Concrete Structures (NZ) Limited v Inframax Construction Limited

[2017] NZHC 783

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2014-419-0045

CIV2014-419-000365 [2017] NZHC 783

BETWEEN

CONCRETE STRUCTURES (NZ)

LIMITED Plaintiff

AND

INFRAMAX CONSTRUCTION LIMITED

Defendant

Hearing:	On the papers
Judgment:	26 April 2017

COSTS JUDGMENT OF DUFFY J

This judgment was delivered by me on 26 April 2017 at  3.00 pm pursuant to

Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors / Counsel: McCaw Lewis, Hamilton Holland Beckett, Tauranga

CONCRETE STRUCTURES (NZ) LIMITED v INFRAMAX CONSTRUCTION LIMITED [2017] NZHC 783 [26 April 2017]

[1]      There are two proceedings, to which I will refer as the Okura proceeding (CIV 2014-419-045) and the Rugby Road proceeding (CIV 2014-419-365).  The trial of the Okura proceeding was scheduled to commence on 22 August 2016 with the Rugby Road proceeding to commence immediately afterwards.   However, neither trial proceeded.  Reasons for this are set out in the minute of 22 August 2016.1

[2]      Adjournment of trial fixtures close to or on the day of trial necessarily give rise to costs issues, often with each opposing side blaming the other for why the trial did not proceed.  This is what has happened here.  The parties have been unable to agree costs.

[3]      In its costs memorandum the plaintiff continues to maintain the stance that its late attempt to argue the existence of an implied contractual term was simply a clarification of its existing pleading and did not materially change the nature of its claim against the defendant. This is wrong. The original claim said nothing about an implied contractual term.  It was clear from the defendant’s statement of defence that its defence proceeded on the basis it did not have to meet an allegation of an implied contractual term.

[4]      I do not accept the plaintiff’s argument that reading an implied term into the contract is simply part and parcel of contractual interpretation.  That is not so.  If a plaintiff wants to assert the existence of terms of a contract that are not expressed either orally, in writing or by conduct it must allege in its statement of claim that such terms are implied and the facts and circumstances from which the implication

arises.2

[5]      The plaintiff’s late change of course through its wish to include the existence

of an implied term in the contract upon which it was suing was the main reason for the trial not proceeding on 22 August 2016.

1      The minute of 22 August 2016 which fully explains why the trial was adjourned should be read together with this judgment on costs.

2      IH Jacob Bullen and Leake and Jacob’s Precedents of Pleadings (12th ed, Sweet and Maxwell, London, 1975) at 345.

[6]      The defendant’s failure to have its contribution to the agreed bundle properly sorted out before the trial date was a factor in the trial not proceeding.  However, had it been the sole factor the trial could have proceeded, as this was something that could have been accommodated.   Accordingly, I am satisfied that the prime responsibility for the trial not proceeding on 22 August 2016 lies with the plaintiff.

[7]      I  accept  the  defendant’s  submission  that  there  has  been  wasted  trial preparation.  Whilst I accept in principle the plaintiff’s argument that preparation for the lost trial can be of use for the later trial date, here the new trial date is not until later this year.  Much of what would have been done for a trial in August 2016 in terms of witness briefing in preparation for giving evidence and preparing to cross- examine the opposing parties’ evidence will have been wasted, in the sense it is likely to  have  to  be  done  again.    This  type  of  preparation  is  not  likely  to  be remembered so well that it will not have to be repeated for the new trial. The Court’s

jurisdiction to award costs in respect of wasted preparation is well established.3

[8]      The trial on 22 August 2016 was set down for hearing for eight days, though it was thought it could be completed in seven days.  Ordinarily, for costs purposes trial preparation time at category 2B is three days.   Here the defendant seeks an award of costs that includes three days at category 2B for pre-trial preparation.

[9]      Given the length of the trial, the issues it raised and the timing of the adjournment, which first arose on the last working day before the trial commenced and ran into the trial time, I think it is appropriate that the defendant be granted costs for three days preparation at category 2B as sought.   I am satisfied this time was spent and is now lost.  The defendant will have to duplicate this preparation for the new trial.

[10]     The defendant also seeks category 2B costs for time spent in dealing with the consequences of the plaintiff attempting to expand its case so late in the day.  Those

costs are sought at category 2B and they seem to me to be appropriate.

3      See Burgess v Monk [2015] NZHC 1881 at [15]–[16].

[11]     I consider therefore that the defendant is entitled to all the costs it currently seeks.   Whether the plaintiff’s conduct entitles the defendant  to claim costs for additional factors seems to me to be something that is better dealt with once the trial has occurred.  The merits of the plaintiff ’s amended claim cannot be assessed now. If the allegation of an implied term turns out to be a winning point, that will have an impact on how the late amendment is ultimately viewed.  Conversely, if the implied term argument fails, the fact it was responsible for derailing the 22 August 2016 trial so late in the day may be reflected in the quantum of a costs award.

[12]     Each counsel has referred extensively to case law that sets out and applies well settled principles.   Whilst I have considered those cases carefully, I consider that the approach to awarding costs here turns very much upon the particular circumstances of this case.

[13]     I find  the defendant  is  entitled  to  an  award  of category 2B costs.    The defendant calculates those costs as being $14,383.50 but seeks a rounded sum of

$15,000 to cover other costs not taken into account, such as the cost of liaising with witnesses and cancelled flights.  I am not prepared to adjust costs upwards on such as basis. Accordingly, the costs award is $14,383.50.