Cousins & Associates v FM Custodians Ltd - [2013] NZCA 99

IN THE COURT OF APPEAL OF NEW ZEALAND

CA777/2011
[2013] NZCA 99

BETWEEN COUSINS & ASSOCIATES
Appellant

AND FM CUSTODIANS LIMITED
Respondent

Hearing: 13 March 2013

Court: O'Regan P, Arnold and Miller JJ

Counsel: A C Hughes-Johnson QC for Appellant
J E Bayley for Respondent

Judgment: 11 April 2013 at 11.30 am

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellant must pay the respondent costs on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by O’Regan P)

Introduction

This is an appeal against a judgment of Whata J awarding costs against the appellant, Cousins & Associates (Cousins), in favour of the respondent, FM Custodians Limited (FMC).[1]

Issue

[1]FM Custodians Ltd v Cousins & Associates HC Christchurch CIV-2009-409-2728, 26 October 2011.

The issue on appeal is not the amount of costs awarded, but whether it was appropriate for the Judge to award costs in circumstances where issues relating to liability have been resolved but the quantum of damages remains to be determined. Cousins argued in the High Court that costs should not have been awarded until after all of the issues in dispute between the parties, including damages, were decided. In the alternative, it argued that, if costs were to be awarded prior to the determination of damages, the order for costs ought to have been stayed until after the determination of the quantum of damages. Both of those arguments failed in the High Court and are now renewed in this Court.
Before turning to those arguments, we briefly set out the factual background.

Facts

FMC is a custodian trustee through which investors in mortgages hold their investments. FMC agreed to make a loan to Lichfield Ventures Limited (Lichfield) which was to be secured by a first mortgage over a Christchurch property. The property was all of the land described in one certificate of title and part of the land described in another. FMC instructed Cousins, a firm of solicitors which acted for Lichfield, to attend to the preparation, execution and registration of the mortgage. The mortgage was not registered pending the amalgamation of the two parcels of land into one title, but Cousins undertook that all was in place to effect the amalgamation and that there was no impediment to its proceeding.
FMC alleged that Cousins did not act in accordance with its instructions when registering security documents in that Cousins failed to register a first mortgage over a particular title owned by Lichfield, which was part of the mortgaged land.
FMC alleged negligence on the part of Cousins and the suffering of loss. The claim is defended by Cousins.
A liability trial was ordered. But on 8 July 2011, just over two weeks before the liability trial was to commence, Cousins admitted liability. This admission came after most of the normal steps required to prepare a case for trial had taken place. The parties submitted a joint memorandum noting their agreement on issues of liability. The memorandum, recorded Cousins’ position in…

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: [2013] NZCA 99
Decision Date: 11 April 2013

CaseChat Overview and Summary

Cousins & Associates appealed against a decision of Whata J awarding costs to FM Custodians Ltd (FMC). The appeal focused on whether it was appropriate for the Judge to award costs when the issues of liability had been resolved, but the quantum of damages remained undecided. Cousins argued that costs should not be awarded until all issues, including damages, were determined. Alternatively, it argued that if costs were to be awarded prior to damages being determined, the order should have been stayed until after damages were determined. Both arguments were unsuccessful in the High Court and were renewed in this Court. The Court of Appeal found that the decision to award costs was discretionary and that the appellate restraint applied to discretionary decisions. The Court did not find that the decision to award costs was contrary to principle. The Court held that the Judge was entitled to view the wasted effort by the parties and the Court as a relevant factor and that this factor would still be relevant in the assessment of costs if Cousins was successful at the quantum hearing. The Court declined to stay the costs award. The appeal was dismissed and Cousins was ordered to pay costs on a band A basis and usual disbursements.

Orders