Shabor Limited v Graham - [2020] NZHC 1592

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2017-419-88

[2020] NZHC 1592

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

BETWEEN

SHABOR LIMITED

Plaintiff

AND

ROBERT GRAHAM

First Defendant

PINE RIDGE TRUSTEE COMPANY LIMITED

Second Defendant

Hearing: On the papers

Counsel:

KM Quinn and CB Pearce for plaintiff

DM O'Neill and PA Depledge for first and second defendants

Judgment:

7 July 2020

JUDGMENT OF FITZGERALD J

[As to costs]

This judgment was delivered by me on 7 July 2020 at 4pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Cargill Stent Law, Taupo
Forgeson Law, Te Kuiti (D Forgeson) Gilbert/Walker, Auckland (I Rosic)

Shabor Limited v Graham [2020] NZHC 1592 [7 July 2020]

Introduction

[1] In my substantive judgment in this matter 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 and s 9 of the Fair Trading Act 1986.

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

[3] At the conclusion of my substantive judgment, I encouraged the parties to seek to agree costs. While there is agreement on some aspects of the proposed costs award, the parties have not been able to reach a concluded view. This judgment accordingly determines the competing cost claims.

The parties’ submissions

[4] First, there is no dispute that Mr Graham was the successful party overall and is entitled to costs. It is also agreed that costs should be awarded on a scale 2B basis. Also (largely) agreed is the calculation of scale costs for the substantive trial, before any adjustments.

[5] Mr Graham says that despite losing on the issues of the carrying capacity of the farm and whether the relevant advertising material was false or misleading, there should be no reduction to the scale costs award in his favour. He says he was always entitled to “put the plaintiff’s case to proof”. The plaintiff, on the other hand, says that a very significant proportion of the evidence adduced by both parties and the time at trial was directed to the issues on which Mr Graham lost. It accordingly proposes a 25 per cent reduction to the scale costs award to be made to Mr Graham.

[6] The plaintiff also says that the allowance for second counsel should be reduced by 50 per cent, given second counsel was not in fact present at Court for more than

1 Shabor Ltd v Graham [2020] NZHC 507.

about half of the actual Court sitting time. Mr Graham, on the other hand, says that despite only being in Court for approximately four…

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.

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Details

Case: [2020] NZHC 1592
Decision Date: 7 July 2020

CaseChat Overview and Summary

In the High Court of New Zealand, Shabor Limited, the plaintiff, brought a case against Robert Graham, the first defendant, and Pine Ridge Trustee Company Limited, the second defendant, regarding the sale and purchase of a farm at 910 Morangi Road, Oparau. The plaintiff alleged that the defendants had falsely represented the carrying capacity of the farm, which was in breach of the Contract and Commercial Law Act 2017 and the Fair Trading Act 1986. The court found the defendants' advertising to be false and misleading, but dismissed the plaintiff's claim due to a no liability/disclaimer clause in the agreement for sale and purchase between the parties. The case then proceeded to a determination of the costs incurred by both parties.

The court had to decide on the allocation of costs between the parties, specifically considering the costs related to the substantive trial and the earlier application for a defendant's summary judgment. The plaintiff proposed a 25 per cent reduction to the scale costs award for the substantive trial, arguing that a significant portion of the evidence and time at trial was directed to issues on which the defendants lost. The defendants argued against any reduction, stating they were always entitled to put the plaintiff's case to proof. Regarding the summary judgment application, the plaintiff argued for costs to be awarded to them as it was successful in preventing the application, while the defendants argued for costs to lie where they fall, given they were ultimately successful on the matter.

The court ruled that the defendants were entitled to costs and agreed that the award should be made on a scale 2B basis. The court accepted the plaintiff's submission for a 25 per cent reduction to the costs award for the substantive trial, considering the significant amount of time and energy devoted to the carrying capacity issue. The court also accepted the plaintiff's submission for a 50 per cent reduction for the second counsel's award. The court found that it was reasonable for the defendants to call valuation evidence in response to the plaintiff's evidence, but agreed that the quantum of the expert's fee appeared somewhat high. The court determined that the costs on the summary judgment application should lie where they fall.

The court ordered the substantive trial costs for the defendants to be reduced by 25 per cent, resulting in a final award of $62,559.25. The court also allowed an allowance of $10,000 for the expert's fee, considering the nature of the trial and the fact that the evidence was not accepted. The court ordered that the costs on the summary judgment application lie where they fall.

Orders