Pangani Properties Ltd v Lloyd - [2019] NZHC 863

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV 2016-454-126

[2019] NZHC 863

BETWEEN
PANGANI PROPERTIES LIMITED

Plaintiff

AND

G R LLOYD

First Defendant

AND

P J L NEVILL

Second Defendant

Hearing: On Papers

Counsel:

J V Ormsby and S Meares for Plaintiff A B Darroch for Defendants

Judgment:

17 April 2019

JUDGMENT OF ELLIS J (COSTS)

[1] This judgment is consequential on my substantive judgment of 6 August 2018,in which I found that, in the course of acting in relation to the sale of a commercial property in Palmerston North, the defendants (who are real estate agents) had breached fiduciary duties owed to their client, Pangani Properties Ltd (Pangani).1 I held (inter alia) that their breach had caused Pangani to lose the opportunity of declining to extend the due diligence period in relation to a conditional sale of the property to Zambora Ltd (Zambora) and, instead, pursuing a lease of its property to New Zealand Post Ltd (NZ Post).

1 Pangani Properties Ltd v Lloyd [2018] NZHC 1982. This judgment needs to be read in conjunction with that substantive judgment; I do not intend to repeat the facts or my findings in any detail here.

PANGANI PROPERTIES LTD v G R LLOYD [2019] NZHC 863 [17 April 2019]

[2]I made orders that the defendants pay to Pangani:2

(a)$63,150, being the net commission received by the defendants on the sale of Pangani’s property;3

(b)equitable compensation in the sum of $650,000 for loss of chance (being the value I placed on the lost chance of pursuing the lease); and

(c)equitable compensation in the sum of $100,000 in relation to the costs incurred by Pangani investigating and pursuing a complaint of fiduciary breach before the Complaints Assessment Committee (CAC) established under the Real Estate Agents Act 2008.

[3] I said that interest should run on the equitable compensation at a rate of five per cent from a date or dates to be agreed by counsel. At Mr Ormsby’s request I also reserved the question of costs.4

[4] The question of interest has been resolved between counsel and so now needs to be recorded. There are outstanding disputes about costs and disbursements which need to be resolved. It is those issues with which this judgment principally deals.

Interest

[5] Although there was not immediate agreement between the parties about the dates from which interest should run, it is now agreed that:5

2 At [173].
3      It was accepted at trial that the GST component of the commission, which was paid to the Commissioner of Inland Revenue, could not be disgorged.
4      The inference being that there was pre-trial correspondence relevant to that issue, as indeed there was (discussed below).
5      The rate of five per cent is the rate contained in s 87(1) of the Judicature Act 1908 (these proceedings having been commenced prior to 1 January 2018).

(a)interest on the loss of chance compensation runs from 6 May 2015; and

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 Pangani Properties Ltd v Lloyd

Details

AGLC: Pangani Properties Ltd v Lloyd [2019] NZHC 863
Case: [2019] NZHC 863
Decision Date: 17 April 2019

CaseChat Overview and Summary

Pangani Properties Ltd brought an action against G R Lloyd and P J L Nevill, real estate agents, for breach of fiduciary duty in relation to the sale of a commercial property in Palmerston North. The court had already ruled in Pangani’s favour, awarding damages and costs. The current judgment deals with the outstanding issues of interest, costs, and disbursements. The defendants had already paid the awarded damages and Pangani had conceded some of the costs. The remaining issues were the rate of interest, the band allocation for certain steps in the proceeding, the allowance for second counsel, the effect of Calderbank letters exchanged between the parties, and some disbursements.

The court ruled that interest should run at five per cent from 6 May 2015 and from the dates identified in Appendix B to Mr Ormsby’s memorandum dated 20 December 2018. The court declined to certify for second counsel, finding that the trial was run in the “modern” way and that the legal issues, although difficult, were within the expertise of the plaintiff’s counsel. The court also declined to order increased costs based on the Calderbank letters, finding that the defendants were not unreasonable in rejecting the plaintiff’s offers.

The court ruled on the band allocation for certain steps in the proceeding, finding that Band B costs were appropriate for all steps. The court also ruled on some disbursements, finding that the private investigator’s fees and the expenses of Pangani’s directors in attending the trial were not claimable, but that the fees of Pangani’s solicitor, who was also a factual witness at trial, were claimable.

The court made orders for interest, costs, and disbursements, as set out in the judgment.

Orders