Godfrey Hirst Limited v Cavalier Bremworth

[2013] NZHC 2256

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-002065 [2013] NZHC 2256

UNDER  the Fair Trading Act 1986

BETWEEN  GODFREY HIRST LIMITED Plaintiff

ANDCAVALIER BREMWORTH Defendant

Hearing:                   On the papers

Counsel:                  J C L Dixon and J B Hamlin for the Plaintiff

S E Fitzgerald and J Edwards for the Defendant

Judgment:                30 August 2013

COSTS JUDGMENT OF GILBERT J

This judgment was delivered by me on 30 August 2013 at 4.30 pm

Pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:

GODFREY HIRST LIMITED v CAVALIER BREMWORTH [2013] NZHC 2256 [30 August 2013]

[1]      In  my  judgment  dated  31  July  2013,  I  found  that  Cavalier  Bremworth breached ss 9 and 13 of the Fair Trading Act 1986 in the way it promoted warranties concerning a new range of synthetic carpet on its website and in a letter it sent to retailers.   However, because Cavalier Bremworth promptly rectified this following issue of the proceedings and provided an undertaking to the Court after the hearing not to publish these statements in any media in the future, I was not prepared to grant the injunction sought by Godfrey Hirst in relation to these statements.

[2]      I  also  found  that  one  of  the  statements  made  by  Cavalier  Bremworth concerning the warranties on stickers attached to the backs of carpet samples was misleading.  These statements were not corrected following issue of the proceeding and  accordingly  I  issued  an  injunction  restraining  Cavalier  Bremworth  from persisting with such statements.

[3]      I reserved the question of costs.   Both parties now seek costs against the other.  Both claim that they were successful in the proceeding.

[4]      There is no dispute between the parties as to the correct approach.   Costs should follow the event.   The dispute concerns what the “event” was  for costs purposes.  The application for costs must be determined by considering which party was successful in reality.

[5]      Cavalier Bremworth contends that it was the successful party because:

(a)      Godfrey  Hirst  claimed  that  Cavalier  Bremworth’s  conduct  was misleading in 16 different respects but only three of these were upheld and these were relatively minor in the overall context of the claim; and

(b)Cavalier Bremworth promptly and responsibly rectified the position in relation to most of the issues after the proceedings were served on it.

[6]      Cavalier Bremworth  submits that Godfrey Hirst ought to have engaged with it  regarding  its  complaints  before  issuing  the  proceeding  but  made  no  genuine

attempt to do so.   In these circumstances, Cavalier Bremworth submits that the appropriate course would be to award costs in its favour reduced by 10 per cent to reflect Godfrey Hirst’s modest success.

[7]      I do not accept Cavalier Bremworth’s position for the following reasons:

(a)      Godfrey  Hirst  succeeded  in  establishing  that  Cavalier  Bremworth made misleading statements regarding the warranties in breach of ss 9 and 13 of the Fair Trading Act on its website and in the letter it sent to carpet retailers;

(b)Godfrey Hirst was entitled to move promptly to have its complaints determined, particularly given that it understood at the time it issued the proceeding that Cavalier Bremworth’s new range of carpets was about to be launched;

(c)      Although Cavalier Bremworth moved promptly following service of the proceeding to remove the misleading claims on its website and send a clarification letter to the carpet retailers, it took this step on a “without prejudice” basis and it was not until after the hearing had concluded that it provided an undertaking to the Court not to repeat such statements in any media.  I consider that this undertaking must be considered as part of the success Godfrey Hirst achieved in the proceeding; and

(d)Godfrey Hirst also succeeded, albeit to a limited extent, in relation to the claims made by Cavalier Bremworth on the carpet samples. Godfrey Hirst succeeded in obtaining a permanent injunction restraining Cavalier Bremworth from persisting with such claims.

[8]      In  these circumstances,  I consider that  Godfrey Hirst  was  the successful party, even though it was not successful in relation to a number of the issues.  In my view, the appropriate course is to reflect Cavalier Bremworth’s partial success in the proceeding by reducing the award to which Godfrey Hirst would otherwise have

been  entitled.    I  consider  that  a  reduction  of  25  per  cent  from  scale  costs  is appropriate in all of the circumstances of this case.

Result

[9]      Godfrey Hirst is entitled to costs on a Category 2, Band B basis reduced by

25 per cent.

M A Gilbert J