Lion Residences Limited v Robert Bell Consultants Limited

[2021] NZHC 2477

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001492

[2021] NZHC 2477

BETWEEN

LION RESIDENCES LIMITED

Plaintiff

AND

ROBERT BELL CONSULTANTS LIMITED

Defendant

On the papers:

25 August 2021

Appearances:

J Donkin for the Plaintiff

I Hutcheson for the Defendant

Judgment:

21 September 2021

COSTS JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 21 September 2021 at 2.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Alexander Dorrington, Auckland Croftfield Law, Auckland

J Donkin, Auckland
I Hutcheson, Auckland

LION RESIDENCES LTD v ROBERT BELL CONSULTANTS LTD [2021] NZHC 2477 [21 September 2021]

[1]                 In my judgment delivered on 14 July 2021 I granted the plaintiff’s application for summary judgment against the defendant.1 I ordered that the defendant pay the plaintiff’s costs, and that if the parties could not agree costs, the plaintiff was to file a memorandum, followed by the defendant.

[2]                 The plaintiff has filed a memorandum dated 4 August 2021, setting out its calculation of 2B scale costs plus disbursements. The plaintiff submits that an uplift from scale costs under r 14.6(3)(b)(ii) is appropriate, as the defendant’s arguments lacked merit and were inherently unlikely to succeed. This is highlighted by the fact that in an earlier, related proceeding, the defendant did not raise the key defences raised in the current proceeding. Further, on 29 March 2021, counsel for the plaintiff pointed out to counsel for the defendant the reasons why the summary judgment claim would succeed and made a settlement offer which, the plaintiff says, was unreasonably rejected.

[3]The defendant has not filed a memorandum in response.

[4]                 The prerequisite for an order for increased costs is unreasonable conduct on the part of the party paying costs, where the unreasonable conduct has impacted upon the cost of the proceeding in practical terms, necessitating extra work (and, therefore, presumed expense).2

[5]                 Where increased costs are sought, a four-step approach is normally followed.3 First, it is necessary to categorise the proceeding under r 14.3. Then, it is necessary to work out a reasonable time for each step in the proceeding under r 14.5. Then, a party can, under r 14.6(3)(a), apply for extra time for a particular step. Finally, the applicant for costs should step back and look at the costs award it would be entitled to at that point. The applicant can argue for additional costs under r 14.6(3)(b), with any increase above 50 per cent on the costs produced by steps 1 and 2 being unlikely.

1      Lion Residences Ltd v Robert Bell Consultants [2021] NZHC 1760.

2      Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27].

3      Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [43]–[46].

[6]                 It may not be necessary to follow these steps when a party makes an unjustified application such that all the steps associated with the application may be subject to an increased award,4 such as the disclosure application in N R v M R,5 and the stay application in the Broadspectrum (New Zealand) Ltd v Nathan.6

[7]                 In terms of the present proceeding, the defendant’s defences were not strong. However, this is not a situation, as in N R v M R and Broadspectrum (New Zealand) Ltd, where the losing party has unreasonably brought an application that was devoid of merit and never should have been brought. I do not think it can be said that the defendant’s position was so wholly without merit that it should not have defended the summary judgment application at all.

[8]                 The question then becomes whether the defendant contributed unreasonably to the time taken for any given step in the proceeding. The plaintiff has not established that they did. Therefore, I reject the application for an uplift on 2B scale costs.

[9]I order RBC to pay to Lion:

(a)2B scale costs of $24,378, plus disbursements of $1,598, as set out in the schedule to the plaintiff’s memorandum dated 4 August 2021.

Associate Judge Gardiner

4      Adams v Watcher [2021] NZHC 432 at [22].

5      NR v MR [2014] NZCA 623, (2014) 22 PRNZ 636.

6      Broadspectrum (New Zealand) Ltd v Nathan [2017] NZCA 434.