Jin House NZ Limited v Scott Point Estate GP Limited
[2018] NZHC 3359
•17 December 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2018-404-1085
[2018] NZHC 3359
UNDER the Declaratory Judgments Act 1908 and the High Court Rules 2016, r 18.1(c)(i) – claim for compensation under contract of sale of
land
IN THE MATTER
Lot 139/17A Scott Road, Hobsonville
BETWEEN
JIN HOUSE NZ LIMITED
Plaintiff
AND
SCOTT POINT ESTATE GP LIMITED
Defendant
Hearing: On the papers Appearances:
R S Pidgeon for the Plaintiff
P R Cogswell for the Defendant
Judgment:
17 December 2018
JUDGMENT OF JAGOSE J
[Costs]
This judgment is delivered by me on 17 December 2018 at 3.00 pm pursuant to r 11.5 of the High Court Rules.
.....................................................
Registrar / Deputy Registrar
Counsel/Solicitors:
R S Pidgeon, Barrister, Auckland Grant SCK Sidnam, Auckland
Cogswell0 Law, Auckland
JIN HOUSE NZ LTD v SCOTT POINT ESTATE GP LTD [2018] NZHC 3359 [17 December 2018]
[1]My judgment of 23 November 2018 dismissed Jin House’s claim.1
[2] In my preliminary view, as the successful party, Scott Point thus was entitled to 2B costs, agreed to amount to $13,714.50, plus disbursements (including expert fees) of $1,325.64. But Scott Point seeks indemnity costs in the amount of $18,447.62, in the wake of its written offer not to seek costs to which it would otherwise be entitled on the claim’s discontinuance, made without prejudice except as to costs.
[3] Acceptance of Scott Point’s offer would have been more beneficial to Jin House than its costs liability on dismissal of the claim. Although no judgment was obtained by Jin House “against” Scott Point, the sense of HCR 14.11(3)(b) is the unaccepted offer entitles Scott Point to costs on the steps taken in the proceeding after the offer is made. Here, the offer was made before any steps were taken by Scott Point.
[4] But that takes matters no further forward than my preliminary view of Scott Point’s entitlement to costs. Instead, under HCR 14.6(3)(b)(v), I may order a party to pay increased (not indemnity) costs if Jin House has contributed unnecessarily to the time or expense of the proceeding by failing, without reasonable justification, to accept an offer to settle or dispose of the proceeding. Scott Point’s offer was such an offer.
[5] Significantly, the offer was founded on essentially the same point as was conceded fatal to Jin House’s case. There was no reasonable justification for the offer’s refusal. Continuing the proceeding after the offer unnecessarily contributed to the time and expense of the proceeding. Scott Point is entitled to increased costs.
[6] Increased costs are determined by uplift from scale, the Court of Appeal accepting the uplift “logically” should not be more than 50 per cent.2 In my view, a 30 per cent uplift serves to reflect the justified increase here. That is increased costs of, say, $17,800, plus disbursements (including expert fees).
1 Jin House NZ Ltd v Scott Point Estate GP Ltd [2018] NZHC 3066.
2 Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [46]-[48].
[7] However, as a matter of first principle, an award of costs is not to exceed expenses incurred.3 And – if the costs claimant is registered for GST, as Scott Point may be – recoverable expenses exclude GST, for which the GST-registered party is able to recover a GST input credit from the Commissioner of Inland Revenue.4 But Scott Point’s claimed solicitor-client expenses of $18,447.62 “include GST and disbursements”. If Scott Point is GST-registered, its GST-neutral expenses incurred, including disbursements, seem to be about $16,000.
[8] I therefore order Jin Point pay increased costs to Scott Point in an amount not exceeding its recoverable expenses incurred, to a maximum of $17,800, plus disbursements.
—Jagose J
3 HCR 14.2(1)(f).
4 New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282, (2016) 27 NZTC 22-058 at [6] and [12].
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