George Grant Engineering Limited v Fabrication & Pipe Services Limited
[2021] NZHC 2032
•6 August 2021
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
PlaintiffAND
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 needs to be given for that factor.
[10] I also accept that some amendments need to be made to the calculations in the FPS’s Schedule 1. One day should be allowed for item 30 (preparation of affidavits), one day for item 32 (preparation for hearing), and a half-day for item 34 (the hearing, which concluded before lunch on 11 May 2021).
[11] I also decline to make any allowance for the preparation of the written submissions on costs (item 36). As van Bohemen J held in Khurana Trustee Ltd v Castle Backpacker K Road Ltd, while the Court has power to award such costs, this is unusual and a court is reluctant to do so.8 The circumstances here do not warrant departure from that usual position.
[12] In making those various deductions, that gives a starting point 2B calculation of $28,231.87.
6 High Court Rules 2016, r 14.6(3)(b).
7 As provided in High Court Rules 2016, r 14.2(1)(f).
8 Khurana Trustee Ltd v Castle Backpacker K Road Ltd [2021] NZHC 1315 at [61], citing Epsom Woods Ltd v Waitakere Farms Ltd [2020] NZHC 3137 at [4] and Combined Property Maintenance Ltd v Singh [2021] NZHC 621.
[13] I then find that there should be a one-third deduction to take into account the fact that there is some significant duplication involved in this case given the substantial overlap in the issues between the competing applications. That then leaves a figure of
$18,915.36.
Should I award an increase?
[14] I accept the submission of Ms Whitfield, for the defendant, that GGE acted improperly in commencing and pursuing its summary judgment application in circumstances where it was reasonably clear from the outset that its case was unsuitable for summary judgment. In terms of r 14.6, GGE acted unreasonably.
[15] FPS sent GGE a letter, some five months before the proceedings were commenced, that detailed the grounds on which FPS denied liability and provided an affidavit (from Mr Nildo Siqueira) that confirmed the factual dispute in relation to events that occurred on site and on which the GGE had based its claim.
[16] When the FPS received the summary judgment application, it gave notice to GGE of the factual dispute and clearly particularised why summary judgment was inappropriate. GGE had the opportunity to withdraw its summary judgment application at this point.
[17] Furthermore, GGE’s pleadings and summary judgment application and supporting affidavits did not mention the FPS’s reliance on the terms of trade and the defendant’s position based on those terms of trade. As Ms Whitfield submitted, the plaintiff had a duty to disclose in its affidavit any facts it was aware could amount to a defence.9 The terms of trade were ultimately decisive in my determination to grant the defendant’s application for summary judgment.
[18] In these circumstances, I find that the defendant should be awarded a 50 per cent uplift on the base scale figure of $18,915.36. That results in a total costs award of $28,373.04.
9 Comalco-CWH Aluminium v Chapman (1992) 5 PRNZ 382 (HC) at 384.
[19] I am not prepared to make an award of $40,656.03 which, in substance would be an award of indemnity costs. While I find there is clear cause justifying an increased costs award,10 GGE does not meet the threshold of “flagrant” misconduct justifying an award of indemnity costs.11
Result
[20] I order that the plaintiff, George Grant Engineering Ltd, is to pay costs to the defendant, Fabrication & Pipe Services Ltd, in the sum of $28,373.04, together with disbursements as sought in the sum of $38.00.
Associate Judge P J Andrew
10 Bradbury v Westpac Banking Corporation, above n 4, at [28].
11 Bradbury v Westpac Banking Corporation, above n 4, at [28], citing Prebble v Huata [2005] 2 NZLR 467; (2005) 17 PRNZ 581 (SC) at [6].
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