Mahon v Edney - [2018] NZHC 1856

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-993

[2018] NZHC 1856

BETWEEN
NEVILLE CHRISTOPHER MAHON

First Plaintiff

CORONATION ROAD HOLDINGS LIMITED
Second Plaintiff

AND

TIMOTHY LAIRD EDNEY

First Defendant

THE STATION AT WAITIRI LIMITED

Second Defendant

Hearing: On the papers

Counsel:

D J Cooper and A M Glenie for Plaintiffs

D J Chisholm QC and M J W Lenihan for Defendants

Judgment:

25 July 2018

COSTS JUDGMENT OF WHATA J

This judgment was delivered by me on 25 July 2018 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors: Anderson Creagh Lai Limited, Auckland
Brown Partners, Auckland

MAHON v EDNEY [2018] NZHC 1856 [25 July 2018]

[1] In my judgment in this matter, the defendants succeeded in defending a claim to properties, valued at $8 million – $11 million based on an alleged warehousing arrangement.1 In short, I rejected that the defendants agreed to return the properties on specified terms. I proposed costs in favour of the defendants on a 2B basis, less 10 per cent to account for Mr Mahon’s success on a quantum meruit claim.

[2] The parties have now filed submissions. The defendants seek increased costs on a standard 2B costs award of $103,251.98, to a global figure of $150,000. They seek the increase because of Calderbank offers made by the defendants prior to trial. The plaintiffs accept scale costs, except in relation to (a), the request for particulars, and (b), the quantum of disbursements claimed by the defendants’ experts. The plaintiffs claim that the rejection of the Calderbank offer was not unreasonable given, among other things, full discovery about a sale of the affected properties had not been made at the time of the offer.

[3]I deal first with the Calderbank offers. There were two of them, one made on

21 September 2017 which offered $100,000 to the plaintiffs in full and final settlement. The second, dated 2 May 2018, offered “to settle all issues in the proceeding on the basis that both parties walk away from the proceeding with no issue to costs”. I can deal with this aspect summarily. As recently noted by Gordon J in Xiao v Sun:2
[25] Under r 14.6(3)(b)(v), the Court may order a party to pay increased costs if that party failed, without reasonable justification, to accept an offer of settlement. The reasonableness of a party's rejection of an offer must be assessed at the time the offer was made and declined, not against the subsequent result. It will depend on the circumstances of the case, including the size and timing of the offer, the reasonable expectations of the party refusing the offer and on the parties' ability, at the time of the offer, to assess the merits of the case.

[4] In my view, it was not unreasonable for the plaintiffs to reject a Calderbank offer of $100,000 or on a no costs basis in relation to claims…

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 Mahon v Edney

Details

AGLC: Mahon v Edney [2018] NZHC 1856
Case: [2018] NZHC 1856
Decision Date: 25 July 2018

CaseChat Overview and Summary

The High Court of New Zealand was tasked with determining costs in a dispute between Neville Christopher Mahon and Coronation Road Holdings Limited (the plaintiffs) against Timothy Laird Edney and The Station at Waitiri Limited (the defendants). The plaintiffs originally sought to recover properties valued between $8 million and $11 million, which they alleged were part of a warehousing arrangement. The court dismissed the claim for the return of the properties but allowed a quantum meruit claim. The primary focus of the case then shifted to the determination of costs.

The court had to decide whether the plaintiffs' rejection of Calderbank offers, which proposed settlements of $100,000 and a no-costs basis, was reasonable. The defendants argued for an increase in costs due to these rejected offers. Additionally, the court examined the reasonableness of expert witness fees claimed by the defendants, specifically those of Mr Burns and Mr Jarvis, as the plaintiffs contested the quantum of these fees. The court also needed to determine whether the plaintiffs' quantum meruit claim should be treated as an alternative cause of action.

The court found that the plaintiffs' rejection of the Calderbank offers was reasonable given the disproportionate value of the offers relative to the claim. The court acknowledged the complexity of the case, which required a detailed factual resolution rather than a straightforward contract interpretation. Regarding the expert witness fees, the court deemed the fees excessive, particularly for Mr Burns, and reduced them by 50% and 25% respectively. The court concluded that it was appropriate to reduce the overall costs awarded to the defendants by 10% to reflect the plaintiffs' success on the quantum meruit claim. The court also noted that substantive issues regarding the quantum meruit claim should be addressed in the Court of Appeal.

Orders