General Finance Limited v Serepisos - [2017] NZHC 1367

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2016-485-835 [2017] NZHC 1367

BETWEEN
GENERAL FINANCE LIMITED

Plaintiff

AND

ALIKI SEREPISOS Defendant

On thepapers:

Counsel:

S O McAnally for the plaintiff
K R Smith for the defendant

Judgment:

21 June 2017

COSTS JUDGMENT OF ASSOCIATE JUDGE SMITH

Introduction

[1] On 13 April 2017 I entered summary judgment for the plaintiff

(General Finance) in the sum of $50,000.1 General Finance had claimed a total of

$294,667.59, being the balance of advances made to Ms Serepisos, interest and costs. In my judgment, I found that Ms Serepisos had an arguable defence under s 176 of the Property Law Act 2007 (mortgagee’s duty to take reasonable care to obtain the best price reasonably obtainable on a sale of the security), to the extent that the claim exceeded the sum of $50,000. I entered summary judgment for the
$50,000, and directed that if counsel could not agree on costs, memoranda could be filed.

[2] Counsel have both filed memoranda on costs, and I now give judgment on that issue.

1 General Finance Ltd v Serepisos [2017] NZHC 749.

Counsel’s submissions

[3] For General Finance, Mr McAnally submits that his client was substantially successful with its summary judgment application. Of the four issues raised by Ms Serepisos, three were dismissed, and the court entered judgment on the fourth for part of the amount claimed.

[4] Mr McAnally submits that General Finance is entitled to indemnity costs under cl 7(f) of the relevant Term Loan Agreement, under which Ms Serepisos agreed to pay on demand:

All sums expended by the lender in the exercise of the lender’s rights and powers following a default or in exercising or enforcing or attempting to exercise or enforce any power, right or remedy contained or implied in this contract.

[5] General Finance relies on r 14.6(4)(e) of the High Court Rules 2016, which permits the court to award indemnity costs if the contract between the parties so provides.

[6] General Finance claims a total of $30,475.93 (including disbursements and GST) under that clause. The actual legal costs claimed are $23,810.00. The balance of the claim is made up of GST and disbursements. As a finance company, General Finance does not have the benefit of input credits on its legal costs; hence the GST is included within its claim. Mr McAnally produced a breakdown of his firm’s time transactions for the period from 29 August 2016 to 21 April 2017, together with copies of the firm’s nine invoices rendered in respect of the matter to date.

[7] The overarching question for the court asked to make such an order is: “for the necessary steps, are the costs claimed reasonable in amount?”.2

[8] Mr McAnally submits that there is no basis to question the reasonableness of

Keegan Alexander’s fees relating to some sixty three hours of time spent over an

2 Black v ASB Bank Ltd [2012] NZCA 384 at [77]–[99].

eight month period by a staff solicitor at an hourly…

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: [2017] NZHC 1367
Decision Date: 21 June 2017

CaseChat Overview and Summary

The High Court of New Zealand considered the matter of General Finance Limited versus Aliki Serepisos. General Finance claimed a balance of $294,667.59 from Ms Serepisos, which included advances, interest, and costs. The court entered summary judgment for General Finance in the sum of $50,000, finding that Ms Serepisos had an arguable defence under the Property Law Act 2007. The court now considered the issue of costs, with General Finance seeking indemnity costs under the relevant Term Loan Agreement and the High Court Rules 2016. General Finance claimed a total of $30,475.93 for legal costs, disbursements, and GST.

The legal issues before the court involved whether General Finance was entitled to indemnity costs, and if the costs claimed were reasonable. General Finance argued that it was substantially successful with its summary judgment application and that its claimed costs were reasonable. Ms Serepisos argued that the appropriate course was to reserve costs or for each party to meet its own costs, as each had enjoyed a measure of success. The court had to determine whether the costs claimed by General Finance were reasonable and if indemnity costs were applicable.

The court decided to reserve the issue of costs on the summary judgment application. The court found that General Finance was not substantially successful, as it had only recovered approximately one-sixth of the amount claimed. The court considered that if General Finance were to recover only the amount for which the judgment had been entered, there might be some discount from the costs which would otherwise be awarded. The court found that reserving costs was the fairest course, as it would allow for the costs to be fixed with full knowledge of General Finance's ultimate recovery. The court also noted that even if General Finance relied on a costs indemnity clause, there remained a possibility that it may have claimed more than it was entitled to recover, and it must be a question as to whether the costs claimed were reasonable.

The court made no final orders regarding costs at this stage, reserving the issue until further knowledge of General Finance's ultimate recovery.

Orders