Xu v Liu aka Hu - [2017] NZHC 2137

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-002384 [2017] NZHC 2137

BETWEEN
JIANGANG XU

First Plaintiff

YOUZHI ZHU Second Plaintiff

AND

JIN LIU (AKA DANIEL HU) First Defendant

PING WANG (aka SHERRY WANG)

Second Respondent/Defendant

Hearing: On the papers

Judgment:

4 September 2017

JUDGMENT OF KATZ J [Costs]

This judgment was delivered by me on 4 September 2017 at 2:00pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors: Jesse & Associates, Auckland Northern Legal Lawyers, Auckland Glaister Ennor, Auckland

Counsel: A Sharp, Chancery Chambers, Auckland
G P Blanchard QC, Shortland Chambers, Auckland

XU v JIN LIU (AKA DANIEL HU) [2017] NZHC 2137 [4 September 2017]

Introduction

[1] On 20 July 2017 I dismissed two applications brought by the defendants. In the first application the defendants sought summary judgment or strike-out of the plaintiffs’ first cause of action. In the second application the defendants sought a stay or dismissal of the plaintiffs’ second and third causes of action. The plaintiffs now seek costs in respect of both of those applications.

[2] It is common ground that the proceedings are properly classified as Category

2, being a proceeding of average complexity requiring counsel of skill and experience considered average in the High Court.1 In terms of time allocation, the plaintiffs seek Band B for a number of steps, but Band C for preparation of affidavits and for all steps taken after the making of a Calderbank offer on 18 May 2016. The plaintiffs’ claim is capped at $28,640, however, so as not to exceed the actual costs they have incurred.

[3] The defendants submit that costs should be awarded on a 2B basis. They also submit that there are a number of errors in the plaintiffs’ calculations, which I will address first.

Errors in plaintiffs’ calculations

[4] The defendants submit that the plaintiffs’ costs claim errs in the following

respects:

(a) The Category 2 recovery rate used by the plaintiffs is $1,990 when it should be $2,230.

(b)The plaintiffs’ calculations include a number of items from Schedule 3 of the High Court Rules (“Rules”) that are not properly claimable in the context of interlocutory applications, as they apply to trials only.

(c) The plaintiffs’ calculations wrongly include costs for obtaining
judgment without appearance. That item cannot apply to a defended hearing.

1 High Court Rules 2016, r 14.3(1).

(d) Time allocation “A” has been used in some parts of the plaintiffs’

claim when scale “B” was apparently intended.

[5] The plaintiffs acknowledge errors (a) and (d), but otherwise submit that the fact that no express provision is made in Schedule 3 of the Rules for particular matters does not mean that costs cannot be claimed in respect of such matters. That is clearly correct and the defendants do not dispute the point, although they note that costs cannot be claimed in relation to a trial and undefended hearing that did not take place.

[6] Ultimately, where items are claimed that fall outside the scope of the default provisions…

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.

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Details

Case: [2017] NZHC 2137
Decision Date: 4 September 2017

CaseChat Overview and Summary

Jiangang Xu and Youzhi Zhu, the plaintiffs, brought a claim against Jin Liu and Ping Wang, the defendants, in the High Court of New Zealand, Auckland Registry. The plaintiffs sought damages for alleged breaches of contract and unjust enrichment. The defendants filed two applications: one seeking summary judgment or strike-out of the first cause of action, and the other seeking a stay or dismissal of the second and third causes of action. Both applications were dismissed, and the plaintiffs now seek costs in respect of these applications.

The primary legal issues before the court were whether the plaintiffs' costs claim was accurate and justified, particularly in relation to the preparation of affidavits and the period following the defendants' rejection of a Calderbank offer. The defendants contested the plaintiffs' claim, arguing that there were errors in the calculations and that the costs claimed for certain steps were excessive. The court had to assess the reasonableness of the costs claimed and whether the defendants' rejection of the Calderbank offer was justified.

The court found that there were errors in the plaintiffs' costs calculations, such as using an incorrect recovery rate and including items not properly claimable in interlocutory applications. The court also determined that the defendants were not unreasonable in rejecting the Calderbank offer, as they had limited information at the time and faced uncertainty regarding the enforceability of a judgment in China. The court accepted the defendants' submissions on these points and ruled that the plaintiffs were not entitled to increased costs for the period following the rejection of the offer. Based on these findings, the court ordered the defendants to pay the plaintiffs' costs in the sum of $10,927.

The court's judgment clarifies the correct approach to costs calculations in interlocutory applications and reinforces the importance of assessing the reasonableness of a Calderbank offer at the time of its rejection. The outcome ensures that the parties bear their own costs in relation to the dismissed applications, reflecting the court's view on the merits of the arguments presented.

Orders