Herd v Haines
[2019] NZHC 795
•12 April 2019
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE
CIV-2014-488-187
[2019] NZHC 795
BETWEEN ROBERT JOHN HERD
First Plaintiff
RHUMBA HOLDINGS LIMITED
Second PlaintiffAND
RODNEY DAVID HAINES
and
KATHLEEN ANNE NORMANDefendants
Hearing: On the papers Appearances:
J W Maassen for Plaintiffs
N W Gedye and R C Mark for Defendants
Judgment:
12 April 2019
JUDGMENT OF LANG J
[as to quantum of judgment and costs]
This judgment was delivered by me on 12 April 2019 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date……………
HERD v HAINES [2019] NZHC 795 [12 April 2019]
[1] This judgment deals with the two issues that remain outstanding in this proceeding so far as I am concerned. They relate to the quantum for which judgment should be entered and costs in relation to all steps taken in the proceeding other than the pre-trial hearing conducted by Associate Judge Bell during the week prior to the commencement of the trial. The costs payable in relation to that hearing are to be determined by the Associate Judge.
Quantum of judgment
[2]Mr Mark for the plaintiffs seeks judgment in favour of his clients as follows:
(a)AUD$240,000 plus interest under s 87 Judicature Act 1908 from 26 September 2013 to 5 March 2019 (1986 days) at five per cent per annum amounting to AU$65,559.76 - a total of AU$306,539.76;
(b)AUD$40,000 plus interest under s 87 Judicature Act 1908 from 26 September 2013 to 5 March 2019 (1986 days) at five per cent per annum amounting to AUD$10,882.19 - a total of AUD$50,882.19;
(c)Valuation costs under clause 9.7(c) –
(i) AUD$1,200;
(ii) NZD$747.50;
(iii) Marsden Cove Boatbuilders Invoice NZD$11,053.23;
(d)Common law damages amounting to NZD$352,595.84 plus interest under s 87 Judicature Act 1908 to the date of judgment of NZD$62,446.55 – a total of NZD$415,042.39.
[3] Counsel for the defendants has not responded regarding the issue of quantum. I therefore infer that the defendants take no issue with the quantum sought by the plaintiffs.
[4] By my calculations the sum of the two figures referred to above at [2](a) is AUD$305,559.76. With that exception I consider the amounts for which the plaintiffs seek judgment correspond with the determinations contained in my substantive judgment. I therefore direct that judgment is to be entered in favour of the plaintiffs against the defendants as sought at para 9(a) to (d) of the memorandum of counsel for the plaintiffs dated 2 April 2019 but amending the figure relating to the claim for AUD$240,000 in accordance with my calculations.
Costs
[5] The plaintiffs seek costs on a category 2B basis amounting to $61,274 as itemised at para 3 of the memorandum of counsel for the plaintiffs dated 22 March 2019. The plaintiffs also seek disbursements (including expert witnesses’ fees) amounting to $49,244.63.
[6] In addition, the plaintiffs seek increased costs to reflect the late challenge by the defendants to aspects of the plaintiffs’ evidence. That issue will be dealt with by Associate Judge Bell, who heard that challenge during the week prior to the commencement of the trial.
[7] The plaintiffs also seek increased costs on the basis that the defendants unreasonably failed to respond to offers of settlement made by the plaintiffs on 7 December 2018 and 23 January 2019. The plaintiffs submit that costs should be increased by 25 per cent to reflect these factors.
[8] Finally, the plaintiffs seek costs in relation to the unsuccessful challenge by the defendant to the jurisdiction of the Courts of New Zealand to hear the proceeding. The defendants initially succeeded in relation to this issue before the Associate Judge,1 but the Associate Judge’s decision was reversed on review by Duffy J.2 The defendants then unsuccessfully sought leave from Duffy J to appeal to the Court of Appeal against her decision.3 The plaintiffs seek costs on a category 2B basis together with disbursements in relation to this issue. The costs sought are itemised in paragraph 13
1 Haines v Herd [2015] NZHC 3365.
2 Haines v Herd [2016] NZHC 1928.
3 Haines v Herd [2016] NZHC 3193.
of the memorandum of counsel for the plaintiffs dated 22 March 2019. In total, the plaintiffs seek costs under this head of $14,217.20 together with disbursements of
$556.70.
The defendants’ response
[9] Issues raised by counsel for the defendants in response to the plaintiffs’ submissions are as follows:
(a)Costs should be awarded on a category 2B basis, with no increase as sought by the plaintiffs.
(b)No allowance should be made for second counsel at the trial.
(c)The Court should not allow as a disbursement the invoices rendered by Professor Corrin, the expert witness called by the plaintiffs in relation to the law of Vanuatu.
(d)The plaintiffs have not made any allowance for GST in their costs calculations.
(e)There is likely to be an element of double-counting in relation to costs relating to research of Vanuatu law.
Increased costs?
[10] I agree that costs should be awarded on a category 2B basis because the proceeding was one of average complexity requiring counsel of skill and experience considered average in the High Court. I do not take the plaintiffs to disagree with this proposition.
[11] I do not consider an award of increased costs is justified on the ground that the defendants unreasonably failed to respond to offers of settlement made by the plaintiffs prior to the commencement of the proceeding. The fact that a party ultimately fails at trial does not mean he or she will have acted unreasonably in rejecting or failing to respond to a settlement offer prior to trial. In the present case I consider that all of the
issues that went to trial were contestable, including the issue relating to the admissibility of contracts on which stamp duty had not been paid in Vanuatu. Furthermore, the nature of the obligations Mr Herd assumed under the second contract was central to the plaintiffs’ success and this issue was clearly contestable. I therefore consider the defendants were justified in taking the matter to trial and did not act unreasonably in refusing to respond to pre-trial offers of settlement.
Allowance for second counsel
[12] Mr Mark has acted as the plaintiffs’ solicitor from the outset. He also led evidence at trial from some of the witnesses. I consider the factual matrix of the case was sufficiently complex that his presence at trial was necessary and should be reflected in an award of costs.
Professor Corrin’s invoices
[13] The defendants contend that the evidence given by Professor Corrin was not substantially helpful because it related to matters of law that were for the Court to determine in the same way as judges of this Court sit on appellate courts in Vanuatu. I disagree. It was necessary for the plaintiffs to adduce evidence of Vanuatu law because the Court cannot take judicial notice of the law of another country. That is a factual matter and must be proved accordingly.
[14] I consider Professor Corrin’s evidence relating to the approach taken in Vanuatu to the interpretation of contracts was substantially helpful and I relied on it in relation to several issues in my judgment. I am therefore satisfied the disbursements claimed in relation to Professor Corrin’s evidence should be permitted.
Allowance for GST
[15] Mr Maassen has raised a concern that the plaintiffs have made no allowance for the impact of GST, and this may affect the disbursements they have claimed by 15 per cent.
[16] Mr Mark responds to this point by confirming his clients have incurred and paid the disbursements in their personal capacities and they are not registered for GST.
It follows that they have not been able to claim input tax in relation to the disbursements they have paid.
[17]I consider Mr Mark’s response answers the concern raised by Mr Maassen.
Double-counting for research
[18] Mr Maassen notes that, in their submissions relating to the pre-trial hearing before the Associate Judge, the plaintiffs have sought costs for the time and expense involved in urgently researching Vanuatu law. He submits that such research also related to arguments advanced by the plaintiffs in the substantive hearing. He is concerned that the plaintiffs may be seeking to obtain an award of costs for the same item twice.
[19] I will leave it to counsel to address this issue in the submissions they file in relation to the pre-trial challenge heard by the Associate Judge Bell.
Leave reserved
[20] I believe I have dealt with all of the issues that both counsel have raised but I reserve leave for counsel to file further memoranda if they consider I have omitted to deal with an issue or argument raised in the memoranda filed to date.
Lang J
Solicitors:
Wadham Partners, Palmerston North Counsel:
N Gedye QC, Barrister, Auckland R C Mark, Barrister, Kerikeri
J Maassen, Barrister,
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