Claims Resolution Service Limited v Pfisterer - [2021] NZHC 1943

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000649

[2021] NZHC 1943

BETWEEN CLAIMS RESOLUTION SERVICE LIMITED
Plaintiff

AND

LUCIA RENATE PFISTERER

First Defendant

GRANT SHAND
BARRISTERS AND SOLICITORS

Second Defendant

Hearing: On the papers

Judgment:

30 July 2021

JUDGMENT OF HINTON J

(Interest and costs)

This judgment was delivered by me on Friday, 30 July 2021 at 11 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Canterbury Legal, Christchurch. GCA Lawyers, Christchurch.
Darroch Forrest Lawyers, Wellington. ARB Barker QC, Auckland.
MS Smith, Wellington.

CLAIMS RESOLUTION SERVICE LTD v PFISTERER [2021] NZHC 1943 [30 July 2021]

Introduction

[1]In my judgment dated 21 May 2021, I made the following findings:1

I find that [Grant Shand Barristers and Solicitors (GSBS)] breached its fiduciary duty of loyalty and good faith to Mrs Pfisterer in continuing to negotiate the terms of settlement and filing a memorandum in Court after their instructions had terminated, but find against Mrs Pfisterer on the remedies sought and otherwise find against her affirmative defences and counterclaim.

Judgment is entered for [Claims Resolution Service Ltd (CRSL)] in the sum of $93,744.95.

[2] The sum of $93,744.95 was owed by Mrs Pfisterer to CRSL under the contract she had signed with them. The amount is made up of CRSL’s commission and costs and GSBS’s fees and disbursements, incurred in settling her claim. CRSL had paid the GSBS invoices.

[3]I reserved the issues of interest and costs.

[4] The parties have filed memoranda addressing both issues and also the matter of disbursements. I analyse the respective claims below.

Interest claimed by CRSL

[5]Clause 6 of the contract between CRSL and Mrs Pfisterer provides:

if there are outstanding charges owed by the client… CRS may:

…

d. Recover from the client or deduct from or set off against any amount owing to the client all amounts for damage, loss, costs, or expenses (including solicitor-client costs and expenses) arising from the default or non- performance by the client including any accrued charges.

e. Charge and the client must pay default interest on overdue amounts from the date payment falls due to the date of actual payment at the rate of 2% per month.

[6] Mrs Pfisterer concedes that she is liable to pay interest to CRSL on “overdue amounts” in terms of cl 6e and there is no dispute that the overdue amount includes

1 Claims Resolution Service Ltd v Pfisterer [2021] NZHC 1088 at [172]–[173].

the amount already paid by CRSL to GSBS. The dispute is over whether interest should be at a compounding or simple rate of two per cent per month and from what date interest starts to accrue.

Whether interest is compounding

[7] CRSL seeks interest at a compounding rate of two per cent per month from 1 October 2017 until 21 May 2021 (judgment date). This equates to $125,917.22.

[8] Mr Barker QC, counsel for CRSL, submits that the interest rate should be compounding as…

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.

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Details

Case: [2021] NZHC 1943
Decision Date: 30 July 2021

CaseChat Overview and Summary

Claims Resolution Service Limited (CRSL) initiated proceedings against Lucia Renata Pfisterer to recover a debt owed under a contract for legal services. The dispute centred on the calculation of interest on overdue amounts and the reasonableness of the costs claimed by CRSL and Grant Shand Barristers and Solicitors (GSBS). The court was tasked with determining whether the interest on overdue amounts should be calculated on a compounding or simple basis, the date from which interest should accrue, and the reasonableness of the costs claimed by CRSL and GSBS. The court also had to consider the disbursements claimed by both CRSL and GSBS.

The court held that the interest should be calculated at a simple rate of two per cent per month. It reasoned that a standard form contract directed at laypeople would need to explicitly state if interest were to compound. The court determined that interest should accrue from 1 October 2017 on CRSL's commission and costs and from 18 June 2018 on GSBS's fees and disbursements. The court awarded CRSL solicitor-client costs of $150,000 (excluding GST) and disbursements of $5,061.15. It also awarded GSBS costs of $62,834 and disbursements of $7,515.89. The court reasoned that the costs claimed by CRSL were reasonable for a case of this nature, despite some concerns regarding the fees of certain counsel. The court also found that GSBS's costs and disbursements were reasonable, subject to certain adjustments.

Orders