Curtis Investment Limited v John Curtis Limited

[2023] NZHC 346

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-588

[2023] NZHC 346

BETWEEN

CURTIS INVESTMENTS LIMITED

Plaintiff

AND

JOHN CURTIS LIMITED

Defendant

Hearing:	(On the papers)
Appearances:	P Whiteside KC and J R Pullar for Plaintiff M A Powell for Kathryn Corston (Intervenor)
Judgment:	28 February 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

CURTIS INVESTMENTS LIMITED v JOHN CURTIS LIMITED [2023] NZHC 346 [28 February 2023]

[1]                  In April 2022, Kathryn Corston (Kathryn), was granted leave to intervene in this proceeding. Originally, Curtis Investments Limited (CIL) sought specific performance of an agreement for sale and purchase with John Curtis Limited (JCL). In August 2022, CIL advised the solicitor acting for JCL that it was not pursuing the application  for  specific  performance  and  sought  the  return  of  the  deposit.   On 2 August 2022, JCL’s solicitor acknowledged receipt of that advice and said that given the real estate agents involved had deducted their commission from the deposit, JCL needed to raise further funds to pay the balance of the deposit and interest.

[2]                  The Court was advised on 16 August 2022 that the specific performance claim was abandoned. An amended statement of claim was filed at around the same time seeking judgment for the return of the deposit and interest on the deposit. There was a further cause of action based on an implied term that JCL, the vendor, would do all things reasonably necessary to ensure that settlement occurred in accordance with the agreement. JCL had taken no steps to remove a caveat lodged by the intervenor and CIL sought judgment for costs it claimed to have incurred in removing the caveat.

[3]                  To give the amended statement of claim some context, the amount claimed for costs and damages was $9,200 (including GST). The unpaid interest on the deposit turned out to be just over $14,000, albeit this sum was not pleaded.

[4]                  The deposit was repaid prior to the hearing of the summary judgment application. Accordingly, by the time of the summary judgment hearing, it appeared that prior to the submissions for CIL being filed, the only matters in issue were interest on the unpaid deposit and the second cause of action for breach of an implied term, albeit it was not entirely clear from the plaintiff’s application if summary judgment was sought in respect of the second cause of action.

[5]                  However, in the submissions filed in support of the summary judgment application, the plaintiff pursued a claim for interest based not on the value of the unpaid deposit, but on the entire unpaid purchase price.

[6]                  The claim pursued by CIL for interest on the entire purchase price was, in my view, without merit. It necessitated a hearing that should not have occurred. While it

is true that by the time of the hearing on 24 November 2022, approximately $14,000 of interest payable on the deposit had not been repaid, as I set out below, a Calderbank offer to pay that sum was made prior to the hearing.

[7]                  On any view of it, a claim for $14,000 did not warrant a High Court summary judgment hearing.

[8]                  I have no doubt that the intervenor is entitled to costs. Costs are opposed by CIL on the grounds that it was partly successful in its claim. Anyone reading my judgment of 30 November 2022,1 would not consider CIL achieved any real level of success.

[9]                  CIL’s claim for interest on the purchase price was inconsistent with the terms of the agreement for sale and purchase, Court of Appeal authority and was not supported by the leading text.

[10]              Counsel for CIL submits the hearing was still necessary as prior to the hearing, the position of the intervenor was not to pay interest. Of course, immediately prior to the hearing, CIL’s claim had morphed from a claim for interest, in essence accepted by JCL’s solicitor back on 2 August 2022, to a much greater claim. This submission also ignores what amounted to a Calderbank offer made to CIL before the hearing, referred to below.

[11]              CIL chose to abandon its claim for specific performance and amended statement of claim.   It essentially failed on  its amended  claim it advanced in the   30 November 2022 hearing.

[12]              The grounds upon which CIL’s claim failed were anticipated by counsel for the intervenor in a letter prior to the hearing and sent after CIL’s submissions were received. CIL’s submissions raised for the first time the inflated interest claim.

[13]              The letter proposed that the summary judgment hearing be settled on the basis that JCL would pay interest on the deposit at the contractual rate, that is, approximately

1      Curtis Investments Ltd v John Curtis Ltd [2022] NZHC 3165.

$14,000, with costs then to be dealt with by memorandum. It was pointed out that the claim for the inflated interest figure was made for the first time in submissions. The letter for the intervenor also pointed out why the alternative claim based on the implied term would also fail and again, that proved to be the case.

[14]Accordingly, the hearing could and should have been avoided.

[15]              In my view, CIL persisted with a claim that was without merit meaning that there should be an uplift in respect of the preparation of submissions for the hearing and attendance at the hearing. The issue is whether an uplift for those steps is appropriate or whether indemnity costs are called for as sought.

[16]              The actual costs claimed for preparing submissions is $4,560.50 and for preparation for and attendance at the hearing of $4,342.50. Costs on a 2B basis for those steps would be $3,585 and $596.50 respectively – a total of $4,182.50 versus indemnity of $9,203.

[17]              I consider costs on a 2B basis with a 50 per cent uplift reflects a reasonable costs award for the two steps for which indemnity costs were sought, with 2B costs without an uplift for the remaining steps, being appropriate. There is an order accordingly, along with disbursements as fixed by the Registrar.

[18]              Counsel for CIL submitted that as the memoranda were joint memoranda, an adjustment to 2B costs was appropriate with it being submitted costs should be awarded on a 2A basis. I do not adjust the costs for those memoranda, either for that reason or to reflect that they were also in part relevant to related proceedings. To reflect the overall costs outcome in the related proceedings, the requested uplift sought by Ms Corston (as plaintiff, not as intervenor), was declined.

[19]              The reality is that this and its related proceeding were closely connected. The overall costs position reached in both proceedings is one I consider reasonable and reflecting the level of overlap between the issues and the parties.

Associate Judge Lester