Reynolds v Calvert - [2015] NZHC 870

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2012-412-000910 [2015] NZHC 870

BETWEEN
GRANT BRUCE REYNOLDS as

liquidator of JAMES DEVELOPMENTS LIMITED (in liquidation)

Plaintiff

AND

HILARY JANE CALVERT and HGW TRUSTEES LIMITED as Trustees of Frongopoulos Trust of Dunedin

First Defendants

AND

CHRIS JAMES Second Defendant

Hearing: 29 April 2015 (On the papers)

Appearances:

M J McCartney QC and A Sorrell for Plaintiff
M R Sherwood King and M Gilkinson for Defendants

Judgment:

29 April 2015

JUDGMENT OF DUNNINGHAM J RE: COSTS DECISION

[1] In a decision issued on 9 March 2015, I gave judgment in the plaintiff’s

favour against the first defendants in the sum of $740,000 plus interest1 from

27 June 2012.2

[2] In summary, I held that the plaintiff had a contractual right to recover the sum of $740,000 from the first defendants, along with interest from the date of demand, and that claim was not statute-barred. Because the contractual claim succeeded, the alternate cause of action against the first defendant alleging a constructive trust over
the trust property failed. The various claims against the second defendant also failed

1 At the prescribed rate under the Judicature Act 1908.
2 Reynolds v Calvert [2015] NZHC 400.

REYNOLDS v CALVERT [2015] NZHC 870 [29 April 2015]

because the continued existence of the contractual right meant there had been no loss to the plaintiff caused by the second defendant’s defaults.

[3] I reserved the issue of costs. The parties have not been able to agree on costs and have reverted to the Court for a determination on the plaintiff’s entitlement to costs.

The proceedings

[4] The question of costs has been complicated by the drawn out procedural history of the claim. There was an unsuccessful summary judgment application by the plaintiff, there have been numerous interlocutory applications in relation to discovery (including seeking further and better discovery, non-party discovery, challenging claims to privilege and seeking that the Court inspects certain documents), and there have been notices to answer interrogatories, and to admit facts issued against the first and second defendants.

The plaintiff ’s position

[5] The plaintiff’s starting point is that he is entitled to costs on a 2B basis, except for the steps related to the inspection of documents, the summary judgment preparation and the trial preparation. Costs for these steps are sought on a 2C basis.

[6] He then also seeks an uplift of between 50 and 100 per cent for costs incurred after delivery of the summary judgment decision on 21 May 2013. The reasons for seeking an uplift include that:

(a) the case involved actual fraud relying on findings in my judgment;

(b)the second defendant was the “ultimate controlling and funding hand behind the first defendants”;

(c) the defence case was “meritless” given my findings that the first defendant received advice from his accountant that the “re-documentation” of the advance as a repayment of debt would not

be effective, and where it was only because of the defendants’ claims of honest belief,…

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 Reynolds v Calvert

Details

AGLC: Reynolds v Calvert [2015] NZHC 870
Case: [2015] NZHC 870
Decision Date: 29 April 2015

CaseChat Overview and Summary

In Reynolds v Calvert, the plaintiff, Grant Bruce Reynolds as liquidator of James Developments Limited, sought costs against the first defendants, Hilary Jane Calvert and HGW Trustees Limited, and the second defendant, Chris James. The plaintiff was successful in recovering $740,000 plus interest against the first defendants. The plaintiff sought costs on a 2B basis, except for specific steps such as inspection, summary judgment preparation, and trial preparation, which were sought on a 2C basis. The plaintiff also sought an uplift of between 50 and 100 per cent for costs incurred after the delivery of the summary judgment decision. The plaintiff further sought a joint and several costs order against both the first and second defendants.

The legal issues before the Court were whether the plaintiff was entitled to costs on a 2B or 2C basis, whether there were grounds for an uplift in costs, whether the plaintiff was entitled to the disbursements sought, and whether the costs award should be made jointly and severally against the first and second defendants. The Court found that the plaintiff was the successful party but only in relation to the successful claim for $740,000 plus interest. The Court accepted that certain steps were more time-consuming and awarded costs on a 2B basis, except for the summary judgment application where costs were to lie where they fell. The Court also found that a 50 per cent uplift was appropriate for costs incurred after the Calderbank offer was made. The Court declined to make a joint and several costs order against the second defendant, as there was insufficient evidence to establish that he funded the defence.

The final orders were that costs were awarded to the plaintiff on a 2B basis, except for the summary judgment application where costs were to lie where they fell. Costs incurred on steps taken following the making of the Calderbank offer on 8 July 2014 were subject to a 50 per cent uplift. There was no costs award against the second defendant.

Orders