Sun v Peninsula Road Limited (in receivership and in liquidation)

[2016] NZHC 3108

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-007991 [2016] NZHC 3108

BETWEEN

HO KOK SUN & ORS

Plaintiffs

AND

PENINSULA ROAD LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION)

First Defendant

KAWARAU VILLAGE HOLDINGS LIMITED

Second Defendant

RUSSELL MCVEAGH Third Defendant

MELVIEW (KAWARAU FALLS STATION INVESTMENTS LTD) (In Receivership)

Fourth Defendant

On the papers
Counsel:	ARB Barker for Plaintiffs M G Colson and T B Fitzgerald for Second and Fourth Defendants
Judgment:	16 December 2016

COSTS JUDGMENT OF GILBERT J

This judgment is delivered by me on 16 December 2016 at 12.30 pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Counsel/Solicitors:
ARB Barker, Barrister, Auckland  [email protected]

Bell Gully, Auckland  [email protected] [email protected]

SUN & ORS v PENINSULA ROAD LTD (IN R’SHIP & IN LIQ) & ORS - COSTS [2016] NZHC 3108 [16 December 2016]

Introduction

[1]      The defendants succeeded in this Court and costs were awarded in their favour.  However, the substantive judgment has now been overturned by the Court of Appeal and, accordingly, the plaintiffs are now entitled to costs in this Court on their claim and on the defendants’ counterclaim.  This judgment deals with the disputed issues regarding the calculation of these costs.

Discovery

[2]      The plaintiffs each seek costs calculated on a category 1 band A basis for this step whereas the defendants were awarded a global allowance of three times 2C costs to reflect the fact that there were multiple plaintiffs.  The plaintiffs contend that the  differential  approach  is  justified  because  the  defendants  insisted  that  each plaintiff prepare a separate list of documents.

[3]      The amount claimed by the plaintiffs, being 1A costs for 104 affidavits of documents, is $96,096 whereas the defendants contend that $41,790 should be allowed, consistent with the costs they were awarded.

[4]      I consider that there is justification for awarding greater costs to the plaintiffs than was allowed for the defendants.   The plaintiffs, all of whom were overseas, were  each  required  by  the  defendants  to  prepare  an  affidavit  of  documents.    I consider that they are each entitled to costs for this step.   These have been appropriately calculated at the lowest level provided for in the scale.   I therefore allow costs for this step as claimed by the plaintiffs.

Inspection and evidence

[5]      The  plaintiffs  seek  double  costs  for  inspection  of  documents  and  for preparing their evidence on the basis that they had to prepare for the claim and the counterclaim.   The defendants contend that one set of costs is more appropriate because of the overlap between the claim and the counterclaim.

[6]      I accept the plaintiffs’ position on this issue.   The defendants sought costs calculated on the same basis when they initially obtained judgment in their favour.  I

consider that the amount claimed is an appropriate allowance given the time that is likely to have been required for these steps in this case.

Calderbank offer

[7]      The plaintiffs offered to settle the proceedings in March 2014, two months prior to the commencement of the trial, on the basis that they would pay the defendants $3 million.  They contend that they should receive a 50 per cent uplift on costs because the defendants rejected that offer.

[8]      Rule 14.6(3)(b)(v) of the High Court Rules provides that the Court may order a party to pay increased costs if that party contributed unnecessarily to the time or expense of the proceeding or a step in it by failing, without reasonable justification, to accept an offer of settlement.

[9]      I do not consider that any uplift is justified in the present case arising out of the defendants’ rejection of this offer.  The defendants had reasonable justification for rejecting the offer and did not contribute unnecessarily to the time or expense of the proceeding by doing so.   This is demonstrated by the fact that the defendants initially succeeded in this Court in obtaining judgment for excess of $45 million. The plaintiffs’ offer was late and little more than a “walk away” proposal at that stage.

Expert evidence

[10]     The plaintiffs seek a 50 per cent allowance for the actual costs incurred for expert valuation evidence obtained from Dean Humphries.  The defendants contend that this evidence was not relevant to any of the issues the plaintiffs pursued on appeal and no allowance should be made for this disbursement.

[11]     I disagree.  The Court of Appeal referred to the valuation evidence as being relevant to the issue of whether the obligation to complete stages 2 and 3 of the development should be treated as an essential term of the agreements for sale and purchase.    This  evidence  was  also  relevant  to  the  defendants’ counterclaim  for

damages.  I consider that the plaintiffs’ claim for a 50 per cent contribution to these

costs is fair and reasonable.

Result

[12]     The plaintiffs are entitled to costs as claimed, modified in accordance with this judgment.

M A Gilbert J