Watson v Whitehead - [2015] NZHC 1679

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2013-488-000359 [2015] NZHC 1679

BETWEEN
DENIS ERIC WATSON AND MERYL

JOY WATSON (AS TRUSTEES OF THE SALEM CHARITABLE TRUST)

First Plaintiffs

WATSON & SON LIMITED Second Plaintiff

AND

JOHN EDWARD WHITEHEAD AND ROSALEEN MARIE WHITEHEAD AND EDWARD IVAN WHITEHEAD (AS TRUSTEES OF THE J AND R WHITEHEAD TRUST)

First Defendants

SHILOH CHARITABLE TRUST Second Defendant

Hearing: On the papers

Appearances:

K P Sullivan for First and Second Plaintiffs
M C Black for First and Second Defendants

Judgment:

20 July 2015

COSTS JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie on 20 July 2015 at 3.30pm
pursuant to r 11.5 of the High Court Rules

Registry/Deputy Registrar

Date:

WATSON v WHITEHEAD & ANOR [2015] NZHC 1679 [20 July 2015]

Introduction

[1] I issued an interim judgment dealing with liability in this matter on 27

November 2014. I invited the parties to file memoranda as to quantum and recorded that once final judgment had issued, I would invite further memoranda as to costs.

[2] There was delay by the parties in filing memoranda as to quantum. They eventually did so, and I issued a final judgment dealing with quantum on 17 April
2015.

[3] In the final judgment, I recorded that both parties had had a measure of success in the proceedings, and that both had failed in other respects. I invited counsel to reach agreement as to costs, but put in place a timetable for the filing of memoranda in the event that they were unable to do so.

[4] Counsel were unable to reach agreement. I have now received lengthy memoranda from both dealing with costs. I summarise the submissions made below.

Procedural history

[5] I dealt with this in my interim judgment of 27 November 2014. I will recap briefly, focussing primarily on the way in which costs have been dealt with to date.

[6] The plaintiffs - (Mr and Mrs Watson as trustees of the Salem Charitable Trust (“Salem”) and Watson & Son Limited (“WSL”)) – initially sued only the first defendants – the Whiteheads as trustees of the J and R Whitehead Trust (“JRWT”). They claimed that they had a right of first refusal to purchase all non-medical grade Manuka honey produced from 2,300 hives which they had leased to JRWT. They sought an injunction to prevent JRWT from selling that honey to any other party.

[7] The application was called before Heath J on 25 June 2013. Counsel then filed a joint memorandum recording that JRWT had agreed not to sell the honey the subject of the claim pending a further hearing. Heath J reserved costs at that stage. The application was next called before Brewer J on 11 July 2013. Again, a joint memorandum was filed. The memorandum advised that the honey was being sold

by JRWT to the plaintiffs. Counsel asked for an adjournment to enable that transaction to take place. This request was granted. Brewer J made various directions, including 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.

Continue reading Watson v Whitehead

Details

AGLC: Watson v Whitehead [2015] NZHC 1679
Case: [2015] NZHC 1679
Decision Date: 20 July 2015

CaseChat Overview and Summary

In Watson v Whitehead, the High Court of New Zealand considered the costs incurred in a complex commercial dispute. The case involved a dispute between the Watsons and the Whiteheads over a contract for the sale and lease of beekeeping equipment and honey. The proceedings were lengthy and involved multiple claims and counterclaims. The court was required to decide the issue of costs between the parties.

The court began by noting that all matters relating to costs are at the discretion of the court. The court observed that both parties had succeeded on some claims and failed on others. However, the court emphasised the importance of maintaining the integrity of the costs regime outlined in the High Court Rules. The court found that both parties were entitled to costs in relation to their successful claims, as per rule 14.16 of the High Court Rules.

The court then proceeded to consider the defendants' entitlement to costs. The court found that the defendants were entitled to their reasonable solicitor-client costs incurred in enforcing their entitlement under the agreement for the sale and purchase of honey, but only up until the date of the Calderbank offer. However, the court was not satisfied with the information provided by the defendants to assess the reasonableness of the costs claimed. The court ordered the defendants to provide an itemised account of their costs to the plaintiffs and allowed the plaintiffs to request a taxation of the costs if they did not accept the defendants' calculation.

The court also considered the plaintiffs' entitlement to costs. The court found that the plaintiffs were entitled to costs in respect of the rental claims but reduced the amount by 50% due to the plaintiffs' conduct during the proceedings and the disproportionate time taken by the claims. The court did not award costs to either party in respect of the other multifarious matters advanced at trial and which failed.

In summary, the court awarded costs to the defendants for their successful claims relating to the sale and purchase of honey and ordered them to provide an itemised account of their costs to the plaintiffs. The court awarded costs to the plaintiffs for their successful claims relating to rental but reduced the amount by 50%. The court did not award costs to either party in respect of the other failed claims.

Orders