Hepburn v Cunningham Contracts Limited - [2013] NZHC 2119

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-1308 [2013] NZHC 2119

BETWEEN HEPBURN & ORS Plaintiffs

AND

CUNNINGHAM CONTRACTS LIMITED & ANOR

Defendants

Hearing: On the papers

Counsel:

P H Bremer for Plaintiffs
F B Collins for Defendants

Judgment:

21 August 2013

JUDGMENT OF WILLIAMS J (COSTS)

[1] In my judgment of 15 February 2013 I awarded the plaintiffs damages of

$364,469.53 plus interest at 7.5 per cent per annum less 50 per cent in contributory negligence against the fourth defendant.1

[2] This amount is reduced because, prior to the hearing on 24 February 2012 following a judicial settlement conference the plaintiffs settled with the first and second defendants for $110,000. It is further reduced because, on 25 March 2013, the plaintiffs finalised a Financial Assistance Package (FAP) of $86,193.46 from the Crown under the Weathertight Homes Resolution Services Act 2006. As a result of these payments, the amount that Mr Cunningham is liable to pay turns on the calculation of interest on the damages awarded.

[3] In my judgment I invited the parties to file memoranda on:

1 Hepburn v Cunningham Contracts Ltd [2013] NZHC 210.

HEPBURN & ORS v CUNNINGHAM CONTRACTS LIMITED & ANOR [2013] NZHC 2119 [21 August
2013]

(a) apportionment of liability between the defendants; (b) interest on the award; and
(c) costs.

[4] I received memoranda from both parties in relation to those matters. The parties agreed that Mr Cunningham is liable for the sum remaining after the
$110,000 settlement payment and the FAP are deducted from the award of damages. In relation to interest on the award, the parties disagreed on the commencement date of interest, the rate of interest, and the portion of the award of damages that Mr Cunningham should be required to pay interest on.

[5] In relation to costs, the parties agreed that costs are to be calculated on a 2B Category basis, plus disbursements for experts. Both parties sought costs in relation to the proceedings.

Interest

[6] There are three issues here:

(a) commencement date of interest; (b) rate of interest per annum; and
(c) the portion of the award that Mr Cunningham should pay interest for.

[7] The principles in relation to interest are well settled. The discretion to award interest is to be exercised as the justice of the case requires.2 The ability to award interest enables the Court to properly compensate a plaintiff for his or her loss. An
award of interest is not intended to punish a defendant.3

2 Wilson & Horton Ltd v Attorney-General [1997] 2 NZLR 513 at 530; Day and Mead [1987]
2 NZLR 443 at 463.
3 Chen v Zhong HC Auckland CIV-2010-404-1995, 8 December 2011.

[8] In this case, the award of damages was made to compensate the plaintiffs for the cost of repair. The purpose of interest is to compensate the plaintiffs for the loss of the use of the money spent on repairs.

[9] The first issue is when interest on the award should commence.…

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.

Continue reading Hepburn v Cunningham Contracts Limited

Details

AGLC: Hepburn v Cunningham Contracts Limited [2013] NZHC 2119
Case: [2013] NZHC 2119
Decision Date: 21 August 2013

CaseChat Overview and Summary

Hepburn and others initiated legal proceedings against Cunningham Contracts Limited and another defendant, seeking damages for repair costs related to a property issue. The case was heard in the High Court of New Zealand, Wellington Registry. The primary legal issues revolved around the apportionment of liability between the defendants, the calculation of interest on the awarded damages, and the determination of costs. The court had to decide on the commencement date and rate of interest, and whether Cunningham should bear interest on certain amounts settled or covered by a Financial Assistance Package (FAP).

Regarding interest, the court considered the principles of compensating the plaintiffs for the loss of use of money spent on repairs. The court rejected the plaintiffs' argument for starting interest from the cause of action date and opted for a mid-point of repair work, 15 February 2012. The rate of interest was set at 5 per cent per annum as per the prescribed rate from 1 July 2011. Cunningham was found liable for interest amounting to $27,496.43, but after accounting for settlements and the FAP, he was not required to pay any amount.

On costs, the court acknowledged that the unsuccessful party typically pays the costs of the successful party but emphasized the importance of considering all relevant circumstances. The plaintiffs argued valid reasons for continuing the claim against Cunningham despite settlements and potential FAP payments. The court ruled that an award of costs against Cunningham was appropriate, considering the vindication of the plaintiffs' legal rights and the potential deterrence against future settlements or FAP claims if costs were awarded to Cunningham. The plaintiffs were awarded scale costs of $32,793 plus disbursements of $21,182.35.

Orders