Takapuna Residence Development Limited v Dixon - [2023] NZHC 1668

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-001423

[2023] NZHC 1668

BETWEEN
TAKAPUNA RESIDENCE DEVELOPMENT LIMITED
First Plaintiff

EDEN GP LIMITED
Second Plaintiff

EDEN DEVELOPMENT NO.1 LP
Third Plaintiff

AND

PETER ANDREW DIXON and MARGARET JOAN DIXON

Defendants

Hearing: On the papers

Appearances:

A J Casey for the Plaintiffs

W McCartney for the Defendants

Judgment:

30 June 2023

COSTS JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by Associate Judge Gardiner
on 30 June 2023 at 3.00 pm, pursuant to r 11.5 of the High Court Rules

Registrar / Deputy Registrar – Date: ………………………………..

Solicitors:

Duncan King Law, Auckland Duthie White, Auckland

W McCartney, Auckland A J Casey, Auckland

TAKAPUNA RESIDENCE DEVELOPMENT LTD v DIXON [2023] NZHC 1668 [30 June 2023]

Introduction

[1] In a judgment delivered on 27 March 2023, I entered summary judgment for the first plaintiff against the defendants for $342,825.35, including interest to 21 February 2023.1

[2] The plaintiffs now seek $23,264.51 by way of increased or indemnity costs pursuant to r 14.6 of the High Court Rules 2016.

Submissions

[3] The plaintiffs rely on three grounds. First, that the defendants failed, without reasonable justification, to accept an offer of settlement. The plaintiffs say that prior to filing the proceeding in August 2022, they made several requests for the defendants to repay the GST amount to avoid the need for proceedings. On 27 October 2022, the plaintiffs made a Calderbank offer to accept $340,000, an amount less than what they were awarded by the judgment. The plaintiffs say they also wrote to the defendants on 22 June 2022 requesting repayment of the GST and accounting fees, plus interest accrued to that date. They say that amount was also less than what the first plaintiff was awarded.

[4] Second, the plaintiffs submit that the defendants pursued arguments that lacked merit and/or failed to accept legal argument. They say that it should have been clear to the defendants from the outset that their defence was completely without merit. They refer to s 60B of the Goods and Services Tax Act 1985 and the comparable authorities of the Ling and Park Homes.2 The plaintiffs submit that their letters set out the basis on which they considered that the defendants had no defence to the claim, being the basis on which they were ultimately successful.

[5] Third, the defendants acted vexatiously or unnecessarily in defending the proceeding. The plaintiffs point out that in the defendants’ notice of opposition dated 13 October 2022, the defendants only disputed part of the claim, while acknowledging

1 Takapuna Residence Development Ltd v Dixon [2023] NZHC 624.
2 YL NZ Investment Ltd v Ling [2017] NZHC 1793, upheld in Ling v YL Investments Ltd [2018] NZCA 133, (2018) 20 NZCPR 830; and Park Homes Ltd v Miah [2022] NZHC 1352.

that they had no defence to the balance of around $265,000. Despite that, they did not pay that…

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 1668
Decision Date: 30 June 2023

CaseChat Overview and Summary

Takapuna Residence Development Limited, Eden GP Limited, and Eden Development No. 1 LP filed a claim against Peter Andrew Dixon and Margaret Joan Dixon, seeking repayment of a sum amounting to $342,825.35, inclusive of interest. The claim was related to a dispute over goods and services tax (GST) and accounting fees. Following the entry of summary judgment in favour of the plaintiffs, they sought an order for increased or indemnity costs against the defendants. The defendants opposed this application, arguing that their conduct did not warrant such an award. The primary legal issue before the court was whether the defendants' conduct justified an order for increased or indemnity costs. The court considered three grounds advanced by the plaintiffs: the defendants' failure to accept a settlement offer, the defendants' pursuit of a defence that lacked merit, and the defendants' vexatious or unnecessary conduct in defending the proceeding. The court found that the defendants' conduct did not warrant an order for increased or indemnity costs. The court held that the settlement offer made by the plaintiffs was objectively unattractive to the defendants if they believed they had a valid defence to the disputed amount. Furthermore, the court concluded that the defendants' defence was not "hopeless" and that they had not acted unreasonably or unmeritoriously in a Bradbury sense. The court also found that the defendants' conduct did not contribute unnecessarily to the time or expense of the proceeding. Consequently, the court declined to award increased or indemnity costs to the plaintiffs. Instead, the court awarded the plaintiffs scale 2B costs of $16,252, plus disbursements of $1,347.01.

Orders