Brown v Burnett - [2012] NZHC 1137

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV 2012-463-000025 [2012] NZHC 1137

BETWEEN PAUL MURRAY BROWN, KELLY MARIE BROWN AND MICHAEL JOSEPH ADAMSON, AS TRUSTEES OF THE BROWN FAMILY TRUST
Plaintiffs

ANDKAREN ANNE BURNETT First Defendant

ANDBRUCE EDWARD HODGKINSON Second Defendant

ANDBRUCE HODGKINSON LIMITED Third Defendant

Hearing: 22 May 2012

Counsel: M R C Wolff for plaintiffs
J P Temm for second and third defendants

Judgment: 25 May 2012

JUDGMENT OF ASSOCIATE JUDGE ABBOTT

This judgment was delivered by me on 25 May 2012 at 4.15pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:
B Easton/M Wolff, Grimshaw & C, PO Box 6646, Wellesley Street, Auckland
K Patterson, Barrister & Solicitor, PO Box 13 006, Tauranga
A Vane, Le Pine & Co, PO Box 140, Taupo

Counsel:
J P Temm, Barrister, PO Box 1124, Rotorua 3040

BROWN & ORS V BURNETT & ORS HC ROT CIV 2012-463-000025 [25 May 2012]

[1] The second and third defendants (the defendants) have applied for an order for costs, following the plaintiffs’ discontinuance of the claims against them.

[2] The plaintiffs advised that they were discontinuing the claims shortly before hearing of an application by the first and second defendants for security for costs.

[3] The plaintiffs accept that the defendants are entitled to costs, on a scale 2B basis, but contest the defendants’ entitlement to costs for several of the steps claimed or, in some cases, to the full amount of the costs.

[4] The parties’ respective positions have been set out in memoranda filed

following the discontinuance.

History of claim

[5] The plaintiffs are the former owners of a residential property in Taupo, purchased from the first defendant (the vendor) in August 2007. The house was constructed in 1992. The plaintiffs approached the first defendant in early 2007, through a real estate agent, offering to purchase the property. After entering into an agreement they arranged for the agent to approach the second defendant, a builder, to have him undertake a visual inspection and report on the construction and condition of the property.

[6] The second defendant carries on business through the third defendant. He inspected the property and the third defendant provided the plaintiffs, through their agent, with a brief written report that there was no visible damage to suggest any major problems with the house. The report stated explicitly that it was based only on a visual inspection only.

[7] The plaintiffs sold the property in October 2011 for a substantially lower figure than they had paid for it in 2007. On 22 December 2011 they issued this proceeding, contending that the building suffered from defects, which had allowed ingress of water and resulted in damage, and that a substantial part of the drop in

value (in excess of $1.1M) was attributable to the defects. They claimed that the defendants and the vendor were liable for this damage. In the case of the defendants, they said that the report constituted misleading and deceptive conduct,…

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 Brown v Burnett

Details

AGLC: Brown v Burnett [2012] NZHC 1137
Case: [2012] NZHC 1137
Decision Date: 25 May 2012

CaseChat Overview and Summary

The plaintiffs, who are the former owners of a residential property in Taupo, initiated legal proceedings against the defendants, alleging defects in the property that resulted in significant damage and a substantial drop in value. The plaintiffs sought to hold the defendants liable for misleading and deceptive conduct, negligent misstatement, and breach of a contractual duty of care. The defendants applied for an order for costs following the plaintiffs’ discontinuance of the claims against them. The primary legal issue was whether the defendants were entitled to the costs they claimed, and if so, in what amount. The court had to determine whether the defendants were entitled to costs for steps where no formal defence had been filed, where the same counsel appeared for multiple defendants, and where the hearing time was divided between different applications.

The court held that the defendants were entitled to costs on a scale 2B basis. It found that a defendant need not file a formal defence to be entitled to costs for commencement of the defence, as they must still take advice on the claim and explore potential defences. Regarding the costs for preparing a memorandum and appearing at a case management conference, the court determined that while the same counsel appeared for multiple defendants, the cases were distinct in terms of facts and legal issues, and thus the defendants were entitled to the full costs for those steps. However, for the hearing, the court reduced the claim by 50% because the hearing time was divided equally between the application by the vendor and the discontinuance against the defendants. The court awarded the defendants costs totaling $6,909, less $235 for the shared appearance at the hearing.

The court declined to award costs for the preparation of memoranda, adhering to the general approach that such costs are not usually awarded. The decision concluded that the defendants were appropriately compensated by the costs order made.

Orders