Sipka Holdings Limited v Merj Holdings Limited

[2015] NZHC 2662

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-000199 [2015] NZHC 2662

BETWEEN

SIPKA HOLDINGS LIMITED

First Appellant

AND

ANG PROPERTY INVESTMENT LIMITED

Second Appellant

AND

MERJ HOLDINGS LIMITED Respondent

Hearing:	On the papers
Judgment:	29 October 2015

JUDGMENT AS TO COSTS OF WYLIE J

This judgment is delivered by Justice Wylie on 29 October 2015 at 2.30pm

pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar Date:……………………………….

Solicitors/counsel:

Stainton Chellew for Appellants

SRG Judd, Auckland for Respondent

SIPKA HOLDINGS LTD & ANOR v MERJ HOLDINGS LTD [2015] NZHC 2662 [29 October 2015]

[1]      On 20 August 2015 I issued a reserved judgment in these proceedings.   I dismissed the respondent’s cross-appeal against liability.  I declined the appellants’ appeal against the quantum of damages awarded, vacated the District Court’s award of damages and remitted the matter to the District Court pursuant to   s 76(1)(b) of the District Courts Act 1947, so that it could hear the matter insofar as it needed to do so to determine what damages should properly flow from the respondent’s breach of the Contractual Remedies Act 1979 and the Fair Trading Act 1986.

[2]      In my judgment I recorded that both parties had had a measure of success, and indicated a preliminary view that costs should lie where they fell.

[3]      The respondent has filed a memorandum seeking costs.   It argues that it succeeded on its cross-appeal, and that the appellants had failed on their appeal.  It also asserts that it made a number of offers, without prejudice as to costs, and that if accepted, the offers would have left the appellants in a better position than they are now in and would have saved both parties the cost of the appeals.

[4]      The appellants resist  any award of costs.   They take the view that they succeeded in relation to liability, and express concern that the respondent has not as yet compensated or remediated its breach by an award or payment of damages.

[5]      All matters in relation to costs are at the discretion of the Court – r 14.1. That discretion is not however unfettered.  It is qualified by the specific rules dealing with costs.  One of those rules is contained in r 14.2(a) – the party who fails with respect to  a  proceeding  or  interlocutory application  should  pay costs  to  the  party  who succeeds.

[6]      In the present case, there were two matters in dispute between the parties.

[7]      First, the respondent challenged the District Court Judge’s decision that it had breached the Fair Trading Act and the Contractual Remedies Act.   It argued that there was no liability on it.  It failed in that regard.  The appellants argued that the respondent was liable, and they succeeded in those arguments in support of the District Court Judge’s decision.

[8]      Secondly, the appellants sought to overturn the District Court Judge’s award of damages.  They sought damages in the sum of $120,684.07, which they said were the losses they incurred.   They also sought additional damages of $23,000 for a claimed loss of profit.   The appellants  failed  in this regard and the respondent succeeded.   I vacated the award of damages in the District Court, because in my judgment there was no evidence that there was any loss to the appellants which was caused by the misrepresentation.  Given my findings as to liability, I considered that an appropriate award of damages properly attributable to the misrepresentation and misleading and deceptive conduct should flow as a result, and I remitted the matter to the District Court to enable it to hear further evidence in that regard.

[9]      It follows in my judgment that both parties have had a measure of success and a measure of failure in the appeal.

[10]     The leading authority in such situations is the decision of the Court of Appeal in Packing In Ltd (in liquidation) formerly known as Bond Cargo Ltd v Chilcott.1

The Court there confirmed that it is not helpful to focus too closely on which party succeeded.   Rather the starting point should be that approximately equal success attended the efforts of both sides. In the end, the Court must endeavour to do justice to both sides, bearing in mind all material features of the case.2

[11]     In the present case, approximately equal success and failure attended the efforts of both sides.  Roughly equal time was spent at the hearing on each aspect – liability and then damages.  In my view, taking into account all material features of the case, both parties have succeeded and failed in equal measure, and costs should lie where they fall.

[12]     I do not consider that the various Calderbank offers exchanged between the parties are relevant.  The initial offers made by the respondent were simply in the amount of the judgment which had then been obtained in the District Court.  While

later offers were made which exceeded the judgment sum, it cannot be said that the

1      Packing In Ltd (in liq), formerly known as Bond Cargo Ltd v Chilcott (2003) 16 PRNZ 869 (CA).

2 At [5].

offers made will necessarily exceed the amount of such judgment as may ultimately be obtained by the appellants when (and if)3  the matter is re-heard by the District Court.

[13]     For these reasons, I decline to make an award of costs in favour of either party.

Wylie J

3      I note that the respondent has filed an interlocutory application seeking recall of the judgment and/or leave to appeal to the Court of Appeal in relation to my decision to remit the matter to the District Court. That application is opposed by the appellants. It is yet to be heard.