Messenger v Stanaway Real Estate Limited

Case

[2015] NZHC 3352

21 December 2015

No judgment structure available for this case.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-007205 [2015] NZHC 3352

BETWEEN

JAMES MESSENGER AND JUNE

MARRY MESSENGER Plaintiffs

AND

STANAWAY REAL ESTATE LIMITED Defendant

AND

GARY MESSENGER First Third Party

REALTY NZ LIMITED Second Third Party

SIMPSON WESTERN Third Third Party

Hearing: On the papers

Appearances:

G Blanchard and MHL Morrison for the Plaintiff
M Ring QC and K Burkhard for the Defendant
GB Lewis and LLC Cooney for First Third Party and Second
Third Party
P Fee and VS Wethey for the Third Third Party

Judgment:

21 December 2015

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Monday, 21 December 2015 at 3:00 pm pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

……………………………………

MESSENGER v STANAWAY REAL ESTATE LTD & ORS [2015] NZHC 3352 [21 December 2015]

Introduction

[1]      In proceedings first filed on 30 November 2012, James Messenger and his wife, June Messenger (Mr and Mrs Messenger), claimed that Stanaway Real Estate Limited (Stanaway), the real estate company which acted as their agent in the sale of a beachfront  property at 29  Muritai  Road,  Milford, Auckland,  was  negligent  in relation  to  a  failed  sale  of  the  property  in  2006.    They  claimed  a  total  of

$2.77 million for the loss on the resale of the property together with interest and legal fees.

[2]      On 31 July 2015, I issued judgment against Stanaway in favour of Mr and Mrs Messenger, although with a reduction in the total sums awarded to reflect some contributory negligence on their part as vendors.1     I dismissed Stanaway’s claim against the three third parties.

[3]      The parties now disagree as to costs.  Stanaway has reached agreement with the  first  and  second  third  parties.     However,  the  question  of  costs  remains outstanding between Stanaway and Mr and Mrs Messenger, and Stanaway and the third   third   party,   Simpson  Western,   the   law   firm   who   acted   for   Mr   and Mrs Messenger.

[4]      I will consider each claim in turn, by category of costs sought.

2B or not 2B? (Stanaway and Mr and Mrs Messenger)

[5]      Mr and Mrs Messenger claim 2B costs against Stanaway generally, which Stanaway accepts.  However, they also claim entitlement to a greater than band B allocation for three steps of the proceeding. The three steps claimed for are:

(a)       Step 30 Preparation of briefs:  This is claimed as warranting band C

costs.  Mr and Mrs Messenger say that they served 158 pages of briefs of evidence.

1      Messenger v Stanaway Real Estate Ltd [2015] NZHC 1795, (2015) 16 NZCPR 335.

Stanaway says that the volume of briefs does not warrant band C costs, as Mr and Mrs Messenger must show that the briefs of evidence reflect  a  more  complex  proceeding  in  some  way,  which  justifies band C recovery.   Stanaway points to the facts that the briefs were primarily expert  evidence,  with  limited factual  briefs  of evidence. They say that normal time only would have been required.

(b)Step  32  Preparation  of  list  of  issues,  authorities  and  common bundle:   This is also claimed as warranting band C costs.   The common bundle required liaising with three parties, involving 1018 pages. Twelve case authorities were cited.

Stanaway says that the common bundle was three volumes, which is not  excessive  or  abnormal.     The  fact  that  12  authorities  were submitted points toward band B being appropriate, as it shows it was not that complex.

(c)      Step  33  Preparation  for hearing:    Mr and  Mrs Messenger  seek increased costs to reflect a more reasonable preparation time.  They rely on Trustpower v Commissioner of Inland Revenue as authority.2

Stanaway replies that Trustpower was a much more complex case than this one, and that in any event in that case the judge allocated a quarter of the actual time spent in preparation as recoverable.  Here, the standard allocation is three days which is more than a quarter of the actual time spent on preparation.

[6]      The basis for Mr and Mrs Messenger’s respective claims is unclear.   The references to r 14.6 suggest that they seek increased costs under that rule.  However, in other respects the claim appears to be a request for different bands to be applied to certain steps of the proceeding.   This is because r 14.6 only grants the court jurisdiction to pay increased costs if the time required by the party claiming costs

would exceed band C, or if a number of other circumstances have occurred which

2      Trustpower v Commissioner of Inland Revenue [2014] NZHC 3072.

have  led  to  the  party  opposing  costs  contributing  unnecessarily  to  the  time  or expense of the proceeding.

[7]      In this case, the time required by Mr and Mrs Messenger would clearly not exceed band C, where only band C costs are claimed.  Nor have any reasons been put forward by Mr and Mrs Messenger which would suggest that Stanaway contributed unnecessarily to the time necessary for each highlighted step, or any of the  other  relevant  qualifiers  under  r  14.6(3)(b),  (c)  or  (d).    Further,  Mr  and Mrs Messenger make a specific separate claim for increased costs in relation to their preparation for hearing.

[8]      Mr and Mrs Messenger’s submissions proceed on the assumption that what they have to show is that the work done for each step was particularly complex. This is not the test for increased costs, as noted.  However, it can be part of the test for re- categorising  part  of  the  proceeding.    Based  on  this,  I  consider  that  Mr  and Mrs Messenger’s claim is ultimately best treated as a request for a re-categorisation of those specific steps in the proceedings.

[9]      Under r 14.5, the reasonable time for a step is either made by reference to band  A,  B  or  C   according  to   whether  a  comparatively  small,   normal   or comparatively large amount of time is considered reasonable for that step.   The bands may differ at each step of the proceeding – there is no requirement for a

blanket assessment for banding.3    However, the onus is on the party who seeks to

show  that  an  amount  of  time  other  than  the  normal  amount  of  time would  be appropriate.4

Analysis

[10]     The current case involved a wide range of legal arguments.  As noted by the parties,  the  common  bundle  and  briefs  of  evidence  were  relatively  extensive.

However, it did not involve in depth technical evidence, as many complex cases do.

3      Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) 24

NZTC 24,500 at [161].

4      Paper Reclaim Ltd v Aotearoa International Ltd [2007] NZCA 544, (2007) 18 PRNZ 743, at

[35].

The briefs were primarily factual, although the basic outline of events appears to have been well established in prior proceedings.5

[11]     Although the case was sizable one, it was not overly legally complex, in that it did not require extensive examination of a novel legal point or an in-depth case law analysis.  The dispute was primarily dealt with on first principles, as a matter of contractual interpretation.   In that respect, simply pointing to the number of cases cited does not demonstrate anything about the complexity of the case.  Knowing that

12  cases  were  cited  does  not  help  explain  qualitatively  whether  the  case  was complex or not (I note that citing 12 cases is also not by any means an excessive number of cases in a dispute which ranged across various heads of claim).

[12]     In relation to the preparation of witness briefs, I also do not consider that 158 pages of briefs of evidence is sufficient to demonstrate that preparing the briefs took beyond the normal amount of time allocated. While clearly there was a large amount of factual evidence at trial, as noted by Stanaway, some of those pages (almost 84 pages, or over half) were simply valuation reports, which would not have taken counsel any “extra” time to prepare.

[13]     I agree with Stanaway that Mr and Mrs Messenger have not made out a case for either step in the proceeding to  be granted on a 2C basis.   They have not demonstrated that a comparatively large amount of time was required to prepare briefs of evidence, or to prepare the case authorities and common bundle.

[14]     As to the claim for increased costs, I consider that it must fail.   Increased costs are allowed where, under r 14.6:

(3)      The court may order a party to pay increased costs if—

(a)       the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or

(b)       the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

5      See  Messenger v  Goodman [2012] NZCA 535, [2013] ANZ ConvR 13-016; Messenger v

Goodman HC Auckland CIV-2009-404-3974, 20 October 2011.

(i)        failing to comply with these rules or with a direction of the court; or

(ii)      taking  or  pursuing  an  unnecessary  step  or  an argument that lacks merit; or

(iii)      failing,  without  reasonable  justification,  to  admit facts, evidence, documents, or accept a legal argument; or

(iv)      failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or

(v)       failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under  rule 14.10 or  some  other  offer  to  settle  or dispose of the proceeding; or

(c)       the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or

(d)       some other reason exists which justifies the court making an order for increased costs despite the principle that the determination  of  costs  should  be  predictable  and expeditious.

[15]     The procedure to be followed by an applicant seeking increased costs has been summarised by the Court of Appeal in Holdfast NZ Ltd v Selleys Pty Ltd:6

(a)       Categorise the proceedings in terms of category;

(b)Work out a reasonable time for each step in the proceeding (with reference to the daily recovery rates and the time allocations);

(c)       Apply for extra time for a particular step as necessary; and

(d)Only after the preceding three steps have been complied with should the applicant step back and consider the amount of costs it would receive by this process, and then argue for additional costs if it is

considered such can be justified.

6      Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [43] – [45] and [48].

(e)      It   is   also   established   that   in   only   the   most   exceptional   of circumstances would an increase of 50 per cent above scale costs be warranted.

[16]     As emphasised by McGechan on Procedure in ordering increased costs, “the courts uplift from scale, it is not a question of awarding a percentage of actual costs”.7

[17]     In Trustpower, an order was sought for 53.1 days of preparation (half of the actual time spent).8    It involved the preparation of “comprehensive chronologies”, land access schedules, preparation for cross-examination of witnesses and document management and organisation.   The common bundle covered 60 Eastlight folders. An order for costs for 30 days worth of preparation was granted.   Although Trustpower  clearly  stands  for  the  proposition  that  where  a  case  is  particularly

complex, the time allocated for preparing for the hearing may be substantially increased, it is not highly analogous to the current case as it appears to have been significantly different in scope.

[18]     In this case, the case is the standard category 2 case.  That is not disputed. However,  the trial  was  relatively long  at  19  days  long.   This  could  justify the reasonable  time  for  preparation  being  increased  beyond  the  “normal”  time. However, nothing has been pointed to show, other than the length of trial, which points toward the case’s complexity.

[19]     In Samson Corporation Ltd v Macrennie Commercial Construction Limited, the Judge noted that “there will always be cases where the required time will fall somewhere between the band B and band C allocations, and one of the functions of the costs regime in the High Court Rules is to achieve a degree of predictability.”9

Although this case might have been at the upper end of the 2B range, that does not

necessarily warrant assigning a band C scale.

7      Andrew Beck and others McGechan on Procedure (online looseleaf ed, Brookers) at HR 14.6.02 (1).

8      Trustpower v Commissioner of Inland Revenue, above n 2, at [44].

9      Samson Corporation Ltd v Macrennie Commercial Construction Ltd [2014] NZHC 1934 at [30]

[20]     On the basis that I do not think 2C costs are warranted, it will follow that I do not see increased costs as appropriate.  No real argument has been made by Mr and Mrs Messenger as to their entitlement to increased costs, other than merely stating that the case was complex beyond the scope of band 3.  More analysis of the actual complexities of the case which warrant 2C costs would be necessary to develop this claim.

2B or not 2B? (Stanaway and Simpson Western)

[21]     Simpson Western claims costs against Stanaway on a 2B basis for work undertaken  before  19  August  2014.    This  does  not  appear  to  be  disputed  by Stanaway.  However, Simpson Western claim:

(a)      Costs on a 2C basis for discovery: because Simpson Western had a considerable volume of documents which had to be reviewed and listed, made more difficult by Mr and Mrs Messenger maintaining privilege over some documents.

Stanaway says that the list of documents filed in March 2014 by Simpson  Western  is  almost  identical  to  the  list  filed  by  Mr  and Mrs Messenger in June 2013.   On that basis, although there were a number of documents, Stanaway says that the bulk of the cost of reviewing  the  documents  would  have  been  borne  by  Mr  and Mrs Messenger or split between them and Simpson Western, and so do not justify uplifted costs.

(b)      Costs on a 2C basis for all steps in the proceeding after 19 August

2014, on the basis that at this date the claim against Simpson Western entirely changed, with new allegations raised about the proper contractual interpretation which should have been adopted.

Stanaway states that its case against Simpson Western did not fundamentally change upon filing the amended statement of claim, as it simply introduced new particulars around the precise duty on Simpson Western.   Stanaway notes that Fogarty J, in granting leave

for an amended pleading, stated that he did not see it as a new theory of the case but simply reflecting the common ground between the parties that the sale and purchase agreement was unclear.10

Further, Stanaway notes that the individual steps in the proceeding which occurred after 19 August 2014 do not require band C level costs.  There is said to be no reason that the amended claim made the preparation  of  the  common  bundle,  or  briefs  of  evidence,  more

onerous.

Analysis

[22]     The scope of discovery required in this case would have been significant, given the amount of documentation involved.  Although there was likely to be some similarity between the documents relied on by Mr and Mrs Messenger and those of Simpson Western, there is no evidence that the lawyers for those groups actually collaborated in any way.  Given that Mr and Mrs Messenger maintained privilege, I consider that this would be an added complicating factor warranting costs on a 2C basis.

[23]     In relation to the claim that the nature of the proceeding changed significantly from 19 August 2014, the amended statement of claim did alter some of the claims made against Simpson Western.  It is clear from the amended Statement of Defence, compared to the initial Statement, that the although the broad basis of the claim was still the same (insofar as the claim was for negligence) the substantive claims that Simpson Western were more specific in nature.

[24]     However, the original claims were still underlying the new pleadings.  The essential claims being made about what Simpson Western had done did not change. When Fogarty J allowed the pleadings to be amended, he noted:11

I am doubtful as to whether this is a new theory of the case.  The pleading seems to reflect on common ground that the original agreement for sale and purchase raised problems as to how it was to be performed.   Both parties

10     Messenger v Stanaway Real Estate Ltd [2014] NZHC 2090.

11     Messenger v Stanaway, above n 9, at [9].

have  engaged  conveyancers  giving  advice  as  to  how  they  consider competent solicitors should have reacted to the agreement and advised the parties.

[25]     His Honour was satisfied that the expert solicitors would have been reflecting on the “challenges presented to the solicitors by this agreement for sale and purchase as signed by the parties” for some time, and would have time to consider the merits of the new particulars.

[26]     I agree  that  the  nature  of  the  claim,  although  obviously different  to  the original pleadings, was not so different that the claim could be said to have entirely changed.  Further, given the clear focus of the case generally on the terms of the sale and purchase agreement and what the “correct interpretation” of that was, the newly developed allegations would not have required significant extra resources to respond to, as the issues raised were within the scope of the existing claim.

[27]     Although Simpson Western did have to do extra work, such as filing reply briefs and amended statements of defence, these will all be recognised in the costs assessment, albeit at a 2B level.  Simpson Western has not established that 2C costs are justified for all the steps following 19 August 2014.

Increased costs (Stanaway)

[28]     As well, Simpson Western seeks an uplift of 30 per cent of the scale costs from 19 August 2014, under r 14.6(3)(a) or (b).

[29]     Simpson Western argues that either the nature of the proceeding from that point onwards was such that the time required by the party claiming costs would substantially exceed the time allocated under band C, or that Stanaway contributed unnecessarily to the time or expense of the steps following that date.

[30]     Given that I have not found that 2C costs were warranted, it follows that there is no basis for uplifting scale costs on the basis that the time necessary for each step would exceed the scale allocations.

[31]   Under r 14.6(3)(b), Simpson Western argues that Stanaway contributed unnecessarily to the time or expense of the proceeding either, by taking an argument that lacks merit, or by failing without reasonable justification to accept an offer of settlement.

[32]     In relation to the argument that Stanaway brought an argument which lacked merit, Simpson Western points to:

(a)      Stanaway’s “fixation” on the subjective intention of the parties at the time the sale and purchase agreement was signed, based on the meaning of an email from Mr and Mrs Messenger.   This took up a disproportionate amount of time, and is said to be contrary to the clear position  that  the  interpretation  of  the  agreement  was  objective. Further, Stanaway’s insistence as to the one “proper interpretation” of the contract was contrary to the view expressed by Priestley J in an earlier decision in the case.

(b)Allegations Stanaway made, of unethical or improper behaviour on the part of Simpson Western in adopting the contractual interpretation which they took on behalf of the Mr and Mrs Messenger.  Simpson Western  says  that  such  allegations  were  unpleaded  but  were  the subject of “extensive and forceful” cross-examination.

(c)      The changing of allegations across the course of the trial.  Of the ten pleaded  allegations,  seven  were  abandoned,  and  only  two  of  the eleven allegations of negligence made in Stanaway’s closings were pleaded.   They also say that a late decision to not call an expert witness required significant amendments to their briefs of evidence.

[33]     Stanaway says that evidence as to the actual intentions of the parties was relevant, despite the test for contractual interpretation being objective, toward the interpretation adopted by Simpson Western and its reasonableness.  Further, they say that the argument advanced in the current proceeding differed from the interpretation advanced before Priestley J, meaning the new argument advanced did not inherently

lack merit.   They argue that the amended statement of claim signalled that they intended to pursue the reasonableness of the strategy adopted by Stanaway, and that any cross-examination was in support of that contention, and not intended to relate to a claim of misconduct or improper behaviour.

[34]     Stanaway says that it is part of the nature of litigation that arguments will evolve over time.  This does not show that the claim lacked merit, nor do strategic decisions relating to witness choice.

[35]     In support of the claim that the party failed to accept a settlement offer, Simpson Western submits that Stanaway failed  to accept two Calderbank offers (from April  and August 2014),  and that the logic in those offers underpins the reasoning which was eventually decisive in the judgment.  Further, Stanaway refused to attend a settlement meeting prior to trial, and suggested only a “drop hands” offer.

[36]     In response, Stanaway say that the reasonableness of a settlement offer must be assessed at the time of the offer.  At the time, the claim against Stanaway was for over $2.5 million, and when the August offer to “drop hands” arrived, substantial expense in preparing for trial had already been incurred.  It was therefore reasonable to refuse the offer.  Stanaway says that it rejected the settlement meeting (which it had proposed initially) only after receiving briefs which in their view, did not accord with the evidence.  Further they say limited money would have been saved at that stage, as the meeting was the Friday before trial.

[37]     There is no response relating to the April offer.

[38]     The procedure to be followed by an applicant seeking increased costs was outlined above.12    As I have declined to increase the parties costs from 19 August

2014 from 2B to 2C, any uplift would be to scale from 2B costs.

12     Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [43] – [45] and [48].

Analysis

[39]     I consider that there is a valid claim to be made in relation to increased costs on the basis that an argument that lacks merit was pursued.  The claim in relation to Simpson Western occupied a large amount of the hearing.  The pursuit of their being “one proper interpretation” theory was at odds with the history of the case as a whole, especially given that the basis of the dispute as a whole regarded the complexity of the correct contractual interpretation.   The meaning of the contract was evidently not straightforward, and it was unlikely Simpson Western would be able to be faulted for not coming to the precise right interpretation (at an initial assessment) as any expert solicitor who had been given ample time to consider it.

[40]     In  conjunction,  the  fact  that  Stanaway  pursued  its  argument  about  the “proper” interpretation of the agreement based substantially on the subjective intentions of Mr and Mrs Messenger added to the lack of merit in relation to their argument about the interpretation Simpson Western should have adopted.  I consider that the amount of time spent pursuing this point does appear to have been the pursuit of an argument that lacked merit.

[41]     However, I do not see the fact that the precise allegations which were made changed over the course of trial, and that an expert witness was not called at the last minute as adding to the case for increased costs.  It is the nature of cases that tactical decisions as to the experts to be called will be made.  Parties should not be punished with increased costs for those decisions.

[42]     In relation to the settlement offer, both offers were “walk away” offers, as

described by the Court of Appeal in Hira Bhana & Co Ltd v PGG Wrightson Ltd.13

In that case, the Court stated:14

… where the nature of the offer made is simply a ‘walk away’ proposition, made early in the proceedings, it cannot be the case that the mere fact that the party which rejected the offer subsequently loses means that party is required to pay indemnity costs  or increased costs.  If that were so, it would mean that the costs regime set out in [r 14] would be effectively bypassed in almost all cases where the defendant succeeds, because defendants would

13     Hira Bhana & Co Ltd v PGG Wrightson Ltd [2007] NZCA 342.

14 At [26].

routinely make ‘walk away’ offers of the kind made in this case, and then

claim indemnity costs if they subsequently succeed at trial.

[43]     In that case, as this one, Keane J at trial had commented that he terms of Hira

Bhana’s offer letter had forecast the reasons he found the claim was unsuccessful.15

The fact that reasoning underpinning the Calderbank letter was accepted in my judgment does not require increased costs to be given.

[44]     There are some distinctions to Hira Bhana, and the cases following it.16    In this case I have found that Stanaway was unreasonable to pursue the argument that it did in relation to the interpretation of the contract.   Further, there was an early settlement offer in April, but also another one in August so it was not simply a walk away offer in the early stages of the proceeding.  However, by the time of the August offer, Stanaway had incurred significant costs to which the offer offered nothing. Although Simpson Western’s views would ultimately be accepted, ultimately, the test is that a settlement offer must have been rejected without reasonable justification.  In this case, declining a “drop hands” offer at the initial stages, and that close to trial cannot be seen as without some reasonable justification.

[45]     Although I have not accepted all of the grounds on which Simpson Western advanced its claim for increased costs, I would allow an uplift of 20 per cent on scale costs from 19 August 2014 for the reasons given above.

Second counsel

[46]     Mr and Mrs Messenger seek costs of second counsel, on the basis of the trial’s complexity and the length of the case, which spread over 19 days.  Simpson Western also seek certification for second counsel, as each party entered appearances for at least two counsel.  Simpson Western says that a significant amount of time was spent in relation to the case against them (5.5 out of the initial 13.5 days of hearing) and junior counsel attended the hearing as well as preparing evidence in chief and

cross-examination outside of court.

15     Hira Bhana v PGG Wrightson, above n 13, at [10].

16     See, for example, Prophecy Networks Ltd v Revera Ltd [2015] NZHC 899.

[47]     Stanaway’s  submissions  do  not  address  whether  certification  for  second

counsel should be granted in either case.

[48]     In Nomoi Holdings Ltd, Chambers J held that the key question in determining whether to certify costs for second counsel was:17

… whether the nature of this proceeding, given the way the trial was conducted, was such as to justify requiring the losing party to contribute to the winning party’s cost in having a junior counsel present.

[49]     The approach to determining whether second counsel should be granted is always objective, and “is focused on the nature of the proceeding, not the actual counsel involved and how he or she or they choose to conduct the litigation”.18    It was emphasised both in Nomoi Holdings Ltd and in subsequent cases, that there will usually need to be some unusual feature to the litigation to warrant allowances for second counsel.19   However, in Wholesale Distributors Ltd v Songle Ltd, it was noted that the applicant did not need to show that the case was beyond the capabilities of the principal counsel, so long as it was sufficiently complex to justify certification for second counsel.20

[50]     These proceedings were complex.  As stated in the judgment, the evidence and submissions were very extensive, and as Stanaway notes in its submissions on costs, the basis of the defence (and the claims against the third parties) did develop over the course of the  hearing.   This required  significant work  for all counsel, including junior counsel.  Stanaway itself had three lawyers appearing in court, and all were actively engaged in the litigation.

[51]     In these circumstances, I consider that it is appropriate to certify for second counsel for both Mr and Mrs Messenger and Simpson Western.

17     Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155 (HC) at [21].

18 At [21].

19     See Nomoi Holdings Ltd, above n 17, at [19], and ZYXCBA Developments Ltd v Auckland

Council [2015] NZHC 2224 at [16].

20     Wholesale Distributors Ltd v Songle Supermarket Ltd [2015] NZHC 809 at [8].

Interest

[52]     Mr and Mrs Messenger have also requested that I make orders in relation to interest on the judgment debt at the same time as considering these costs issues.  In the judgment issued on 31 July 2015, I did not make any specific orders as to the value of the interest claim.  Instead I made orders that Mr and Mrs Messenger were entitled to $1,256,000 plus interest for the lost resale value of their property and

$331,953.60  plus  interest  for  the  legal  costs  of  past  proceedings.    Under  the Judicature Act interest is payable from the date the cause of action arose until the date of judgment, at the rates prescribed under that Act.21

[53]     Mr and Mrs Messenger have provided calculations as to the sum of interest that they are entitled to.  Those calculations take into account the varying rates of interest to which they were entitled under the Judicature Act between the date of judgment (31 July 2015) and the date on which they calculate the cause of action arose (1 December 2006, being the date that negligent advice was given by the real estate  agent  to  Mr  and  Mrs  Messenger).    These  result  in  the  total  figures  of

$520,193.33 and $148,134.31 interest on each sum. [54]       These calculations are not disputed.

Conclusion

[55]     I make orders that:

(a)      Mr and Mrs Messenger are entitled to 2B costs for all steps of the proceeding.

(b)Simpson  Western  is  entitled  to  2B  costs  for  all  steps  of  the proceeding, excluding discovery, for which they are entitled to 2C costs.

(c)      Simpson Western is entitled to a 20 per cent increase on scale costs for all steps following 19 August 2014.

21     Judicature Act 1908, s 87(1).

[56]     I certify for second counsel for both the Mr and Mrs Messenger and Simpson

Western.

[57]     I also make orders that the Mr and Mrs Messenger are entitled to:

(a)       $520,193.33  being the interest  on  the  sum  awarded  in  lost  resale value; and

(b)$148,134.31 being the interest on the sum awarded in legal costs of the past proceedings.

……………………………….

Woolford J

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