BFMG Limited v Speirs

[2014] NZHC 3361

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-2370 [2014] NZHC 3361

BETWEEN

BFMG LIMITED

Plaintiff

AND

DAVID JOHN CAMERON SPEIRS Defendant

Hearing:	On the papers
Judgment:	19 December 2014

COSTS JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is

12 pm on the 19th day of December 2014.

Solicitors:           Rainey Collins, Wellington, for Plaintiff

Thomas Dewar Sziranyi Letts, Lower Hutt, for Defendants

BFMG LTD v SPEIRS [2014] NZHC 3361 [19 December 2014]

[1]      In my judgment delivered on 13 October 2014, I reserved costs and invited the  parties  to  submit  memoranda  if  they  are  unable  to  agree.1    I  now  have memoranda and must fix costs.

[2]      The plaintiff was successful, and there is no basis to depart from the general principle in r 14.2 of the High Court Rules that the plaintiff should have costs.

[3]      The   parties   are   agreed   that   costs   incurred   up   to   27 June 2014   are appropriately dealt with on a category 2B basis.  The parties are also agreed that a deduction needs to be made from the award in favour of the plaintiff to reflect the defendant’s success on the plaintiff’s interim injunction application.

[4]      The main contest between the parties is as to costs from 27 June 2014.  The significance of that date is that it is the date of a Calderbank offer made by the plaintiff.    That  offer  was  more  favourable  to  the  defendant  than  the  judgment obtained by the plaintiff.  Counsel for the plaintiff claims actual solicitor client costs under   r 14.6(3)(b)(v),   namely   that   the   defendant   failed   without   reasonable justification  to  accept  an  offer  for  settlement,  and  under  r 14.6(4)(a),  that  the defendant acted unnecessarily in defending the proceeding.

[5]      The usual effect of a settlement offer is set out in r 14.11.  That usual effect is to protect an unsuccessful party from an award of costs where the successful party obtains a judgment for less than it would have received under the settlement offer. Such an offer will not ordinarily affect the award of costs where the offer is made by the successful party.  It will do so only if the failure to accept the settlement offer was without reasonable justification, when it may form a basis for an award of increased costs under r 14.6(3).

[6]      I do not consider that the refusal of the settlement offer justifies an award of increased costs under that rule.  The defendant was entitled to take the matter to trial. The fact that he was ultimately unsuccessful should not be taken into account in

determining whether, at the time the offer was made, the refusal of it was without

1      BFMG Ltd v Speirs [2014] NZHC 2503.

reasonable justification.  This is not a case where increased costs should be awarded under r 14.6(3).

[7]      Nor do I consider that the case falls within r 14.6(4)(a), which deals with indemnity costs.  The defendant was entitled to defend the proceeding, and the fact that he was ultimately unsuccessful should not be taken into account in determining whether he acted unnecessarily in defending the proceeding.  This is not a case for indemnity costs.  Accordingly, I decline to award increased costs or indemnity costs. Costs for the period after 27 June 2014 should also be on a 2B scale basis.

[8]      The parties are broadly agreed on the calculation.   There are two items in dispute, namely a claim under item 10 of sch 3 for preparation for the first case management conference, and a claim for second counsel at trial.

[9]      The conference had been set down for 24 June 2014 but was subsequently vacated.  Counsel for the plaintiff had prepared for that case management conference by drafting a joint memorandum suggesting timetabling steps, but there was no agreement so counsel attended a duty Chambers List to confirm timetabling directions.  The case management conference was then vacated as superfluous. Counsel for the defendant has annexed to his memorandum copies of the memoranda which were filed.  It is clear that the reason the case management conference did not proceed was because all the relevant orders were made earlier.   Dealing with the matter by appearance in the duty list (which is separately claimed as an item) was facilitated by the preparatory work which had been done.   In the circumstances, I allow the plaintiff’s claim for preparation under item 10 in the amount claimed,

$796.

[10]     On the second item in dispute, I allow the claim for second counsel at trial, under item 35, in the sum of $1,741.25.

[11]     That  is  a  total,  for  plaintiff’s  costs,  of  $35,073.75.    From  that  must  be deducted the agreed 2B allowance for defendants’ costs on the interim injunction application, $4,676.50. That leaves a total of $30,397.25.

[12]     Disbursements are also claimed, in the sum of $14,602.72.  That amount is not challenged.

[13]     There will be an order for costs to the plaintiff in the sum of $30,397.25 plus disbursements of $14,602.72.

“A D MacKenzie J”