Sherman Limited v Harlow - [2014] NZHC 1697

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2008-419-000877 [2014] NZHC 1697

BETWEEN
SHERMAN LIMITED

Plaintiff

AND

ROY J HARLOW and NANCY JEAN HARLOW Defendants

Hearing: [On the Papers]

Counsel:

D J Taylor for the Plaintiff
D Delic for the Defendants

Judgment:

21 July 2014

JUDGMENT OF DUFFY J [Re Costs]

This judgment was delivered by Justice Duffy on 21 July 2014 at 4.00 pm, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Counsel: D J Taylor, Hamilton

Solicitors: McBreens (J C G Cochrane), Hamilton
Fletcher Law Limited, Hamilton

SHERMAN LTD v HARLOW [2014] NZHC 1697 [21 July 2014]

[1] The defendants were unsuccessful in this Court. They successfully appealed against the decision, and the Court of Appeal’s decision set aside the decision of this Court. At [47] of the Court of Appeal judgment, there is an order that the plaintiff must pay the defendants costs in the High Court. The Court of Appeal directed that:

In the absence of agreement, costs must be fixed in the High Court, in light of this judgment.

[2] The parties have been able to agree on most aspects of the costs award in this Court. However, they have been unable to agree on the question of whether the defendants are entitled to payment of disbursements for expert witness fees.

[3] The issue in dispute raises the question of whether parties that enjoy success on narrower grounds than they advanced at trial should be entitled to an award of costs and, as in this case, disbursements that includes those that arise from the grounds on which they were not successful.

[4] The trial Judge has now retired. The costs application has recently been given to me for determination.

[5] When the experts’ fees were first sought as a disbursement payable by the plaintiff, the defendants were unable to provide invoices of those fees. They sought a ruling in principle on their entitlement to be reimbursed for those costs. They have since provided an updated memorandum that attaches copies of the relevant invoices. Since that memorandum was provided, the plaintiff has not disputed the quantum of the experts’ fees.

[6] The defendants called two expert witnesses at the trial: a valuer, John Sweeney; and a surveyor, Tony Tynan. Mr Tynan’s evidence was not challenged by the plaintiff at the trial; Mr Sweeney’s evidence was.

[7] The plaintiff contends that it should not be liable for the costs of the defendants’ expert witnesses because the issues on which they gave evidence were not the subject of the appeal. The plaintiff argues that this means that the findings of this Court on those issues, which were favourable to the plaintiff, remain relevant, particularly in regard to costs. They contend that the reference at [47] of the Court

of Appeal’s judgment to costs being fixed in this Court “in light” of their judgment is an indication that matters properly falling outside the scope of that judgment should not be included in…

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: [2014] NZHC 1697
Decision Date: 21 July 2014

CaseChat Overview and Summary

Sherman Limited, the plaintiff, sought a determination of costs against Roy J Harlow and Nancy Jean Harlow, the defendants, following a successful appeal by the defendants against a decision of the High Court. The Court of Appeal had ordered that the plaintiff must pay the defendants’ costs in the High Court. The parties have been able to agree on most aspects of the costs award, except for the defendants' claim for reimbursement of expert witness fees. The plaintiff contends that it should not be liable for the costs of the defendants' expert witnesses because the issues on which they gave evidence were not the subject of the appeal. The defendants argue that the Court of Appeal's judgment reversed the judgment of the High Court, and they should be entitled to be treated as having been successful on all fronts. The court found that the expert witness fees were not reasonably necessary for the determination of the relevant issue in the proceeding, and therefore the defendants are not entitled to claim their expert witness fees as a disbursement. The court considered that the expert evidence had little or nothing to do with the defence of the plaintiff's claim against the defendants, and was particularly relevant to the counterclaims that the defendants made regarding alleged misrepresentations. The court noted that the assessment of entitlement to an award of disbursements is based on whether incurring the costs of the item was reasonably necessary. The court found that the expert witness fees were not reasonably necessary, and so the defendants are not entitled to claim them as a disbursement. The parties have resolved all other issues regarding costs.

Orders