Shabor Limited v Graham - [2021] NZHC 3576

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2017-419-88

[2021] NZHC 3576

IN THE MATTER of the sale and purchase of a farm at 910 Moerangi Road, Oparau

BETWEEN

SHABOR LIMITED

Plaintiff

AND

ROBERT GRAHAM

First Defendant

PINE RIDGE TRUSTEE COMPANY LIMITED

Second Defendant

Hearing: On the papers

Appearances:

KM Quinn and CB Pearce for the Plaintiff

DM O’Neill and PA Depledge for the First and Second Defendants

Judgment:

21 December 2021

JUDGMENT No. 3 OF FITZGERALD J

[As to readjustment of costs in light of appeal decision]

This judgment was delivered by me on 21 December 2021 at 3.00pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Cargill Stent Law, Taupo
Forgeson Law, Te Kuiti (D Foregson)

SHABOR v GRAHAM [2021] NZHC 3576 [21 December 2021]

Introduction and background

[1] In my substantive judgment delivered on 13 March 2020, I found that the first and second defendants (collectively “Mr Graham”) had falsely represented the carrying capacity of a farm when advertising it for sale.1 I found this to be in breach of s 35 of the Contract and Commercial Law Act 2017 (CCLA) and s 9 of the Fair Trading Act 1986 (FTA).

[2] Despite these findings, however, I ultimately dismissed the plaintiff’s (Shabor’s) claims on the basis of a no reliance/disclaimer clause in the agreement for sale and purchase between the parties.

[3] Shabor subsequently appealed against my judgment to the Court of Appeal. The Court of Appeal dismissed the appeal on the CCLA cause of action, but granted the appeal on the FTA cause of action.2 The Court concluded that the no reliance/disclaimer clause did not break the chain of causation between Mr Graham’s misleading conduct and Shabor’s loss.3 Had I upheld Shabor’s FTA claim, I had recorded what I would have likely awarded by way of damages, including that I would have reduced the damages award by 40 percent to reflect Shabor’s own conduct.4 The Court of Appeal adopted my assessment of the difference between the price paid by Shabor for the farm and its actual value ($530,000),5 though reduced that amount by 30 percent, not 40 percent, to reflect Shabor’s own conduct.6

[4] In my original costs judgment, I awarded scale costs in Mr Graham’s favour, though reduced the award by 25 percent to reflect that a (very) significant amount of time and cost was devoted by both parties to assessing the carrying capacity of the farm, an issue on which Mr Graham was unsuccessful.7

1      Shabor Ltd v Graham [2020] NZHC 507 (HC judgment).
2      Shabor Ltd v Graham [2021] NZCA 448, (2021) 16 TCLR 177 (CA judgment).
3 At [56].
4 HC judgment, at [236].
5 CA judgment, at [67].
6 At [83].
7      Shabor Ltd v Graham [2020] NZHC 1592 (original costs judgment).

[5] In light of Shabor’s successful appeal on the FTA cause of action, and the Court of Appeal’s award of damages, the costs of…

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 Shabor Limited v Graham

Details

AGLC: Shabor Limited v Graham [2021] NZHC 3576
Case: [2021] NZHC 3576
Decision Date: 21 December 2021

CaseChat Overview and Summary

Shabor Limited filed a claim against Robert Graham and Pine Ridge Trustee Company Limited regarding the sale and purchase of a farm located at 910 Moerangi Road, Oparau. The plaintiff, Shabor, alleged that the defendants had falsely represented the carrying capacity of the farm when advertising it for sale, which was in breach of the Contract and Commercial Law Act 2017 and the Fair Trading Act 1986. Despite the court finding the defendants' conduct misleading, the plaintiff's claims were ultimately dismissed due to a no reliance/disclaimer clause in the agreement for sale and purchase. However, the Court of Appeal later found in favour of the plaintiff on the Fair Trading Act cause of action, and Shabor subsequently appealed the court's decision on costs.

The central issue before the court was whether the costs award should be substantially reduced to reflect the plaintiff's partial success on appeal and the reduction in damages awarded by the Court of Appeal. The court examined the nature of the plaintiff's claims, the extent to which the defendants' conduct increased the costs of the litigation, and whether certain disbursements and costs should be excluded from the award.

The court held that a reduction in the costs award was appropriate to reflect the plaintiff's partial success on appeal and the reduction in damages awarded. However, the reduction should be modest, at 10 percent. The court also found that the costs of the summary judgment application, the fees of the expert witness, and the hearing fee should all be included in the costs award. The court ultimately awarded costs in the amount of $181,324.45, comprising scale costs of $97,378.00 and disbursements of $83,946.45, with a 10 percent reduction applied to the scale costs.

The court's decision highlights the importance of considering the nature of the claims, the extent to which the defendants' conduct increased the costs of the litigation, and the principles of costs awards when determining the appropriate costs award in a case of partial success on appeal. The court's approach to reducing the costs award in this case may serve as a useful guide for future cases involving similar issues.

Orders