Downer v Signature Developments Limited - [2020] NZHC 3157

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2019-404-000544

[2020] NZHC 3157

BETWEEN
MALCOLM ROBERT DOWNER

Plaintiff

AND

SIGNATURE DEVELOPMENTS LIMITED

Defendant

Hearing: On the papers

Counsel:

M J W Lenihan for the Plaintiff

R Amaranathan for the Defendant

Judgment:

30 November 2020

COSTS JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 30 November 2020 at 3.30pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:
Alan Jones Law Limited, Auckland M J W Lenihan, Barrister, Auckland Rice Craig, Papakura

DOWNER v SIGNATURE DEVELOPMENTS LIMITED (Costs Judgment] [2020] NZHC 3157 [30 November 2020]

Introduction

[1] On 23 September 2020, I delivered judgment in these proceedings in favour of the plaintiff, Mr Downer.1 I held that:

(a)The defendant, Signature Developments Ltd (Signature), breached an essential term of an agreement for sale and purchase (ASP) it entered into with Mr Downer;

(b)Mr Downer was entitled to cancel the ASP in accordance with s 37 of the Contract and Commercial Law Act 2017 (CCL Act); and

(c)Mr Downer was entitled to be repaid the sum of his deposit advanced under the ASP, $466,000.00, and made orders as such.

[2] In accordance with directions in my judgment, Mr Lenihan filed a memorandum seeking costs on behalf of Mr Downer and Ms Amaranathan filed a memorandum in reply.

[3] Mr Downer seeks 2B costs of $40,133.00 together with an uplift of 30 per cent, totalling $52,172.90, as well as disbursements of $3,109.51 (excluding GST).

[4] Ms Amaranathan does not dispute that costs should be awarded on a 2B basis or Mr Lenihan’s calculation of costs on that basis. She submits, however, that an uplift on scale costs is not warranted.

The parties’ positions

Submissions for Mr Downer

[5] Mr Lenihan submits that a 30 per cent increase on scale costs is warranted in accordance with r 14.6(3)(b)(ii) of the High Court Rules 2016 because Signature pursued a position lacking in merit.

1 Downer v Signature Developments Ltd [2020] NZHC 2488.

[6] Mr Lenihan refers to a letter dated 19 March 2019 from Mr Downer’s solicitors to Signature’s solicitors which put Signature on notice that proceedings would be instituted if it did not return Mr Downer’s deposit. Mr Lenihan says the letter recorded that, in a letter dated 1 March 2019 to Mr Downer’s solicitor, Signature’s solicitor did not deny propositions put by Mr Downer’s solicitors in an earlier letter that:

(a)Signature was under no obligation under the Property Law Act 2007 (PLA) to assign the Agreement to Lease to Pukekohe Educare Ltd. The situation arose through clear error on the part of Signature’s solicitor;

(b)Signature breached cl 26 of the ASP;

(c)Signature breached its duties under the ASP as a constructive trustee for failing to consult with Mr Downer about either the assignment of the Agreement to Lease (ATL) or the terms of the Deed of Lease;

(d)Signature’s solicitor had a number of conflicts of…

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 Downer v Signature Developments Limited

Details

AGLC: Downer v Signature Developments Limited [2020] NZHC 3157
Case: [2020] NZHC 3157
Decision Date: 30 November 2020

CaseChat Overview and Summary

Downer v Signature Developments Limited [2020] NZHC 3157 involved a dispute between Malcolm Robert Downer, the plaintiff, and Signature Developments Limited, the defendant. The case centred on a breach of an agreement for sale and purchase (ASP) between the parties, with Mr Downer seeking a refund of his deposit and the costs associated with the litigation. The High Court of New Zealand was tasked with determining whether Signature Developments Limited had breached the agreement and, if so, whether costs should be awarded to Mr Downer on an increased basis.

The primary legal issues in this case were whether Signature Developments Limited had breached an essential term of the ASP and whether Mr Downer was entitled to cancel the agreement and reclaim his deposit. Additionally, the court had to decide if Signature Developments Limited's conduct warranted an increase in costs beyond the standard 2B costs.

The court ruled in favour of Mr Downer, finding that Signature Developments Limited had indeed breached an essential term of the ASP by assigning the Agreement to Lease (ATL) without Mr Downer's approval. The court held that Mr Downer was entitled to cancel the agreement and reclaim his deposit. The court also found that Signature Developments Limited's conduct during the litigation was lacking in merit, particularly in its assertion that the identity of the tenant was not an essential term of the agreement. The court was satisfied that Signature Developments Limited had pursued an argument that was inherently unlikely to succeed and had failed to accept Mr Downer's legal arguments without reasonable justification.

Given these findings, the court awarded Mr Downer 2B costs of $40,133.00, with a 30 per cent uplift, totaling $52,172.90, along with disbursements of $3,575.94 including GST. The court concluded that an increase in costs was appropriate due to Signature Developments Limited's conduct throughout the litigation.

Orders