Erni v Brooky - [2021] NZHC 1075

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2019-419-105

[2021] NZHC 1075

BETWEEN PETER MICHAEL ERNI AND BETTY MERLE ERNI
Plaintiffs

AND

KATRINA JEAN BROOKY

Defendant

Hearing: On the papers

Appearances:

J K Gilby-Todd & M D Branch for Plaintiffs K J Patterson for Defendant

Judgment:

13 May 2021

JUDGMENT OF PAUL DAVISON J

[Re: Costs]

This judgment was delivered by me on 13 May 2021 at 4:30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Harkness Henry, Hamilton Grantham Law, Hamilton

ERNI AND v BROOKY [2021] NZHC 1075 [13 May 2021]

Background

[1] The plaintiffs brought this proceeding against the defendant seeking to recover sums they had advanced to her as loans. The trial took place on 29 and 30 June 2020. By judgment dated 24 November 2020, I found for the plaintiffs and entered judgment in their favour in the sum of $574,009.37 together with interest and costs.1

[2] Counsel for the plaintiffs submits that as the successful party, at a minimum the plaintiffs are entitled to 2B costs together with reasonable disbursements. However counsel further submits that the plaintiffs’ costs should be uplifted on account of the defendant’s rejection of their two settlement offers. Counsel for the defendant accepts that the plaintiffs are entitled to 2B costs but submits that the Court should not uplift the costs above scale 2B costs.

Law

[3] Pursuant to r 14.6(3)(b)(v) of the High Court Rules 2016, the Court has the power to make an order for increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding, or step in it, by failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under r 14.10 or some other offer to settle or dispose of the proceeding. The offers made by the plaintiffs do not fall within the scope of r 14.10 but rather were “other offer[s] to settle or dispose of the proceeding”.2

[4] The Court of Appeal in Bradbury v Westpac Banking Corp said as regards the costs provisions in the High Court Rules that:3
The distinction among our three broad approaches: standard scale costs; increased costs; and indemnity costs may be summarised broadly:

(a)standard scale applies by default where cause is not shown to depart from it;

(b)increased costs may be ordered where there is failure by the paying party to act reasonably; and

1      Erni v Brooky [2020] NZHC 3116.
2      High Court Rules 2016, r 14.6(3)(b)(v).
3      Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] NZLR 400 at [27] and [28].

(c)indemnity costs may be ordered where that party has behaved either badly or very unreasonably.

[5] In relation to Calderbank offers, I note Asher J’s observations in Water Guard NZ Ltd v Midgen Enterprises Ltd:4

[17] A Calderbank offer can lead to cost consequences when it is vindicated by the quantum of damages…

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 Erni v Brooky

Details

AGLC: Erni v Brooky [2021] NZHC 1075
Case: [2021] NZHC 1075
Decision Date: 13 May 2021

CaseChat Overview and Summary

The plaintiffs, Peter Michael Erni and Betty Merle Erni, sought to recover sums advanced to the defendant, Katrina Jean Brooky, as loans. The court previously found in favour of the plaintiffs, ordering the defendant to pay $574,009.37 plus interest. The plaintiffs sought costs, arguing that the defendant unreasonably rejected their settlement offers. The defendant conceded entitlement to 2B costs but opposed any uplift on those costs. The court considered whether the defendant’s rejection of the settlement offers warranted an uplift in costs. The court found the defendant’s rejection unreasonable given the timing of the offers and the weakness of her case. The court ordered the defendant to pay the plaintiffs' costs on a 2B basis for steps taken before 10 March 2020, and a 50% uplift on 2B costs for steps taken thereafter, along with disbursements. The court also made an order for the defendant to pay the plaintiffs' costs of the proceeding.

Orders