Body Corporate 207624 v Grimshaw & Co

[2023] NZHC 3381

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2018-404-002107

[2023] NZHC 3381

BETWEEN

BODY CORPORATE 207624

Plaintiff

AND

GRIMSHAW & CO

Defendant

Hearing:	On the papers
Counsel:	D R Bigio QC, A G Holden and A J McCombie for the Plaintiff L Taylor QC, P J L Hunt, R J Scott and J T Neville-Smith for the Defendant
Judgment:	27 November 2023

JUDGMENT OF TAHANA J

(Costs)

This judgment was delivered by me on 27 November 2023 at 2.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:

D R Bigio QC, Auckland Wilson Harle, Auckland McElroys, Auckland

BODY CORPORATE 207624 v GRIMSHAW & CO [Costs] [2023] NZHC 3381 [27 November 2023]

Costs claimed

[1]                 In a judgment delivered on 28 April 2023 I awarded damages in favour of the plaintiff (the Body Corporate) in the amount of $3,268,201.14 plus interest.1 Costs were reserved. The parties have been unable to agree costs and counsel have exchanged memoranda.

[2]The Body Corporate seeks a total of $1,468,195.78 comprising:

(a)total costs of $1,017,416.55:

(i)for the period up to 10 September 2021, scale costs on a 3B basis (with a 50 per cent uplift for discovery and briefing); and

(ii)from 10 September 2021, indemnity costs; and

(b)disbursements of $450,779.23.

[3]                 The Body Corporate says the proceedings should be re-categorised as 3B due to their complexity. The Body Corporate relies on the defendant’s, Grimshaw & Co’s (Grimshaws’), rejection of a Calderbank offer and its conduct in defending the proceeding in support of its application for indemnity (or alternatively, increased costs) from 10 September 2021.

[4]                 Grimshaws accepts that the Body Corporate is entitled to category 2 scale costs of $249,634.00 and disbursements of $450,780.14 (total $700,414.00) but says that the total amount awarded (both costs and disbursements) should be reduced by 40 per cent, to $420,248.00, to reflect the fact that the Body Corporate was unsuccessful in recovering the full amount claimed. There is a difference of $1,047,947.78 between the parties.

1      Decision on liability: Body Corporate 207624 v Grimshaw & Co [2023] NZHC 979, delivered on 28 April 2023 (reissued on 10 May 2023). Decision on quantum of damages: Body Corporate 207624 v Grimshaw & Co [2023] NZHC 1155, delivered on 15 May 2023.

[5]                 The parties have helpfully provided schedules2 identifying each of the tasks for which costs are claimed and their respective positions.

[6]I therefore need to determine the following issues:

(a)Should the proceeding be re-categorised as category 3?

(b)For costs prior to 10 September 2021, what is the appropriate band, and should there be any uplift for discovery and briefing?

(c)For costs after 10 September 2021:

(i)How should costs be awarded for discovery?

(ii)Should additional time be allowed for trial preparation?

(iii)Should costs be awarded for a third counsel?

(iv)Is the Body Corporate entitled to indemnity or increased costs?

(d)For the whole period, should costs be reduced by 40 per cent to reflect that part of the Body Corporate’s claim that was unsuccessful?

Should the proceeding be re-categorised as category 3?

[7]                 Rule 14.3 of the High Court Rules 2016 (HCR) includes the following categories:

….

Category 2 proceedings          Proceedings of average complexity

requiring counsel of skill and experience considered average in the High Court

Category 3 proceedings          Proceedings   that   because   of their

complexity   or   significance require

2      Schedule 1 lists costs prior to 10 September 2021, Schedule 2 lists costs after 10 September 2021, and Schedule 3 lists all disbursements. A version of these Schedules reflecting the outcome of this judgment is annexed below.

counsel to have special skill and experience in the High Court

(2) The court may at any time determine in advance a proceeding’s  category, which applies to all subsequent determinations of costs in the proceeding, unless there are special reasons to the contrary.

[8]                 The proceedings were categorised as category 2B in late 2018.3 There must be “special reasons” to change the category.4

[9]                 Early categorisation assists the parties in calculating, as a proceeding goes forward, their potential exposure to costs.5 The Court of Appeal in Paper Reclaim Ltd v Aotearoa International Ltd considered it was “far too late” to be waiting until after the substantive hearing to propose to re-categorise the proceeding.6 In that case the Court of Appeal did not accept that the litigation had changed character after its original categorisation. At its core, it remained a proceeding “of average complexity requiring counsel of skill and experience considered average in the High Court.”7 There were no special reasons to justify re-categorisation.8

[10]             In Heslop v Cousins, this Court considered there were special reasons to re- categorise the proceeding because when the hearing began counsel on both sides appeared to have seriously underestimated its complexity.9 Counsel had estimated two weeks for the hearing and the hearing ran into a fifth week. The Court was not satisfied that it was a proceeding of average complexity requiring counsel of skill and experience considered average in the High Court and so re-categorised the proceedings, from a specified date, as category 3.

[11]             When this proceeding was categorised as 2B by consent in 2018 the parties’ estimated trial time was seven days, involving seven to eight plaintiff witnesses, and four to five defence witnesses (11 to 13 in total). The substantive proceeding was heard over 19 days (more than double the estimated time) and involved 23 witnesses.

3      Body Corporate 207624 v Grimshaw & Co [2021] NZHC 2608 at [15].

4      High Court Rules 2016, r 14.3(2).

5      Paper Reclaim Ltd v Aotearoa International Ltd [2007] NZCA 544 at [29].

6 At [30].

7 At [31].

8 At [32].

9      Heslop v Cousins HC Christchurch CIV 2005-409-2833, 6 August 2007 at [7].

[12]             The proceeding was also categorised prior to agreement on discovery categories. Grimshaws discovered 14,456 documents and the Body Corporate 10,680. That is a significant volume of discovered documents which is unsurprising given the period of time relevant to the proceeding, that being over a decade.

[13]             While Grimshaws acknowledge that 2C costs are appropriate for discovery, it does not consider there are any special reasons for re-categorisation to category 3.

[14]             While the causes of action (negligence and breach of contract) were reasonably straightforward, the factual background spanned more than a decade, during which time there was legislative change10 raising issues as to the duty of care owed by Grimshaws when advising on a contract made while the previous legislation was in force. There were also issues as to the scope of the duty of care and whether this extended to losses arising from delayed construction. Grimshaws advanced many defences including statutory limitation, contributory negligence, estoppel, betterment, standing, and the existence of the litigation funding agreement. Grimshaws also asserted that the damages claimed were too remote and unrecoverable.

[15]             I am satisfied that the complexity of the proceeding required counsel to have special skill and experience in the High Court and it is appropriate to re-categorise the proceeding as category 3.

What costs should be awarded for tasks prior to 10 September 2021?

What is the applicable band?

[16]             While Grimshaws says that each step should be separately assessed before a band is confirmed, the Body Corporate says that analysing each step (there are 70 in total) would be an extensive and detailed task. Instead, the Body Corporate submits that a pragmatic approach would be for the Court to assess each step as 3B. That categorisation would recognise that under-recovery for a step that would be 3C, would to some extent be offset by steps that would have been 3A.

10     The Unit Titles Act 1972 was repealed and the Unit Titles Act 2010 was enacted.

[17]             Rule 14.5(2)(b) identifies band B as appropriate “if a normal amount of time is reasonable.” Based on my knowledge of the issues in the proceeding and the manner in which the parties conducted their respective claims and defences, except in circumstances where there is evidence to the contrary, there is no basis for considering the normal amount of time would not be required for each step.

[18]             For nine of the steps taken by the Body Corporate involving step 11,11 as defined by the HCR and detailed in Schedule 1 below, Grimshaws argue that 2A is appropriate. Band A allocates 0.2 days, whereas 0.4 days are allocated for band B.

[19]             The reasons Grimshaws give for those steps being band A are that the memoranda were brief and some related to “timetabling.”

[20]             Brevity of a final document does not necessarily mean its preparation only involved a relatively small amount of time.12 The time involved for a step includes time involved considering issues and preparing and formulating the document. I am not satisfied any of those nine steps should be allocated band A and not the “normal” amount of time specified in band B.

Should an uplift apply for discovery?

[21]Rule 14.6(3) provides that the Court may order increased costs if:13

(a)the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or

(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)failing to comply with these rules or with a direction of the court; or

(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or

11    Step 11 is defined in Schedule 3 of the High Court Rules 2016 as “Filing memorandum for first   or subsequent case management conference or mentions hearing”. The nine steps of this kind taken by the Body Corporate and challenged by Grimshaws are set out in Schedule 1 below and are listed as items: 2, 8, 10, 12, 14, 16, 17, 24, and 35.

12 Minister of Education v James Hardie New Zealand [2018] NZHC 2960 at [16].

13 High Court Rules 2016.

(iii)failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

(iv)failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or

(v)failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or

(c)the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or

(d)some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.

[22]             The courts recognise that the complexity of a case might mean that, in addition to experienced counsel, more time is needed for particular steps in preparation than is provided for in the scale.14 A realistic and pragmatic approach is required.15

[23]             The Body Corporate seeks increased costs for both the discovery of its own documents and the inspection of Grimshaws’ documents. I first consider the Body Corporate’s discovery.

Should costs be awarded by tranche or by affidavit of documents?

[24]             The Body Corporate discovered its documents in five tranches but they were listed in four affidavits dated 5 November 2019 (7,168 documents), 11 March 2020 (556 documents), 26 February 2021 (2,640 documents) and 13 May 2022 (317 documents). Documents were informally discovered on 22 October 2021 and then listed in the 13 May 2022 affidavit. The Body Corporate separately claims the actual costs for the time spent locating and informally disclosing documents on 22 October 2021. I note that the 13 May 2022 affidavit was filed after 10 September 2021, so I deal with documents included within that affidavit when dealing with costs after that date.

14     Kidd v van Heeren [2015] NZHC 3191 at [13].

15     Kidd v van Heeren [2015] NZHC 3191 at [13], citing Trustpower v Commissioner of Inland Revenue

[2014] NZHC 3072 at [27].

[25]             The Body Corporate seeks a 50 per cent uplift for the 5 November 2019 affidavit of documents. The Body Corporate reviewed 17,765 documents and discovered 7,168 documents. Band B allocates 2.5 days to that task. Grimshaws accept that the Body Corporate is entitled to 2C costs in relation to that task which allocates 7 days. I agree that an allocation of 7 days (band C) is appropriate and award 3C costs for that task (item 13).

[26]             Turning to inspection of Grimshaws’ discovery, the Body Corporate proposes a 50 per cent uplift and Grimshaws propose 2C costs for inspection of documents provided on 12 November 2019 (item 15). Band C allocates 6 days and band B allocates 1.5 days for inspection of documents. Grimshaws says 10,150 documents were listed in its affidavit of documents.

[27]             I agree with Grimshaws that given the volume of documents the time allocated should be on a band C basis rather than by way of a 50 per cent uplift. I therefore award 3C costs for item 15.

Should an uplift apply for briefing?

[28]Grimshaws says that the costs awarded for preparing briefs of evidence (item

58) should be based on the scale (13.25 days) and no further uplift should be provided as evidence was prepared prior to the Calderbank offer.

[29]             The Body Corporate seeks both an increase on the scale to 20 days, plus an uplift of 50 per cent for the costs of its reply evidence. The Body Corporate says this is justified because Grimshaws served “voluminous” briefs of evidence (three factual and nine expert), meaning that the Body Corporate had to file reply briefs, including from a further three experts. The Body Corporate submits that the scale allocation (13.25 days for a 19-day trial) is insufficient to realistically and pragmatically reflect the time needed for reply briefs because the evidence served by Grimshaws was unnecessarily complex and lengthy. The Body Corporate submits that 20 days is a

reasonable time allocation. The actual time taken to prepare the reply briefs was 42 days, thus substantially exceeding the time allocated for scale costs.16

[30]             I consider that given the extent of the reply evidence required by the Body Corporate because of Grimshaws’ evidence, the time taken to complete this task substantially exceeded the time allocated for scale costs of 13.25 days. This justifies increasing the time allocation to 20 days, which the Body Corporate accepts would be reasonable. An allocation of 20 days is less than half of the actual time spent by the Body Corporate on this task. I do not accept that a further uplift is justified.

[31]             I therefore award costs for step 33 (item 58) based on a time allocation of 20 days at category 3.

What costs should be awarded for tasks after 10 September 2021?

Body Corporate’s affidavit of documents dated 13 May 2022

[32]             Grimshaws disputes that the Body Corporate is entitled to claim for the documents the Body Corporate informally disclosed in October 2021 (item 45) and then included in its 13 May 2022 affidavit of documents (item 49). The Body Corporate claims actual costs of $4,610.19 for informally disclosing documents on 22 October 2021 and actual costs of $5,391.08 for the May 2022 affidavit amounting to $10,001.27 in total. Grimshaws says only 2B costs (2.5 days) should be awarded in the amount of $5,975.00 for the May 2022 affidavit. I consider that to be consistent with the scale, costs should only be awarded for the affidavit of May 2022 but on a 3B basis in the amount of $8,825.00. Item 45 in Schedule 2 is therefore rejected, and item 49 is awarded on a 3B basis.

Documents included within Grimshaws’ 17 February 2022 affidavit

[33]             The Body Corporate seeks costs of inspection of five tranches of documents on 18 June 2021 (27 documents, item 37), 21 October 2021 (188 documents, item 44), 12 November 2021 (15 documents, item 46), 24 and 25 November 2021 (5 documents,

16     The time allocation is the same for all bands for this step (step 33 in Schedule 3 of the High Court Rules 2016).

item 47), and 15 December 2021 (1,646 documents, item 48), documents which were included in an affidavit of documents of 17 February 2022. The Body Corporate does not separately claim for the February 2022 affidavit of documents.

[34]             Grimshaws challenges the Body Corporate’s approach of claiming costs for each time it inspected a tranche of documents and says costs should be awarded for the February 2022 affidavit only. A total of 1,924 documents were listed in the affidavit of 17 February 2022. Band B allocates 1.5 days for inspection. To be consistent with the scale and the manner in which costs were awarded for the November 2019 inspection, costs should be awarded for the 17 February 2022 list on a 3B basis. I therefore award 3B costs for item 48 and reject the claims for items 37, 44, 46 and 47.

Documents inspected on 18 May 2022

[35]             Grimshaws also challenges the Body Corporate’s claim for actual costs of inspecting documents on 18 May 2022 (item 50) and says that costs have already been awarded by Harvey J in his decision of 21 September 2022.17 It is evident from [31] of that judgment that the Body Corporate’s costs application in that case did not include inspection of the documents but was related to the application for discovery. I therefore reject Grimshaws’ submission and award actual costs which are less than scale costs.

Should additional time be allowed for trial preparation?

[36]             Grimshaws oppose the Body Corporate’s claim for 40 days of preparation time. The scale allows 13.25 days ($46,772.50 at category 3) and the Body Corporate seeks scale costs for 40 days at category 3 ($141,200.00) (plus an increase) or actual costs of $510,172.21 (item 60).

[37]             The Court may order a party to pay increased costs if the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C.18 It is clear that the actual

17     Body Corporate 207624 v Grimshaw & Co [2022] NZHC 2421.

18     High Court Rules 2016, r 14.6(3)(a).

time required for preparing for the hearing substantially exceeded the 13.25 day allocation. I consider that 40 days’ preparation time is reasonable given the nature of the proceeding, the volume of evidence and the number of defences. I therefore award category 3 costs for 40 days for item 60.

Should costs be allowed for a third counsel?

[38]             Grimshaws oppose the Body Corporate’s claim for the actual costs of a third counsel (item 63). I note that three counsel attended the trial for Grimshaws so this indicates that they considered the complexity and nature of the proceedings warranted a third counsel. I consider that a third counsel was warranted. I therefore award actual costs of $17,551.13 for item 63 given they are less than 3B scale costs plus an uplift (ultimately granted).

Should indemnity or increased costs be awarded for the Calderbank offer?

[39]Rule 14.10 acknowledges that parties may make settlement offers, as follows:19

14.10Written offers without prejudice except as to costs

(1)A party to a proceeding may make a written offer to another party at any time that—

(a)is expressly stated to be without prejudice except as to costs; and

(b)relates to an issue in the proceeding.

(2)The fact that the offer has been made must not be communicated to the court until the question of costs is to be decided.

[40]             The Body Corporate’s offer falls within the scope of r 14.10. Rule 14.11 then prescribes the effect of such an offer on costs:20

14.11Effect on costs

(1)The effect (if any) that the making of an offer under rule 14.10 has on the question of costs is at the discretion of the court.

(2)Subclauses (3) and (4)—

(a)are subject to subclause (1); and

19     High Court Rules 2016.

20     High Court Rules 2016.

(b)do not limit rule 14.6 or 14.7; and

(c)apply to an offer made under rule 14.10 by a party to a proceeding (party A) to another party to it (party B).

(3)Party A is entitled to costs on the steps taken in the proceeding after the offer is made, if party A—

(a)offers a sum of money to party B that exceeds the amount of a judgment obtained by party B against party A; or

(b)makes an offer that would have been more beneficial to party B than the judgment obtained by party B against party A.

1. The offer may be taken into account, if party A makes an offer that—

(a)does not fall within paragraph (a) or (b) of subclause (3); and

(b)is close to the value or benefit of the judgment obtained by party B.

[41]             The Court may also award increased costs if a party fails, without reasonable justification, to accept an offer of settlement whether in the form prescribed by r 14.10 or not.21

[42]             In Aldrie Holdings Ltd v Clover Bay Park Ltd Heath J considered that r 14.11 does not provide for a presumptive entitlement to costs where the offer does not fall within r 14.11(3) (where a defendant offers to settle for an amount less than claimed) but noted that Brewer J, in Junior Farms Ltd v Commissioner of Inland Revenue, equated the position of a plaintiff offering to accept a lesser sum to that claimed to that of a defendant offering to pay such an amount.22

[43]             Here, the Body Corporate offered to accept a lesser sum than it was claiming. In those circumstances, r 14.11(3) does not apply so there is arguably no presumptive entitlement to costs. While in Junior Farms Ltd v Commissioner of Inland Revenue23 the Court regarded the plaintiff as being in the same position as a defendant whose Calderbank offer had been refused, this was because the plaintiff in reality was defending a claim for income tax. That is not the case here. I consider it appropriate

21     High Court Rules 2016, r 14.6(3)(b)(v).

22     Aldrie Holdings Ltd v Clover Bay Park Ltd [2016] NZHC 1482, citing Junior Farms Ltd v Commissioner of Inland Revenue (No 2) HC Auckland CIV-2009-404-2870, 5 October 2011.

23     Junior Farms Ltd v Commissioner of Inland Revenue (No 2) HC Auckland CIV-2009-404-2870, 5 October 2011.

to consider whether Grimshaws had a reasonable justification for rejecting the Calderbank offer in determining its effect on costs.

[44]             On 10 September 2021, the Body Corporate offered to settle for $4,000,000 for a claim in excess of $10,000,000. The Body Corporate says the amount recovered, inclusive of interest, disbursements and costs, will exceed the $4,000,000 offered on 10 September 2021, and the $4,285,544.7524 offered on 8 March 2022.

[45]             When considering whether the Calderbank offer was less than the ultimate award, interest and costs can be taken into account.25 Grimshaws acknowledges that the offer could approach the judgment sum, interest and costs “calculated to that date”26 but says even if the offer exceeds the amount awarded (including interest and costs), the Body Corporate must show the offer was rejected without reasonable justification.

[46]At trial, the Body Corporate was successful in claiming damages of

$3,268,201.14 plus interest.27 I accept that the offer is less than the amount ultimately awarded, taking into account damages plus interest and costs.

[47]               Grimshaws says that it had reasonable justification for rejecting the offer because the Body Corporate failed to disclose the delay period on which the offer was based or explain (by line item) the losses that the Body Corporate had been willing to compromise on.

[48]             In making the 10 September 2021 offer, the Body Corporate indicated its claim had been reviewed by a retired High Court Judge on a “black hat” basis and explained why the quantum of damages had been reduced, as follows:

24 This amount comprises the offer of $4,000,000 plus indemnity costs of $218,000 and a refund of the wasted costs award of $67,544.75.

25 Tudhope v McEwan (2003) Ltd [2010] NZCA 166.

26 Grimshaws calculates interest to 10 September 2021 at $301,096, disbursements at $283,000 and scale costs at $100,000 so that the total would be $3,952,297, which is slightly less than

$4,000,000.  They also say a 40 per cent reduction for costs is appropriate.

27  Decision on liability: Body Corporate 207624 v Grimshaw & Co [2023] NZHC 979, delivered on 28 April 2023 (reissued on 10 May 2023). Decision on quantum of damages: Body Corporate 207624 v Grimshaw & Co [2023] NZHC 1155, delivered on 15 May 2023.

24.… The simple proposition which can be established on the plaintiff’s evidence by reference to contemporary documents is that had the settlement monies been available for distribution in February 2014 the Body Corporate was ready to proceed promptly with the remedial process.

25.Notwithstanding the above, the plaintiff is aware that the quantum claimed may appear large in comparison to the nature and extent of Grimshaw’s breaches. We acknowledge that a High Court Judge may be uncomfortable with the implications of Grimshaws being responsible for all foreseeable consequences of the breach of their duty and that this could lead a Judge to seek to find ways to “discount” the quantum of the claim to reduce this perception.

26.To that end, the plaintiff has previously adopted and continues to adopt a pragmatic approach to the resolution of this matter. The adjournment of this trial has given the parties an opportunity to resolve this matter well in advance of the need to recommence preparation for trial. In those circumstances, the plaintiff is prepared to accept the sum in $4,000,000 (plus GST, if any) in full and final settlement of the claim with payment to be made by 1 October 2021. This offer remains open for acceptance until 17 September 2021.

[49]             It is necessary to traverse the whole of the without prejudice correspondence to determine whether there was reasonable justification for rejection, because the Body Corporate had made previous offers and set out its reasons more fully in prior correspondence.

[50]             The parties exchanged without prejudice offers over a number of months with Grimshaws making an initial offer on 18 February 2021 for the Body Corporate to discontinue its claims with no issue as to costs.

[51]The Body Corporate responded on 29 June 2021 offering to settle for

$7,000,000. In that letter, the Body Corporate referred to the evidence of Ms Michaela Cook (delay expert), Mr Joshua Rawlinson (council expert), and Mr Francis Cleary (architect), and the Body Corporate’s witnesses of fact, concluding that if the funds had been available, rescoping would have been completed promptly and the Body Corporate would have obtained an amended building consent in 2014, or at the latest by early 2015. On Ms Cook’s evidence, the Body Corporate would be entitled to damages for a delay of two years. The Body Corporate’s claim sought damages for a delay period of four years.

[52]             The Body Corporate noted witnesses’ evidence that the prototyping work was interrupted because the Body Corporate did not have sufficient funds. The Body Corporate asserted that had settlement funds been distributed to the Body Corporate by the time the prototyping had started, the rescoping work would have been completed quickly, without interruption. That letter also referred to the evidence for Grimshaws that the Body Corporate’s best case was a quantum of $2,662,188.33, plus interpleader and remediation costs of $306,985.58, which indicated a starting point of at least $3,000,000.

[53]The Body Corporate set out the basis for the offer as follows:

60. The above totals $11,391,204.59 (plus GST). To promote settlement discussions, the Body Corporate is content to forego consideration of other smaller line items claimed, the COVID increased costs and all of the differences in tender pricing between Arrow and Brosnan. It also takes into account the deduction in respect of interest earned.

[54]             On 2 July 2021, Grimshaws rejected the offer and again proposed to settle if the Body Corporate discontinued without any issue as to costs. In rejecting the offer Grimshaws disclosed its view of the Body Corporate’s case:

37. Your  client’s approach to damages in this case is misconceived and, quite frankly, ridiculous. The amount claimed is totally disproportionate to the nature and scope of the alleged duty. That, in itself, is a clear indication that the claim for damages is misconceived and cannot succeed.

[55]             On 4 July 2021, the Body Corporate rejected Grimshaws’ offer to walk away. In responding, the Body Corporate again set out its reasons for claiming delay costs:

13. The Body Corporate reasonably undertook prototyping  and  investigation of repetitive elements of remedial work. That would not have prevented designs and amendments to parts of the building consent from being progressed in parallel with negotiations with a contractor. Concurrent work-flows and negotiations are usual construction practice. There would not have been a sequential workstream as Grimshaws suggests.

…

17.The Body Corporate’s approach to damages is correct.  Its loss is not the difference between what it might have received under different hypothetical CDAs [conduct and distribution agreements]. Its loss is the (financial) consequences of the delay caused by the dispute. Cost escalation over time was entirely foreseeable, especially to a specialist

leaky building litigation law firm. The Body Corporate’s costs in resolving the interpleader dispute, including Grimshaws’ fees in that proceeding and the commission it charged while the funds were frozen in its trust account, were a direct result of the dispute its negligence caused. This conduct during the interpleader, coupled with the abject failure to provide advice on a matter which the defendant knew could have adverse consequences for its clients, will reflect very poorly on them.

[56]             On 17 August 2021, Grimshaws responded indicating that it preferred for the issues to be resolved by the Court, but due to the adjournment of the trial, would make one further offer to settle on a walk away basis. Grimshaws maintained its position on liability:

4.Grimshaws’ position is that the claim was speculative from the outset and has never had any prospect of success. …

…

44. There is no plausible basis, either in fact or in law, for your client’s assertions that any breach of duty by Grimshaws has somehow caused loss to the BC of the kind claimed. Even if there were some bases for claiming that the alleged breach of duty has resulted in (caused) increased building costs, such losses are clearly outside the scope of any duty owed by Grimshaws when drafting or advising about the terms of the CDA.

…

47. An award of damages for those kinds of alleged losses would be both disproportionate and unreasonable. That confirms our view that the damages claimed are too remote and, as stated in our previous correspondence ridiculous. We do not consider there is any realistic prospect of your client’s claim for damages succeeding.

[57]             Against the above backdrop, the Body Corporate made the 10 September 2021 offer.

[58]             On 14 September 2021, Grimshaws rejected the offer referring back to its   17 August 2021 letter and making a fourth offer to settle on a walk away basis.

[59]             On 8 March 2022, the Body Corporate again wrote to Grimshaws referring to the 1,800 further documents that Grimshaws had discovered since the trial was adjourned and asserting that those documents indicated that Grimshaws was aware of the legal position and flaws in the conduct and distribution agreement (CDA). The Body Corporate made a further offer to avoid unnecessary cost through to trial,

offering to settle for $4,000,000, plus payment of its indemnity costs from the adjournment of the trial ($218,000 (excluding GST)), and repayment of the wasted costs award ($67,544.75).

[60]Grimshaws responded on 30 March 2022, rejecting the offer and stating:

37.Your letter of 8 March says nothing as to issues of causation and loss which have been addressed in detail in our previous correspondence. The body corporate’s offer has not attempted to express why Grimshaws should pay it $4,285,544.75. This is despite the claim being broken down into constituent parts in the statement of claim. [There followed the breakdown of the claim from the BC’s statement of claim.]

…

38.The body corporate should be able by this stage of the proceeding to draw a line from breach, through causation to the loss itemised above and why Grimshaws should pay it an amount of money.

39.Instead, it has chosen to offer to settle for $4m plus some costs, plus the wasted costs award. This amount is lower than the claimed amount, yes, but you have provided no reason why Grimshaws should pay this amount except that you consider their defence on liability will not succeed. This is inadequate.

40.Grimshaws’ position throughout, as communicated to you, is that the body corporate’s claim is flawed at all points from duty, through breach and causation to loss and quantum. There is nothing in your letter which persuades us that a payment of anything like the amount proposed is justified.

…

42.Grimshaws’ position is that the claim for damages for increased costs of construction should never have been brought. Grimshaws do not consider they will be liable for any costs associated with the increased construction costs, irrespective of any success in the interpleader claim.

[61]             The letter concluded with Grimshaws offering to pay $500,000. That offer was then rejected.

[62]             The without prejudice correspondence indicates that Grimshaws made four offers to settle on a walk away basis and was only willing to settle by paying $500,000. The Body Corporate first offered to settle for $7,000,000, then for $4,000,000, and then for $4,000,000 plus costs.

[63]             Grimshaws says it had a reasonable basis to refuse the Calderbank offer because the Body Corporate “repeatedly refused to engage with [Grimshaws] as regards when the remedial work would have commenced and the extent of the delay losses.” Grimshaws refers to the without prejudice correspondence and says that the Body Corporate at no stage engaged appropriately (given the evidence) with Grimshaws in relation to contracting and rescoping.

[64]             The Body Corporate set out the basis for its settlement offer in relation to delay when offering to settle for $7,000,000. It indicated the line items it was willing to forego. Further, by the time of the offer, Ms Cook had filed her evidence acknowledging a potential delay caused by the negligence of only two years. In circumstances where the Body Corporate was claiming in excess of $5,000,000 for escalation costs due to delay, it would have been obvious to Grimshaws that the Body Corporate was offering to compromise on the period of delay. I do not consider that the Body Corporate’s failure to specify the exact extent of the delay period it was willing to accept provides a reasonable basis for Grimshaws to reject the offer in circumstances where Grimshaws had all the evidence.

[65]             Grimshaws also rely on Aldrie Holdings v Clover Bay Park Limited.28 In that case, the Court considered that the defendant had a reasonable basis for rejecting the Calderbank offer because the offer relied on a cause of action that was subsequently abandoned. The claim under the relevant Act was unsuccessful as to damages. The plaintiff was awarded damages for another cause of action which was not articulated in the settlement offer. That is clearly not the case here. The Body Corporate was successful on the pleaded causes of action. The Body Corporate only failed in respect of the extent of damages it claimed. The settlement offer reflects a concession on that very issue.

[66]             I am not satisfied that Grimshaws had reasonable justification for refusing the settlement offer. It was not necessary for the Body Corporate to specify the period of delay on which its offer was based in order for Grimshaws to understand the basis of the settlement offer. The correspondence indicates that Grimshaws did not consider

28     Aldrie Holdings Ltd v Clover Bay Park Ltd [2016] NZHC 1482.

that the Body Corporate was entitled to damages as a matter of law and that is likely the reason for its rejection of the offer, not the Body Corporate’s failure to specify a delay period. A review by a retired High Court Judge was not sufficient to persuade Grimshaws, nor was the Body Corporate’s evidence.

[67]             A Calderbank offer that was reasonable and unreasonably rejected does not of itself give rise to an entitlement to increased costs, as this remains at the Court’s discretion. In Weaver v HML Nominees Ltd the Court helpfully set out the factors that are relevant in considering whether the rejection of a settlement offer justifies increased costs as follows:29

(a)the size of the offer relative to the actual costs of counsel;

(b)the amount of the claim;

(c)the reasonable expectations of the party that refuses the offer;

(d)the amount of preparation for trial already undertaken;

(e)whether the proceeding concerns an uncertain area of law;

(f)whether the parties were in a position to assess the merits when the offer was received;

(g)the information available to the party who receives the offer and the extent to which they can to assess the offer;

(h)the timing of the offer;

(i)          the conduct of the offeror. (footnotes omitted)

[68]             The settlement offer of $4,000,000 was less than half of the amount claimed. It was made after briefs of evidence were served so Grimshaws would have been in a position to assess the merits of the evidence regarding delays when the offer was received. The Body Corporate, in its without prejudice correspondence, indicated a willingness to settle and make compromises. Grimshaws were aware that proceeding to a four-week trial would involve significant time and costs (as is evident from the actual costs the Body Corporate incurred). The conduct of the Body Corporate was reasonable and indicated a willingness to engage constructively in seeking to settle.

29     Weaver v HML Nominees Ltd [2016] NZHC 473 at [30].

As a result of Grimshaws’ failure to accept the settlement offer, the Body Corporate was forced to continue to incur significant costs in pursuing the claim.

[69]             I am not satisfied that Grimshaws’ rejection of the Calderbank offer justifies indemnity costs but it does justify an increase in costs but any increase needs to be considered alongside the other relevant factors under r 14.6(3) so I now consider whether the conduct of Grimshaws’ defence also justifies an increase.

Should increased or indemnity costs be awarded because of Grimshaws’ conduct?

[70]             The Body Corporate also relies on Grimshaws’ conduct as a basis for increased or indemnity costs. In seeking increased costs, the Body Corporate relies on the grounds in r 14.6(3), as follows:30

(3)       The court may order a party to pay increased costs if—

…

(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)failing to comply with these rules or with a direction of the court; or

(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii)failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

(iv)failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or

(v)failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; …

[71]             In seeking indemnity costs, the Body Corporate relies on r 14.6(4)(a) and (b) where the Court may award indemnity costs if:31

30     High Court Rules 2016.

31     High Court Rules 2016, r 14.6(4)(a) and (b).

(a)the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or

(b)the party has ignored or disobeyed an order or direction of the court or breached an undertaking given to the court or another party.

[72]             The Body Corporate points to the following conduct of Grimshaws as justifying increased costs:

(a)Not disclosing all documents in its 12 November 2019 list of documents and disclosing a further 1,854 documents in late 2021.

(b)Making bulk claims of privilege which the Body Corporate says put it to significant unnecessary expense in identifying the existence of the undisclosed documents and then having to inspect the documents.

(c)Refusing to disclose documents for six weeks despite the Court concluding that Grimshaws’ “assertion of privilege [was] incompatible with Grimshaws’ professional fiduciary obligations to its clients under r 7 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008”,32 which resulted in the Body Corporate filing memoranda seeking orders.

(d)Discovering a further 518 documents four weeks prior to trial.

[73]             The Body Corporate also refers to the fact that it was a former client of Grimshaws and it was seeking disclosure of documents that Grimshaws obtained during the course of advising it. Grimshaws also acted for second plaintiffs, so to that extent not all of the documents related to Grimshaws’ engagement by the Body Corporate. The Body Corporate says that breach of duty by a lawyer in respect of a former client can justify an uplift in costs where the lawyer places their own interests ahead of those of their former client.

32 Body Corporate 207624 v Grimshaw & Co HC Auckland CIV-2018-404-002107, 1 April 2022 (Minute of Associate Judge P J Andrew [Inspection of documents over which defendant maintains privilege]) at [3].

[74]             Grimshaws says that both parties filed further discovery after the trial was adjourned in 2021 and the Court has already considered Grimshaws’ conduct in relation to discovery and awarded costs with a 40 per cent uplift.33 The Body Corporate is not claiming for the costs it has already been awarded for discovery but rather I understand the Body Corporate to be arguing that the overall manner in which Grimshaws conducted its defence (including in the context of discovery) was unnecessary, without reasonable justification and lacked merit. That in turn increased the time required to respond to the defences.

[75]             The Body Corporate also refers to other conduct of Grimshaws which it says was unnecessary and justifies indemnity costs, including:

(a)Taking every conceivable point against the Body Corporate.

(b)Grimshaws’ defences, especially the allegation that the Body Corporate caused its own loss by levying practice.

(c)Affirmative defences relating to estoppel, the settlement agreement, betterment, standing and disclosure of the litigation funding agreement.

(d)Grimshaws’ argument that the statutory vesting of ownership was akin to a purchase with knowledge and was hopeless.

(e)Irrelevant and lengthy cross-examination of Mr Brian Remmington, Mr Toby Cooper, and Mr Thomas Gibbons when Grimshaws knew, by virtue of its own arguments as counsel in other proceedings, that the contentions were correct and reasonable.

(f)Challenges to the professional integrity and competence of Mr Simon Barnes, Mr Cleary and Mr Gary Cheyne.

(g)The repetitive and lengthy nature of Grimshaws’ evidence.

33     Body Corporate 207624 v Grimshaw & Co [2022] NZHC 2421.

(h)Repeated requests for documents, some of which had already been discovered.

(i)Unmeritorious in-trial applications.

(j)Grimshaws’ unnecessary requests for copies of the litigation funding agreement.

[76]             Grimshaws was entitled to defend the claims and to advance defences. To the extent Grimshaws did pursue or take an unnecessary step or an argument that lacked merit, that is a relevant factor when considering whether it is appropriate to grant increased costs under r 14.6(3).

[77]             I do accept that Grimshaws’ conduct as referred to in [75] included unnecessary steps or arguments that lacked merit.

[78]             Further, if Grimshaws considered that an unredacted version of the litigation funding agreement was actually necessary to defend the substantive claim, it would not have waited until closing submissions to raise this issue. That was unnecessary, the argument lacked merit and was inconsistent with the authorities relied on. Whether the litigation funding agreement is relevant to costs is a separate issue and was not the reason for Grimshaws seeking an unredacted copy during closing submissions.

[79]             Despite finding that Grimshaws took steps that were unnecessary or lacking merit, I agree with Grimshaws’ submission that the arguments did not significantly increase trial time so any increase in costs should be proportionate to the additional time required. I consider that it likely contributed to an increase of approximately 25 per cent. That increased time however, needs to be assessed against Grimshaws’ arguments in support of a reduction in costs, which I consider below after addressing the issue of animosity between the insurer and litigation funder.

Does any animosity between the insurer and litigation funder justify a further increase in costs?

[80]             The Body Corporate says the insurer has been instrumental in the conduct of Grimshaws’ defence and that such approach must be aimed at reducing the funds available to the Body Corporate should it be successful. Grimshaws and the insurer reject the allegations as to motive and say the fact of litigation funding is irrelevant to any costs award.

[81]             Based on the materials provided to the Court, there does appear to be some animosity between the insurer and the litigation funder. I cannot however, on the material before me, determine whether that animosity has contributed to the manner in which Grimshaws conducted its defence.

[82]             I understand the Body Corporate’s frustration but to the extent that the conduct of the defence contributed to an increase in costs it has been taken into account in the award of costs for interlocutory matters and in the time allocated for responding to the defences. I do not consider that the existence of litigation funding on its own is relevant, and it would be speculative to infer that the insurer was motivated by animosity towards the litigation funder in determining how the defence should be conducted.

[83]             Before considering the total amount of any increase, it is appropriate to first consider Grimshaws’ argument that costs be reduced.

Should costs be reduced?

[84]             Grimshaws say costs should be reduced.   The Court may reduce costs under  r 14.7(d) if the party claiming costs has succeeded overall but failed in relation to an issue which significantly increased the costs of the opposing party. Grimshaws says that a substantial portion of the defence related to the Body Corporate’s argument that it was entitled to recover losses arising from construction delay of four years. I held that the Body Corporate was only entitled to recover for a delay of 18 months.

[85]             Grimshaws relies on Weaver v Auckland City Council34 where the Court reduced the costs awarded by half to reflect unsuccessful arguments advanced by Weaver. The Body Corporate says Weaver and Water Guard NZ Ltd v Midgen Enterprises Ltd35 are distinguishable given the much greater proportion of total time spent on unsuccessful issues.

[86]             The Body Corporate was successful on both causes of action but unsuccessful on the extent of damages claimed. I awarded damages for a delay period of 18 months and not four years as claimed. The Body Corporate also failed in its claims relating to the rigid air barrier ($382,273.99), timber nogging ($338,726.71), and the tender price difference ($1,383,293.00).

[87]             The Body Corporate maintained its position on delay and these other items throughout trial. Grimshaws says it had to call evidence that was more extensive than would otherwise have been required. Grimshaws estimates that the Body Corporate’s unsuccessful arguments about delay approximately doubled the time and effort that would otherwise have been involved. Therefore, a 40 per cent reduction of the Body Corporate’s costs and disbursements is requested.

[88]             I accept that additional costs were likely incurred due to the Body Corporate’s position on delay. However, I do not consider that such time would have constituted half of the time required such that a 40 per cent reduction is warranted. Issues of delay would have been required to be canvassed regardless of the period claimed. I consider a reduction is appropriate but not to the extent sought. Further, any additional time Grimshaws spent responding to the Body Corporate’s claim for damages must be weighed against the additional time the Body Corporate spent responding to Grimshaws’ meritless defences. In my view, the additional time required on both sides, cancels each other out so that no increase or reduction is justified.

[89]             That then leaves any increase for Grimshaws’ rejection of the Calderbank offer without reasonable justification. I consider a 25 per cent increase is appropriate for costs incurred from 10 September 2021.

34     Weaver v Auckland City Council [2017] NZCA 330.

35     Water Guard NZ Ltd v Midgen Enterprises Ltd [2017] NZCA 36 at [13].

Other costs issues

Indemnity costs to be awarded if actual costs are less than scale costs

[90]             The Body Corporate claims actual costs where they are less than scale costs. It is appropriate that the Body Corporate only recover for costs actually incurred. I therefore award indemnity costs for each task where the actual costs are less than scale costs. This is set out in the Schedules (1 and 2) annexed below.

Should increased or indemnity costs be awarded for Grimshaws’ wasted costs application?

[91]             In his 31 March 2022 decision, Campbell J reserved the question of wasted costs relating to the adjourned 2021 trial for the trial judge.36 This was on the grounds that the trial judge would be in a better position to assess the relevance of the documents Grimshaws disclosed after the aborted trial. Grimshaws accepts it is not entitled to wasted costs on the Body Corporate’s application for an adjournment of the proceedings in 2021. Grimshaws has repaid the wasted costs sum plus interest. It has also paid the ordered 2B costs on the Body Corporate’s application to recall the judgment. Grimshaws accepts that the Body Corporate is entitled to 2B costs in connection with its memorandum in opposition to Grimshaws’ memorandum seeking wasted costs.

[92]             I have determined that the proceeding should be re-categorised as category 3. The Body Corporate is therefore entitled to 3B costs in connection with its memorandum in opposition to Grimshaws’ memorandum seeking wasted costs. I do not consider that increased or indemnity costs are appropriate. The wasted costs application is dismissed.

Conclusion

[93]I dismiss the wasted costs application.

[94]I re-categorise the proceedings as category 3.

36     Body Corporate 207624 v Grimshaw & Co [2022] NZHC 634 at [76].

[95]             I award costs as set out in each of the Schedules (1 to 3) annexed to this judgment. For costs after 10 September 2021 (Schedule 2), I increase costs by 25 percent.

[96]In summary, I order that:

(a)Grimshaws pay costs of $569,087.04 to the Body Corporate.

(b)Grimshaws pay disbursements of $450,779.13 to the Body Corporate.

Tahana J

Schedule 1 – costs before 10 September 2021

Item	Description	Date	Step	Days	3B costs ($)37	Comment
1	Commencement of proceeding by statement of claim	28 Sep 2018	1	3	10,590.00
2	Joint memorandum of counsel seeking extended timetable	20 Nov 2018	11	0.4	1,412.00
3	Statement in reply to defendant’s statement of defence	30 Nov 2018	3	0.8	2,824.00
4	Joint memorandum ahead of case management conference	11 Dec 2018	11	0.4	1,412.00
5	Preparation for first case management conference (including discussion about discovery)	11 Dec 2018	10	0.4	1,412.00
6	Joint memorandum of counsel for subsequent case management conference	5 Apr 2019	11	0.4	1,412.00
7	Amended statement of claim	31 May 2019	9	0.6	2,118.00
8	Joint memorandum ahead of first call of applications for particular discovery categories	10 Jun 2019	11	0.4	1,412.00
9	Joint memorandum of counsel as to agreed discovery categories	13 Jun 2019	11	0.4	1,412.00
10	Joint memorandum of counsel as to timetabling of defendant’s application for particular discovery categories	21 Jun 2019	11	0.4	1,412.00
11	Statement in reply to statement of defence of amended statement of claim	1 Jul 2019	9	0.6	2,118.00
12	Joint memorandum of counsel seeking deferral of fixture for hearing of interlocutory applications	19 Aug 2019	11	0.4	1,412.00
13	List of documents on discovery – tranche 1	5 Nov 2019	20	7	24,710.00	Awarded on a 3C basis, see [25].
14	Joint memorandum of counsel regarding adjournment of teleconference	11 Nov 2019	11	0.4	1,412.00

1. All scale costs are 3B unless indicated as 3C or otherwise.

15	Inspection of documents – tranche 1	12 Nov 2019	21	6	21,180.00	Awarded on a 3C basis, see [27].
16	Joint memorandum of counsel seeking vacation of teleconference	10 Feb 2020	11	0.4	1,412.00
17	Joint memorandum of counsel seeking amendment of discovery directions	6 Mar 2020	11	0.4	1,412.00
18	List of documents on discovery – tranche 2	11 Mar 2020	20	2.5	8,825.00
19	Memorandum of counsel for the plaintiff regarding discovery, readiness for trial, and proposing timetabling	12 May 2020	11	0.4	1,412.00
20	Supplementary memorandum of counsel for the plaintiff in response to defendant’s proposed timetable	14 May 2020	11	0.4	1,412.00
21	Appearance at case management conference	14 May 2020	13	0.3	1,059.00
22	Second amended statement of claim	24 Jun 2020	9	0.6	2,118.00
23	Statement in reply to defendant’s statement of defence to second amended statement of claim	29 Jul 2020	9	0.6	2,118.00
24	Memorandum of counsel for the plaintiff in relation to quantum of claim	30 Oct 2020	11	0.4	1,412.00
25	Third amended statement of claim	20 Oct 2020	9	0.6	2,118.00
26	Statement of reply to statement of defence of third amended statement of claim	14 Dec 2020	9	0.6	2,118.00
27	Memorandum of counsel for the plaintiff updating on service of briefs of evidence, bundle nominations, discovery	23 Feb 2021	11	0.4	1,412.00
28	Memorandum of counsel for the plaintiff on delay in serving briefs of evidence	23 Feb 2021	11	0.4	1,412.00
29	List of documents on discovery – tranche 3	26 Feb 2021	20	2.5	8,825.00
30	Memorandum of counsel for the plaintiff regarding trial length, service of evidence, and timetable	26 Feb 2021	11	0.4	1,412.00
31	Fourth amended statement of claim	26 Feb 2021	9	0.6	2,118.00
32	Memorandum regarding expert conferral	11 Mar 2021	11	0.4	1,412.00
33	Memorandum in reply to defendant’s memorandum regarding expert conferral	11 Mar 2021	11	0.4	1,412.00
34	Memorandum seeking further directions	19 Mar 2021	11	0.4	1,412.00
35	Joint memorandum of counsel regarding conferral of experts	24 Mar 2021	11	0.4	1,412.00

36	Statement of reply to statement of defence of fourth amended statement of claim	13 May 2021	9	0.6	2,118.00
37	Inspection of documents – tranche 2	18 Jun 2021	21	1.5	-	Rejected, see [34].
38	Memorandum of counsel for the plaintiff in advance of pre-trial conference	21 Jun 2021	11	0.4	1,412.00
39	Preparation for and attendance at issues conference	24 Jun 2021	15	0.5	1,765.00
40	Joint memorandum of counsel regarding trial sequence	30 Jun 2021	11	0.4	1,412.00
41	Memorandum giving notice of admissibility issues in defendant’s briefs of evidence	28 Jul 2021	11	0.4	1,412.00
42	Memorandum in response to the defendant’s memorandum seeking wasted costs	3 Aug 2021	11	0.4	1,412.00
43	Memorandum of counsel for the plaintiff in response to defendant’s memorandum	4 Aug 2021	11	0.4	1,412.00
Total				133,434.00

Schedule 2 – costs after 10 September 2021

Item	Description	Date	Step	Days	3B costs ($)38	Indemnity  or no uplift ($)	Comment
44	Inspection of documents – tranche 3	21 Oct 2021	21	1.5	-	-	Rejected, see [34].
45	List of documents on discovery – tranche 4	22 Oct 2021	20	2.5	-	-	Rejected, item 49 is awarded on 3B basis, see [32].
46	Inspection of documents – tranche 4	12 Nov 2021	21	1.5	-	-	Rejected, see [34].
47	Inspection of documents – tranche 5	24–25 Nov 2021	21	1.5	-	-	Rejected, see [34].
48	Inspection of documents – tranche 6	15 Dec 2021	21	1.5	5,295.00	3B costs awarded, see [34].
49	List of documents on discovery – tranche 5	13 May 2022	20	2.5	8,825.00	3B costs awarded, see [32].
50	Inspection of documents – tranche 7	18 May 2022	21	1.5	2,059.20	Actual costs awarded, see [35].
51	Memorandum of counsel for the plaintiff regarding order of witnesses, AVL directions, and service of bundle	25 May 2022	11	0.4	1,412.00
52	Appearance at issues conference	26 May 2022	14	0.5	495.00	Actual costs awarded.
53	Memorandum of counsel for the plaintiff regarding defendant’s application for leave to appeal	14 Jun 2022	11	0.4	956.00 (2B)	Awarded on 2B basis in Body Corporate 207624 v Grimshaw & Co [2022] NZHC 1510 but not yet claimed.
54	Notice of opposition to defendant’s application for leave to appeal	15 Jun 2022	23	0.6	575.00	Awarded on 2B basis in Body Corporate 207624 v Grimshaw & Co [2022] NZHC 1510 but not yet claimed. Given 2B scale costs exceed actual costs, actual costs are awarded for this step.
55	Inspection of documents – tranche 8	20 Jun 2022	21	1.5	2,018.32	Actual costs awarded.

1. All scale costs are 3B unless indicated as 3C or otherwise.

56	Preparation of written submissions in opposition of defendant’s application for leave to appeal	23 Jun 2022	24	1.5	3,585.00 (2B)	Awarded on 2B basis in Body Corporate 207624 v Grimshaw & Co [2022] NZHC 1510 but not yet claimed.
57	Memorandum of counsel for the plaintiff – evidence objections	15 Jul 2022	11	0.4	1,412.50	Actual costs awarded.
58	Preparation of briefs, list of issues, authorities, and agreeing common bundle	18 Jul 2022	33	20	70,600.00	Body Corporate awarded 20 days at category 3 rate, but no uplift.
59	Allowance for preparing common bundle	18 Jul 2022	33A	0.5	1,765.00
60	Preparing for hearing	18 Jul 2022	33B	40	141,200	Body Corporate awarded 40 days at category 3 rate, see [37].
61	Appearance at hearing from principal counsel	18–22 Jul, 25–29 Jul, 1–5 Aug, 8 Aug, 9 Aug, 11    Aug, and 12    Aug 2022	34	19	67,070.00
62	Second and subsequent counsel	18–22 Jul, 25–29 Jul, 1–5 Aug, 8 Aug, 9 Aug, 11    Aug, and 12    Aug 2022	35	9.5	33,535.00
63	Subsequent counsel	18–20 Jul, 1–5 Aug, 9 Aug, 12 Aug 2022	35	4.5	17,551.13	Actual costs awarded, see [38].
64	Memorandum of the counsel for the plaintiff – response to objections in Mr Toby Cooper’s brief	19 Jul 2022	11	0.4	1,412.00
65	Preparation of written submissions opposing defendant’s in-trial application for production of documents	21 Jul 2022	24	1.5	1,800.00	Actual costs awarded.
66	Memorandum of counsel for the plaintiff – response to objections in Mr Frank Cleary’s brief	26 Jul 2022	11	0.4	1,412.00
67	Memorandum of counsel for the plaintiff – opposing defendant’s application for reply	9 Aug 2022	11	0.4	952.80	Actual costs awarded.
68	Submissions in response to defendant’s application for Mr Daniel Parker’s brief to be read as affidavit	9 Aug 2022	24	1.5	1,215.90	Actual costs awarded.
69	Submissions in response to defendant’s further submissions without leave	16 Aug 2022	24     (by analogy)	1.5	2,124.44	Actual costs awarded.
7139	Joint memorandum of counsel confirming damages calculation	12 May 2023	11	0.4	1,412.00
Total 3B costs				267,879.00
25% of 3B costs				66,969.75
Total 3B costs plus 25% uplift				334,848.75
Total Indemnity costs				100,804.29
Overall total (uplifted 3B + Indemnity)				435,653.04

1. Schedule 2 does not include an item 70.

Schedule 3 – disbursements

Date	Description	Item	Amount (excl GST) ($)	Total ($)
Ministry of Justice filing fees
28 Sep 2018	Filing statement of claim	4	1,173.91
31 May 2019	Filing interlocutory application by plaintiff for particular discovery categories (with Court allocated date)	9(c)	434.78
31 May 2019	Filing amended statement of claim	6	95.65
20 Jun 2019	Ministry of Justice filing fee for notice of opposition	14(c)	95.65
7 Aug 2019	Filing amended notice of opposition to defendant’s application for particular discovery categories	14(c)	95.65
12 Dec 2019	Scheduling fee – application for particular discovery categories	20	1,391.30
9 Jun 2020	Scheduling fee	20	1,391.30
24 Jun 2020	Filing second amended statement of claim	6	95.65
18 Sep 2020	Filing opposition to defendant’s application for further particulars and better discovery	14(c)	95.65
30 Oct 2020	Filing third amended statement of claim	6	95.65
24 Nov 2020	Filing amended notice of opposition to defendant’s amended application for further particulars and better discovery	14(c)	95.65
26 Feb 2021	Filing fourth amended statement of claim	6	95.65
12 Nov 2021	Filing application for particular discovery and setting aside privilege	9(c)	434.78
26 Nov 2021	Filing amended application for further discovery and setting aside privilege	9(c)	434.78
25 Jan 2022	Scheduling fee	17(d)	695.65
29 Apr 2022	Schedule fee – 2022 hearing	17(d)	54,260.87
15 Jun 2022	Filing notice of opposition to defendant’s application for leave to appeal	14(c)	95.65
Total	61,078.22
Invoices from expert witness – Mr Thomas Gibbons
25 Jun 2020	McCaw Lewis invoice #54608	2,367.00
18 Jan 2021	Thomas Gibbons Law invoice #INV-1062	3,825.00
28 Feb 2021	Thomas Gibbons Law invoice #INV-1104	7,760.00
31 May 2021	Thomas Gibbons Law invoice #INV-1186	7,065.00
30 Jun 2021	Thomas Gibbons Law invoice #INV-1205	4,410.00
30 Jun 2022	Thomas Gibbons Law invoice #INV-1552	2,120.00
31 Jul 2022	Thomas Gibbons Law invoice #INV-1576	15,335.00
Total	42,882.00
Invoices from expert witness – Mr Simon Barnes

31 Oct 2017	Barnes Beagley Doherr invoice #bbd-07499	4,125.00
13 Dec 2019	Barnes Beagley Doherr – missed invoice #bbd-12575 (dated 30 Aug 2019)	687.50
13 Dec 2019	Barnes Beagley Doherr – missed invoice #bbd-12344 (dated 31 Jul 2019)	1,512.50
31 Jul 2020	Barnes Beagley Doherr invoice #bbd-15349	2,667.50
30 Sep 2020	Barnes Beagley Doherr invoice no. 15858	4,130.00
31 Oct 2020	Barnes Beagley Doherr invoice #bbd-16205	5,135.00
1 Dec 2020	Barnes Beagley Doherr invoice #bbd-16504	1,807.50
18 Jan 2021	Barnes Beagley Doherr invoice #bbd-16762	2,165.00
28 Feb 2021	Barnes Beagley Doherr invoice #bbd-17261	13,002.50
28 Mar 2021	Barnes Beagley Doherr invoice #bbd-17526	3,530.00
30 Apr 2021	Barnes Beagley Doherr invoice #bbd-17791	2,025.01
31 May 2021	Barnes Beagley Doherr invoice #bbd-18200	3,900.00
30 Jun 2021	Barnes Beagley Doherr invoice #18463	5,862.50
31 Jul 2022	Barnes Beagley Doherr invoice #bbd-22567	14,408.75
31 Aug 2022	Barnes Beagley Doherr INV-22964	750.00
Total	65,708.76
Invoices from expert witness – Ms Michaela Cook
28 May 2021	Copper Consulting Ltd invoice #INV-0005	12,690.00
21 Jun 2021	Copper Consulting Ltd invoice #INV-0007	13,905.00
30 Jun 2021	Copper Consulting Ltd invoice #INV-0008	2,160.00
31 Jul 2022	Copper Consulting Ltd	8,556.46
Total	37,311.46
Invoices from expert witness – Mr Gary Cheyne
31 May 2021	Extensor Advisory Ltd invoice #4498	11,896.50
30 Jun 2021	Extensor Advisory Ltd invoice #4531	1,699.50
30 Jun 2022	Extensor invoice 4846	1,266.90
31 Jul 2022	Extensor Advisory Ltd inv #4876	9,077.34
Total	23,940.24
Invoices from expert witness – Mr Josh Rawlinson
24 Jun 2021	Prendos invoice #95421	13,244.93
19 Jul 2021	Prendos invoice #95898	1,250.00
31 Jul 2022	Prendos invoice #102777	3,053.98
Total	17,548.91
Invoices from expert witness – Mr Chris Hale
28 Feb 2021	Prime Project Solutions invoice #20-0033	9,900.00

31 May 2021	Prime Project Solutions invoice #21-008	1,530.00
2 Jul 2021	Deadline Express Couriers to courier documents to Chris Hale	5.92
5 Jul 2021	Deadline Express Couriers to courier documents to Chris Hale	7.65
29 Jul 2022	Prime Project Solutions INV#22-017	1,277.39
Total	12,720.96
Invoices from witness – Mr Frank Cleary
7 Sep 2017	Babbage Consultants Ltd – invoice #61664	4,200.00
1 Sep 2020	Neo Architecture Ltd invoice #031	13,520.00
30 Oct 2020	Neo Architecture Ltd invoice #037	1,300.00
18 Jan 2021	Neo Architecture Ltd invoice #044	10,530.00
30 Apr 2021	Neo Architecture Ltd invoice	8,910.00
30 Jun 2021	Neo Architecture Ltd invoice #061	17,680.00
31 Jul 2022	Neo Architecture Ltd invoice #085	11,570.00
Total	67,710.00
Invoices for discovery software
14 Jun 2019	Deadline Express Couriers (courier of documents to SLS for ingestion)	19.64
28 Jun 2019	Streamlined Litigation Support (SLS) invoice #I004161	1,167.84
1 Jul 2019	SLS Invoice No. I004413	1,225.00
1 Aug 2019	Deadline Express Couriers (courier of documents to SLS for ingestion)	12.52
22 Aug 2019	SLS invoice #I004715	1,950.00
23 Sep 2019	SLS invoice #I005018	8,692.52
23 Oct 2019	SLS invoice #I005289	6,907.37
23 Nov 2019	SLS invoice #I005557	9,039.34
13 Dec 2019	SLS invoice #I005779	3,059.88
30 Jan 2020	SLS invoice #I006049	3,478.51
27 Feb 2020	SLS invoice #I006323	1,225.00
30 Mar 2020	SLS invoice #I006631	1,225.00
29 Apr 2020	SLS invoice #I006901	1,225.00
1 May 2020	SLS invoice No. I007212	2,326.88
25 Jun 2020	SLS invoice #I007499	1,225.00
30 Jul 2020	SLS invoice #I007757	1,225.00
31 Aug 2020	SLS invoice #I008111	1,225.00
30 Sep 2020	SLS invoice No. I008391	1,175.00
29 Oct 2020	SLS invoice #I008695	6,978.77
27 Nov 2020	SLS invoice #I008973	2,312.42
20 Jan 2021	SLS invoice #I009059	1,792.80
1 Feb 2021	SLS invoice #I009583	1,675.00

25 Feb 2021	SLS invoice I009827	1,675.00
26 Mar 2021	SLS invoice #I010045	2,489.60
29 Apr 2021	SLS invoice #I010367	1,650.00
28 May 2021	SLS invoice #I010595	1,550.00
29 Jun 2021	SLS invoice #I010985	1,550.00
29 Jul 2021	SLS invoice #I011251	2,066.79
30 Aug 2021	SLS invoice #I011508	1,600.00
29 Sep 2021	SLS invoice #I011707	2,538.05
29 Oct 2021	SLS invoice #I012027	1,675.00
29 Nov 2021	SLS invoice #I012259	1,858.16
21 Dec 2021	SLS invoice #I012529	1,675.00
28 Jan 2022	SLS invoice #I012749	1,675.00
28 Feb 2022	SLS invoice #I012988	1,886.50
30 Mar 2022	SLS invoice #I013236	1,943.75
27 Apr 2022	SLS invoice #I013428	1,625.00
30 May 2022	SLS invoice #I013726	1,625.00
30 Jun 2022	SLS invoice #I014021	1,625.00
28 Jul 2022	SLS invoice #I014209	145.00
29 Aug 2022	SLS invoice #I014454	3,524.61
28 Sep 2022	SLS invoice #I014624	1,225.00
28 Oct 2022	SLS invoice #I014999	1,225.00
Total	95,990.95
Invoices from third parties for locating and providing documents on discovery
10 Apr 2019	Price Baker Berridge – courier charges – retrieval of former client files	58.68
20 Nov 2020	SHAY Solutions Ltd (body corporate management service provider) invoice #3666	150.00
25 Jan 2021	Brosnan Construction Ltd invoice 1095-002059 retrieval of construction timelines	2,100.00
11 Feb 2021	Shay Strata Solutions Ltd (body corporate management service provider) invoice #3722	190.00
23 Feb 2021	SHAY Solutions Ltd (body corporate management service provider) invoice 3759	95.00
26 Feb 2021	SHAY Solutions Ltd (body corporate management service provider) invoice #3762	237.50
23 Jun 2021	SHAY Solutions Ltd (body corporate managements service provider) invoice #3860	95.00

12 Nov 2021	SHAY Solutions Ltd (body corporate management service provider) INV#3940	237.50
18 Feb 2022	SHAY Strata Solutions Ltd (body corporate management service provider) invoice #3995	95.00
Total	3,258.68
Invoices in relation to bundle preparation
18 Jul 2022	Colour Copy & Print Invoice #13761	7,931.00
24 May 2023	Yallop Litigation Support Ltd for hearing bundles and electronic courtroom	14,697.95
Total	22,628.95
Overall total			450,779.13