IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2014-409-000207 [2018] NZHC 2375
BETWEEN SAYAD MOSTAFA SADAT AND MASTOREH SADAT
Plaintiffs
AND
TOWER INSURANCE LIMITED
First Defendant
AND
EARTHQUAKE COMMISSION
Second Defendant
Hearing: On the papers Counsel:
K T Dalziel, J R Pullar and K L Wright for Plaintiffs M C Harris and S F Alawi for First Defendant
N S Wood and J W Upson for Second Defendant J Moss for Claims Resolution Service
Judgment:
10 September 2018
JUDGMENT OF NATION J AS TO COSTS
[1] After a hearing that concluded on 7 April 2017, through a judgment of 6 July 2017, the plaintiffs (the Sadats) failed on their claim against the first and second defendants.1 They had been unable to prove that their home suffered material damage as a result of the September 2010 earthquake that resulted in any liability on the first defendant (Tower) for the cost of repairs or a rebuild. They had not proved there was damage for which the second defendant (EQC) could be liable, in excess of the $43,000 EQC had already paid to the Sadats.
SADAT v TOWER INSURANCE LTD [2018] NZHC 2375 [10 September 2018]
[2] The trial of the proceedings was originally scheduled to begin on 20 March 2017. The Sadats’ reply briefs were to be served by 10 March 2017 at the latest. The defendants sought urgent telephone conferences prior to trial because of difficulties they faced due to the Sadats’ geotechnical engineer, Mr Thompson, serving an extensive brief of evidence with significant new material on 16 March 2017 and extensive further evidence from a structural engineer, Dr Wu, on 17 March 2017.
[3] As a result of conferences with counsel on 17 and 21 March 2017, various steps were taken by the Sadats’ experts to enable the defendants’ experts to deal with this new evidence. Certain modifications were made to the evidence to be presented by Dr Wu. On that basis, leave was granted for further evidence to be admitted but the start of the trial was delayed to 22 March 2017. In a minute of 21 March 2017, I noted that significant cost issues had arisen as a result of these developments but reserved those issues for consideration in due course.
[4] In my judgment of 6 July 2017, I noted the defendants would be entitled to costs. I said:2
There may be an issue as to whether the Sadats’ experts, Mr Thompson and Dr Wu, should have to personally make a contribution towards the defendants’ costs, particularly so because of the new evidence they presented just prior to the hearing. Earthquake Services Limited was a litigation funder for these proceedings.
[5] Both then and in a later minute, I made certain directions for all parties to progress any costs applications and to respond to those that were made.
[6]All costs issues as between Tower and other parties have…
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CaseChat Overview and Summary
The court held that while the late provision of supplementary evidence by the plaintiffs' experts caused issues for EQC, it was not egregious conduct that justified an award of increased costs. However, the court held that the late provision of expert evidence was not conducive to the efficient and economical progression of court proceedings and warranted an increase in the allowance for preparation for hearing. The court also held that CRSL was liable for costs jointly and severally with the plaintiffs.
The court held that while the high threshold for an award of costs against expert witnesses had been met, it was not making any award for costs against Dr Wu and Mr Thompson personally. The court considered it important that expert witnesses and counsel understand the obligations they have to assist the court, but it was also important that those who have the expertise to assist the court not be deterred from doing so through a fear of their exposure to a costs order if their evidence was not ultimately accepted.
The court ordered that the plaintiffs and CRSL were jointly and severally liable to pay costs to EQC on a 2B basis in the sum of $79,042.50, together with disbursements in the sum of $96,201.58. EQC was also entitled to costs against the plaintiffs and CRSL jointly and severally on the costs application in the sum of $3,000.
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