Waimakariri District Council v Gauld - [2015] NZCA 200

IN THE COURT OF APPEAL OF NEW ZEALAND

CA288/2014
[2015] NZCA 200

BETWEEN	WAIMAKARIRI DISTRICT COUNCIL Appellant
AND	KEITH FRASER GAULD Respondent

Hearing:	30 April 2015
Court:	Harrison, Keane and Wylie JJ
Counsel:	F P Divich and A C Harpur for Appellant K W Clay for Respondent
Judgment:	26 May 2015 at 3 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellant must pay the respondent indemnity costs calculated on a reasonable solicitor and client basis together with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Harrison J)

Introduction

Following a trial in the High Court at Christchurch, Whata J entered judgment for Keith Gauld against Waimakariri District Council (WDC) for damages of $6,913.39.[1] The Judge found that WDC had negligently failed to issue a statutory rectification notice for Mr Gauld’s house. But he reduced its liability by 25 per cent to allow for contributory negligence.
[1]Gauld v Waimakariri District Council [2013] NZHC 1923, [2013] NZAR 1320.
In the normal course costs follow the event. When giving judgment on liability Whata J provisionally observed that Mr Gauld should be entitled to costs on a 2B basis less 25 per cent.[2] Given the modesty of the damages award, it might have been expected that the parties would accept Whata J’s provisional view or agree on costs. However, WDC sought a costs award against Mr Gauld on the ground that he acted unreasonably in rejecting its offer made on 26 March 2013, two weeks before the trial started, to settle his claim for $50,000. WDC sought costs from that date of $18,275.22. Mr Gauld maintained his claim for costs.
[2]At [102].
Whata J found for Mr Gauld and entered judgment in his favour for costs of $31,288 plus disbursements.[3] WDC now appeals against the costs judgment but not the liability judgment.

High Court

[3]Gauld v Waimakariri District Council [2014] NZHC 956.

Whata J identified the key issue as being whether WDC’s settlement offer of $50,000 had the effect of either disentitling Mr Gauld to costs either in full or in part or entitling WDC to its costs from the date of the offer.[4]
[4]At [3].
WDC’s offer was made in terms of r 14.10 of the High Court Rules. Costs were thus governed by r 14.11 which materially provides:
14.11 Effect on costs
(1)The effect (if any) that the making of an offer under rule 14.10 has on the question of costs is at the discretion of the court.
…
(3) Party A is entitled to costs on the steps taken in the proceeding after the offer is made, if party A—
(a) offers a sum of money to party B that exceeds the amount of a judgment obtained by party B against party A; or
(b) makes an offer that would have been more beneficial to party B than the judgment obtained by party B against party A.
(4) The offer may be taken into account, if party A makes an offer that—
(a)…

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: [2015] NZCA 200
Decision Date: 26 May 2015 at 3 pm

CaseChat Overview and Summary

Waimakariri District Council (WDC) appealed against the costs judgment of Whata J, who had found for Keith Gauld against the council for damages of $6,913.39. The council had made a settlement offer of $50,000 two weeks before the trial began. The judge found that the council had negligently failed to issue a statutory rectification notice for Mr Gauld’s house. The judge reduced the council’s liability by 25 per cent to allow for contributory negligence. The council sought a costs award against Mr Gauld on the ground that he acted unreasonably in rejecting its offer to settle his claim for $50,000. The judge found for Mr Gauld and entered judgment in his favour for costs of $31,288 plus disbursements. The council now appealed against the costs judgment but not the liability judgment. The court found that the judge was satisfied that justice would be done to both sides if Mr Gauld received at least some of his costs. The judge granted Mr Gauld costs on a 2B basis but reduced by 35 per cent. The appeal was dismissed and the council must pay Mr Gauld indemnity costs calculated on a reasonable solicitor and client basis together with usual disbursements.

Orders