Chen v Zhong HC Auckland CIV 2010-404-001995

[2011] NZHC 1752

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-001995

BETWEEN  WANG KANG CHEN Plaintiff

ANDLING ZHONG First Defendant

ANDWLC PROPERTIES LIMITED Second Defendant

Hearing:         (On the papers)

Counsel:         M Keall for the Plaintiff

No Appearance for First and Second Defendants

Judgment:      8 December 2011 at 4:00 PM

[COSTS] JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie

On 8 December 2011 at 4.00 pm

Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Distribution:

MG Keall: [email protected]

W Wang (Defendants):  [email protected]

CHEN V ZHONG & ANOR HC AK CIV 2010-404-001995 8 December 2011

[1]      I refer to my reserved judgment of 14 November 2011.  I awarded damages against the second respondent, WLC Properties Limited, in favour of Mr Chen, and held that he was entitled to interest on those damages as from the date or dates on which various payments were made by him.  I also held that Mr Chen was entitled to his costs and reasonable disbursements, calculated on a 2B basis.  Inter alia, I invited the parties to come back to me if there was any difficulty in finalising the interest calculation.

[2]      I have received a memorandum from counsel for Mr Chen.  He advises that Mr Chen has had difficulty in pinpointing exactly when each of the many invoices relating to the partial completion and rectification of the building work was paid. Mr Chen seeks a direction that interest should instead run on the judgment sum either  from  31  March  2010  when  the  proceedings  were  commenced,  or  from

15 August 2010, by which point a sufficient portion of the rectification work had been completed.

[3]      The power to award interest is contained in s 87 of the Judicature Act 1908. The section provides that the Court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate not exceeding the prescribed rate as the Court thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment.

[4]      The Court’s discretion is fourfold.  It can decide:[1]

[1] McGechan on Procedure, at [J87.01].

(a)       whether to award interest at all;

(b)      whether to award interest on all or any part of the damages;

(c)       whether to award interest for the whole or part of any period between the date when the cause of action arose and the date of judgment, and

(d)whether to award interest at the maximum prescribed rate, or some lower rate.

The discretion is to be exercised as the justice of the case requires.[2]    The ability to award interest enables the Court to properly compensate a successful plaintiff for his or her loss. An award of interest is not intended to punish a respondent.

[2] Wilson & Horton Ltd v Attorney-General [1997] 2 NZLR 513 at 530; Day v Mead [1987] 2 NZLR 443 at 463.

[5]      There is no fixed rule for the commencement date of an interest award.  The section sets a parameter – it can start from the date that the cause of action arose, and justice will often require that interest run from that date down to the date of judgment.[3]

[3] Day v Mead at 463.

[6]      Here, the cause of action arose on or about November 2009 when WLC abandoned the site.  However, no damages were incurred by Mr Chen at that stage. Mr Chen issued the proceedings promptly – in March 2010.  It is acknowledged in the memorandum filed that as at that date, Mr Chen had incurred only a modest degree of expenditure.

[7]      The damages awarded by me totalled $128,141.70.  I set out in [82] through to [86] of my judgment how that sum was made up.   Part of the damages award included the estimated costs of completing the remaining work.   Those estimated costs were $74,331.22.

[8]      I accept the argument advanced for Mr Chen that it is all but impossible in the circumstances to have interest running from the date each payment was made, and that in respect of the remedial work still to be completed, no payments have yet been made by him.   I also accept the argument that the evidence showed that a significant portion of the costs incurred by Mr Chen had been met by 15 August

2010.

[9]      It seems to me that the matter is best resolved if I award interest at the prescribed rate on the judgment sum, less the estimated cost of the remedial works,

as from 15 August 2010 through to the date of judgment.  Interest on the judgment sum, including the estimated cost of completing the remedial works, will run at the prescribed rate as from the date of judgment pursuant to r 11.27 of the High Court Rules.

[10]     Counsel should note that the prescribed rate decreased from 8.4 per cent to

5 per cent per annum as from 1 July 2011.

[11]     Counsel’s memorandum also includes a schedule of costs incurred on a 2B basis, and the amount claimed in respect of costs.  Disbursements are also claimed, with the relevant invoices annexed.  The schedule has been checked.  It is accurate.

Accordingly, I award total costs of $33,276, and disbursements of $14,768.25.

Wylie J