DKMK Limited v Skibo Limited - [2020] NZHC 3293

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

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

CIV-2020-488-38

[2020] NZHC 3293

BETWEEN
DKMK LIMITED

Plaintiff

AND

SKIBO LIMITED

First Defendant

ALLAN JOHN GRAY

Second Defendant

Hearing: On the papers

Counsel:

S Davies-Colley for the Plaintiff P R Cogswell for the Defendants

Judgment:

15 December 2020

JUDGMENT OF GAULT J

(Costs)

This judgment was delivered by me on 15 December 2020 at 10:00 am pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

Solicitors:
Mr S Davies-Colley and Mr D P Adams, WRMK, Whangarei Mr P R Cogswell, Cogswell Law, Auckland

DKMK LTD v SKIBO LTD [2020] NZHC 3293 [15 December 2020]

[1] On 14 September 2020 I made orders by consent resolving the plaintiff’s claim in relation to the provision of financial information and contractual restrictions on the first defendant.1

[2] In relation to costs, by consent, I made an order requiring the first defendant to pay all of the plaintiff’s actual and reasonable costs (legal, accounting and otherwise) incurred in relation to attempts to obtain and assess information. I made timetable directions by consent for costs memoranda (or affidavits if necessary) to be filed and served and for costs to be determined on the papers.

[3] As a preliminary point, Mr Davies-Colley, for the plaintiff, submits that at the hearing on 14 September 2020 it was agreed that the costs award should be made against the second defendant or, at least, jointly and severally against both defendants. Mr Cogswell, for the defendants, submits that is incorrect. As I made the orders on 14 September 2020 by consent, it would not be appropriate to vary the order now given the defendants’ opposition.

Approach to actual and reasonable costs

[4] It is common ground that the approach to costs on an indemnity, solicitor/client or actual and reasonable basis where a party is entitled to such under a contract is that effect should be given to such an entitlement, subject to an assessment of the reasonableness of the costs claimed. In Black v ASB Bank Ltd the Court of Appeal said:2
[77] As this Court held in Frater Williams & Co Ltd v Australian Guarantee Corporation (NZ) Ltd,³ where there is a contractual right to indemnity costs the question for the Court asked to make an order is: for the necessary steps, are the costs claimed reasonable in amount? That is because r 14.6(1)(b) permits the Court to order payment of costs “reasonably incurred”. It follows from the wording of r 14.6(1)(b) that indemnity costs are determined with reference to actual costs, but may be less than the actual costs if the Court considers the actual costs were not reasonably incurred.

…

1      DKMK Ltd v SKIBO Ltd HC Auckland CIV-2020-488-38, Minute / Orders 14 September 2020.
2      Black v ASB Bank Ltd [2012] NZCA 384.
3      Frater Williams & Co Ltd v Australian Guarantee Corp (NZ) Ltd (1994) 2 NZ ConvC 191,873 (CA) at…

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 3293
Decision Date: 15 December 2020

CaseChat Overview and Summary

DKMK Limited brought proceedings against Skibo Limited, with Allan John Gray as the second defendant, in the High Court of New Zealand, Whangarei Registry. The dispute centred on the provision of financial information and contractual restrictions imposed on Skibo Limited. The court was tasked with determining the costs incurred by DKMK Limited in obtaining and assessing this information, as well as resolving the issue of whether the costs should be borne by the first defendant or jointly by both defendants.

The legal issues included whether the costs claimed by DKMK Limited were reasonable and related to the attempts to obtain and assess information. The court had to assess whether the costs claimed were within the scope of the contractual indemnity and whether they were reasonably incurred. The court also had to consider whether there should be an additional award for costs on costs, which refers to the costs incurred by DKMK Limited in justifying the reasonableness of their claims.

Gault J reviewed the submissions and evidence presented. The court accepted that the costs claimed by DKMK Limited were reasonable and related to the attempts to obtain and assess information. The court rejected the defendants' objections to certain costs, including those for independent counsel and the costs on costs. The court determined that the first defendant, Skibo Limited, was responsible for paying the plaintiff's actual and reasonable costs of $80,514.23 incurred in relation to attempts to obtain and assess information.

The court's final order was that the first defendant, Skibo Limited, is to pay the plaintiff's actual and reasonable costs of $80,514.23 incurred in relation to attempts to obtain and assess information. The court did not find it appropriate to award additional costs on costs.

Orders