Daisley v Ark Contractors Limited - [2020] NZHC 1672

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2015-404-002799

[2020] NZHC 1672

BETWEEN
MALCOLM JAMES DAISLEY

First Plaintiff

AND

SDD LIMITED

Second Plaintiff

AND

ARK CONTRACTORS LIMITED

First Defendant

AND

PAUL GERRARD KELLER and KAREN ELIZABETH KELLER

Second Defendants

AND

THOMSON WILSON LAW (a firm)

Third Defendant

On papers

Appearances:

E Smith for Plaintiff

J Browne and C Martin for First and Second Defendants V Wethey and H Birch for Third Defendant

Judgment:

13 July 2020

JUDGMENT OF WALKER J

[AS TO COSTS OF THIRD DEFENDANT]

This judgment was delivered by me on 13 July 2020 at 3.30 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

DAISLEY v ARK CONTRACTORS LIMITED [2020] NZHC 1672 [13 July 2020]

Introduction

[1] On 23 April 2020, I issued my substantive judgment.1 Among other determinations, I dismissed the plaintiffs' claims against the third defendant.

[2] The parties have been unable to agree on costs. I have now received comprehensive memoranda as to costs.

[3] The third defendant seeks a combination of 2B costs and indemnity costs from 10 October 2018, being the date on which the third defendant made a "drop hands" offer. By this I mean an offer that the third defendant would not pursue costs if the plaintiffs discontinued the claims against the third defendant. As a fall-back, the third defendant seeks a 50 per cent uplift for steps taken from the same date.

[4] The plaintiffs oppose indemnity costs. They submit the threshold for an order of indemnity costs is high, rarely reached and not warranted in the circumstances of this case. The plaintiffs concede, however, that an uplift from schedule costs may be arguable. This is a proper concession. The plaintiffs submit that if so, it should be limited to a 25 per cent uplift. The plaintiffs also oppose certification of second counsel.

[5] There is no challenge in respect of the schedule provided by the third defendant which sets out the steps in the proceedings. I return to this below.

[6] The contest between the parties is therefore focused on two main issues: whether there should be an uplift or an award of indemnity costs, and certification for second counsel.

[7] Costs are to be fixed in accordance with Part 14 of the High Court Rules 2016. The principles are relatively well established. There is an overriding discretion, but it is to be exercised within the framework of the costs regime to provide certainty to parties. The rules themselves provide for departure from Schedule costs and for indemnity costs in prescribed circumstances.

1 Daisley v Ark Contractors Limited [2020] NZHC 793.

Certification for second counsel

[8] The third defendant submits the claim for second counsel is appropriate and justified in the circumstances. Ms Wethey points to factors including the logistics of Auckland based counsel conducting a trial in Whangārei and the length of the trial.2 The first and second defendants entered appearances for two counsel; the plaintiffs…

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: [2020] NZHC 1672
Decision Date: 13 July 2020

CaseChat Overview and Summary

This case involved a legal dispute between Malcolm James Daisley and SDD Limited, who were the plaintiffs, and Ark Contractors Limited, Paul Gerrard Keller, Karen Elizabeth Keller, and Thomson Wilson Law (a firm), who were the defendants. The plaintiffs sought damages for breach of contract and negligence related to the construction of a property. The court had to decide on the legal issues of whether the third defendant, Thomson Wilson Law, was liable for costs incurred by the plaintiffs in pursuing their claims against it. The third defendant argued for indemnity costs, while the plaintiffs opposed this and suggested a limited uplift instead. The third defendant also sought certification for second counsel, which the plaintiffs opposed. The court considered the nature of the claims, the complexity of the issues, and the reasonableness of the plaintiffs' decision to continue with their claims against the third defendant despite the offers of settlement. The court determined that the third defendant was entitled to a 50 per cent uplift on costs from 31 October 2018, but not indemnity costs. The court also certified for second counsel, but with an adjustment for the appearance at trial. The court's final orders included awarding the third defendant 2B costs for steps up to 1 August 2019 at the then prevailing daily rate of $2,230, 2B costs for steps after 1 August 2019 at the daily rate of $2,390, a 50 per cent uplift on each step undertaken from 31 October 2018, and disbursements of $20,470.68. The court also directed the Registrar to release to the third defendant the sum of $45,000 paid into Court as security for costs in respect of the claim against it.

Orders