Damon Engineering (2009) Limited v Jourdain

[2015] NZHC 2602

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-044-001413 [2015] NZHC 2602

BETWEEN

DAMON ENGINEERING (2009)

LIMITED Plaintiff

AND

CHERIE JOURDAIN Defendant

Hearing:	On the papers
Counsel:	S Carey for Plaintiff R S Pidgeon for Defendant
Judgment:	22 October 2015

JUDGMENT OF KEANE J [re costs]

This judgment was delivered by me on 22 October 2015 at 11.30am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Churton Hart & Divers, Highland Park, Auckland

Pidgeon Law, Auckland

DAMON ENGINEERING v JOURDAIN [2015] NZHC 2602 [22 October 2015]

[1]      On 19 June 2015 Andrews J gave judgment in this case against Damon, and in favour of Ms Jourdain, on all Damon’s causes of action and held that Ms Jourdain was entitled to costs in category 2B, on the ordinary principle that costs follow the event, subject to any issue of principle to be resolved on submissions.  She has since retired and I must decide costs in her place.

[2]      Two issues arise which are to a degree interrelated.  The first is whether any greater or lesser award than scale 2B costs should be made.  Ms Jourdain contends, in principle, that she is entitled to a greater award, though she has not quantified it, and Damon contends that she is entitled to a less than scale award.  The second is as to the offsetting award to which Damon entitled, as a result of the adjournment of the initial four day fixture in the District Court.

[3]      I must resolve these two issues on the principles that apply giving first place to the Judge’s own assessment, culminating in the judgment she gave, and to her related reference to the issue of costs.

Context

[4]      In 2012 Damon began this case in the District Court, North Shore, and in November 2012 applied for summary judgment against Ms Jourdain for damages in excess of $63,000, contending principally that she was in breach of a contract to supply it with a health and safety policy and manual able to be supplied to its customers;   that   the   documents   were   seriously   deficient;   and   that   Damon consequently suffered loss.

[5]      On 29 May 2013, at the fixture given, summary judgment was declined and the case was later set down for a four day hearing to commence on 2 December

2013.   That too did not proceed.   On 28 November 2013, on Ms Jourdain’s application, the case was adjourned.   Ms Jourdain was then self represented and Damon intended to call nine witnesses, the first of whom was Damon’s principal director, Christopher Barrett, with whom she had been in a relationship and by whom she had a child.

[6]      Damon was awarded costs on the adjournment, which were not then fixed. The award made was subject to this rider, “quantification of the plaintiff’s additional costs can occur and be the subject of an order following the hearing or other resolution of the case”.

[7]      On  22  January  2014,  when  the  case  was  next  called,  Damon’s  counsel advised the Court that it intended to amend its claim; that the amendment was likely to take the claim outside the jurisdiction of the District Court, $200,000; that Ms Jourdain was unlikely to waive the excess and  that the case would have to be transferred to the High Court.

[8]      On 3 February 2014 Damon filed in the District Court an amended claim seeking  increased  damages.    In  a  memorandum,  dated  7  February  2014,  Ms Jourdain’s counsel, whose instructions had recently been confirmed on a grant of legal aid, confirmed that she did not object.   On 12 February 2014 the case was transferred by consent.  At the first case conference in this Court on 13 August 2014

Damon was permitted to file an amended statement of claim, a three day fixture was allocated, and costs category 2 was agreed.

[9]      In its amended statement of claim, dated 18 September 2014, Damon claimed in  its  first  two  causes  of  action,  in  contract  and  negligence,  damages  totalling

$226,097.50 alleging three losses: (i) $19,607.50 paid to another contractor for services for which Ms Jourdain had already been paid; (ii) $166,590 for lost sales to two customers to January 2014 (a claim to be updated in evidence); and (iii) the cost of Mr Barrett’s real time in attempting to rectify Ms Jourdain’s work, $39,900.  In its third and fourth causes of action Damon claimed further distinct losses totalling

$3,194.

[10]     In  her  statement  of  defence,  as  well  as  denying  liability,  Ms  Jourdain contended  affirmatively  in  response  to  Damon’s  first  cause  of  action,  that  her capacity to contract had been overridden by the extreme pressure that Mr Barrett had exerted on her.  For this purpose she adduced evidence as to their relationship and related proceedings in the Family Court.

[11]     After a three day hearing on 30 March – 1 April 2015, and later submissions, Andrews J gave judgment against Damon, and for Ms Jourdain.   At every point critical to each cause of action, the Judge preferred Ms Jourdain’s evidence to that of Mr Barrett.  She also said that, had she found Ms Jourdain in breach of contract or negligent, she would have awarded Damon much less than it claimed.  Damon had contributed to its own loss.  It had failed to mitigate and overstated its claims for lost profits and Mr Barrett’s time.

[12]     Conversely, Andrews J ruled out Ms Jourdain’s affirmative defence.   Ms Jourdain’s evidence, and that of Mr Barrett, she said, had been permeated with acrimony.  Each had attributed to the other the breakdown of their relationship, and their inability to divide relationship property and to share the care of their child. This dimension to their relationship, the Judge said, was irrelevant to the case.

Principles

[13]     The paramount principle is that costs lie within the discretion of the Court.1

The governing usual principle is, however, that “the party who fails with respect to a proceeding … should pay costs to the party who succeeds”.2   As to that there is no issue, though there is an issue as to the accuracy of Ms Jourdain’s calculation.  In issue, primarily, is whether Ms Jourdain’s award should be adjusted upwards, if only notionally, or downwards.

[14]     Ms Jourdain contends that, in principle, her award ought be adjusted upwards on the ground that “the party opposing costs has contributed unnecessarily to the time or expense of the proceedings or a step in it” by pursuing a claim which lacks merit.3    Conversely, Damon contends that it should be reduced on the ground that “although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the

party opposing costs”.

1      HCR 14.1.

2      HCR 14.2(a).

3      HCR 14.6(3)(b)(ii), (d).

[15]     Those opposed issues are to be assessed in broad terms.4    I must also make that assessment conservatively.   I was not the trial Judge and Andrews J did not anticipate in her decision that there would be any such debate.

Opposed submissions

[16]     Ms Jourdain seeks a scale 2B award of $35,855, and $403.54 disbursements,

$8990 in the District Court and $26,865 in this Court together with an expert’s fee of

$4,000.  But, to answer Damon’s claim for costs on the adjournment in the District

Court, she contends that in the claim she has made she has been conservative.

[17]     Damon, Ms Jourdain contends, pursued her unreasonably by a multiplicity of causes  of  action,  bolstered  by serious  allegations  against  her  which  lacked  any foundation; in short that Mr Barrett improperly advanced his case by attacking her.5

On that basis, she contends, she is entitled to a significant uplift more than offsetting any award to which Damon may be entitled for the adjournment in the District Court.

[18]     In response, Damon first contends that, even though Ms Jourdain may be entitled to a scale 2B award, her costs calculation is overstated.   Then, Damon contends, her proper entitlement must be further reduced because of the way in which she advanced her affirmative defence, and her case generally.

[19]     Ms  Jourdain’s  cost  calculation  as  to  the  District  Court  phase,  Damon contends, assumes inaccurately that she was entitled to claim for preparing an information capsule.  Neither side prepared those capsules.  Her claim in that phase must reduce by $3,000.  As to the High Court phase of the case, Damon contends also, her claim must be reduced on three bases, by $4,776:

(a)       Step 11: Ms Jourdain joined in but did not prepare the  memorandum  for  the  first  case  management

4      Packing Inn Ltd (in liq) formerly known as Bond Cargo Ltd v Chilcott [2003] 16 PRNZ 869 (CA) at [5].

5      HCR 14.6(3)(b)(ii); Smithkline Beecham (NZ) Ltd v Minister of Health (2002) 16 PRNZ 361 (HC); Hedley v Kiwi Co-operative Dairies Ltd (Costs) (2002) 16 PRNZ 694; HCR 14.6; Re Moffat (Costs) HC Auckland CIV-2010-404-7116, 29 November 2011.

conference;  a  0.4  day  claim  to  which  she  is  not entitled.	$796.00
(b)	Step 12: There was no mentions hearing or call-over warranting a 0.2 day claim.	$398.00
(c)	Step 29: sealing order.   The time allocated is 0.2 days,  not  2  days  as  claimed.     8.2  days  is  not
warranted.	$3,582.00

[20]     Then, Damon contends, Ms Jourdain’s correct entitlement, $27,979, should reduce still further on the basis that, as the Judge concluded, she founded her affirmative defence on an irrelevant and complicating consideration: the proceedings in which she and Mr Barrett had been involved in the Family Court, particularly as they related to domestic violence.  The Judge disallowed Ms Jourdain’s affirmative defence and Damon seeks a significant but unspecified reduction.6

[21]     Damon advances its offsetting claim for costs on the adjournment in the District Court in two increments.  It seeks $620 for preparing and filing a notice of opposition to the application (step 9.10) and $1,550 for preparing submissions (step

9.12), in total $2,170.  It then seeks costs wasted in preparing for trial, $6,975 (steps

6.1 – 2); or even $12,400 under r 17.1, on the basis that there was to be a four day trial.7

Conclusions

[22]     I conclude, firstly, that, as Andrews J envisaged, Ms Jourdain is entitled to an award  of  scale  2B  costs  accurately  calculated.    Her  calculation  is  overstated, however, for the reasons Damon has identified, which I accept.  The scale 2B award to which she is entitled, therefore, subject to any upward or downward adjustment, is

$27,979.

6      HCR 14.7(d)(e)(ii).

7      Hamilton v Papakura District Council (1997) 11 PRNZ 43 (HC).

[23]     Secondly,  I see no  basis for an  upward or downward adjustment to this award. Andrews J did not suggest any in her decision.  Ms Jourdain’s notional claim for an uplift is irreconcilable with the Judge’s dismissal of her affirmative defence. Conversely, on my own review, that defence did not unduly lengthen or complicate the hearing.  The issues the Judge had to decide, as she summarised the evidence, remained the principal focus.

[24]     Thirdly, Damon is entitled, on the adjournment in the District Court, to the initial costs it claims, $2,170.   In principle it is entitled also to the further related award  it  claims,  notionally  $6,975.    The  trial  was  then  only  five  days  away. However, after the case was adjourned Damon increased its claim significantly.  By consent the proceedings were transferred to this Court.  Although Damon has not succeeded, the adjournment then was plainly to its advantage.  It will be enough if it receives a further award of $2,000.

[25]     Fourthly, there is no question that Ms Jourdain is entitled to be reimbursed the expert’s fee of $4,000.  That is not opposed.  She is, I consider, entitled to any filing fees that she paid.  She also claims other expenses, particularly photocopying. Damon, I accept, incurred a photocopying disbursement, attributable to Ms Jourdain, which proved unnecessary.  It more than offsets Ms Jourdain’s further claims.

[26]     In the result, I award Ms Jourdain scale 2B costs of $27,979 reduced by Damon’s offsetting entitlement on the adjournment, $4,170, a $23,809 net award. Ms Jourdain will have her expert’s fee, $4,000, and her filing fees, but no other

disbursements.

P.J. Keane J