Roading & Asphalt Ltd v South Waikato District Council

[2012] NZHC 2243

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2010-463-0473 [2012] NZHC 2243

BETWEEN  ROADING & ASPHALT LIMITED Plaintiff

ANDSOUTH WAIKATO DISTRICT COUNCIL Defendant

Hearing:         On the papers

Counsel:         P P Beutow & M B Lake for Plaintiff

J A Macgillivray & M S Crocket for Defendant

Judgment:      31 August 2012

JUDGMENT OF KEANE J [re interest and costs]

This judgment was delivered by  on 31 August 2012 at 4pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

Solicitors:

Carter & Partners, Auckland for Plaintiffs

Heimsath Alexander, Auckland for Defendants

ROADING & ASPHALT LIMITED V SOUTH WAIKATO DISTRICT COUNCIL HC HAM CIV 2010-463-

0473 [31 August 2012]

[1]      In my decision, dated 8 June 2012, I omitted to award RAL the interest to which it was entitled and, though I said that RAL was entitled to an award of costs, RAL and the Council are apart as to five issues.

[2]      It has been agreed that I should recall my judgment under HCR 11.10 to award RAL the interest it claims under s 87 of the Judicature Act 1908 at five per cent, reflecting the 24 months of the contract opportunity denied, $16,171.25. By consent, I recall my judgment and make that interest award in favour of RAL.

[3]      The five issues dividing RAL and the Council as to costs are as to whether (i) RAL should have scale costs for second counsel; (ii) two days preparation for the February 2011 judicial settlement conference; (iii) eight days preparation for the hearing (and whether subject to a Council offset); (iv) a 50 per cent uplift as a result of a Calderbank letter, dated 6 October 2011; (v) the GST paid on its expert's fee.

[4]      The first issue, whether RAL should have scale costs for second counsel, turns on whether the hearing could have been conducted by principal counsel only. No doubt principal counsel could have conducted the case by themselves. But it was of a sufficient order of complexity, I consider, to justify the choice each made of second counsel. RAL may claim for second counsel.

[5]      The second issue, whether RAL should be able to claim for two days to prepare and attend the half day judicial settlement conference in Rotorua in February

2011, turns on whether it should have two days to travel to, as well as to prepare for, the conference. The Council concedes at most one day. RAL is fixed with its choice of counsel from Auckland, but I accept that something in excess of one day is justifiable. I will allow RAL one and a half days.

[6]      The third issue, RAL's claim for eight days to prepare for the hearing that was scheduled for four days, turns on why the hearing was accomplished in three days.

[7]      RAL says that quantum was only agreed on the last working day before trial, once  work  on  quantum  was  complete,  and  thus  it  is  entitled  to  eight  days preparation. The Council says that only six days is justifiable because quantum could

have been agreed well before trial had RAL given complete discovery earlier. It did not complete discovery until early September. The Council also claims by way of offset an award for having had to apply for further and better discovery.

[8]      In its reply submission RAL contends that it had discovered all documents relevant to quantum well before September and that those sought in September were irrelevant.

[9]      There is, I find, an issue whether any absence of relevant discovery impeded the fixing of quantum before trial. I resolve it in this way. RAL will have six, not eight,  days  for  preparation,  but  there  will  be  no  offset  to  the  Council  for  its application for further and better discovery.

[10]     The fourth issue, whether the Council should have a 50 per cent uplift on scale 2B costs after its Calderbank letter, dated 6 October 2011, turns in part on the significance of that letter at the time and how reasonable a wholesale uplift is.

[11]     On 6 October 2011, RAL offered in its letter to accept in full and final settlement $345,772, plus GST, including interest, relying on its expert's opinion as to foregone profits for the two years of the contract, and scale 2B costs and disbursements coming to $44,892.

[12]     The Council did not respond by 20 October 2011, the date on which the offer was to expire, and when it did respond by letter dated 4 November 2011, the Friday before the hearing, it rejected the offer and noted that it was prepared only to offer an unidentified amount for 'wasted litigation costs'.

[13]     The judgment RAL obtained, $346,805, including interest, was greater than the sum it had offered to accept. Furthermore, the Council's own expert only reduced the profit figure claimed by $14,000. Hence the agreed quantum, $330,634; a figure RAL contends could have been agreed before the hearing.

[14]     RAL is, I accept, entitled to an uplift after the date of the letter, but not of the order it claims. The sum RAL offered to accept is not much less than the sum it

obtained, and the Council was not unreasonable in taking the matter to trial. Its case was clearly arguable.

[15]     Furthermore, while I accept that a 50 per cent uplift for principal counsel might is justifiable, I do not consider that the uplift for preparation ought to be more than 20 per cent and I see no justification for an increase for second counsel or for sealing the judgment.

[16]     Finally,  RAL claims  in  full  its  expert's  fee,  including  GST,  under  HCR

14.12(2). I accept the Council's point, however, that GST is not recoverable.1  RAL

will have its expert's fee less GST. I leave it to the parties to complete the calculation required to give effect to this decision.

P.J. Keane J

1      Crown Money Corporation Ltd v Grasmere Estate Trust Co Ltd [2008] 19 PRNZ 591 at [7].