Forivermor Limited v ANZ National Bank Limited

[2014] NZHC 1453

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-00072 [2014] NZHC 1453

BETWEEN

FORIVERMOR LIMITED

Plaintiff

AND

ANZ NATIONAL BANK LIMITED Defendant

On the papers
Counsel:	G J Thwaite for Plaintiff C T Walker for Defendant
Judgment:	26 June 2014

JUDGMENT OF GODDARD J AS TO COSTS

This judgment was delivered by me on 26 June 2014 at 11.00 am, pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Gilbert Walker, Auckland for Defendant

FORIVERMOR LIMITED v ANZ NATIONAL BANK LIMITED [2014] NZHC 1453 [26 June 2014]

[1]      On 31 October 2012, I entered judgment in favour of the defendant, ANZ Bank New Zealand Limited (ANZ), in respect of nine causes of action brought by the plaintiff, Forivermor Limited (Forivermor).

[2]      Following  the  issue  of  judgment, ANZ  sought  costs  against  Forivermor, having failed to resolve the issue of costs with Forivermor by agreement prior to trial in terms of a Calderbank letter sent to Forivermor’s counsel on 26 June 2012.

[3]      On the basis of matters outlined in that Calderbank letter and the terms of the offer  of  settlement  therein  made  (including  a  financing  package  containing significant discounts to market interest rates, which would have enabled Mr and Mrs Morley to purchase a new farm), ANZ sought a 50 per cent uplift on scale costs.

[4]      In support of the 50 per cent uplift, counsel for ANZ submitted that:

Forivermor acted unreasonably in rejecting ANZ’s offer.  The explanations in the letter as to why Forivermor’s claim would fail correspond to the reasoning in Your Honour’s decision.  The offer was made at the same time that ANZ served its evidence, which allowed Forivermor to make a fully informed and accurate assessment of its prospects.  Nevertheless, Forivermor chose  to  press  ahead  with  a  hopeless  claim,  causing ANZ  to  incur  the significant expenses associated with a four day trial.

[5]      In  submissions  filed  in  response,  counsel  for  Forivermor  countered  by pointing to  the loss  which Forivermor  had  suffered  directly and  which  Mr and Mrs Morley suffered consequently, and which counsel reasserted had originated with ANZ.  In a lengthy memorandum, counsel essentially reiterated passages from the evidence at trial upon which Forivermor had unsuccessfully relied and repeated the allegations made in the numerous versions of the statement of claim.  Further advice was that the judgment laid the basis for a good faith appeal to the Court of Appeal and possibly to the Supreme Court as well, for the purpose of defining a bank’s obligations in “boom time”.  Exploration of a bank’s potential liability was advanced as a matter of public interest which justified the Court exercising its discretion to decline to make any order for costs in favour of ANZ.

[6]      In the event, no award of costs was made by me at that time.

[7]      On 7 April 2014, the Court of Appeal dismissed Forivermor’s appeal, which had been advanced on the same grounds as the nine causes of action pleaded in this Court.  On dismissal of the appeal the Court of Appeal made an award of costs in favour of ANZ on a band A basis with a 50 per cent uplift plus usual disbursements.

[8]      ANZ has renewed its application for an award of costs in this Court.

Conclusion

[9]      There  is  no  basis  for  the  Court  exercising  its  discretion  to  decline  to make an award of costs following the entry of judgment in favour of ANZ  on

31 October 2012.

[10]     Accordingly, costs are awarded in this Court in favour of ANZ on a 2B basis, together with the costs of second counsel at trial, together with a 50 per cent uplift plus disbursements.

Goddard J