George Grant Engineering Limited v Fabrication & Pipe Services Limited - [2021] NZHC 2032

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2020-419-000123

[2021] NZHC 2032

BETWEEN GEORGE GRANT ENGINEERING LIMITED
Plaintiff

AND

FABRICATION & PIPE SERVICES LIMITED

Defendant

Hearing: On the papers

Counsel:

T J P Bowler for Plaintiff

V Whitfield and M J Meier for Defendant

Judgment:

6 August 2021

COSTS JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 6 August 2021 at 3.30 pm
pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar Date………………………

GEORGE GRANT ENGINEERING LTD v FABRICATION & PIPE SERVICES LTD [2021] NZHC 2032 [6
August 2021]

Introduction

[1] In my substantive judgment of 2 June 2021,1 concerning applications for summary judgment from each of the plaintiff, George Grant Engineering (GGE), and defendant, Fabrication & Pipe Services Limited (FPS), I:

(a)dismissed GGE’s application for summary judgment; and

(b)granted summary judgment on the FPS’s application, dismissing the proceedings in their entirety.

FPS now seeks increased costs of $40,656.03 plus disbursements.

[3] GGE opposes any increase and contends the Court should award usual 2B scale costs, in the sum of $10,038.00.

Relevant legal principles

[4] In accordance with Part 14 of the High Court Rules 2016, the party who fails with respect to a proceeding should pay costs to the party who succeeds.2 An award of costs should reflect the complexity and significance of the proceeding3 and costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding.4

[5] The Court of Appeal summarised the approach to standard scale costs, increased costs and indemnity costs in Bradbury v Westpac Banking Corporation:5

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

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

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

1      George Grant Engineering Ltd v Fabrication & Pipe Services Ltd [2021] NZHC 1281.
2      High Court Rules 2016, r 14.2(1)(a).
3      High Court Rules 2016, r 14.2.(1)(b).
4      High Court Rules 2016, r 14.2(a)(c).
5      Bradbury v Westpac Banking Corporation [2009] 3 NZLR 400, (2009) 19 PRNZ 385 (CA) at [27].

[6] A Court may award increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding by taking or pursuing an unnecessary step or an argument that lacks merit.6

Decision

Scale costs

[7] FPS has advised that its actual costs are $40,656.03 and properly accepts that the Court cannot award an amount of costs that exceed that sum.7

[8] FPS seeks an uplift of 25 per cent on its calculation of scale costs. It provides a schedule of costs calculations that totals $34,655.00.

[9] I accept GGE’s submission that there is a clear element of duplication in these essentially parallel summary judgment applications. Some discount…

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

AGLC: George Grant Engineering Limited v Fabrication & Pipe Services Limited [2021] NZHC 2032
Case: [2021] NZHC 2032
Decision Date: 6 August 2021

CaseChat Overview and Summary

In the High Court of New Zealand, George Grant Engineering Limited (GGE) and Fabrication & Pipe Services Limited (FPS) were involved in a dispute over costs associated with a previous litigation. The matter was heard by Associate Judge P J Andrew, who delivered a costs judgment on 6 August 2021. FPS sought increased costs of $40,656.03 plus disbursements, while GGE opposed any increase and contended that the Court should award usual 2B scale costs of $10,038.00. The central legal issues revolved around the principles governing costs awards, including standard scale, increased costs, and indemnity costs, as outlined in the High Court Rules 2016 and previous case law.

The court considered the principles for awarding costs, particularly focusing on the circumstances where a party fails to act reasonably, which could justify an increased costs award. The court found that GGE's application for summary judgment was unreasonable, given that FPS had clearly outlined the factual dispute and the basis for denying liability well before the proceedings began. The court also noted that GGE did not adequately address the terms of trade which were crucial to FPS’s defence. The court determined that FPS was entitled to a 50 per cent uplift on the base scale figure, resulting in a total costs award of $28,373.04, along with disbursements of $38.00.

Associate Judge P J Andrew concluded that while GGE's conduct warranted an increased costs award, it did not meet the threshold for an indemnity costs award. Consequently, GGE was ordered to pay $28,373.04 in costs to FPS, together with the disbursements. This decision underscored the importance of reasonable conduct in litigation and the consequences of pursuing unsuitable claims.

Orders