West End Property Developments Limited v Prescott - [2022] NZHC 1900

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2020-419-000253

[2022] NZHC 1900

BETWEEN
WEST END PROPERTY DEVELOPMENTS LIMITED

Plaintiff

AND

RYAN PRESCOTT and PAUL PRESCOTT

Defendants

Hearing: On the papers

Counsel:

A R Gilchrist for Plaintiff K I Bond for Defendant

Judgment:

3 August 2022

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

[Costs]

This judgment was delivered by Associate Judge Andrew on 3 August 2022 at 1.30 pm
pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar

Date …………………………

WEST END PROPERTY DEVELOPMENTS LTD v PRESCOTT [2022] NZHC 1900 [3 August 2022]

Introduction

[1] In my judgment of 24 March 2022,1 I granted the defendants’ application for summary judgment. I concluded that the two causes of action, namely breach of contract and estoppel, were incapable of success.

[2]The parties have been unable to agree on costs. This is my judgment on costs.

[3]The defendants, the successful party, seek costs as follows:

(a)2B costs for all steps prior to 3 September 2021 ($19,598) (i.e. prior to a Calderbank offer) plus a 25 per cent uplift on those costs ($4,899.50) and indemnity costs thereafter of $39,805.08, for a total of $64,302.58 plus disbursements;

(b)Alternatively, 2B costs for all steps prior to 3 September 2021 ($19,598) plus a 25 per cent uplift ($4,899.50) and 2B costs for steps after 3 September 2021 ($8,126) plus a 50 per cent uplift ($4,063), for a total of $36,686.50 plus disbursements.

[4] The defendants have also brought a non-party costs application against Mr Russell Mead, the director of the plaintiff company.2 The application is based on correspondence received from counsel for the plaintiff, written in the context of seeking to resolve the issue of costs. Mr Mead says that that correspondence is subject to settlement negotiation privilege (i.e. without prejudice correspondence) and is therefore inadmissible under s 57 of the Evidence Act 2006. Mr Mead says that there is no basis for the non-party costs award against him.

[5] West End’s position is that there should be a single costs award against it on a 2B basis and in the sum of $27,724.00 plus disbursements.

[6]The critical issues I must determine are as follows:

1 West End Property Developments Ltd v Prescott [2022] NZHC 560.
2 West End.

(a)Should there be an increase in costs above the 2B scale on the basis of the Calderbank offer and, if so, what is the appropriate calculation?

(b)Is the letter from counsel for the plaintiff of 6 April 2022 the subject of settlement negotiation privilege under s 57 of the Evidence Act 2006 and therefore inadmissible?

(c)Are the grounds made out for a non-party costs award against Mr Mead?

Background facts

[7] In 2019 and 2020, solicitors for the parties exchanged correspondence with a view to trying to resolve the dispute. That was prior to the plaintiffs issuing the proceedings. In their letter of 20 December 2019, the solicitors for the plaintiff contended that a binding…

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 West End Property Developments Limited v Prescott

Details

AGLC: West End Property Developments Limited v Prescott [2022] NZHC 1900
Case: [2022] NZHC 1900
Decision Date: 3 August 2022

CaseChat Overview and Summary

In the High Court of New Zealand, the case of West End Property Developments Limited v Prescott involved a dispute between the plaintiff, West End, and the defendants, Ryan and Paul Prescott. The plaintiff sought damages for breach of contract and estoppel, which were dismissed by the court. The primary focus of this judgment is on the costs incurred by the parties. The defendants, as the successful party, sought various costs orders, including indemnity costs and a non-party costs application against Mr Russell Mead, a director of the plaintiff company. The plaintiff argued for a single costs award against it.

The court considered three main issues: the appropriate increase in costs beyond the standard scale (2B), the admissibility of a letter from the plaintiff's counsel under the settlement negotiation privilege, and the validity of the non-party costs application against Mr Mead. The court found that the plaintiff's conduct in rejecting a generous settlement offer and pursuing a meritless argument justified a 25% uplift for costs incurred before the offer and a 50% uplift thereafter. The court also ruled that the letter from the plaintiff's counsel was not protected by settlement negotiation privilege and should be admitted due to inconsistencies in the evidence provided by Mr Mead. Finally, the court granted the non-party costs application against Mr Mead, finding that he substantially controlled the litigation and had funded it for personal gain, making him the "real party to the litigation."

The court ordered that the plaintiff and Mr Mead are jointly and severally liable for the defendants' costs, and a specific sum held in trust was to be paid to the defendants in partial satisfaction of the costs award.

Orders