CFR Line NZ Limited v Dream America Limited
[2025] NZHC 2758
•22 September 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2025-404-977 [2025] NZHC 2758
BETWEEN CFR LINE NZ LIMITED
Appellant
AND DREAM AMERICA LIMITED
Respondent
Hearing: 17 September 2025 Appearances: D W Grove for Appellant
S A McKenna for Respondent
Judgment: 22 September 2025
JUDGMENT OF LANG J
[on appeal against award of costs]
This judgment was delivered by Justice Lang On 22 September 2025 at 11.00 am
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
Solicitors:
Foy & Halse, Auckland/ D Grove, Auckland McKenna King, Hamilton
CFR LINE NZ LTD v DREAM AMERICA LTD [2025] NZHC 2758 [22 September 2025]
[1] This is an appeal against an award of costs made against the appellant, CFR Line NZ Ltd (CFR), in a civil proceeding in the District Court at Auckland. CFR contends that the Judge who made the award erred in several respects and this resulted in a decision that was plainly wrong.
Background
[2] The respondent, Dream America Limited (Dream America), imports horse trailers manufactured in the United States for sale to customers in New Zealand.
[3] In 2021, Dream America arranged to import two horse trailers to fulfil purchase orders from its customers. The horse trailers arrived in New Zealand in mid-September 2021. When the horse trailers were delivered to Dream America, presumably in a disassembled state, it discovered that several items were missing. These comprised six axles, five wheels and one fender. Dream America then arranged for the manufacturer to send replacement parts to New Zealand. These arrived approximately three months later. CFR was engaged by Dream America’s customs agent to “devan”, or unload, the container in which the replacement parts had arrived.
[4] Dream America received an invoice from CFR for this service and it paid the invoice immediately. It then sought to collect the parts from CFR. CFR initially refused to allow Dream America to uplift the parts until monies owed to it by a company associated with Dream America were paid. These totalled approximately $4,300. Not surprisingly, Dream America protested against this and endeavoured to uplift the parts. CFR refused to hand them over.
[5] CFR subsequently advised Dream America that the parts had not been cleared by the customs authorities. Dream America checked with the customs authorities and found that this was not correct. At this point CFR told Dream America that it had mislaid the parts. It said the goods were likely to have been erroneously shipped overseas.
[6] Dream America did not believe this explanation and issued proceedings in the District Court seeking orders that the items be delivered up to it. On 8 February 2022,
Dream America obtained an interim injunction on a without notice basis that required CFR to pass possession of the parts to Dream America.
[7] The injunction proved ineffective and in July 2023 Dream America amended its claim to seek monetary damages from CFR. Dream America sought recovery of the cost of obtaining replacement parts together with the costs Dream America alleged it had incurred in attempting to uplift the items that CFR had mislaid. The fact that Dream America had never been in a contractual relationship with CFR meant that it was required to base its claim in the tort of detinue rather than breach of contract.
[8] CFR took no steps to defend Dream America’s claim. Through counsel it acknowledged that it was liable to Dream America but disputed the quantum of the damages Dream America was claiming. Dream America’s amended statement of claim sought damages of approximately $31,000, meaning that it needed to be heard in the District Court rather than the Disputes Tribunal.
[9] The matter was eventually set down for a hearing as to quantum. Both parties filed evidence in support of their respective positions on that issue. The evidence filed by Dream America reduced the amount claimed to approximately $21,000. Shortly before the date of the hearing, counsel for Dream America filed a memorandum pointing out that, because CFR had not filed a statement of defence, r 15.9 of the District Courts Rules 2014 required the claim to proceed by way of formal proof. This meant that CFR would not be able to adduce evidence challenging the factual basis of Dream America’s claim.
[10] On 11 March 2025, the day before the quantum hearing, Judge K G Davenport KC held a conference with counsel and subsequently issued a minute containing the following directions:1
[10] In my view, the case tomorrow cannot proceed. It is possible that I could have directed Mr Grove to file a statement of defence under the rules, which would have been sufficient to resolve the problem under rule 15.9. But I think the problem is more fundamentally that the plaintiff is not in a position to proceed with a quantum hearing where the manner in which the goods were lost is not exactly as they have pleaded.
1 Dream America Limited v CFR Line Limited DC Auckland CIV-2022-004-162, 11 March 2025.
[11] So what to do? My options are to adjourn this case, order costs and set it down for another hearing once the defence has been filed, or to allow the hearing to proceed directing Mr Grove to file a statement of defence, or alternatively to transfer this matter to the Disputes Tribunal.
[12] Having considered the matter, I think that the fastest and most efficient and cost-effective way of dealing with the matter is for the case to go to the Disputes Tribunal. This Court can advise the Disputes Tribunal on what has been agreed. I propose to send a copy of this minute to the Disputes Tribunal saying that the defendant does not contest that it is liable to the plaintiff for the goods not arriving, but that the question of whether the goods have been lost or withheld remains open.
[13] That then leads me to the question of costs. I think that both parties have unwittingly contributed to the position that they find themselves in now. However, the plaintiff did obtain an injunction and I think it is appropriate that [it] obtain[s] some costs. The plaintiff will file its submissions as to costs, being both liability and quantum, by 25 March. Mr Grove, can you file your submissions in costs by 8 April. (agreed by Mr Grove)
[14] The Court will send the matter down to the Disputes Tribunal , but not until such time as costs have been determined, because otherwise I will not have the benefit of the file.
The Judge’s costs decision
[11] Counsel for both parties filed written submissions dealing with the issue of costs. Dream America sought costs in accordance with the scale contained in the District Courts Rules as follows:
Item Proceeding Step Time Allocation
(days)
1 Drafting and filing original Statement of Claim 1.5 9.10 Drafting and Filing Application for Interim
Injunction
0.4 8.1 Preparation for Judicial Settlement Conference 0.25 8.2 Appearance at Judicial Settlement Conference 1 9.8 Drafting and filing memorandum in advance of Judicial Conference (2 March 2023. 4 April 2023,
22 June 2023, 28 August 2023, 29 August 2023,
13 October 2023, 8 March 2024, 2 April 2024)
2 1 Drafting and filing Amended Statement of Claim 0.75* Total 5.9
[12] On 3 April 2025 the Judge awarded Dream America costs in the sum of $6,350. Her decision was contained in a minute sent to counsel by the Registry rather than by way of formal judgment. The minute records the Judge’s reasons for her decision as follows:
This case is to go to the Disputes Tribunal. The defendant has admitted liability + quantum is the only issue. Both parties see[k] costs on the transfer for costs incurred to date. In the absence of a decision as to what steps were appropriate the Court can only fall back on the fact that no defence was filed, and the liability admitted. I have reviewed the costs sought and total time spent by the plaintiff. I consider all costs should be allocated on an A band. I certify as the case was for a small sum and straightforward.
For costs on a[n] A basis @$1270 per day for 5 days. the 2 days claimed for conference is excessive and I reduce it to 1.1 days a total of $6350.
[13] The difference between the amount Dream America sought and the amount awarded by the Judge is explained by the fact that the Judge reduced the amount awarded for filing memoranda in advance of conferences from 2 days to 1.1 days. Further, she directed that daily recovery rate was to be assessed on the category 1 basis of $1,270 per day rather than the category 2 basis of $1,910 per day as sought by Dream America.2
The appeal
[14] As I have already noted, CFR contends that the award of costs that the Judge made was plainly wrong. On its behalf Mr Grove acknowledges that CFR admitted liability after the proceeding was issued. To that extent he accepts that Dream America may be regarded as the successful party in the proceeding. However, he submits that the application for an interim injunction was misplaced and should never have been filed or granted. Mr Grove also contends that the quantum of damages sought by Dream America in its amended statement of claim was excessive. This is demonstrated by the fact that Dream America ultimately reduced the amount of its claim by approximately $10,000. Finally, he points out that CFR sought from an early stage to have the proceeding transferred to the Disputes Tribunal. That was the outcome ultimately selected by the Judge.
2 District Court Rules 2014, sch 5.
[15] In addition, Mr Grove contends that the Judge failed to take into account offers of settlement contained in correspondence he sent to Dream America’s solicitors on two occasions. He argues that CFR is entitled to costs on all steps taken after Dream America failed without reasonable justification to accept those offers.
Overview
[16] Although all matters relating to costs are at the discretion of the Court,3 the discretion is not unfettered. It must be exercised in accordance with the principles contained in r 14.2 of the District Court Rules. To the forefront of these is the principle that an unsuccessful party should be required to contribute to the costs of the successful party.4
[17] In the present case I consider Dream America was the successful party in the proceeding during the period leading up to its transfer to the Disputes Tribunal. It was plainly entitled to issue the proceeding because CFR had failed to deliver up the parts it was holding on Dream America’s behalf. CFR had no legal justification for doing so.
[18] Further, CFR elected not to file a statement of defence and, through its counsel, expressly accepted liability to Dream America’s claim as pleaded in both the original and amended statement of claim. In electing not to file a statement of defence CFR may not have appreciated that it was thereby restricting its options in defending the quantum of the damages to be awarded to Dream America. This led to the issue that arose immediately before the hearing and ultimately resulted in the Judge referring the dispute to the Disputes Tribunal for determination. The starting point must therefore be that Dream America was entitled to an award of costs in its favour.
[19] However, the principle that the unsuccessful party should contribute to the costs of the successful party is not absolute. Rule 14.7 of the District Court Rules permits the Court to reduce or refuse costs in certain specified circumstances. It provides:
3 District Court Rules, r 14.1.
4 Rule 14.2(1)(a).
Refusal of, or reduction in, costs
Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—
(a)the nature of the proceeding or the step in a proceeding was such that the time required by the party claiming costs would have been substantially less than the time allocated under band A; or
(b)the property or interests at stake in the proceeding were of exceptionally low value; or
(c)the issues at stake were of little significance; or
(d)although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue that significantly increased the costs of the party opposing costs; or
(e)the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in the proceeding by—
(i)failing to comply with these rules or 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, or 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 any 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
(f)some other reason exists that justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.
[20] There is no dispute regarding the approach an appellate court is required to take in determining an appeal against an award of costs. As this Court observed in Lough v Taupo Residential Ltd:5
[18] All matters relating to costs are at the discretion of the court. In consequence, on an appeal, the appellate court should not interfere unless satisfied that the judge who made the order, in exercising the discretion, acted
5 Lough v Taupo Residential Ltd [2018] NZHC 1603. (Footnotes omitted).
on a wrong principle, or failed to take into account some relevant matter, or took account of some irrelevant matter, or was plainly wrong.
[21] The issue for present purposes is whether the Judge’s decision was plainly wrong because she failed to refuse or reduce costs to reflect the points made by Mr Grove on the appeal.
The application for an interim injunction
[22] As already noted, Mr Grove contends that Dream America’s application for an interim injunction was misplaced and should never have been filed or granted. In effect this submission seeks a reduction of costs under r 14.7(e)(ii) to reflect the fact that Dream America unnecessarily increased the costs of the proceeding by pursuing an unnecessary step or an argument that lacked merit.
[23] Mr Grove bases this submission on the fact that, in an email sent on 25 January 2022, CFR’s Managing Director responded to advice from Dream America’s solicitors that they had been instructed to apply for an injunction. In doing so he provided an explanation as to what had happened to the goods:
Hi Libby, thank you for your mail.
An injunction for what? In order to produce thin-air?
Your customer needs to start the claim procedure as is normal under commercial law.
That is the way forward. We regret that these things happen but although we strive for perfection, mistakes get made in business.
By not following normal process and insisting on this weird legal route, legal cost will accrue and since it is your customer’s choice and therefore any charges will be passed on to them.
I know that you have to produce our correspondence in court and getting an injunction for lost goods would be highly unusual.
We think these goods were loaded by mistake to Tonga in a consolidated container. Something we tried to verify but has become harder now with the port there being ruined and may containers washed away. We have not been able to communicate with our office there, as it is located right on Queen Salote wharf in Nuku’alofa.
Once we learn more, we will inform you or your client. Meanwhile please ask them to file an official claim. They have already exceeded the time frame allowed and making it worse by the day.
In their anger they can’t see the forest for the trees. You owe them proper legal advice.
(Emphasis added.)
[24] Mr Grove submits that this explanation ought to have dissuaded Dream America from proceeding with an application for an injunction. He therefore contends it took an unnecessary step or pursued an argument that lacked merit when it sought and obtained an interim injunction just two weeks later.
[25] This argument needs to be viewed in light of the fact that by 25 January 2022 CFR had already wrongly attempted to withhold delivery of the goods until outstanding payments owed by another company associated with Dream America had been made. It had also, again erroneously, advised Dream America that the goods had not been cleared by the customs authorities. Given that background Dream America was entitled to be sceptical of CFR’s claim that the goods were no longer in its possession. I am therefore satisfied that it was entitled to apply for an interim injunction requiring CFR to hand the goods over. In doing so it did not take an unnecessary step or advance an argument that lacked merit.
[26] Mr Grove also criticises Dream America for not annexing the correspondence that it had received from CFR on 25 January 2022 to the affidavit filed in support of its application for an interim injunction. I agree that Dream America should have taken this step given that it filed the application on a without notice basis. When an application is filed on a without notice basis the applicant is expected to be fulsome in the information it provides to the Court. This reflects the fact that r 7.16 of the District Court Rules requires the applicant to take “all reasonable steps to ensure that the application and supporting documents contain all material that is relevant to the application, including any defence that may be relied upon by any other party and any facts that would support the position of any other party”.
[27] In this context Mr McKenna, on Dream America’s behalf, contends that it met its obligations under r 7.16 because the affidavit filed in support of the application expressly referred to the explanation given by CFR as follows:6
Harald [CFR’s Managing Director] told the Police and us that the parts had been accidentally shipped to Thailand, so CFR Line does not have them
6 Affidavit of Erana Kim Shattock (Director of Dream America Ltd) dated 8 February 2022.
anymore. Harald also told my solicitors that the goods had been shipped to Tonga, and because of the volcanic eruption and tsunami they could not confirm or verify this. To me, this is incredibly suspicious and convenient for CFR Line. I believe they continue to be obstructive, and I just don’t believe they accidentally shipped the parts off after we had confirmation they were in CFR Line’s possession and they knew they were subject to a dispute.
[28] As I have already observed, Dream America was entitled to be sceptical about CFR’s explanation that it was no longer in possession of the goods. However, and regardless of Dream America’s scepticism, the explanation CFR had given was plainly relevant to the exercise of the District Court’s discretion both to deal with the application on a without notice basis and to grant it. And, although the affidavit paraphrased CFR’s explanation in broad terms, it did so in a dismissive manner. I consider it would have been preferable for Dream America to have annexed the correspondence so that the Judge who considered the application could reach an objective view regarding the weight to be given to it.
[29] Had the Judge who considered the application seen the correspondence, he or she may have directed that it be served on CFR immediately so that it could be heard on a “Pickwick” basis. This would have given CFR the opportunity to confirm that it no longer had the items in its possession and that any order requiring them to be delivered up would be futile.
[30] However, CFR ultimately suffered no prejudice as a result of not being heard on the application because Dream America did not seek any sanctions against it for failing to comply with the terms of the injunction. Rather, it subsequently amended its claim to seek monetary damages rather than an injunction. This also meant CFR was not put to the costs of filing an application for an order rescinding the interim injunction. I therefore do not consider that costs should be refused or reduced to reflect the fact that Dream America failed to include the correspondence from CFR in the material it filed in support of the application for an interim injunction.
Should costs be reduced to reflect the fact that Dream America’s initial claim for damages was excessive?
[31] I accept that Dream America’s initial claim for damages sought recovery of sums that were described in very broad terms. By way of example, the amended
statement of claim sought recovery of the sum of $3,000 “for labour (including corresponding to arrange parts from USA, airfreight, police, customs legal services and customers.” Dream America also sought to recover the sum of $2,176 for two trips from Hamilton to Auckland to attempt to recover the items from CFR. The statement of claim did not particularise how these sums were made up and they did not form part of Dream America’s final claim as particularised in the affidavit filed in anticipation of the hearing as to quantum.
[32] However, the rationalisation of a plaintiff’s claim prior to trial is not an uncommon occurrence in civil litigation. It may lead to the quantum of the claim being increased or reduced. In general terms, however, a defendant will not be prejudiced by this from a costs perspective unless it results in the parties being required to engage in unnecessary interlocutory procedures. That did not occur in the present case.
[33] The thrust of CFR’s argument under this ground of appeal is that the quantum of the claim for damages as initially pleaded was above the jurisdictional threshold of the Disputes Tribunal. This prevented CFR from applying to have the claim transferred to the Tribunal so as to avoid incurring further legal costs. It says that it incurred unnecessary legal costs as a result of Dream America failing to reduce its claim until it served its evidence in anticipation of the quantum hearing.
[34] This argument needs to be viewed in light of the fact that on 4 September 2023, within three weeks of being instructed by CFR, Mr Grove sent a letter to Dream America’s solicitors in the following terms:
1.As discussed, I met with my client’s director today.
2.This letter is sent on an open basis. It is sent with a view to avoiding the costs of litigation moving forward and so that a process can be agreed to resolve all outstanding issues as promptly as possible and to the satisfaction of all parties involved.
3.The starting point is that as advised, my client received the goods. They were misplaced, probably forwarded to Samoa by mistake. Accordingly, it does not deny liability. Indeed, they will sign a admission of claim in relation to liability if that assists.
4.Quantum however is not simple. It appears that your client has grossly exaggerated its claim. Those are matters however that should be capable of resolution. I suggest two [sic] proposals:
a.The matter to be transferred to the Disputes Tribunal for resolution of the disputes as to quantum; or
b.A without prejudice meeting to be arranged to discuss quantum; or
c.A Judicial Settlement Conference to be allocated with a view to resolving quantum.
5.One matter that your client needs to take into account are the terms of the contract. These are referred to in the attached invoice to your client that was paid. Also attached are the referred to terms of contract. You will see that the amount of damages that can be claimed are limited significantly. Your client took no issue with those terms when it paid the invoice.
6.There are many other aspects of your client’s claim for damages as particularised in the affidavit that appear to be, at least at this stage:
a.Highly exaggerated; and
b.Simply not claimable legally.
7.Once the issue as to quantum has been agreed or determined payment will be made forthwith.
8.Accordingly, please advise which of the above options your client wishes to take to resolve these issues.
[35] Dream America subsequently agreed to attend a Judicial Settlement Conference and this was held on 15 May 2024. Although this did not resolve the dispute it provided CFR with an opportunity to point out the alleged shortcomings in Dream America’s claim for damages. No significant steps were taken in the proceeding between 4 September 2023 and 15 May 2024. I therefore do not consider CFR can legitimately criticise Dream America for agreeing to attempt to resolve the dispute using one of the methods that CFR had suggested through its counsel. The costs of the proceeding were not increased unnecessarily as a result of the parties taking that step.
[36] After the parties failed to reach agreement at the settlement conference Dream America immediately sought the allocation of a fixture to determine the issue of quantum. This was ultimately scheduled for 12 March 2025. The parties then served their evidence and this led to Dream America reducing its claim to the point
where it fell within the jurisdiction of the Disputes Tribunal. The evidence that CFR served in response led to the issues that were identified immediately before the trial arising out of the fact that CFR had failed to file a statement of defence. These led directly to the Judge’s decision that the claim should be transferred to the Disputes Tribunal. However, the preparation of evidence did not result in CFR incurring wasted or unnecessary costs because it will still presumably be able to rely on that evidence when the Disputes Tribunal hears Dream America’s claim.
[37] Taking these factors into account I do not consider Dream America increased the costs of the proceeding unnecessarily by failing to reduce its claim before the point at which it served its evidence in anticipation of the quantum hearing.
Did Dream America fail without reasonable justification to accept CFR’s offers of settlement?
[38] On 16 May 2024, the day after the unsuccessful judicial settlement conference, Mr Grove sent the following letter to Dream America ’s solicitors:
1.Firstly, CFR have accepted liability. The only issue therefore are the damages payable.
2.Despite numerous requests, your client has not advised if it held insurance for this shipment and whether it made a claim. Please advise now.
3.CFR’s view is that these are greatly exaggerated and/or not claimable. This is a matter that could, should and would have been resolved promptly should your client have taken up CFR’s suggestion that a meeting take place to discuss resolution and using CFR’s contacts and experience to ensure that replacement parts were obtained as promptly as possible.
4.Instead of going down that track your client issued proceedings and even sought and obtained an order for immediate delivery up of the lost goods even though it had been explicitly told that they had been lost. Dream America’s conduct therefore only caused further delays that cannot be laid upon CFR.
5.The starting point however is that CFR will pay for the goods that were lost, being the eight wheels, six axles and fender. Based on your client’s figures, that amounts to approximately $9,400.
6.In addition, and solely to resolve this uneconomic litigation, my client is prepared to pay a further amount of $10,600 meaning a total payment to your client of $20,000. This sum is offered given that based on the evidence filed by Dream America by way of affidavit
CFR simply cannot ascertain what the actual damages are. The fact that the goods were inadvertently lost does not give your client an open chequebook as to damages. Further, Dream America had the obligation to mitigate its losses and based upon the correspondence exchanged at the time it did not do so.
7.It is for that reason that since my involvement in these proceedings requests have been made to pursue settlement options as promptly as possible.
8.The extra payment is made without any acceptance of liability but to bring this litigation to an end. If the order is not accepted and this matter goes to trial your client is on notice that strict proof will be required as to each aspect of the damages. As far back as 1 November 2023 I requested further information and documentation regarding the damages claimed. Despite regular requests for an answer that information and documentation has still not been provided.
9.The reason that this offer is sent on an open basis is so that it can be produced to the Court when the trial commences to demonstrate the efforts that CFR have gone to resolve this litigation. It is certainly the writer’s view that:
a.The application for injunctive relief should never have been filed. Your client had been told on a number of occasions that the goods were missing and they could not be located. Despite that fact, it went to the effort to obtain an injunction requiring the goods to be delivered up. How such an order was made given the explicit statements from CFR is to say the least surprising.
b.Further, given the total amount claimed, this is a matter that cried out for Disputes Tribunal proceedings. Those of course would have saved all of the parties tens of thousands of dollars in costs by the time this matter goes to trial.
c.Given the inadequate and/or lack of evidence, it is simply impossible for CFR to make a reasoned settlement offer given the poor evidence relied upon by Dream America.
10.As a further sign of good faith, to be explained to the Court at trial, despite your client not responding to the quite proper request for information and documentation and to demonstrate the desperate position that CFR has been put in in this uneconomic litigation, it is prepared to pay the $20,000 now. Please provide bank details. My client reserves its right however to reclaim this sum should a judgment be necessary and the amount awarded to seek a return of any difference.
11.It is accordingly your client’s decision whether it will accept the
$20,000 in full and final settlement of its claims or alternatively pursue the balance sought of approximately $10,000. If it takes the second option and this matter proceeds to a hearing the costs to be incurred by both parties will greatly exceed the sum being sought.
[39] Mr Grove renewed this offer of settlement in a further email he sent to Dream America’s solicitors on 8 July 2024.
[40] Rule 14.7(e)(v)7 of the District Court Rules permits the Court to refuse or reduce costs where a party has declined an offer of settlement without reasonable justification. CFR relies on this provision to submit that the Judge ought to have refused to award Dream America costs for all steps taken after 16 May 2024. CFR says that it should have received an award of costs in its favour for all steps taken after that date.
[41] Mr Grove points out that his client offered on two occasions to pay Dream America the sum of $20,000 and that this was only slightly below the amount that Dream America ultimately sought when it served its evidence during the period leading up to the quantum trial that was ultimately aborted. He submits that, had Dream America accepted the offers when they were made in May or July 2024, it would have saved the legal costs that it later incurred in pursuing the claim to the point where it was transferred to the Disputes Tribunal. He contends that this means that Dream America failed without reasonable justification to accept the offers.
[42] This argument overlooks the fact that Dream America always sought damages totalling more than $20,000. If it had succeeded in establishing its claim in the District Court it would also have been entitled to judgment for interest on the judgment sum together with costs and disbursements. This means that I cannot say that Dream America refused the offer of settlement without reasonable justification.
[43] Rule 14.11 of the District Court Rules is also potentially relevant in this context. It provides as follows:
Effect 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
7 Set out above at [20].
(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.
(4)The offer may be taken into account if party A makes an offer that—
(a)does not fall within subclause (3)(a) or (b); and
(b)is close to the value or benefit of the judgment obtained by party B.
[44] However, as is evident by its terms, r 14.11 only applies in situations where the Court has issued a judgment. That never occurred in the present case.
[45] It follows that none of the arguments CFR has raised persuades me that the Judge erred in exercising her discretion to award costs in the sum of $6,350 to Dream America, or that her decision was plainly wrong.
Result
[46]The appeal is dismissed.
Costs
[47] Dream America has been the successful party on the appeal and is entitled to an award of costs and disbursements in its favour. Costs are to be calculated on a category 2B basis.
Lang J
0