Codylan Farms Limited v Northern Farm Services Limited

[2016] NZHC 1088

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

CIV-2013-043-262 [2016] NZHC 1088

BETWEEN

CODYLAN FARMS LIMITED

First Plaintiff

VERO INSURANCE NEW ZEALAND LIMITED

Second Plaintiff

AND

NORTHERN FARM SERVICES LIMITED

Defendant

Hearing:	On the papers
Counsel:	S R Ebert for First and Second Plaintiffs P J Napier and N J Pye for Defendant
Judgment:	24 May 2016

SECOND COSTS JUDGMENT OF M PETERS J

This judgment was delivered by Justice M Peters on 24 May 2016 at 12 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

Solicitors:           C & M Legal, New Plymouth

Keegan Alexander, Auckland

CODYLAN FARMS LTD v NORTHERN FARM SERVICES LTD [2016] NZHC 1088 [24 May 2016]

[1]      On 20 July 2015, I issued a judgment in this proceeding which, amongst other things, found for the First Plaintiff (“CFL”) on its claim against the Defendant (“NFS”).1

[2]      The Court of Appeal overturned this part of my judgment in a decision given on 23 November 2015.2   Following that, and at the parties’ request, on 2 December

2015 I recalled a costs judgment I had issued on 20 October 2015 (“October judgment”).3

[3]      I have since received fresh submissions from the parties on the matter of costs.  My decision on the issues raised in those submissions is as follows.

[4]      First,  there  is  an  issue  between  the  parties  as  to  whether  my  October judgment was recalled in its entirety or only as to [3], which concerned the costs and disbursements sought by CFL.  For myself, I would have thought the latter but for the avoidance of doubt, and to the extent necessary, I repeat [2] and [4] to [8] inclusive of my October judgment.

[5]      Secondly, it is necessary to determine the costs and disbursements that CFL should pay NFS following the Court of Appeal’s decision.  For the reasons given in [4] of my October judgment, these costs are to be calculated on a 2B basis, on the rates applying under the High Court Rules.

[6]      NFS seeks:

(a)       (on a 2B basis) an award of costs of $44,425;

(b)      increased costs pursuant to r 14.6(3)(b)(v), High Court Rules; (c)           disbursements of $25,865.24.

1      Codylan Farms Ltd v Northern Farm Services Ltd [2015] NZHC 1678.

2      Northern Farm Services Ltd v Codylan Farms Ltd [2015] NZCA 567.

3      Codylan Farms Ltd v Northern Farm Services Ltd [2015] NZHC 2584.

Quantum of costs

[7]      Leaving aside the increased costs sought, NFS seeks an award of costs on a

2B basis of $44,425.

[8]      Aside from whether the costs should be on the District or High Court scale, the only matter in dispute is whether I should allow for second counsel.4

[9]      I  am  not  satisfied  that  second  counsel  was  warranted  as  the  case  was relatively confined and short. Aside from that, however, I award the sum claimed.

Claim for increased costs

[10]     NFS seeks an additional sum of $10,670.50 by way of increased costs.  These increased costs  are sought pursuant to r 14.6(3)(b)(v), High Court Rules, which provides:

14.6     Increased costs and indemnity costs

(3)      The court may order a party to pay increased costs if—

...

(b)       the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

...

(v)       failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or

[11]     By letter dated 10 February 2015, NFS made an offer to pay the Plaintiffs, that is CFL and Vero, $50,000 in full and final settlement of all issues between the parties.  This offer was made without prejudice except as to costs, four working days before the trial commenced on 16 February 2015.  The Plaintiffs rejected the offer on

11 February 2015.

4      Codylan Farms Ltd v Northern Farm Services Ltd, above n 3, at [4].

[12]     NFS submits that the Plaintiffs’ rejection of the offer was without reasonable

justification and they seek an additional 50 per cent of the costs incurred  after

10 February 2015.

[13]     CFL disputes that NFS is entitled to an award of increased costs and submits

that it had reasonable justification to decline NFS’s offer.

[14]     CFS submits that the offer was made close to trial.  It was also made on the basis that the parties would enter into a “straightforward settlement agreement”, the essential terms of which were not set out in the letter.

[15]     I note also that the sum offered was substantially less than the amount of the Plaintiffs’ claim.  CFL did indicate in its letter that it would be willing to consider an improved offer.

[16]     Accordingly, I decline NFS’s claim for increased costs.

Disbursements

[17]     NFS  seek  disbursements  of  $25,865.24.    The  only  remaining  matter  in dispute (given [4] of my October judgment) is whether the Plaintiffs should have to pay for meals.   For the reasons given by NFS, I am satisfied these are properly claimed.  These should, however, be confined to one counsel, as should airfares and accommodation if they are not already.

..................................................................

M Peters J