Tadd Management Limited v Weine - [2023] NZHC 1968

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-781

[2023] NZHC 1968

UNDER sections 24–30 and 35 of the Contract and Commercial Law Act 2017

IN THE MATTER OF

the property at 134 Queens Drive, Lower Hutt

BETWEEN

TADD MANAGEMENT LIMITED

Plaintiff

AND

RUTH RENTON WEINE and MICHAEL

DAVID HOFFMAN-BODY as trustees of the Ruth Weine Family Trust
Defendants

AND

NEW ZEALAND CONSULTING ENGINEERS LIMITED

Third Party

On the Papers

Counsel:

F Collins and J Perry for the Plaintiff

R J Fowler KC, M Wolff and H Dempsey for the Defendants

Judgment:

26 July 2023

COSTS JUDGMENT OF GWYN J

Solicitors:
Gibson Sheat Lawyers, Wellington Morrison Kent, Wellington

TADD MANAGEMENT LIMITED v [2023] NZHC 1968 [26 July 2023]

Introduction

[1] In this proceeding the plaintiff, as purchaser of a commercial building, brought proceedings for contractual misrepresentation and, in the alternative, common mistake, against the vendors of the building. The claims related to the earthquake rating of the building. The defendant vendors had provided an Initial Seismic Assessment (ISA) of the building to potential purchasers which assessed the building as having a 60%NBS (New Building Standard) rating.1

Judgment

[2] On 5 April 2023 I issued a judgment finding the defendants liable to the plaintiff for contractual misrepresentation and, in the alternative, common mistake.2 I ordered the defendants to pay the plaintiff $592,000, the difference in value between the property as represented and the actual value of the property, together with ancillary costs.

[3]I dismissed the defendants’ claims against the third party.

Costs

[4]The parties have been unable to agree costs. The plaintiff seeks costs of

$97,780.87, being a 50 per cent uplift on category 2B scale costs, together with actual disbursements.

[5] The defendants oppose the application for increased costs and also dispute specific items of costs sought by the plaintiff.

Plaintiff ’s submissions

[6] The plaintiff seeks increased costs under r 14.6(3)(b) of the High Court Rules 2016 (Rules). It submits that a 50 per cent uplift on scale costs from the time the proceeding was initially filed is appropriate.

1 An earthquake risk building is less than 67%NBS; an earthquake prone building is less than 34%NBS: see New Zealand Society for Earthquake Engineering Assessment and Improvement of the Structural Performance of Buildings in Earthquakes (June 2006).
2 TADD Management Ltd v Weine [2023] NZHC 764, (2023) 24 NZCPR 1 [judgment].

[7] The plaintiff says that the defendants throughout the proceeding advanced an argument that lacked merit.3 In particular, the plaintiff says the defendants argued that TADD and its directors should have obtained its own Detailed Seismic Assessment (DSA) of the building prior to purchase.

[8] The judgment found that the timeframe for sale of the property “meant potential purchasers were prevented from making anything other than limited inquiries into the seismic condition of the building.”4 The plaintiff says it is a matter of common sense that the defendants’ argument on this point should never have been pursued.

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: [2023] NZHC 1968
Decision Date: 26 July 2023

CaseChat Overview and Summary

In TADD Management Limited v Weine, the plaintiff, a purchaser of a commercial building, sought damages and costs against the defendants, the vendors of the building, alleging contractual misrepresentation and common mistake concerning the building's earthquake rating. The defendants had provided an Initial Seismic Assessment (ISA) that rated the building at 60% New Building Standard (NBS), but subsequent assessments by the plaintiff indicated a much lower rating, deeming the building earthquake prone. The court found the defendants liable for misrepresentation and awarded the plaintiff the difference in value between the represented and actual property, along with ancillary costs.

The court addressed the plaintiff's application for increased costs, which sought a 50% uplift on category 2B scale costs. The plaintiff argued that the defendants' defence lacked merit, particularly their contention that the plaintiff should have obtained its own Detailed Seismic Assessment (DSA) prior to purchase. The court found that while the defendants' argument lacked merit, it did not rise to the level of being frivolous or vexatious, as required for an award of increased costs. The court also dismissed the plaintiff's claim for increased costs based on the defendants' conduct in relation to settlement, noting that the defendants' late settlement offer did not warrant such an award.

Regarding specific costs, the court allowed the plaintiff to recover most of the claimed disbursements, subject to certain conditions. The plaintiff had claimed costs for electronic discovery services and electronic casebook management, but the court required more detail to ensure there was no double recovery. The court also required the plaintiff to detail the overlap between these services and the steps for which costs were claimed under the scale. Additionally, the court deducted certain costs related to an interlocutory hearing on further discovery, finding that the defendants, having achieved their objective through a consent order, were entitled to a reduction in costs for that matter.

The final orders of the court were that the plaintiff was entitled to category 2B scale costs, along with specific disbursements, subject to certain deductions as outlined in the judgment. The court's decision highlighted the high threshold for awarding increased costs and the importance of ensuring that any claims for costs are justified and not duplicative.

Orders