Diamond Hostel Limited v Kim - [2020] NZHC 1639

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2172

[2020] NZHC 1639

UNDER the Arbitration Act 1996

IN THE MATTER

of an Application for Leave to Appeal against Arbitration Tribunal’s Award

BETWEEN

DIAMOND HOSTEL LIMITED

Applicant

AND

SUNGJA KIM

Respondent

Hearing: On the papers

Appearances:

S Kang for the Applicant

B J Norling for the Respondent

Judgment:

9 July 2020

JUDGMENT OF GORDON J

[As to costs]

This judgment was delivered by me on 9 July 2020 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Fairbrother Family Law, Napier

Norling Law Limited, Auckland

DIAMOND HOSTEL LTD v KIM [2020] NZHC 1639 [9 July 2020]

Introduction

[1]This is an application for costs by the respondent Sungja Kim.

[2] On 31 March 2020, I gave judgment in her favour, refusing an application by Diamond Hostel Ltd (Diamond) for leave to appeal against an Arbitration Tribunal’s Award.1

Background

[3] Diamond applied under cl 5(1)(c) of sch 2 of the Arbitration Act 1996 for leave to appeal part of a decision of an arbitrator given on 9 July 2019.

[4] The dispute related to Diamond’s liability for outgoings under a lease of a property, owned by Ms Kim, at Spring Creek, north of Blenheim. The arbitrator found Diamond was liable for outgoings under the terms of the lease. Diamond applied for leave to appeal on a question of law arising out of the arbitrator’s determination on liability. Ms Kim opposed leave.

[5] The exercise of the discretion to grant leave is subject to cl 5(2). It was common ground that the relevant principles for applying cl 5(2) are to be found in the decision of the Court of Appeal in Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd.2

[6] I found that the precondition in cl 5(2) – whether the question of law could substantially affect the rights of the parties – was not satisfied. Alternatively, even if I was wrong on that point, I would have exercised my discretion by refusing leave after taking account of the factors identified in Gold and Resource Developments.

[7]I declined leave to appeal the partial award of the arbitrator.

1 Diamond Hostel Ltd v Kim [2020] NZHC 663.
2 Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd [2000] 3 NZLR 318 (CA).

Costs claimed

[8] Mr Norling, for Ms Kim, seeks indemnity costs against Diamond. This claim is founded not on Diamond’s conduct in the proceedings but instead on r 14.6(4)(e) of the High Court Rules 20163 and cl 6.1 of the deed of lease entered into by the parties. That clause provides, in part:

The Tenant shall pay … the Landlord’s legal costs (as between lawyer and client) of and incidental to the enforcement of the Landlord’s rights, remedies and powers under this lease.

[9] On this basis, Ms Kim seeks indemnity costs of $14,157.00 (a GST exclusive amount) and disbursements…

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.

Continue reading Diamond Hostel Limited v Kim

Details

AGLC: Diamond Hostel Limited v Kim [2020] NZHC 1639
Case: [2020] NZHC 1639
Decision Date: 9 July 2020

CaseChat Overview and Summary

Diamond Hostel Limited, an applicant, sought leave to appeal a decision of an arbitrator that found it liable for outgoings under a lease of a property owned by Sungja Kim, the respondent. The High Court of New Zealand considered the application and found that the precondition in cl 5(2) of the Arbitration Act 1996 was not satisfied, and that the exercise of discretion to grant leave would be refused after taking account of the relevant factors. The Court refused leave to appeal the partial award of the arbitrator.

The respondent now sought indemnity costs against Diamond. The claim was founded on cl 6.1 of the deed of lease entered into by the parties, which provided that the Tenant shall pay the Landlord's legal costs of and incidental to the enforcement of the Landlord's rights, remedies and powers under this lease. The Court found that the tenant, Diamond, was liable, pursuant to cl 6.1, for the landlord's legal costs on a solicitor-client basis. The Court also found that the claimed costs were reasonably incurred and within the scope of the indemnity given in cl 6.1. The Court further found that the costs should not be reduced because the respondent was justified in rejecting the settlement offer, and that the cost of preparing the costs memoranda and reviewing the memorandum from counsel would not be added to the claimed costs.

The Court awarded costs and disbursements in the sum of $14,357.25 to the respondent against Diamond.

Orders