Honey Bees Preschools Limited v 127 Hobson Street Limited

[2015] NZHC 821

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2014-404-722 [2015] NZHC 821

BETWEEN

HONEY BEES PRESCHOOLS LIMITED

Plaintiff

AND

127 HOBSON STREET LIMITED Defendant

Hearing:	On Papers
Counsel:	S S Khan and C M Fisher for Plaintiff R M Dillon for Defendant
Judgment:	23 April 2015

COST JUDGMENT OF BROWN J

[1]      In my judgment dated 25 November 20141  I found in favour of the plaintiff both on its claim and on the defendant’s counterclaim.  I recorded the preliminary view that the plaintiff would be entitled to costs on a 2B basis.

[2]      The calculation of costs on a 2B basis totals $36,317.50.  So far as scale costs are concerned, in its memorandum of 22 December 2014 the defendant records that the only issue which it takes with a 2B calculation is the inclusion of provision for second counsel.   It submits that by definition this was not a complex or unduly difficult matter, involving only three witnesses in total.

[3]      I do not accept the defendant’s submission.   I consider that the proceeding was not uncomplicated and a significant contribution by counsel was required at the hearing, in particular following the production of new documents from a subpoenaed

witness.  It is appropriate, in my view, to certify for second counsel.

1      Honey Bees Preschools Ltd v 127 Hobson Street Ltd [2014] NZHC 2942.

[4]      However Mr Dillon also takes issue with the inclusion of taxi costs in the disbursements for which approval is sought.   I agree with Mr Dillon that the taxi fares and courier charge should not be included.

[5]      The  plaintiff  seeks  increased  costs  in  reliance  on  its  written  offer  of

2 September 2014, invoking HCRs 14.10 and 14.11.   Mr Khan contends that the offer of 2 September 2014 was significantly more beneficial to the defendant than the judgment of 25 November 2014.  He submits that the offer was reasonable and was made at a time when the defendant was well able to assess the merits of the plaintiff’s claim (the plaintiff having filed full affidavits for the interim injunction application) and well prior to the hearing (some six weeks in advance of the hearing and prior to preparation of briefs of evidence).

[6]      In resisting increased costs Mr Dillon submits that for a settlement offer to be reasonable it should address the matters in dispute and resolve them.  He argues that the offer made did not resolve anything and would have allowed the immediate issue of a further Property Law Act Notice.  The offer addressed the sum held in Court but did not address the quantum issue or the deposit issue.

[7]      I do not accept that analysis of the situation.  The offer of 2 September 2014 proposed that both the claim and counterclaim would be discontinued.  It stated that the email correspondence between the two parties regarding back rent was clear and unambiguous.    It  was  clearly intended  to  be  in  full  and  final  settlement.    The response made by the defendant was robust, asserting that the plaintiff ’s risk “is what is colloquially referred to as a “hiding to nothing””.

[8]      In my view the plaintiff’s claim to actual costs from 2 September 2014 is justified.   Those actual costs are $44,348.60.   The scale costs for the period from

commencement of the proceeding until 2 September 2014 are $11,044.50.2

2      My calculation produces a slightly lesser sum than the plaintiff ’s calculation of $11,840.50.

[9]      Accordingly the plaintiff is entitled to costs in the sum of $55,393.10 together

with disbursements claimed excluding the taxi charges and courier charge.

Brown J

Solicitors:

Fortune Manning, Auckland