Byrne t/a Frank Byrne Builders v Rose

[2015] NZHC 3288

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV-2015-442-000059 [2015] NZHC 3288

BETWEEN

FRANK & CHERIE BYRNE TRADING

AS FRANK BYRNE BUILDERS Plaintiffs

AND

CAROLYN ROSE Defendant

Hearing:	17 December 2015 (Costs Judgment)
Counsel:	G C Engelbrecht for Plaintiffs D E Holloway for Defendant
Judgment:	17 December 2015

COSTS JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      The plaintiffs succeeded on their application for summary judgment on two dishonoured cheques drawn in their favour by the defendant.  They now seek costs on scale 2B together with a 50 per cent uplift, against the defendant.

[2]      The plaintiffs initially sued for the entire sum they say is owing under a building contract, by the defendant.   When the defendant’s affidavit in opposition was filed and served, they withdrew the balance of their application for summary judgment, recognising that there were now disputed facts and the entry of summary judgment for the balance of their claim was not tenable.   They did not file an affidavit in reply.

[3]      The basis on which the plaintiffs say they should be awarded an uplift in costs is that before the hearing they offered to settle the summary judgment application  on  the  basis  of  judgment  being  entered  by  consent  on  the  two dishonoured cheques on which they sued, and the defendant paying $2,500 towards

their costs. That offer was not accepted.

F & C BYRNE trading as Frank Byrne Builders v Rose [2015] NZHC 3288 [17 December 2015]

[4]      The defendant says that the plaintiffs have only been partially successful on their application for summary judgment, abandoning the balance at a late stage,

24 November 2015.  The defendant says that she has enjoyed a measure of success and costs should be dealt with in accordance with the principle in NZI Bank Ltd v Philpott,1   namely that  costs  should  be  reserved  where  a  defendant  successfully resists an application for summary judgment.

[5]      Counsel  for  the  defendant  says  that  it  took  the  plaintiffs  two  weeks  to abandon the balance of their claim after receipt of the defendant’s affidavit, and that the plaintiffs could have applied for summary judgment initially only on the cheques, with the result that a great deal of work responding to the plaintiffs’ very substantial affidavit in support of their application could have been avoided.

Discussion

[6]      Having considered the submissions of counsel, I have reached the following conclusions:

(a)     The plaintiffs’ claim on the dishonoured cheques was a strong claim, and as a matter of established law only very limited defences were open to the defendant.   The reasons they were rejected are set out in the judgment and I need add nothing to the conclusions already set out. Prima facie the plaintiffs would be entitled to costs if that were the only element to their claim.

(b)The plaintiffs offered, without prejudice except as to costs, to withdraw the balance of the summary judgment application, with a nominal contribution towards costs, but that offer was rejected.  The plaintiffs were entitled to then decide not to proceed with the balance of the summary judgment application over and above the claim on the dishonoured cheques.   Although  Mr Holloway complains  about  the amount of time it took them to do so, and there is some force in that submission, the opportunity for this outcome to occur had been given, and was rejected.

(c)     The withdrawal of the balance of the claim from the application for summary judgment was a responsible step given the evident disagreements between the parties on the face of the evidence.  It is a step which could have been taken earlier, but I do not see the delay as being exceptional or unduly prejudicial.

(d)In my view the offer made on a without prejudice basis, save as to costs, was on fair and reasonable terms.

[7]      For  these  reasons  I  am  satisfied  that  the  plaintiffs  are  entitled  to  costs. Mr Holloway argues that although the plaintiffs have enjoyed a measure of success, this has not been a substantial success so costs should not be awarded.   He distinguishes Air New Zealand Ltd v Air Niugini Ltd,2  where it was held that a plaintiff who has been substantially successful is entitled to costs on the summary judgment before the remaining portion of the proceeding is concluded.   I do not think the Court need entertain an analysis based on a percentage of the total claim, in order to determine whether a plaintiff has enjoyed substantial success.   Here the

plaintiffs succeeded to a significant degree and in my view they are entitled to costs.

[8]      I do not consider, however, that they are entitled to an uplift in costs. Applications coming before the Court for increased or indemnity costs have almost reached epidemic proportions.   The mere sending of a Calderbank offer in terms which closely reflect the ultimate outcome of a case is not a sufficient foundation for the Court to go outside the costs scale regime imposed by the High Court.  Even if this was a reasonable basis to consider an increase in costs beyond scale, it would be balanced by the fact that, as Mr Holloway says, claims on building contracts are frequently unsuitable for summary judgment because of the scope that so often exists for argument on the facts.

Outcome

[9]      The defendant will pay to the plaintiffs costs in the sum of $15,164 and disbursements in the sum of $1,677.38.

J G Matthews

Associate Judge

Solicitors:

McFadden McMeeken Phillips, Nelson.

Glasgow Harley, Nelson.