Norris Ward McKinnon v Kaye

[2015] NZHC 2093

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2009-019-1473 [2015] NZHC 2093

BETWEEN

NORRIS WARD MCKINNON

Plaintiff/Counterclaim Defendant

AND

ANTHONY PRATT KAYE AND MORVA KAYE

Defendants/Counterclaim Plaintiffs

Hearing:	On the papers
Counsel:	Counterclaim Defendants in person R J Latton for Plaintiff/Counterclaim Defendant
Judgment:	31 August 2015

COSTS JUDGMENT OF M PETERS J

This judgment was delivered by Justice M Peters on 31 August 2015 at 4.50 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

Solicitors:           Kennedys, Auckland

Copy for:           Mr and Mrs Kaye, Hamilton

NORRIS WARD MCKINNON v KAYE [2015] NZHC 2093 [31 August 2015]

[1]      I gave judgment for the Counterclaim Defendant (“Norris Ward”) in this matter on 14 May 2015.1    Since then, I have received memoranda from the parties regarding costs and they are agreed that I may deal with the matter on the papers.

[2]      Although  in  their  most  recent  memorandum  of  7  August  2015,  the Counterclaim Plaintiffs (“Mr and Mrs Kaye”) proposed that I defer the matter of costs pending determination of their appeal, it is better to determine the issues as to costs now.

[3]      Norris Ward is entitled to an award of costs and disbursements.  The issue is as to quantum.

[4]      Norris Ward’s first claim was set out in their memorandum of 22 May 2015. The claim was revised following my minute of 29 July 2015.

[5]      The gist of Norris Ward’s present claim is that:2

(a)      Mr and Mrs Kaye are entitled to an award of costs of $13,402 in respect of a claim brought by Norris Ward but discontinued in November 2012;

(b)      Norris Ward is entitled to costs on a 2B basis as set out in Appendix 2

of counsel’s memorandum of 5 August 2015, those costs totalling

$52,434.  From this sum, $13,402 must be deducted.

(c)       Norris Ward should have increased costs in respect of steps taken after

1 May 2012, being the date of a “Calderbank” (without prejudice save as  to  costs)  offer  from  Norris  Ward  to  Mr  and  Mrs  Kaye.    The proposed  percentage  increase  is  75  per  cent,  which  would  award Norris Ward an additional $26,566.50 in respect of costs for steps

after 1 May 2012, those costs totalling $35,422 (on a 2B basis); and

1      Norris Ward McKinnon v Kaye [2015] NZHC 1025.

2      Memorandum of Counsel for Counterclaim Defendant dated 5 August 2015.  See also Mr and Mrs Kaye’s Memorandum re Costs dated 7 August 2015; and Memorandum of Counsel for Counterclaim Defendant dated 31 August 2015.

(d)      Norris Ward should have an award of disbursements of $47,500.96.

[6]      The only matter as to which there can be dispute is whether Norris Ward are, in principle, entitled to an award to increased costs and, if so, in what sum.

[7]      The Court may make an order for increased costs in the circumstances set out in High Court Rules, r 14.6(3).  The ground relied upon in the present instance is r 14.6(3)(b)(v)  which,  in  summary,  permits  the  Court  to  order  a  party  to  pay increased costs if they have contributed unnecessarily to the time or expense of the proceeding or a step in it by:

...

(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; ...

[8]      By  letter  dated  1  May  2012,  Norris  Ward  offered  to  pay  $140,000  to Mr and Mrs Kaye in full and final settlement of all issues between them.  The offer was open for acceptance for two months from the date of the letter.  Counsel then acting for Mr and Mrs Kaye subsequently sought and was granted an extension of the offer for a further month.  The offer was rejected in a telephone call from counsel for Mr and Mrs Kaye on 13 August 2012.

[9]      In his memorandum of 22 May 2015, counsel for Norris Ward states that Mr and Mrs Kaye rejected the offer against the advice of their counsel at the time, and others.  I do not have any evidence as to those matters and disregard the point.

[10]     I  do,  however,  consider  the  rejection  of  the  offer  to  have  been  without reasonable justification, having regard to the circumstances prevailing at the time the offer was rejected.  The letter of 1 May 2012 addressed Mr and Mrs Kaye’s claim in detail, the matters that they would be required to prove if they were to succeed, and Norris Ward’s case in response.  As I have said, there was no written response to the offer.  Nor was there a counter proposal.

[11]     I accept counsel’s submission that the matters raised in the letter were such

that the offer should have been accepted.

[12]     That said, a 75 per cent increase is excessive. A 50 per cent increase on costs incurred after 1 May 2012 is fair and reasonable in the circumstances and I so order.

[13]     Accordingly, I award costs and disbursements to Norris Ward as follows:

(a)      Costs on a 2B basis as set out in Appendix 2 of the Memorandum of Counsel for Counterclaim Defendant dated 5 August 2015, those costs totalling $52,434.   From this must be deducted the sum to which Mr and Mrs Kaye are entitled as per [5](a) above, so that the net sum due will be $39,032;

(b)      An increase of 50 per cent on costs in respect of steps taken after

1 May 2012 totalling $17,700.

(c)       An award of disbursements of $47,500.96. [14]          There is leave to apply if any issue arises as to GST.

..................................................................

M Peters J