White v Allen

[2020] NZHC 819

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2478

[2020] NZHC 819

BETWEEN

CAROLINE RUTH WHITE

Plaintiff

AND

RICHARD VIVIAN MARSH ALLEN

Defendant

Hearing:

On the papers

Appearances:

Plaintiff in person

H M Twomey and N Faulkner for the Defendant

Judgment:

28 April 2020

INTERIM JUDGMENT OF GAULT J

(Costs)

This judgment was delivered by me on 28 April 2020 at 2:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel / Parties:

The Plaintiff

Ms H M Twomey and Ms N Faulkner, Robertsons, Auckland

WHITE v ALLEN [2020] NZHC 819 [28 April 2020]

[1]                In my judgment dated 24 October 2019 dismissing Ms White’s claim, I said that Mr Allen was entitled to costs.1 I provided for memoranda if costs could not be agreed and indicated I would deal with costs on the papers.

[2]                A dispute arose between the parties as to  whether costs  have been agreed.  In determining costs, it is appropriate to address first whether there is a binding agreement. Evidence has been filed by way of affidavit and the parties have agreed that the matter can be considered on the papers.

Were costs agreed?

[3]                It is clear from Ms Bridgman’s affidavit that on 6 November 2019 Mr Allen’s solicitors wrote to Ms White’s solicitors setting out their position on costs and indicating that Mr Allen was prepared to agree a reduction in the costs he considers he will recover at Court if costs could be agreed swiftly between the parties and without the necessity for cost memoranda. They offered to accept $91,430.16 (inclusive of GST if any) on account of costs. They sought a response by 5 pm on 18 November 2019.

[4]                No response was received within that timeframe but on 19 November 2019 Ms White’s then counsel, Mr Herzog, replied confirming that Ms White accepted the offer.

[5]                Mr Allen’s solicitors replied the same day acknowledging Ms White’s acceptance of the offer, and indicating they required payment in full to be made within 10 working days. They followed up on 21 November 2019 attaching a draft joint memorandum.

[6]                On 22 November 2019 Mr Herzog replied indicating that the offer was accepted and that the agreement was not in principle or subject to terms of payment still to be agreed.

1            White v Allen [2019] NZHC 2717 at [62].

[7]                The plaintiff’s solicitors wrote again seeking a response in relation to payment terms. After three further follow-ups, Mr Herzog’s response was that “Ms White advises that the [Grafton Road Trust (GRT)] is refinancing and will be in a position to advise on [payment terms] when the Trust is advised by its bankers on the financing proposal”. After a further request for clarification, Mr Herzog advised that “Ms White advises that she is unable to provide a precise date in February 2020 when she proposes that the agreed costs in 2017-404-2078 will be paid”.

[8]                Although the offer was not accepted within the timeframe requested, I consider the offer did not strictly expire on 18 November 2019 and the exchange of correspondence the next day is consistent with that. I would not rule out offer and acceptance on that basis.

[9]                However, whether there is a binding contract depends on whether the parties’ communications led objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations.2 There is no dispute that the parties intended to create legal relations. I consider the real question is whether the absence of agreement as to when payment would be made precludes a binding agreement. Unless there has been express or implied agreement on all essential terms, there is insufficient certainty to create a binding agreement. Terms of payment are essential and therefore the question is whether, in the absence of express agreement, there was an implied term that payment would be made within a reasonable time.

[10]            Applying the orthodox test for implied terms,3 I do not consider such a term should be implied so as to create a binding agreement. At the very least, such an implied term is not so obvious that “it goes without saying”.4 Looking at the circumstances, while it was clear from the offer that Mr Allen was looking for costs to be resolved swiftly, the offer said nothing about payment terms. The same day that

2      Wellington City Council v Body Corporate 51702 (Wellington) [2002] 3 NZLR 486 (CA) at 495; and RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH & Co KG [2010] UKSC 14, [2010] 1 WLR 753 at [45].

3      BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 (PC) at 282-284; Devonport Borough Council v Robbins [1979] 1 NZLR 1 (CA) at 23; and Prudential Assurance Ltd v Rodrigues [1982] 2 NZLR 54 (CA) at 61.

4      BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 (PC) at 283.

Ms White purported to accept the offer, Mr Allen’s solicitors wrote proposing payment within 10 working days. That evidently was not acceptable to Ms White. I conclude that the parties did not reach a binding agreement as to costs.

Costs to be fixed

[11]            Mr Allen seeks an award of costs against the GRT on a 2B basis until 10 July 2018 (the last date to accept a first settlement offer), a 75 per cent uplift on scale costs until 17 June 2019 (the last date to accept a second settlement offer), and indemnity costs thereafter, plus disbursements, totalling $120,758.41.

[12]            I note that Mr Allen’s settlement offer of $91,430.16, which Ms White claimed was accepted, reflected scale costs until 11 July 2018 and a 75 per cent uplift on costs thereafter. Unhelpfully, Ms White’s submissions did not address the quantum of costs to be fixed if costs were not agreed. It is possible this reflects a misunderstanding that I would determine whether costs were agreed and, if not, then give a further opportunity for submissions on costs to be fixed. In the circumstances, before fixing costs on the papers, I propose to give Ms White a final opportunity to address the costs to be fixed in the absence of agreement by way of a brief memorandum within five working days.

Gault J