Waimauri Ltd v Mahon - [2020] NZHC 2310

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000454

[2020] NZHC 2310

BETWEEN
WAIMAURI LIMITED

Plaintiff/First Counterclaim Defendant

TIMOTHY LAIRD EDNEY
Second Counterclaim Defendant

WAIKORO LIMITED
Third Counterclaim Defendant

AND

NEVILLE CHRISTOPHER MAHON

First Defendant

BEACH ARENA LIMITED

Counterclaim Plaintiff

Hearing: 21 August 2020

Counsel:

D Chisholm QC and M J Lenihan for Waimauri Ltd, Edney and Waikoro Ltd

A Glenie for Mahon and Beach Arena Ltd

Date:

4 September 2020

COSTS JUDGMENT OF MUIR J

This judgment was delivered by me on Friday 4 September 2020 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:…………………………

Counsel:
D Chisholm QC, Barrister, Auckland M J Lenihan, Barrister, Auckland
A Glenie, Glenie Legal, Auckland

Solicitors:
Brown Partners, Auckland (J Brown)

WAIMAURI LIMITED v MAHON [2020] NZHC 2310 [4 September 2020]

Introduction

[1] In my substantive judgment1 I gave judgment in favour of the plaintiff (Waimauri) against the defendant Mr Mahon in the amount of $394,245.74 plus interest. I did so on the basis of a loan agreement with Beach Arena Ltd (BAL) of which Mr Mahon was guarantor. Such interest, calculated at the contractual default rate of 18 per cent, totalled $437,639.42 as at 29 May 2020.

[2] By comparison the amount sought in the statement of claim dated 14 March 2018 (including interest to the date of filing) was $2,420,925.22. Ongoing interest was claimed at 18 per cent.

[3]By way of further comparison, the plaintiff claimed in opening an amount of

$1,382,289.29 plus interest. The reduction from the sum pleaded reflected recognition that the compound interest calculation which informed the prayer for relief in the statement of claim was unsustainable.

[4]My judgment also dismissed BAL’s counterclaims. These were:

(a)For the sum of $4,100,000 less the sum secured under the loan agreement.2

(b)Alternatively, $766,295.18 on a quantum meruit claim.

[5] I reserved costs, noting an intention by the plaintiff to seek an indemnity award pursuant to relevant provisions in the loan agreement.

[6] I have now received written submissions and, because of the sums involved, agreed to hear from counsel on 21 August 2020.

[7] The plaintiff seeks an award in the amount of $315,839.12, being approximately 74 per cent of its actual costs of $426,690.86.

1 Waimauri Ltd v Mahon [2020] NZHC 1170.
2 Nominally $442,682.92 although in fact a lesser sum, as discussed in my judgment.

[8]The defendant says:

(a)the contractual indemnity does not respond;

(b)if it does, it is limited to costs incurred in respect of the claim and defence but not the counterclaim;

(c)the maximum amount which should be awarded on the indemnity claim is $55,271.86. However, even this sum should be largely or fully abated because of substantial overreach by the plaintiff in terms of the claim brought by it and the fact that, if it had confined itself to its contractual entitlements, the matter would have resolved long before trial;

(d)if the contractual indemnity does not respond to the…

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.

Continue reading Waimauri Ltd v Mahon

Details

AGLC: Waimauri Ltd v Mahon [2020] NZHC 2310
Case: [2020] NZHC 2310
Decision Date: 4 September 2020

CaseChat Overview and Summary

Waimauri Limited sued Neville Mahon for breach of a loan agreement, seeking the principal sum of $1,382,289.29 plus interest. The defendant counterclaimed for the uplift over the option price which Waimauri received on sale of the property ($4,100,000) or, alternatively, in quantum meruit. Waimauri Limited was successful on its claim but the court held that the amount owing was $394,245.74 plus interest. The court dismissed the counterclaim. Waimauri Limited sought an indemnity award of costs of $426,690.86 plus interest. The defendant opposed the indemnity claim and submitted that the indemnity did not respond, or that if it did, it was limited to costs incurred in respect of the claim and defence but not the counterclaim. The defendant also submitted that even if the indemnity did apply, the sum which should be awarded on the indemnity claim was $55,271.86, subject to abate. The court held that the indemnity did apply to all of the plaintiff’s costs. However, the indemnity did not apply to the costs associated with the defence of the counterclaim. The court held that the plaintiff was entitled to a 40 per cent discount in respect of the indemnity costs. The plaintiff was entitled to indemnity costs of $150,831.66. In respect of the counterclaim, the court held that scale costs were applicable and awarded the defendant $56,178.09.

Orders