Teak Construction Limited v Andrew Brands Limited

[2015] NZHC 2924

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-0828 [2015] NZHC 2924

BETWEEN

TEAK CONSTRUCTION LIMITED

Plaintiff

AND

ANDREW BRANDS LIMITED Defendant

Hearing:	15 October 2015 (on papers)
Appearances:	Ms J Lethbridge and Mr S Powrie for Applicant/Defendant Mr K Gould for Respondent/Plaintiff
Judgment:	23 November 2015

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE [On Costs]

This judgment was delivered by me on

23.11.15 at 4.30 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

TEAK CONSTRUCTION LIMITED v ANDREW BRANDS LIMITED [2015] NZHC 2924 [23 November

2015]

[1]      The parties have not been able to agree costs in this case.  I will deal with each of these disputes after brief reference to the background.

[2]      The defendant in this proceeding was the successful party because it obtained an order that the plaintiff ’s claim should be struck out on the grounds that the parties had effectively submitted any disputes including those raised in the statement of claim, to arbitration.  As a result, High Court Rule 14.2(a) applies which provides that a party who fails with respect to a proceeding or interlocutory application should pay costs to the party who succeeds.  The effect of the decision in this case was that the defendant succeeded overall in having the proceeding dismissed.  The plaintiff, overall, failed.

[3]      There is no requirement that because a party succeeds overall in a proceeding that it therefore will be entitled to costs on every interlocutory step even though it might not have been successful on one or more of those interlocutory steps.   High Court Rule 14.1 gives the Court a discretion in relation to each step in a proceeding.1

[4]      The power to make costs awards in regard to each step is not overridden in circumstances where the opposing party is successful in the ultimate result obtained in the proceeding.

[5]      Dealing  with  the  notice  of  appearance  with  protest  to  jurisdiction,  the defendant was successful in regard to the amended notice and the amended interlocutory application for stay.  Because of the fact that amended documents were filed the two originals were not proceeded with.  It may be inferred though that there were imperfections in those documents otherwise there would have been no need to file the amended documents.  I consider that justice would be done in this case by deleting the entitlement to claims in respect of item 22 and 8 (the first two lines in the  amended  schedule  of  2B  costs  annexed  to  the  costs  memorandum  of  the

defendant).

1 High Court Rule 14.1(c).

[6]      The next item concerns photocopying and service fees.   As Mr Gould has noted, the photocopying bill in this case was $1,534.80.   He further submits that given that the standard disbursement rate is .30 cents per copy, that would involve a claim for $5,116 copied pages “which is clearly excessive in the context of this proceeding and should not be allowed”.

[7]      The defendant has provided a supplementary memorandum.  Mr Gould has objected to this but I consider that the over-riding consideration at this stage is to give the Court the information it needs to deal with the costs application.   The defendant has explained the photocopying cost.  While it does seem high, it is not objectionable because the disbursements were not related to taking steps that the defence was required to take under the Rules.   The photocopying claim will be allowed.

[8]      The next item that is in dispute is a claim for the following:

Sundry Payment to Standards New Zealand – SS – Contract Bld & Civil & CD.”   For $82.80.

[9]      This I apprehend is a claim for obtaining from Standards New Zealand a copy of the standard specifications in contracts that were relevant to this proceeding. Mr Gould says that these were not reasonably necessary for the conduct of the proceedings  “given  that  the  Standards  forms  part  of  the  contract  between  the parties”.

[10]     I do not agree.  I consider that it was not unreasonable for the original of the Standards to be obtained for the purpose of making comparisons with what the parties may have intended by their contract.

[11]     The defendant claimed as a disbursement fees and expenses of an expert witness.  He was a registered valuer giving evidence that because of defects in the construction the property that the defendant owned was of less value than it would have been had the contractual obligations on the part of the plaintiff been met.

[12]     The position that the plaintiff takes is apparently that the alleged defects in the  building  was  an  irrelevant  consideration.    That  stance  was  based  upon  the

assumption that the plaintiff was entitled to the benefit of s 79 of the Construction

Contracts Act 2002.

[13]     The defendant claimed that the plaintiff had not complied with the provisions of the Act and was therefore not entitled to the protection that s 79 affords.   The dispute which the defendant wished to raise was that the amount which the plaintiff was claiming was not covered by the “pay now litigate later” regime under the CCCA.  Further, the defendant’s position was that it had a cross-claim related to the quality of  the work carried  out  under the  contract.   The  defendant  did  not  act unreasonably in obtaining evidence concerning the cross-claim for alleged breach of the contractual requirements as to quality of the work.   Even if the defendant “knocked out” the claim of the plaintiff for non compliance with the provisions of the CCCA, it might still wish to continue with its cross-claim.  Consistent with its contention that there was a binding arbitration agreement in place, it was entitled to take the view that the cross-claim for breach of the quality requirements of the Construction Act should be dealt with in arbitration rather than in Court proceedings. In other words it was entitled to assert that not only the plaintiff’s claim but also the defendant’s cross-claim should be dealt with together and be dealt with at arbitration. If the plaintiff was unable to obtain the protection of s 79 of CCCA, it was open to the defendant to raise as a set-off any claim that it might have for damages for breach of contract against a claim for outstanding payments due under the construction contract.  It was therefore reasonably relevant to the proceeding for the defendant to obtain evidence of that cross-claim.  I consider that the disbursement in relation to the registered valuer would qualify as being reasonably necessary for the conduct of the proceeding.

[14]     I consider that that concludes the matters that the Court is required to rule on. Leave is reserved to either party to seek further directions.

J.P. Doogue

Associate Judge