessary, I will allow the parties to file and serve submissions on that question (no longer than five pages) within 14 days of the date of this judgment. I will then determine costs on the papers.

[2] On 19 September 2024, counsel for the plaintiffs filed a memorandum indicating that the plaintiffs accepted my preliminary view and now seek costs on a 2B basis. In support of the plaintiffs’ application, they refer to the Supreme Court’s statement in Manukau Golf Club Inc v Shoye Venture Ltd that:2
A fundamental principle applying to the determination of costs in all the general courts in New Zealand is that costs follow the event.

[3] The plaintiffs’ counsel also refers to the principle established in the same case that where the Court is simply applying the fundamental principle that costs follow the event and the costs awarded are within the normal range applicable, it does not have to give reasons for costs orders. Rather, it is only when something out of the ordinary is being done that some explanation, which may be brief, should be given.3

[4] The plaintiffs submit that there is nothing in the present case that would justify departing from these normal principles. They submit that the plaintiffs have been substantially successful and that costs should follow the event. In a schedule attached to the plaintiffs’ costs memorandum, they itemised their 2B scale costs and disbursements. I set out that schedule as an appendix to this judgment.

[5] Some time after the deadline for submissions had past, the third defendant Mr Rogers filed a memorandum asserting that the defendants would not have agreed to the settlement agreement without the “implicit threat” of “very significant legal costs” to defend the proceeding, knowing it had no merit in the first place. In other words, Mr Rogers argues that the Court should not award costs to the plaintiffs, given that the first to fourth causes…

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: [2024] NZHC 3219
Decision Date: 31 October 2024

CaseChat Overview and Summary

In the High Court of New Zealand, Wellington Registry, the plaintiffs, William George Porter Birnie and Charles Gilbert Pearce, sought damages and costs against the defendants, Outward Limited, Pricemaker Limited, Rob Darce Rogers, and Playmaker Labs Limited. The plaintiffs alleged that the defendants made misleading representations and breached a settlement agreement. The primary legal issue was whether the plaintiffs were entitled to costs on a 2B basis, uplifted by 50% for breach of a reasonable settlement agreement, or whether the defendants' costs should be deducted from any amount awarded to the plaintiffs.

The court held that the plaintiffs were substantially successful overall, despite their failure in the misrepresentation causes of action. The successful breach of settlement agreement cause of action warranted an award of costs to the plaintiffs. The court rejected the defendants' argument that the plaintiffs should not be awarded costs because they were not successful in their primary claims. The court found that the misrepresentation claims provided the factual context for the settlement agreement claim and that the plaintiffs' success in the latter outweighed their failure in the former. Additionally, the court held that the third defendant, a litigant in person, was not entitled to recover costs in this proceeding.

Consequently, the court ordered that Rob Rogers and Playmaker Labs Limited are jointly and severally liable to pay the plaintiffs' costs and disbursements amounting to $64,981.43. The court ruled that there was no justification to depart from the normal costs principles, and thus, the plaintiffs were entitled to costs on a 2B basis, plus disbursements. The defendants did not identify any defect in the schedule attached to the plaintiffs' original memorandum.

Orders