Body Corporate 172108 v Meader

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2009-404-6868

[2019] NZHC 200

BETWEEN
BODY CORPORATE 172108

Applicant

AND

JOANNA MONICA MEADER and others 1st to 36th and 38 to 48th respondents

MANCHESTER SECURITIES LIMITED

37th respondent

Hearing: On the papers

Appearances:

J B Orpin-Dowell and TJG Allan for the applicant

M C Harris and H E McQueen for the 37th respondent

Judgment:

19 February 2019

JUDGMENT OF JAGOSE J

[Costs]

This judgment is delivered by me on 19 February 2018 at 2.30 pm pursuant to r 11.5 of the High Court Rules.

.....................................................
Registrar / Deputy Registrar

Counsel/Solicitors:
J B Orpin-Dowell, Barrister, Auckland Grove Darlow & Partners, Auckland Gilbert Walker, Auckland

BODY CORPORATE 172108 v MEADER & Ors [2019] NZHC 200 [19 February 2019]

[1] My 17 December 2018 judgment granted the Body Corporate’s claim for interim relief. At [27], I took the preliminary view Manchester was liable to pay 2B costs and disbursements, but reserved costs if either party disagreed.

[2] Calculating 2B costs at $15,654.60, the Body Corporate seeks a 75 per cent uplift to obtain increased costs of $11,740.95, on grounds Manchester “failed, without reasonable justification, to accept an offer … to dispose of the proceeding”,1 or the increase otherwise is justified.2

[3] The Body Corporate’s 30 August 2018 offer proposed omnibus settlement of all four proceedings between the parties,3 on interim terms (including various payment, acknowledgement and deferral of due sums) leading to arbitration after conclusion of Manchester’s works. Manchester’s 6 November 2018 response characterised the proposal as requiring Manchester “to surrender the set-off rights that the Court of Appeal confirmed earlier this year, as well as other claims that are disputed”.

[4] Manchester thus says its rejection of the offer was not unreasonable (although the Body Corporate emphasises Manchester’s response was not made until some two months after the offer ceased to be open for acceptance), and no uplift in excess of 50 per cent is permissible anyway. Also in reply, while maintaining increased costs are justified, the Body Corporate accepts 2B costs as Manchester recalculated them at
$11,707.50, but resists its proposed rejection of disbursements for ‘out of town’ counsel. It says nothing about Manchester’s reduced calculation of its photocopying costs.

[5] At the time of the offer (and still), the merits of the parties’ substantive cases were indeterminate,4 with the consequence I cannot assess the (un)reasonableness

1      HCR 14.6(3)(b)(v).
2      HCR 14.6(3)(d).
3      In addition to this proceeding and the arbitration to which it refers, CIV 2018-485-0225 (the Body Corporate’s application to liquidate Manchester), and CIV 2018-404-0771 (Manchester’s application to set aside the Body Corporate’s statutory demand).
4      New Zealand Sports Merchandising Ltd v DSL Logistics Ltd HC Auckland CIV-2009-404-5548, 19 August 2010 at [36]; Samson v Mourant [2016] NZHC 1119 at [44].

either of the Body Corporate’s offer or Manchester’s lack of immediate response to it. I will not apply any uplift.

[6] Neither am I prepared to disallow disbursements for out-of-town counsel, particularly when the litigation is taking place both in Auckland and Wellington. The Body Corporate is entitled to its choice of common counsel.

[7] I apprehend, from its lack of response, the Body Corporate has nothing to say about the recalculated sum for photocopying. Certainly, if to account for the “expenses of photocopying documents required by these rules”,5 the 5,000 or so pages implied from the near $1,500 claim for “case bundles and authorities” seem unnecessary and disproportionate.6 I substitute $500 under this head.

[8] I therefore order Manchester to pay the Body Corporate 2B costs in the amount of $11,707.50, plus disbursements of $1,653.54.

—Jagose J

5 HCR 14.12(1) (definition of ‘disbursement’)
6 HCR 12.12(2) and (3).

The High Court of New Zealand considered a dispute between Body Corporate 172108 and Joanna Monica Meader, along with other respondents, and Manchester Securities Limited. The Body Corporate sought interim relief, which was granted in a previous judgment. The current matter pertains to the Body Corporate's application for increased costs from Manchester Securities Limited. The Body Corporate sought a 75% uplift in costs based on Manchester's failure to accept a settlement offer or on the alternative grounds that an increase was justified. Manchester contested the Body Corporate's offer and the reasonableness of the proposed uplift. The Body Corporate accepted Manchester's recalculated costs but disputed the rejection of certain disbursements and photocopying expenses.

The court needed to determine whether Manchester's rejection of the Body Corporate's settlement offer was reasonable and whether the proposed uplift in costs was justified. Additionally, the court had to assess the reasonableness of the Body Corporate's disbursements and photocopying expenses. The primary challenge was the indeterminate nature of the parties' substantive cases, which made it difficult to assess the reasonableness of the offer or Manchester's response. The court also had to consider the relevance of out-of-town counsel and the proportionality of photocopying expenses.

The court found that it could not assess the reasonableness of either the Body Corporate's offer or Manchester's lack of immediate response due to the indeterminate merits of the substantive cases. Therefore, the court decided not to apply any uplift in costs. Regarding the disbursements, the court ruled that the Body Corporate was entitled to its choice of common counsel, and thus, the disbursements for out-of-town counsel would not be disallowed. The court also substituted Manchester's proposed photocopying costs, finding the original claim to be unnecessary and disproportionate. The court ordered Manchester to pay the Body Corporate $11,707.50 in costs and $1,653.54 in disbursements.

The final orders of the court were that Manchester Securities Limited was to pay the Body Corporate 2B costs in the amount of $11,707.50, plus disbursements of $1,653.54. This decision effectively resolved the dispute concerning the costs and disbursements arising from the interim relief granted in the previous judgment.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established