Palmer v Hewitt Building Limited

[2021] NZHC 2435

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2019-435-005

[2021] NZHC 2435

BETWEEN

BARBARA LYNN PALMER

Plaintiff

AND

HEWITT BUILDING LIMITED

First Defendant

AND

MARK WILSON HEWITT

Second Defendant

Hearing:

On the papers

Appearances:

P W Michalik for the Plaintiff

R P Conner and S J Martin for the Second Defendant

Judgment:

16 September 2021

JUDGMENT OF COOKE J

(Costs)

[1]    In my judgment of 19 June I gave the plaintiff judgment against the first defendant on a formal proof basis, and judgment against the second defendant for lesser amounts than were claimed.1 I directed that if the parties were unable to agree on costs memoranda could be filed.

[2]    By memorandum dated 8 September 2021 the plaintiff seeks costs, and by memorandum dated 10 September the second defendant takes issue with elements of the claim. I accept the criticism made in the memorandum of counsel for the second defendant that given that details of the costs claim were only provided to counsel for the second defendant on 2 September and had not been responded to there has been no real attempt to seek to agree costs.

1      Palmer v Hewitt Building Ltd [2021] NZHC 1460.

PALMER v HEWITT BUILDING LIMITED [2021] NZHC 2435 [16 September 2021]

Joint and several liability

[3]    As counsel for the second defendant acknowledged, under r 14.14 liability of the defendants is joint and several unless the Court directs otherwise. The second defendant seeks a direction departing from joint and several liability, at least in relation to some elements of the costs claim. This issue is not addressed in counsel for the plaintiff’s memorandum reflecting the lack of meaningful engagement before the plaintiff’s memorandum was filed.

[4]    I see no reason to direct that the liability of the defendants should not be joint and several here. The second defendant’s decision not to defend the claim against the first defendant was made reasonably late in the course of the proceedings. The preparation for the case, including what became a formal proof against the first defendant, properly addressed the claims against both defendants. I make the assessment of costs on that basis and also direct that the costs liability is joint and several.

Commencement (Step 1)

[5]    The plaintiff claims an allowance under time band C for the commencement of the proceeding at 10 days rather than 3 days provided for under band B. The second defendant does not accept that this higher allowance is appropriate.

[6]    I accept that a higher allowance is appropriate. This claim had a degree of legal and factual complexity. Each item of the building process that was alleged to be deficient needed to be identified in the statement of claim, with the particular basis for the deficiency outlined, and the appropriate loss for that item specified. The exercise of making a full assessment of the alleged deficiencies with the property, and the remedy for those deficiencies, would have involved a significant amount of time. It needs to be remembered that the allowance under step 1 is for the commencement of the proceedings overall, not simply for drafting the statement of claim. I accept under r 14.5(2) that “a comparatively large amount of time for the particular step is considered reasonable” rather than “a normal amount of time”. I accordingly accept the 10 day allowance.

List of documents (Step 20)

[7]    The plaintiff claims an allowance under time band C rather than band B (7 days rather than 2.5 days) for providing the plaintiff’s list of documents on discovery. The second defendant disputes that this is appropriate. The plaintiff’s discovery list was 24 pages listing more than 500 documents. The plaintiff says this arose because there was a need to conduct investigations into factual matters and to find documents relevant to the claim given that little documentation was discovered by the defendants.

[8]    I do not accept that the claim under time band C is appropriate as I do not accept that a comparatively large amount of time for this particular step is reasonable. The allowance only covers the time for creating the list of documents. This is not a time allowance for conducting investigations, and obtaining documents through those investigations. Such investigations would not be expected to be done by solicitors rather than the party itself. The claim for legal expenditure is limited to the task conducted by the solicitor in creating the list of documents. It seems to me that 2.5 days is an appropriate amount of time to create a list running for 24 pages, and that 7 days would be excessive.

Hearing time

[9]    The plaintiff has made its claim including calculations based on a five day hearing (steps 33, 33B and 34). The second defendant says this involves an overclaim and that the hearing only took four days.

[10]   I agree with the second defendant’s submission. The evidence was received over a period of three days, and one day was devoted to closing submissions. Whilst the evidence was completed in just over two and a half days, with the Court adjourning at 2.30 pm, a full three day allowance is appropriate given the extent to which the hearing proceeded by taking briefs of evidence as read. A four day allowance for the hearing, with the consequential implications for the costs claim, is appropriate.

Scanning and copying costs

[11]   The second defendant disputes the claimed disbursements for scanning documents and coding scanning documents totalling $2,412.82.

[12]   Disbursements are allowed under r 14.12 if they are specific to the conduct of the proceedings, reasonably necessary, and reasonable in amount. Whether disbursements of this kind should be allowed depends on the circumstances, and can involve only a partial award of this kind of disbursement.2 In the present circumstances I accept that the disbursement should be allowed. It is a reasonably low amount of costs which allowed the documents to be managed electronically and accordingly with greater efficiency. Such claims should be permitted unless there is an element of double recovery given the allowances for discovery.

Expert valuer

[13]The second defendant disputes that the valuation expert witness fees totalling

$4,766.75 should be allowed on the basis that the claim against the second defendant involved the cost of remedying defective building work rather than the loss in value.

[14]   Whilst this is so in relation to the claim against the second defendant, it is not necessarily so in relation to the claim against the first defendant. This was a reasonable disbursement to incur, in a reasonable amount, in relation to the claim against the first defendant and accordingly should be allowed as part of the costs claim for which both defendants are jointly and severally liable.

[15]I award the plaintiff costs on the basis outlined above.

Cooke J

2      See Mainzeal Property and Construction Ltd (In liq) v Yan & Ors [2019] NZHC 1637 at [100]– [106].