Grenadier Real Estate Limited v Henwood HC Auckland CIV 2009-404-2198

[2010] NZHC 989

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-002198

BETWEEN  GRENADIER REAL ESTATE LIMITED Appellant

ANDMATTHEW JOHN HENWOOD AND ROBYN JANICE HENWOOD Respondents

Hearing:         25 June 2010 (On the Papers)

Appearances: J A K Waymouth for the Appellant

I D Matheson for the Respondents

Judgment:      25 June 2010

JUDGMENT OF DUFFY J [Re Costs]

This judgment was delivered by Justice Duffy on 25 June 2010 at 4.00 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Counsel:     J A K Waymouth P O Box 32457 Devonport North Shore City 0744 for the

Appellant

Solicitors:   Reeves   Middleton   Young   Private   Bag   2031   New   Plymouth   Central

New Plymouth 4342 for the Respondents

Copy To:     S M Stodart P O Box 302690 North Harbour North Shore City 0751

GRENADIER REAL ESTATE LTD V HENWOOD AND HENWOOD HC AK CIV-2009-404-002198  25 June

2010

[1]      The respondents, who were successful in the appeal, seek costs.

[2]      On a 2B basis, scale costs for a one day appeal work out at $3,520.  There are also disbursements for travel, case research and photocopying etcetera amounting to

$505.45.  This is a case where the respondents’ counsel was obliged to travel from

New Plymouth for the hearing.

[3]      The respondents have provided invoices which reveal that the actual costs in relation to the appeal are about $7,500, including GST and disbursements.   They argue that the litigation was misconceived from the start, and that actual costs should be awarded.

[4]      Apart  from  those  circumstances  falling  within  the  specific  situations expressed in HR 14.6.03, indemnity costs are rarely awarded: see Prebble v Awatere Huata (No 2) [2005] NZSC 18, [2005] 2 NZLR 467 at [6]; and Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400 at [28]. In this case, the respondents have failed to identify with any particularity the ground in r 14.6.04 on which they rely. It seems to me that the substance of the argument they make is that the appellant’s case was in the “hopeless” category. However, that category is applied to circumstances where the allegations should never have been made, or one side unduly prolongs a case by groundless contentions. In this case, whilst the appellant’s argument failed, it does not follow that the argument should not have been made at all. Indeed, the basis of the appeal being allowed was different from that which resulted in the District Court finding in the respondent’s favour.

[5]      From my reading of the respondents’ memorandum, I cannot see a basis for awarding indemnity costs.  As for increasing the costs award above the scale, this is set out in HR 14.6.03.  Holdfast NZ Ltd v Selleys PTY Ltd (2005) 17 PRNZ 897 (CA) sets out a four step approach.  It is:

a)        Categorisation of the proceeding under r 14.3;

b)Identifying a reasonable time for each step in the proceeding under r 14.5;

c)       As part of the step two exercise, a party can under r 14.6(3)(a) apply for extra time for a particular step; and

d)The applicant for costs should step back and look at the costs award it could be entitled to at this point.   If it considers it can argue for additional costs under r 14.6(3)(b), it should do so, but any increase above 50 per cent on the costs produced by steps one and two is unlikely, given that the daily recovery rate is two-thirds of the daily rate considered reasonable for the particular proceedings.

[6]      The respondents have not expressed their application for costs in terms of the

Holdfast approach.

[7]      Given their success, the respondents are entitled to costs.  But in view of the way in which the application for costs is framed, I can see no basis for an award beyond scale 2B.  The respondents are also entitled to the disbursements they seek.

Duffy J