Watherston v Kaikoura Pastoral Investments Limited

[2015] NZHC 2744

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV-2015-442-000013 [2015] NZHC 2744

UNDER

the Land Transfer Act 1952

IN THE MATTER

of an application that a caveat not lapse under Section 145A Land Transfer Act

1952

BETWEEN

RICHARD JOHN SCOTT WATHERSTON

First Applicant

ROCKY PEAKS CONTRACTING LIMITED

Second Applicant

AND

KAIKOURA PASTORAL INVESTMENTS LIMITED Respondent

Hearing:	13 August 2015 (Judgment 31 August 2015)
Counsel:	R Lynn for Applicants DCJ Russ for Respondent
Judgment:	6 November 2015

COSTS JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      The Court issued a judgment on 31 August 2015 dismissing an application by Mr Watherston for an order that a caveat he had lodged against land owned by the respondent not lapse.  Costs were reserved.

[2]      Costs have not been agreed; memoranda have been filed by the respondent seeking costs on a 2B basis with an uplift of 50 per cent, and by the applicants

agreeing that the starting-point for an award of costs is on a 2B basis, but submitting

WATHERSTON & ANOR v KAIKOURA PASTORAL INVESTMENTS LTD Costs Judgment [2015] NZHC 2744 [6 November 2015]

not only that there should not be an uplift in costs, but also that there should be a reduction.

[3]      I agree that the starting-point for an award of costs is on a 2B basis.

[4]      In  support  of  its  submission  that  there  should  be  an  uplift  in  costs,  the respondent relies on three emails from its solicitors to the applicants’ solicitors sent in May 2015, all of which were sent without prejudice save as to costs, and have now been produced to the Court.  All were sent after the proceeding was issued but before documents were prepared and filed in opposition.

[5]      In the first email there is reference to attempts to contact the applicants’ solicitor  without  success,  and  to  a  wish  to  settle  the  proceeding  by reaching  a commercial solution by negotiation.  In the second email the respondent’s solicitor invites the applicants’ solicitor to forward a letter outlining his clients’ suggestion or proposal to resolve the dispute and/or purchase the property.   It is clear from the email that it follows up an earlier phone call.

[6]      In the third email the solicitor for the respondent notes that no proposal has been made, that no “sensible and meaningful progress” has been made towards resolution, and inviting once more a written proposal for settlement.  A deadline for that is stated.

[7]      Notably, the respondent itself does not set out a settlement proposal in any of the emails relied upon for an increased award of costs.

[8]      In  addition to relying on these emails, Mr Russ also suggests that costs should be increased because of the work required to be undertaken after what he describes as rejection of the respondent’s offer, as well as the decision in the proceedings and, as he sees it, the applicants’ failure to establish their claim in any material way.

[9]      The  grounds  for  awarding  an  increase  in  costs  are  set  out  in  r  14.6(3). Paragraphs (a), (c) and (d) are not relevant.  Paragraph (b) sets out five criteria, the

only relevant one of which is failing, without reasonable justification, to accept an offer of settlement.   As I have said, no offer appears to have been made by the respondent.  For the same reason, r 14.11 is not engaged.  This sets out the effect on an award of costs of an offer made without prejudice except as to costs, but this has not occurred.   Certainly the respondent has indicated a willingness to engage in settlement discussions, but that is as far as the correspondence produced to the Court

goes.  In this circumstance an increase in costs is not warranted.1

[10]     The basis on which the applicants say that an award of costs against them should be reduced from scale is derived from an offer they made on 17 June 2015, without prejudice save as to costs.  They offered to enter an agreement to purchase the property with a settlement date in November 2015, or earlier if some dairy farmland could be subdivided and sold earlier.   Further, they agreed to vacate the property and withdraw any caveats if they were unable to settle, which would have enabled the applicants to enter into a backup agreement to sell the property to a third party.

[11]     In October they submitted an application for consent to subdivision of the dairy farmland to the District Council and on that basis they say that the offer they made, with a November settlement date, was not unrealistic.

[12]     That offer was not accepted.   The caveat was removed after issue of the judgment and the property has now been sold to the third party who have indicated an ongoing interest in buying it.

[13]     On the information available to the Court it is not possible to assess the relative merits of the offer made by the applicants, and the outcome of the case after argument.  In particular, the Court has not been informed of the purchase price in the

applicant’s offer, nor the sale price to the third party.

1      Nandro Homes Ltd v Datt HC Auckland CIV-2008-404-6676, 13 July 2009 at [13].

Outcome

[14]     I have carefully considered the submissions made by both counsel in relation to costs.  I am not persuaded that increased costs should be awarded, nor that scale costs should be reduced.  As a result the applicants will pay costs to the respondent

on a 2B basis together with disbursements fixed by the Registrar.

J G Matthews

Associate Judge

Solicitors:

GCA Lawyers, Christchurch. Fletcher Vautier Moore, Nelson.