OM Hardware Ltd v Body Corporate 303662 - [2015] NZHC 574

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV2013-409-001729 [2015] NZHC 574

BETWEEN
OM HARDWARE LIMITED

First Applicant

AND

N R SKJELLERUP Second Applicant

AND

BURGUNDY FLEUR INVESTMENTS LIMITED

Third Applicant

AND

T R BROWN and CAMBRIDGE TRUSTEE SERVICES LIMITED Fourth Applicants

AND

D C NOBES Fifth Applicant

AND

PANDORA PARNASSUS INVESTMENTS LIMITED Sixth Applicant

AND

BODY CORPORATE 303662
First Respondent

AND

BBS GROUP ENTERPRISES LIMITED Second Respondent

AND

OURWAY TOWER LIMITED Third Respondent

Hearing: (On the papers)

Appearances:

J V Ormsby and SMK Hoffman for Applicants
J E Bayley for Respondents

Judgment:

26 March 2015

JUDGMENT OF DUNNINGHAM J RE: COSTS DECISION

OM HARDWARE LIMITED AND ORS v BODY CORPORATE 303662 AND ORS [2015] NZHC 574 [26 March 2015]

[1] On 17 February 2015, I gave judgment in favour of the applicants, allowing the ownerships interest of the units in the unit title plan for Body Corporate 303662 to be reassessed in the applicants’ favour and insurance proceeds distributed accordingly.

[2] I reserved the issue of costs and set a timetable for filing memoranda on costs if costs could not be agreed. Memoranda have now been filed in accordance with that timetable.

[3] The applicants seek costs in their favour, on a 2B basis, for the identified steps outlined in the schedule to their memorandum. They also seek a 50 per cent uplift in costs from the date of their first Calderbank offer on 30 July 2014 as they say that both that offer, and the subsequent Calderbank offer, were more beneficial to the respondents than the outcome achieved in the litigation.

[4] The second and third respondents (the respondents) accept they are liable to pay 2B scale costs, plus disbursements, to the applicants.1 However, they contest:

(a) the calculation of 2B scale costs;

(b) the claim for an uplift from scale costs; and

(c) the claims for certain disbursements.

Relevant principles

[5] The principles applying to the award of costs are well settled. They are set out at rules 14.1 – 14.7 of the High Court Rules. There is no dispute that, in accordance with r 14.2, the determination of costs should be predictable and the expeditious, and that this is to be achieved in most cases by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding. It is also uncontentious that the rules provide for increased or indemnity costs to be awarded in specified circumstances, including

where the unsuccessful party failed, without reasonable justification, to accept an offer of settlement which would have settled or disposed of the proceeding.2

[6] The award of disbursements is governed by r 14.12 and presumes that the successful party will be awarded the amount of disbursements it claims if the disbursement was specific to, and reasonably necessary for, the conduct of the proceeding, and reasonable in amount.

[7] Bearing these principles in mind, I turn to the issues in dispute.

Calculation of 2B scale costs

[8] The respondents…

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.

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Details

Case: [2015] NZHC 574
Decision Date: 26 March 2015

CaseChat Overview and Summary

The case OM Hardware Ltd v Body Corporate 303662 was heard in the High Court of New Zealand, Christchurch Registry. The applicants, OM Hardware Ltd and others, sought a reassessment of ownership interests in the unit title plan for Body Corporate 303662 and the distribution of insurance proceeds accordingly. The respondents, Body Corporate 303662 and others, contested the applicants' claims. The court was required to decide on the appropriate calculation of 2B scale costs, the justification for an uplift in costs from the date of the first Calderbank offer, and the claims for certain disbursements.

The court addressed the calculation of 2B scale costs, finding merit in some of the respondents' challenges. The court reduced the time allocation for preparation for the issues conference and disallowed certain claims that were more applicable to a normal trial rather than an originating application. The court also disallowed the claim for second counsel, finding the case was not sufficiently complex to justify its attendance. Regarding the uplift on costs, the court concluded that it could not be satisfied that the outcome in the litigation was less favourable to the respondents than the outcome under the settlement offer, and thus, would not award increased costs. Lastly, the court allowed most of the claimed disbursements, except for the Ford Baker valuation, which the court found to be a cost to be borne by the Body Corporate.

The court made the following orders: costs are awarded to the applicants on a 2B basis; the applicants' costs are to be calculated based on the specified time allocations for certain items; and the disbursements set out in the list attached to the applicants' submissions are allowed, except for the cost of the Ford Baker valuation.

Orders