BODY CORPORATE 160361 v BC 2004 LIMITED AND BC 2009 LIMITED [2015] NZHC 2979

BODY CORPORATE 160361 v BC 2004 LIMITED AND BC 2009 LIMITED [2015] NZHC 2979 [26 November 2015]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2011-404-4890[2015] NZHC 2979BETWEEN BODY CORPORATE 160361First PlaintiffBODY CORPORATE 160362Second PlaintiffFONG HONG YUEN & ORSThird PlaintiffAND BC 2004 LIMITED AND BC 2009LIMITEDFirst DefendantsANDREWS PROPERTY SERVICESLIMITEDSecond DefendantAUCKLAND COUNCILThird DefendantContinuedHearing: 8 October, 2 November 2015Further submissions 4 November 2015Counsel: G B Lewis and M Greenhalgh for First, Second and ThirdPlaintiffsD A Cowan and J D McBride for Second Defendant (AndrewsProperty Services Ltd)S A Thodey and T C Wood for Third Defendants (AucklandCouncil)Judgment: 26 November 2015JUDGMENT OF WHATA J[QUANTUM AND COSTS]This judgment was delivered by Justice Whata on 26 November 2015 at 10.00 a.m.,pursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:AND PBS DISTRIBUTORS LIMITEDFirst Third Party (In Liquidation)FAÇADE DESIGN SERVICES LIMITEDSecond Third Party (Discontinued)RONALD CHARLES HANLEYThird Third Party (Discontinued)JOHN LUKASZEWICZFourth Third PartySolicitors:Grimshaw & Co., AucklandRainey Law, AucklandHeaney & Partners, AucklandCopy to:J Lukaszewicz, Blockhouse Bay, AucklandIntroduction[1] In my judgment of 31 July 20151 I found that the first, second and third defendants were liable to the plaintiffs in varying respects relating to the negligent installation of the Overclad rain shield system to the Fleetwood Apartments. Quantum of liability and costs remained to be resolved if they could not be agreed. This judgement is in two parts dealing first with quantum of liability and then costs.PART 1: QUANTUMLiability findings[2] The defendants were found liable in negligence for failing to ensure that the Overclad was installed in compliance with the Building Code.2 The liability in respect of each defendant comprises compensatory, consequential and general damages. As to compensatory damages the judgment observes:[233] Relevant to both types of measure, the APS tender approved by BC1 anticipated remediation of existing damage and a weather-tight building, but clearly states that the costs of the repair of the exiting damage will be additional to the cost of installing the Overclad. BC1 (and the existing owners as at 2005/2006) could not have reasonably expected to be put in a situation where the repairs were (or would be) undertaken without incurring the cost of those repairs. Therefore the prima facie measure of their loss is a wasted cost measure as framed by James White (an expert quantity surveyor called by the Council), namely:(a) The wasted cost of the installation of the Overclad;(b) The cost of the removal of the Overclad;(c) The increased cost of securing a safe weather-tight building in 2014.[3] And further:[237] Unfortunately only Mr White assessed the quantum of compensatory damages on the basis of a wasted costs analysis. Ms Thodey also sought leave to provide further submissions and evidence in the event that I get to this point. I propose to grant leave to the parties to address me on final1 Body Corporate 160361 v BC 2004 Ltd & BC 2009 Ltd & Ors [2015] NZHC 1803.2 At [86], [138] and [176].quantum, but on the basis that I endorse the Mr White's methodology andsubject to my findings in subsequent paragraphs. My expectation is that any final quantification should be a matter for expert agreement.[4] Key findings included:[240] The total amount wasted therefore was $1,223,125.26.[245] The increased costs are measured by the difference in the actual costs in 2014 and the cost of the same works in 2005. Mr White assessed this at $1,263,375 by applying a deflating percentage of 24.66 per cent based on a starting point of $1,718,726. I see no reason to doubt this formula. But given the agreement reached by the experts on the repair cost less betterment, the start point is no longer apposite. A revised figure will need to be provided by the experts based on the agreed repair bill and adjusted to take into account deductions noted at [241] and [244].[5] The judgment concludes:Final quantum[269] The final quantification of the losses will now need to be assessed using the wasted cost framework employed by Mr White, taking into account the agreements reached between the experts as to the cost of repair, and any adjustments to reflect my findings. Final schedules allocating the damages to the Plaintiffs, including in respect of general damages and consequential losses should be updated at the same time.[270] As anticipated by the parties in their joint memorandum on quantum, the parties will also need to address the interest payable on the remedial costs (including in respect of the payments made on the wasted costs), expert remedial costs and other consequential losses.[271] If the parties cannot agree these matters, leave is reserved to seek further assistance of the Court. Leave is also reserved to the parties to submit to the Court on the issue of apportionment in the event that it transpires that the Babbage companies or APS is insolvent.Procedure and Issues[6] The parties were unable to agree the final quantification of liability or costs. I resolved to convene a hearing on the matters raised by the defendants, without accepting that they were properly before me.33 Minute dated 28 September 2015.Agreed sums and schedule of outcomes[7] To ensure that I could release a final decision as to quantum, I also directed the parties to agree schedules for the quantum of liability for the various outcomes sought by the parties. Eleven schedules with agreed quanta were produced.Issues[8] The following primary issues were then contested at the hearing:(a) Whether the principle of issue estoppel applied to the issues raised by the defendants;(b) Whether wasted costs were available to the plaintiffs on the pleadings;(c) What was the proper measure of the wasted costs;(d) Whether increased costs and/or interest on wasted costs were available to the plaintiffs;(e) Whether consequential losses were available to the plaintiffs; and(f) Whether general damages were available to the plaintiffs and if so in what amounts.Minute of outcome of hearing[9] As I did not want to unduly delay the finalisation of this matter, I resolved, with the consent of the parties, to release a minute recording the outcome of my deliberations with reasons to follow. I reserved my position on the issue of increased costs and interest with leave granted to the parties to cross examine Mr White on these matters. My minute then triggered the timetable for completion of submissions on costs and a fixture was allocated to enable cross examination of Mr White together with final argument on quantum and costs.Background to "wasted costs"[10] In order to address the contentions made by the defendants it is necessary to record the background to the approach taken to the method for quantifying quantum.[11] The plaintiffs pleaded "Economic Loss" for "Rectification Work" in the sumof $1,964,500.25 comprising the cost of the full repair undertaken in 2014/2015. Consequential losses and general damages were also sought.[12] Prior to the hearing, Mr McBride raised various and detailed concerns about the pleadings, particularly in relation to the pleaded causes of action about APS'duties and an apparent mismatch between the pleadings and the evidence. No specific mention was made of the need to amend the pleadings in terms of the quantum of losses claimed. But in opening Mr McBride observes in a section headed"APS' response to the claims against it":21. In terms of the claimed losses, the plaintiffs' claim should be confined to their "wasted costs" installing the Overclad system.[13] Mr McBride did not address me in closing on the quantification of losses, except to reiterate that a wasted costs approach had always been a position for APS, referring to his opening paragraph 21 and the authority there cited. 4[14] The Council reached agreement with the plaintiffs as to quantum for the full repair cost. As to wasted costs, Ms Thodey submitted:The bodies corporate and those plaintiffs who owned their apartments at the time of the remedial works presumably say:(i) The council ought not to have issued the consent or the code compliance certificate; and(ii) Ought to have acted in such a way that they would have realised that they needed to carry out more extensive remedial works in 2005/2006(iii) If indeed this is the nature of the claim that has been made, the loss that flows from it are the wasted costs in installing the Overclad and the lost opportunity to sue the council for more than they did.4 Newmans Tours Ltd v Rainer Investments Ltd [1992] 2 NZLR 68 (HC) at 86. I could not recall, and nor could Mr McBride, whether APS raised a pleading issue on wasted costs in argument.[15] In oral argument, Ms Thodey raised concerns about the lack of evidence as to what the wasted costs were and at what point the council might be liable for wasted costs. She observed that it would be unfair to assume what the position might have been without the Council or APS being given the opportunity to argue those issues.[16] The evidence dealing with quantum was, in fact, tabled by consent, includingthe evidence of Mr White as to wasted costs. Mr White's evidence succinctly states the reasons for and frame of his "wasted" costs methodology, namely:Wasted cost analysis25. The wasted cost analysis has been based on the plaintiffs' amendedstatement of claim dated 27 February 2014.26. I have not updated my wasted cost analysis to reflect the figuresshown on the plaintiffs' memorandum of quantum dated 22December 2014.27. The plaintiffs claim from the defendants the full cost of the remedial work carried out in 2014. They allege that this cost will be $1,891,034.99, a figure that is based upon the scope of work referred to in the brief of evidence of Mr Woolgar and the tender pricesubmitted by the Body Corporate's contractor, Teak ConstructionLtd.28. In my opinion, the cost of carrying out the remedial work in 2014 is not an appropriate basis for assessing the construction costs"wasted" on the work carried out in 2005 and 2006.29. The plaintiffs' experts contend that the damage existing at that timealways required a full re-clad of the building. If the court accepts this, the plaintiffs would always have had to carry out and incur the additional costs of a full re-clad.30. The remedial costs claimed by the plaintiffs comprise:a. Removing the Overclad system installed in 2005/06; andb. Remedying the underlying weathertightness defects and carrying out the work I summarised above at 17(d);31. In my opinion, the additional construction costs caused by thedefendants' alleged negligence comprise:a. The costs "wasted" on installing the overclad system; plusb. The costs of removing the overclad system; plusc. The present day cost of fully remediating the building less the cost of doing so in 2005 and 2006.[17] Mr Lewis and Mr Josephson maintained in closing that the proper basis for quantifying losses was by reference to the current repair bill, not a wasted costs methodology. Mr Lewis in reply however accepted that there are two options, either expectations damages or wasted expenditure and in his written reply he observes in relation to the wasted costs methodology:5Wasted expenditure in 2005/2006However, if the Court adopts this approach, then the correct calculation would be to take the $1,208,414.29 actually spend in 2005/2006 and add interest. At Judicature Act interest rates, this would amount to $1,895,985.47. The cost of removing the Overclad system now ($14,710.97) would also need to be added. Then the ownership share of the 14 owners who purchased after 2005/2006 would need to be deducted, and a separate claim made on their behalf based on current cost of repair.[18] As noted, in the July judgment, I resolved to adopt the wasted costs methodology, reserving leave to the parties to address me on final quantum, but on the basis that I endorse Mr Whites methodology and subject to my findings recorded at [238] – [254].Issue estoppel[19] Mr Lewis submits that I made final determinations in relation to wasted costs, increased costs and consequential losses, and that only issues of final quantum of those amounts remained to be finalised. He says that the defendants now seek an opportunity to re-litigate those matters.[20] Ms Thodey submits that the Council is not resiling from its position in the hearing namely that the losses suffered by the plaintiffs who owned their apartments at the time of the original remedial work were to be assessed on a wasted and increased costs basis. But she submitted that due to the pleading deficiencies the Council sought an opportunity to submit and call evidence on the proper quantification of the loss based on a wasted costs methodology.5 Mr Lewis cites Mr White's evidence at [34(a)] and [34(b)] for this submission.[21] Mr McBride submits that my judgment was only an interim judgment as to liability and that quantification of liability has not been resolved with finality.6Assessment[22] Issue estoppel arises where a particular matter of fact or law has been decided by a prior judgment. In short, a party may not re-litigate an identical matter or issue that has already been finally determined.7[23] The July judgment plainly adopts a wasted costs methodology with finality –see [269]. I also agree with Mr Lewis that this cannot be re-litigated now because:(a) The defendants identified wasted costs as the proper measure of quantum of compensatory damages;(b) Mr White's evidence on wasted costs was adduced by consent;(c) Mr Lewis accepted in reply that wasted costs was one of two options available to me;(d) APS did not make any submissions on quantification or seek to challenge a wasted costs approach in closing;(e) The Council did not object to use of the wasted costs methodology, subject to being afforded an opportunity to address specific matters.[24] The finer grain analysis of quantum of liability was, however, expressly left open – see [237], together with the calculation of interest – see [270]. I am satisfied therefore that the matters going to the precise quantification of liability within the wasted cost framework and interest are live issues.6 Mr McBride cited, among cases, Shiels v Blakeley [1986] 2 NZLR 262 (CA) as to the requirement for finality.7 Shiels v Blakeley, above n 6 at 267.Wasted costs – the pleadings issue[25] Mr McBride emphasised that the loss claimed was never pleaded on a wasted costs basis and that the pleaded causes of actions were not directed to establish a wasted costs claim. He contends that had the plaintiffs sought wasted costs, APS would have led evidence and cross examined the owners, Philip Grigg (a Babbage director) and Council officers on:(a) What if anything, the owners would have done if they knew that the clause SW1-A-1 had not been complied with;(b) What and whose costs could have been avoided, and at what point work on the Overclad solution would have ceased.[26] Mr McBride further submits that the plaintiffs must now seek leave to amend the pleadings,8 but that any such application should be declined. He accepts that he identified wasted costs as the proper method for quantum in opening, but in a broader context of discussing corrections needed to the plaintiffs' case. He alsoaccepts that he did not make submissions about quantum and that he did not bring to my attention in closing that the wasted costs quantification was opposed because of deficiencies in the pleadings. He says however that as the plaintiffs never resiled from the pleaded basis for quantum, he did not need to raise the pleading point.[27] Ms Thodey does not seek to exclude the wasted costs assessment based on deficient pleading per se. Rather, as will be addressed below, she submits that because of the pleading deficiency relevant questions of causation and related quantum were not thoroughly explored and need to be assessed before any final award is made.[28] Mr Lewis submits that r 5.31 confers jurisdiction to award losses on an alternative basis and that the requisite criteria for the exercise of such jurisdiction are8 Citing Brownlie v Shotover Mining Ltd CA 181/98, 21 Feburary 1992; Tower Insurance Ltd v Domenico Trustee Ltd [2015] NZCA 372; Multigroup Distribution Services Pty Ltd v TNT Aust Pty Ltd (1996) ATPR 41-522 at 42-769.met. He also did not consider it was necessary to seek leave to re-plead, even if I was minded to entertain such an application.Assessment[29] HCR r 5.31 states:Rule 5.31 Specifying relief sought(1) The relief claimed must be stated specifically, either by itself or in the alternative.(2) Despite subclause (1), it is not necessary to ask for general or other relief but the court may, if it thinks just, grant any other relief to which the plaintiff is entitled, even though that relief has not been specifically claimed and there is no claim for general or other relief.[30] The breadth of this jurisdiction speaks for itself. The object, as it is with the Rules as a whole, is to achieve an efficient, just result.9 This usually requires satisfaction that the plaintiffs are entitled to the unpleaded relief and that defendants are not surprised or materially prejudiced.10[31] Mr McBride helpfully referred me to a Court of Appeal decision, Clarkson v Whangamata Metal Supplied Ltd.11 In that case the Court rejected an argument that interest as damages was part of a loss of profits arising from late settlement and didnot require separate pleading. The Court observed that such an "entitlement arises only when the claim is pleaded and proved, and that requirement was not met."12The Court found that the pleadings and the evidence did not address key variables, including whether the plaintiffs purchase was debt funded, the likely timing of the receipt of profits, and or any set off saved not having to borrow the purchase price.[32] But in Clarkson, the claim as pleaded was a claim for interest on a base award of damages, rather than an independent claim for interest as damages.13 What was sought therefore was an entirely different kind of damage to that pleaded. Its rejection by the Court of Appeal was, with respect, an orthodox application of9 High Court Rules, r 1.2.10 McGechan on Procedure (online ed) at [HR 5.31.04].11 Clarkson v Whangamata Metal Supplied Ltd [2007] NZCA 590, [2008] 3 NZLR 31.12 At 41.13 At [43].principle. In the present case by contrast, wasted costs is "of a kind"14 which the statement of claim seeks – namely economic loss arising from the defendants' acts ofnegligence.15 In simple terms, the plaintiffs' claim for the full repair cost is one measure of their 'costs' and Mr White's assessment provides another measure ofthose costs.[33] I also see no substantive unfairness arising from adopting the wasted costs measure. Pleadings are an essential road map for the Court and the parties, including, in some cases, particulars of loss.16 The current version of the pleadingsdoes not expressly refer to "wasted costs". But the defendants can hardly claim to besurprised by relief based on a wasted costs methodology – they signposted it to the Court as the proper frame for quantifying the plaintiffs' losses and they consented tothe production of expert evidence as to the quantum of wasted costs (including increased costs), previously exchanged on behalf of Babbage.17 Nor is there any dispute as to the quantum of wasted costs actually incurred.18 Relevantly, Kós J inPlatt v Porirua City Council,19 a case also cited by Mr McBride, declined to hold that particulars relating to remedial work in a leaky building case were required. The Judge there concluded:[37] These go beyond the necessary scope of particulars of pleadings, to details of quantum which can be addressed in evidence rather than in pleadings.[34] The quantification of loss was addressed in evidence, including Mr White'sevidence. This is to be contrasted from the facts in Tower Insurance Limited v Domenico Trustee Limited, another authority cited by Mr McBride, where the Court of Appeal reversed a finding of election by delay which was not pleaded.20 But inthat case it was clear that counsel "relied on the particulars given in the amended statement of claim in deciding not to call further evidence and made his closing14 A phrase borrowed from McGechan on Procedure, above n 10 at [HR5.31.04].15 McGechan on Procedure, above n 10 at [HR5.31.04].16 Price Waterhouse v Fortex Group Ltd CA179/99, 30 November 1998 at 19; Platt v Porirua City Council [2012] NZHC 2445at [24] and [36].17 Mr McBride noted that the evidence was adduced by consent under cover of a memorandum dealing with quantum based on the full repair. Be that as it may, the Court, in an adversarial process, can only deal with argument and evidence tabled before it.18 As distinct from increased costs – see [49] below.19 Platt v Porirua City Council, above n 16.20 Tower Insurance Limited v Domenico Trustee Limited, above n 8 at [57].submissions on that basis." That is far removed to what unfolded before me insofaras concerns quantum of liability, as explained above.[35] I am also satisfied that the defendants are not materially prejudiced by an assessment of loss based on a wasted cost measure for the reasons already mentioned at [23]. And the matters for cross examination identified by Mr McBride raise makeweight concerns only:(a) What the owners might have done if they knew that SW1-A-1 was not complied with: In reality, the prospect of the owners, properly advised of their exposure, conceding under cross-examination that they would have continued with the Overclad installation without the full survey and repair was remote. It is also highly doubtful that either Mr Grigg (who unfortunately relied on Mr Dale to manage the project) or Council officers would shed any useful light on what the owners would have done.(b) What and whose costs could have been avoided: This issue is a simple corollary of the timing of the negligence and the subsequent costs incurred, which can be objectively assessed. Indeed, it was assessed inthe July decision on liability. Mr White's evidence also provided a thorough breakdown of the invoiced costs.(c) What point work on the Overclad solution would have ceased: This is also a simple corollary of the timing of the negligence for the purpose of liability, and as noted, the prospect of the owners, properly advised of their exposure, accepting that the Overclad could proceed without a full survey and repair is remote.[36] Overall, as both the Council and APS emphasised to me, "wasted costs" is thelogical measure of the loss for this type of negligence. In this context, and havingregard to the production of Mr White's evidence by consent, the failure tospecifically claim wasted costs is a deficiency of form not substance.Abuse of process[37] Mr Lewis also submitted that the belated objection by APS is an abuse of process given that APS did not make any submissions on quantum or bring to theCourt's attention that APS would challenge the jurisdictional basis of the Court toadopt a wasted costs methodology.[38] I am not satisfied that I should characterise APS objection as an abuse ofprocess. I accept Mr McBride's explanation that he did not think it was necessary toraise the pleading point in closing. Rather he approached the question of quantum assuming that the plaintiffs were not seeking losses on a wasted costs basis and he had not appreciated that Mr Lewis conceded in reply that the wasted costs methodology as one option available to the Court. I also acknowledge MrMcBride's related point that the purpose of raising it now was to afford this Courtthe opportunity to address the concerns raised and to make any corrective steps that might be considered appropriate.[39] In these circumstances, APS' silence on quantification was not tactical andthe belated raising of the pleading point was not an abuse of process. Having said that, as noted above, APS cannot now reasonably complain about a wasted costs methodology defining the quantum of loss.The proper measure of wasted costs[40] As to the measure of wasted costs, Ms Thodey submitted:(a) The Council is effectively being asked to indemnify Babbage and APS for their profit even though the plaintiffs could still recover the funds they expended from Babbage and APS.(b) Given the pleading deficiency, the timing and causative effect of theCouncil's negligence was not explored in terms of wasted costs (including by way of cross examination of Mr White), and so there is insufficient evidence to make any proper conclusion about its liability to pay wasted costs.(c) The Council cannot be liable for wasted costs in advance of any negligent act committed by it, namely the failure to inspect for compliance with SW1-A-1.(d) The Council should not, in any event, be liable for expenditure in advance of the first inspection, as the plaintiffs allowed Babbage and APS to commence works without building consent.(e) The Council that the sum of $250,000 paid in settlement of the 2007 claim should be off set against the wasted costs claim.Indemnifying Babbage and APS[41] I agree with Mr Lewis that the extent to which the Council might be indemnifying Babbage and APS is not material to quantum of liability, except as it relates to apportionment. Having found that the Council was negligent and that this materially contributed to the Plaintiffs loss in the form of wasted costs, it does not matter for the purposes of liability that other tortfeasors may have benefited when the Council did not.Pleading deficiency / inadequate evidence[42] I also reject the proposition that the pleading deficiency meant that Council'sliability for wasted costs was not properly explored. Had the Council performed its consenting task correctly, and sought adequate information in the form of aengineering assessment as to structural integrity, the lion's share of the subsequentwasted expenditure would have been avoided. The council's liability for wasted costs is a simple function of the timing of its negligence and the quantum of the subsequent wasted costs incurred. The timing issue was thoroughly explored at trial and quantum of subsequent wasted costs is not disputed.[43] It is also difficult to reconcile the Council's concerns about evidence given that it produced Mr White's evidence by consent. Ms Thodey submitted in closing and in the quantum hearing, that she did not adopt Mr White's evidence in itsentirety (though I note that in the submissions after the costs hearing the Councilrelies on Mr White's assessment of increased costs). But the Court must have aproper basis to reject uncontradicted expert evidence – it is not sufficient for the party adducing it to subsequently seek to distance itself from it.The first act of negligence[44] I accept that the Council can only be liable for expenditure incurred after its first act of negligence. Conversely, it cannot be liable for pre-existing losses already incurred because the Council cannot be said to have caused those losses. I do notaccept however that the Council's first act of negligence was the failure to inspect.As recorded in the judgment at [153] the Council did not have a proper informational basis to grant building consent. Strict conformity with the plans and specifications may have avoided the causative potency of the informational inadequacies. But theCouncil's failure to secure strict conformity meant that the underlying negligence orfailure to secure a proper assessment was not remedied. Liability for subsequent wasted expenditure must follow.Plaintiffs' conduct[45] The submission that the plaintiffs should not be able to recover losses incurred up to the inspection from the Council because they allowed Babbage and APS to commence works without consent is not sustainable. The plaintiffs reached agreement which APS and Babbage to install the Overclad in conformity with the Building Act 2004 requirements. Accordingly, the extent to which Babbage and APS commenced works without consent is a matter going to apportionment, and has already figured in the judgment.The settlement sum[46] The Council settled the 2007 proceedings in the following terms:D. The parties have agreed to settle the proceedings and any and all claims arising directly or indirectly out of the proceedings.[47] The second amended statement of claim set out detailed particulars of the remedial works required to repair the effects of moisture ingress. Those remedialworks correspond with the works required to install the Overclad. Nevertheless, the sum paid by the Council was a payment to settle proceedings for alleged negligence relating to the construction of the Fleetwood apartments in the 1990s, not in relation to the installation of the Overclad. The present claim relates to the subsequent loss incurred flowing from that installation. Therefore, the payment of the $250,000 did not purport to, and cannot, remedy that loss.[48] Given the foregoing, I see no proper basis for reducing the base quantum of the wasted costs.Increased costs[49] Mr McBride submits that:(a) Mr White's evidence on increased cost is simply accounting for inflation.(b) A claim to purely inflationary costs is not a recognised head of damage, citing Endhill Pty Ltd v Grasso Searles & Romano.21(c) Had the plaintiffs sought this type of loss, evidence should have been called as to the actual difference and adjusted to account for the value of money over time.(d) In these circumstances the plaintiffs cannot be awarded increased costs as there are too many variables that have not been explored in evidence.[50] Ms Thodey also submitted that the use of money offset must be taken into account.[51] Mr Lewis responds that it was under no obligation to plead relief based on increased costs and that in any event, the Council and APS had ample opportunity to21 Endhill Pty Ltd v Grasso Searles & Romano [1993] 2 QD R 136 (QCA).make submissions on Mr White's wasted costs methodology, including the increased costs component at the hearing.Assessment[52] I have rejected APS' primary pleading point about wasted costs for thereasons stated at [33] and [34].[53] I accept however that two aspects of the methodology needed to be tested in light of submissions in order to secure a fair result to the parties, namely the purely deflationary approach to quantifying the increased costs and the treatment of interest on the wasted costs. Ms Thodey had flagged concerns about the precise quantification based on Mr White's methodology (though she emphasises that it remains the Council's preferred approach), and Mr Lewis signalled a claim tointerest in his reply submissions (and on which I sought further submissions). I also accept that while APS did not submit on quantum, Mr McBride's primary concernsabout the deflationary approach could be fairly put to Mr White without unduly elongating the process.[54] I turn then to the criticism of Mr White's approach. Mr White explained his "increased" costs in this way:Increased costs of carrying out "appropriate" remedial works in 2014instead of 2005/200636. If the plaintiffs succeed, they would also be entitled to claim the higher costs of carrying out in 2014 the remedial work that ought to have been carried out in 2005 and 2006.37. To determine this, I have first assessed the 2014 costs of the workthat "ought" to have been carried out, based on the scope of works andinvoices submitted by Teak Construction. This figure is $1,718,726.00 (including fees and GST).38. I have excluded betterment and other work that the plaintiffs would have to have carried out in any event. For example, I have excluded the cost of repainting because the building would now be due for repainting regardless of any need for remedial work in 2014. The costs I have excludedon this basis are listed in the attached schedule under the heading "Quantum Deductions".39. Having assessed the cost of the works in 2014, the next step is to assess the cost of those same works in 2005/2006. The most appropriateway to calculate this is to adjust the cost of the works in 2014 to what it would have cost in 2005/2006. I have done this by applying a deflation percentage of 24.86%, in line with the increase in the Capital Goods Price Index between June 2005 and December 2013. This has resulted in a figure of $1,263,375.32.40. I consider that this is a more appropriate way of determining thecosts which "ought" to have been carried out in 2005/2006 than assessingthe tenders submitted by APS in 2004 for undertaking a removal and re-clad. This is because those tenders were never accepted and there is no detailedscope of works on which to base any calculation on what "ought" to havebeen done. By using the 2014 scope of works and deflating the cost back to 2005, I am able to calculate a more accurate 'like for like' comparisonbetween what the work would have cost in 2005/2006 and what the work is costing in 2014.41. I calculate that the higher costs of carrying out "appropriate"remedial works in 2014 instead of 2005/2006 are:(a) Cost of works in 2014 $1,718,726.00(b) Less: cost of works in 2005/2006 $1,263,375.32Difference $455,350.6842. I have not made any allowance for interest on the funds expended on the work carried out in 2005 and 2006. This is because the costs of carrying out the work in 2014 are higher than they would have been in 2005/2006: on their case, the plaintiffs would have spent more in 2005/2006 than theyactually did spend if the "appropriate" remedial work had been undertaken at that time.[55] Under cross-examination, Mr White maintained that his deflationary approach to calculating the costs accorded with industry practice and was a valid tool for calculating the difference in building cost over time. He accepted that he did not take into account the relative change in the cost of other commodities or in the value money over the same period, and that he was not qualified to do so. Mr White also accepted under cross-examination that if the interest on wasted costs exceeded the increased costs, then this difference should be added to the loss.[56] With the benefit of this cross-examination, Mr Lewis submitted that wasted costs plus interest was the proper starting point and that increased costs should be added to these. Ms Thodey insisted that the increased costs approach used by MrWhite was appropriate, though appeared to concede that Mr White's adjustment forinterest in excess of increased costs should be taken into account. Mr McBride maintained that increased costs could not be properly imposed without a fullassessment of the actual costs that would have been incurred in 2005/6 and adjusted to reflect the changes in the value of money over the period 2005 – 2014. He also submitted that if a wasted cost methodology was to be employed, then the proper approach was to add interest but to make an adjustment for any collateral benefit.The deflationary approach[57] I remain unconvinced that Mr White's Capital Goods Price Index (CGPI)deflationary method, based on industry practice, is inherently flawed for the purpose of quantifying increased costs. First, Mr White presented as a knowledgeable and forthright witness in his specific field of expertise as a quantity surveyor. Second, his estimate of the costs of construction in 2005/6 was robustly established by referenceto the CGPI's residential building index in the absence of readily availableinformation on the likely actual cost in 2005/6. Third, his basic premise is that inorder to remedy the defendants' negligence,22 the owner plaintiffs were required to expend more money in 2014 than in 2005/6 to achieve Building Code Compliance. Fourth, the Court may ordinarily take into account changes in prices between the date of breach and trial.23 Fifth, adjustments to account for the changing value of money or the price of other commodities that might offset the increased construction cost is not apposite in an orthodox cost of repair assessment as distinct from a difference in net value analysis – for example where negligent misstatement induces the plaintiff to enter into a contract.24 The former is simply concerned with the real cost of repairing the defective workmanship, while the latter is concerned with all22 I found APS and the Council liable in negligence in so far as the failed to ensure that the installation of the Overclad conformed to Building Code requirements: Body Corporate, above n 1 at [138] and [176].23 See Peter Blanchard (ed) Civil Remedies in New Zealand (2nd ed, Brookers, Wellington, 2011) at 137, and cases cited therein, in particular Alcoa Minerals of Jamaica Inc v Broderick [2002] 1 AC 371 (PC) where the Privy Council allowed a plaintiff in this position to recover damages as at the date of judgment, by which time building prices had quadrupled due to inflation. See alsoDodd Properties (Kent) Ltd v Canterbury CC [1980] 1 WLR 433 (CA) and Bevan v Blackhall & Struthers (No2) [1973] 2 NZLR 45 at 68 – 72, in this regard I adopt Beattie J's reasoning that forthe purpose of remedy for building defects, there is no material difference between thecontractual and tortious measure (at 69). Woodhouse J's reasoning in Bevan Investments Ltd v Blackhall and Struthers (No2) [1978] 2 NZLR 97 (CA) from 116 – 119 affirms the appropriateness of adjustments for inflation.24 Marlborough District Council v Altimarloch Joint Venture Ltd [2012] NZSC 11, [2012] 2 NZLR 726 at [50]the gains and advantages from the flawed transaction in order to establish theplaintiffs' true loss.25Interest on wasted costs[58] Mr Lewis submitted that an award of interest on wasted expenditure was orthodox, and notwithstanding his insistence on finality, I was free to make that award, in addition to an increased costs award. Mr McBride contends that wasted costs plus interest is the proper measure, and that the cumulative approach would put the owner plaintiffs in a better position than had the negligence not occurred and is contrary to principle.[59] Mr White explained that he did not include interest on wasted costs as this ineffect double counted the plaintiffs' loss. He did concede however that to the extentthat the interest exceeded the increased costs figure, then that sum should be added to the quantum of loss.[60] I agree with Mr White that an award of increased costs and interest maydouble count the plaintiffs' loss but for a different reason.26 An increased costs award and an interest award address two different types of loss. As Blanchard noted,27 increased costs is designed to preserve the real value of the damages award, while interest is to compensate for being kept out of that real value;28 but as interest25 Marlborough District Council v Altimarloch Joint Venture Ltd, above n 24 at [50]. Similarly, the analysis in Endhill Pty Ltd v Grasso Searles & Romano, above n 21 is not on point. That case concerned a claim to losses arising from the negligent failure to settle a contract of sale of land, including increased cost of construction on the land between 1986 when the construction had originally been planned by the client to begin, and January 1992 when it actually began. In rejecting the claim to increased construction costs, the Court was addressing losses arising froma deferred commercial transaction and framed the central issue as to "whether the affected clientwould have made more money out of the initially contemplated transaction than it made, in theevents that happened", at 139. It can be readily seen then why the Court in that case required the plaintiff to show that he was net worse off, including within that assessment the effect of thechanging value of the plaintiff's assets subject to the transaction. That is however far removed from a tortious damages claim simpliciter for defective workmanship.26 Mr White does not take into account interest on wasted costs because the plaintiffs would have incurred the cost of the full repair in any event. But this analysis erroneously purports to offset the plaintiffs actual losses against a counterfactual in which the plaintiffs obtain commensuratecapital value for their expenditure. This is to be contrasted from a situation where the plaintiffs'losses are properly offset by a likely poor counterfactual investment as postulated by Lord Hoffman in South Australia Asset Management Corpn v York Montague Ltd [1997] AC 191(HL).27 Blanchard, Civil Remedies, above n 23 at 137.28 Citing Pickett v British Rail Engineering Ltd [1979] All ER 774 (HL) at 782 per Lordrates themselves take into account the risk that money will lose its value, the plaintiff may in effect be recovering twice for the same risk. If damages are effectively adjusted for inflation, as here, then the interest must be correspondingly lower.29[61] Problematically, there is no assessment of the adjustment to interest required in order to fairly compensate the plaintiffs for their combined loss on increased costs and interest. I am not prepared to speculate on this. In the result, I have come to the view that the plaintiffs should receive the interest on the wasted costs at the prescribed (and agreed) rate as this "in a rough and ready way"30 will accommodatethe effects of inflation. I also think this outcome accords with Mr White's pragmatic concession and responds to Ms Thodey's submission that interest rate should beadjusted if it is to replace or to be added to the increased costs.Use of money offset / collateral benefit[62] The following benefits are claimed:(a) Use of money offset or collateral benefit (being the amount that the plaintiffs did not have to spend in the interim); or(b) The benefit of a weather tight building in the interim.[63] The premise underlying both submissions is that the installation of the Overclad deferred the cost of a full repair and provided a weather tight building until the Prendos intervention and full remediation. But the deferred cost of repair is not a financial benefit into the hands of the plaintiffs or a loss avoided, because the cost had to be paid in any event, at an inflated price.[64] As to the interim benefit of a weather-tight building, the plaintiffs did not seek a temporary measure and whatever "benefit" they received does not mitigate theloss on wasted expenditure – it was still incurred unnecessarily. Mr McBride alsoWilberforce.29 Also noted by Blanchard Civil Remedies, above n 23 at 137. See also Drower v Minister of Works [1984] 1 NZLR 26 at 30, 33-34 per Woodhouse J, and at 39 per Somers J.30 Cookson v Knowles [1979] AC 556 (HL) at 571-572, also cited by Blanchard Civil Remedies,above n 23 at 138.conceded that this benefit, if material, should have been raised in relation to the primary repair cost claim and cannot sensibly be pursued now.Outcome[65] The plaintiffs are entitled to Mr Whites' wasted costs estimate, plus intereston the wasted costs as agreed.Consequential losses and general damages[66] APS and the Council submit that as the plaintiffs would have incurred consequential losses and general damages in any event, they should not be able toclaim them in addition to the wasted costs compensation. However, the defendants'negligence in this case intervened, preventing the plaintiffs from securing a Code complaint building with one round of repair. Moreover, these losses and damages were agreed by the Council and the plaintiffs without demur by APS prior to the July judgment. I see no proper basis for allowing the parties to resile from that agreement, which also coincides with the expert evidence. If this was a matter of genuine dispute then it applied equally to the claim based on the full repair cost, i.e. on the basis that these losses would have been incurred in any event. It is simply too late in the trial process to challenge the agreement reached.Outcome on quantum[67] Given my conclusions, there shall be an order for quantum as follows:(a) The Council are not liable for wasted costs incurred before 16 June 2005 (pre-consent) in accordance with schedule 4 (attached annex A).(b) APS are not liable for wasted costs before April 2005 (pre- installation) in accordance with schedule 5 (attached annex B).(c) All other losses, as agreed, in schedule 8 (attached annex C).PART 2: COSTSThe plaintiffs' costs[68] The parties accept that the proceedings are properly categorised at as Category 2 matter. The following matters are, however, in issue:(a) Whether band B or band C should apply to all attendances (including answers to interrogatories and preparation for the quantum hearing);(b) Whether increased costs should be paid in relation to preparation of evidence and preparation for trial;(c) Whether increased costs should be paid for attendances post a Calderbank offer made by the plaintiffs; and(d) What level of disbursements is properly payable?The frame[69] Rule 14.1 specifies that all matters are at the discretion of the court if they relate to costs. The exercise of this discretion is, however, to be undertaken in light principles and rules stated at rules 14.2 – 14.10. When the discretion is exercised outside the general scheme of those rules, it must be undertaken in a considered and particularised way.31[70] As set out in Holdfast NZ Ltd v Selleys Pty Ltd,32 the following steps should be taken when assessing costs:(a) Categorise the proceedings under r 14.3;(b) Work out a reasonable time for each step under r 14.5;31 Refer Glaister v Amalgamated Dairies Ltd [2014] 2 NZLR 606 (CA) at 24 and 28; refer alsoJones v WHK Sherwin Chan & Walshe (2011) 25 NZTC 20-095 (HC).32 Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA).(c) Consider whether extra time is justified; and(d) Step back and assess the overall entitlement to costs, under r 14.6, dealing with increased and indemnity costs.Should band B or band C apply?[71] The plaintiff seeks band C in relation to specified attendances. Thedefendants' disagree and maintain that band B is appropriate for most attendances.[72] Rule 14.5 sets out the procedure for determining a reasonable time:(a) The time specified for the event at schedule 3; or(b) A time determined by analogy if the schedule does not apply; or(c) The time is assessed as likely to be required for a reasonable step; and(d) The time must be assessed by reference to band A, B or C depending on whether a comparatively small, normal or large amount of time is considered reasonable.[73] The evident expectation of the rules is that the time allocated to each step must be justified by reference to the bands as strong indicia of reasonableness. A global approach is not permissible.33 The primary object is to ensure that a reasonable time is allocated for the specified step.[74] I have considered the plaintiffs claimed band C allocations. I am satisfied that the items listed below at Table A are properly band C matters having regard to the time likely to be required for each of those steps in a proceeding involving:(a) 42 plaintiffs, 3 defendants and 3 third parties; and33 McLachlan v Mercury Geotherm Limited (Rec) CA117/05, 4 December 2006 at [62].(b) Multiple, complex, factual and legal issues – about 35 primary issues: refer Judgment at [48], [87] and [139];(c) A hearing spanning 20 working days.Table A:34Date Number Description11/08/2011 1 Commencement of proceeding by plaintiff31/07/2012 20 List of documents on discovery30/07/2012 21 Inspection of documents21/10/2013 3 Reply to affirmative defences26/02/2014 15 Preparation for and attendance at pre-trial conference17/04/2014 31 Preparation of list of issues, authorities and common bundle[75] The remaining schedule 3 attendances listed by the plaintiffs are properly band B save in relation interrogatories which I address at [76] and preparation for hearing and briefs of evidence which I address at [80].35Interrogatories[76] I do not agree that the there should be a band C time allocation for the answers to interrogatories as sought by the plaintiffs. Eighteen plaintiffs36 were required to answer a total of 231 questions. This would have required a significant34 The plaintiffs' schedule of costs dated 4 November 2015.35 The Council challenged the plaintiffs' five separate lists of documents. I am satisfied that the requirement for five lists simply reflected the number of plaintiffs involved and was a permissible allowance. Band B however for four of those lists is appropriate in the circumstances.36 The plaintiffs' submissions identified 23 plaintiffs, but the cost schedule identified 18. I proceed on the basis that the costs schedule identified the correct number for this specific claim.effort. But a 72 day allocation is excessive. Rather, I consider that 27 days for the first set is reasonable given that the nature the interrogatories should have enabled a reasonably efficient completion of the answers.Should costs be paid on the quantum attendances?[77] The plaintiffs have sought band C allocation for the additional steps required to respond to the challenge to quantum. The council submits that the plaintiffs cannot reasonably claim costs in relation to quantum because they did not succeed intheir pleaded quantum (i.e. actual repair losses) and that the Council's wasted costsapproach was, in fact adopted by the Court.[78] I accept that the plaintiffs should be entitled, by analogy, to additional time given the extra work involved in resolving quantum and for preparation and hearingtime required to meet the defendants' objections to quantum. Notably the plaintiffs,unlike the defendants, have not sought to contest the Court's primary findings onquantum and responded, as requested by the Court, on the issue of interest.[79] But I do not accept that band C or increased costs for any of these attendances is justified. The key issues of fact and evidence had to be addressed in the main hearing, including in the evidence of Mr White. The fresh issues dealing with jurisdiction, increased (quantum) costs and interest should not have been unduly time consuming. Band B allocation is reasonable for these steps.Should costs be increased for trial preparation and preparation of briefs of evidence?[80] The plaintiffs have sought 40 days (or 8 working weeks) for preparation for the hearing and 50 days (or 10 working weeks) for preparation of evidence. APS submits that this allocation is excessive and well outside the upper bound for such awards. APS and the Council recommended to me a 20 day allocation for both these matters.[81] A number of recent complicated proceedings have attracted increased costs for preparation of briefs and for hearing:(a) Auckland Waterfront Development Agency v Mobil Oil New Zealand Ltd:37 15 days for trial preparation and 15 days for preparation of briefs in a 6 day trial (set down for 4 weeks);(b) Body Corporate 90247 (Manfrini) v Wellington City Council:38 30 days for preparation of briefs and 10 days for trial preparation (effectively double the category C allowance);(c) Trustpower v Commissioner of Inland Revenue:39 29 days for briefing evidence (89.7 days actually spent) and 30 days trial preparation (116.2 actually spent).(d) Todd Pohokura Ltd v Shell Exploration NZ Ltd:40 108 days preparation time for a 41.5 day trial (or 2.5 days preparation per day of trial);(e) Sovereign Assurance Company Ltd v Commissioner of Inland Revenue:41 50 days for preparation of briefs and for hearing in a 21 day trial (or 2.5 days preparation per day of trial).[82] It was suggested by Counsel that these cases reveal the continuance of the approach taken under the previous costs regime to double trial time to calculate preparation time. For my part that is conjectural. More plausibly the judges examined the complexity of the case and applied a reasonable allocation to reflect the likely effort expended.4237 Auckland Waterfront Development Agency v Mobil Oil New Zealand Ltd [2015] NZHC 470. I note that the outcomes in the Todd Pohokura and Sovereign Assurance cases (below) were identified in this decision at [25].38 Body Corporate 90247 (Manfrini) v Wellington City Council [2014] NZHC 962, (2014) 21 PRNZ 821.39 Trustpower v Commissioner of Inland Revenue [2014] NZHC 3072.40 Todd Pohokura Ltd v Shell Exploration NZ Ltd HC Gisborne CIV-2006-485-1600, 1 July 201141 Sovereign Assurance Company Ltd v Commissioner of Inland Revenue [2012] NZHC 357342 I note that Todd Pohokura Ltd, above n 39, was decided under the old regime but in that case Dobson J awarded more than double the trial time to reflect the legal and technical complexity[83] In this case, the burden of preparation of briefs and for trial was substantially increased by a combination of the number of plaintiffs and defendants, complicated facts (both as to background and as to the nature of the defects); heavily disputed expert opinion (as to defects, causation and standards of care); and multiple affirmative defences (including disputes as to individual loss). Costs on a standard band C basis are plainly inadequate to accommodate these factors. But 90 days or 18 working weeks preparation time is not reasonable having regard to the frame set by the rules (in particular the assumption that band C is ordinarily sufficient toaccommodate a "large amount of time") and that allocation on a band C basis forother pre-hearing attendances will be awarded. In addition, the interrogatories process (separately accounted for) should have provided considerable assistance withpreparation of the plaintiffs' briefs.[84] Overall, my assessment is that 50 days for both preparations for hearing and of briefs is reasonable.Should costs be increased for attendances that post date a Calderbank offer?[85] On 26 August 2014 the plaintiffs wrote to the defendants with an offer of settlement on a without prejudice save as to costs basis. They sought $2,000,000 in full and final settlement. They seek 50 per cent uplift on subsequent attendances with the result that the costs award for the post Calderbank attendances increases from $175,273.50 to $262,910.25.[86] Ordinarily a plaintiff is entitled to uplift on costs for post Calderbank attendances. But there are some complicating factors in this case that mitigate the failure to accept the settlement offer:(a) The Council did not sit on its hands and do nothing. It sought to settlethe claim with the Plaintiffs by assignment of the plaintiffs' claimsagainst APS. But, this was deemed to be unlawful by this Court.43 Theof the case.43 Body Corporate 160361 (Fleetwood Apartments) v BC 2004 Ltd [2014] NZHC 1514, [2014] 3 NZLR 758.Council's reluctance to assume full liability without clear recourse toAPS was understandable.(b) APS's technical case dealing with the alleged defective installation ofthe Overclad was successful and the APS corresponding expert evidence was vindicated, so it had a proper basis to challenge asignificant portion of the plaintiffs' case.[87] I think therefore that in order to do justice between the parties, an uplift of 25 per cent properly reflects the failure in this case to accept the settlement offer.[88] APS' counter claims that costs should be reduced by 25% because:(a) Any uplift should be considered in light of APS' success on all defectissues;(b) The plaintiffs should be liable for the APS' expert evidence, who wereproven to be correct;(c) APS was only found liable in respect of the failure to insist on a survey of existing damage;(d) The plaintiffs should not be entitled to Mr Donald's expenses becausehe conceded he was wrong on all material defects issues.[89] I accept that these matters are relevant factors in terms of 14.7(d):14.7 Refusal of, or reduction in, costsDespite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—(d) although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue whichsignificantly increased the costs of the party opposing costs; or [90] But they are mitigating factors only and reflected in my relatively modest uplift at [87]. Furthermore, the matters raised by APS do not fully respond to the fact that APS is (a) liable for the losses suffered and (b) did not settle when it could have done for a sum that is substantially less than the quantum payable.[91] As to expert costs:(a) An expert's overriding obligation is to the Court. In making theconcessions that he did, Mr Donald adhered to that basic requirement having considered all of the evidence then available to him. He is to be commended for his honest and forthright approach.(b) The APS experts won the technical arguments about installation defects, but on the critical issue of structural soundness ultimately agreed with Mr Donald that:(i) It was necessary to assess the sufficiency of the existing structure in terms of its ability to support the Overclad; and(ii) The condition of the existing structure should have been checked by means of engineering survey prior to acceptance of design.(c) In the result, on this crucial expert issue, the plaintiffs were successful.[92] Accordingly I reject APS' suggestion that Mr Donald's expenses should notbe paid and that APS is entitled to its expert fees.What disbursements are payable?Experts[93] The Plaintiffs claims expert costs in the sum of $270,649.24.[94] I have disposed of APS claims regarding expert fees at [88] – [92].[95] The Council claims dispensation from expert costs to reflect:(a) The plaintiffs did not succeed in recovering the amount claimed in relation the third named plaintiffs;(b) The plaintiffs were unsuccessful in their allegations as to the reasons for the Overclad failure;(c) Mr Donald left it to cross examination to make his concessions;(d) The Council was successful in relation to one of the third parties claims in terms of contributory negligence; and(e) The Council did not require the Biodet Services or SGS expert to attend.[96] Items (a) to (d) do not justify a reduction in expenses. In addition to the reasons already expressed at [88] – [92], the Council's partial success in somematters falls well short of justifying a material adjustment to the disbursement costs incurred by the plaintiffs. I accept however that the Council should not be liable for costs of attendance at Court of experts it did not require for cross-examination.Travel costs[97] The plaintiffs claim travel costs for third plaintiff witnesses to travel from overseas in the sum of 14,821.77. I similarly agree with the Council that it should not be liable for the costs of travel of witnesses it did not require for cross- examination.Other issues[98] There appears to be a squabble between the Council and the plaintiffs as to who said what and when in terms of trying to resolve the quantum issue. There are claims that some correspondence is privileged. I am not going to delve into this. Resolution of quantum and costs should be a simple matter, but like other parts of this litigation, it has assumed far great complexity than it needed. In fairness to theCouncil, it tried valiantly to agree most of the damages quanta prior to my first decision and it seems endeavoured to reach agreement on costs. But in the end, as no final agreement was reached on these matters, the plaintiffs are entitled to their reasonable costs and disbursements.[99] One further comment is however necessary. While I am satisfied on my review of the proceedings that the costs claimed are appropriate, in circumstances where a party is seeking costs far in excess of band C, it would be prudent for the claimant to provide a breakdown of the actual costs incurred on the claimed item, to assist the Court in forming a view on the reasonableness of the costs claim. It would also serve the purpose of assuring the Court that the claimed costs do not exceed the actual costs.Result on plaintiffs' costs[100] The plaintiffs are entitled to:(a) Category 2C costs in respect of the items listed at Table A;(b) Category 2B costs in respect of all other items except for interrogatories, trial preparation and briefs of evidence;(c) Increased costs for:(i) Costs of interrogatories at 27 days;(ii) Trial preparation and briefs of evidence at 50 days;(d) Increased costs for attendances post dating the Calderbank offer of 25 per cent;(e) Disbursements as sought by the Plaintiffs against APS;(f) Disbursements as sought against the Council provided that the Council should not be liable for the cost of attendances of experts or lay witnesses not sought for cross examination by the Council.Mr Lucaszewicz's costs[101] Mr Lukascewicz was self represented. He nevertheless seeks a disbursements award for legal fees in the sum of $42,712 incurred in preparation for the hearing. This figure includes a claim for increased legal costs. Mr Lukascewicz complains:[9] (a) The Council significantly amended its claim against me after receiving my first statement of defence, which necessitated further legal and factual analysis, and a second statement of defence.(b) The Council's expert witness, Peter Lalas, filed a lengthy and highlydetailed brief of evidence that contained numerous irrelevant and factually inaccurate criticisms of me personally, and went far beyondthe Council's pleadings. This is confirmed by the fact that none ofMr Lalas's criticisms were upheld and the Council's claim failed, yethis evidence necessitated a very detailed analysis and response.(c) The Council subsequently filed a "reply" brief by Mr Lalas that(improperly) went beyond a reply and made further new allegations (also factually incorrect, irrelevant, and none upheld), and this necessitated a second detailed analysis and reply brief of evidence from me.(d) The Council's statements of claim against me were vague, and itsallegations against me shifted significantly during the proceeding in an attempt to avoid the various legal and evidential flaws that were apparent, requiring considerable further legal advice.(e) The Council filed an interlocutory application after the hearing had concluded, to seek leave to file a reply, over two years out of time,apparently as the result of the Council's own oversight. Thisapplication was legally unprecedented. In the end, the applicationwas not determined because the Council's claim failed on the merits,but the application caused me to incur significant additional legal expenses, after the hearing. As the application was only necessarydue to the Council's own admitted 'oversight', and the Council wasseeking an (unprecedented) indulgence from the Court, it should pay my full indemnity costs on that regardless of any other basis sought in this memorandum.[102] The Council submits that Mr Lukascewicz is entitled to costs in the sum of $22,906.[103] The leading authority remains Lysnar v National Bank of New Zealand (No 2)to the effect that an unrepresented litigant may claim:44(a) Court disbursements;(b) A possible partial indemnity for fees by way of professional assistance;(c) Nothing for his own time and trouble.[104] Both parties agree that Mr Lukascewicz may recover disbursements, including costs associated with professional advice. But the Council disputes the claim to increased costs and has prepared a schedule of costs claimable in accordance with scale on a 2B basis – attached as Annexure D. It was based on a schedule provided by Mr Lukascewicz.[105] I consider that the Council's table provides an appropriate account of thecosts properly claimable by Mr Lukascewicz for the following reasons:(a) There is no proper basis for increased costs:(i) The Council's amendments to pleadings and the broad scopeof the Council's expert evidence are not unusual in a case likethis;(ii) The requirement to seek leave two years out of time to file a reply did not substantially increase the burden confronted by Mr Lukascewicz.(b) A 2B scale award provides an appropriate reference point for a partial indemnity for cost of professional legal services and the deductions made by the Council properly reflect the actual costs incurred where appropriate.44 Lysnar v National Bank of New Zealand (No 2) [1935] NZLR 557 (CA) at 562; See alsoWorking Capital Solutions Holdings Ltd v Pezaro [2014] NZHC 2480.[106] Accordingly there shall be an order in favour of Mr Lukascewicz in the sum of $22,686 together with court fees of $220.Summary of outcomes[107] The plaintiffs are entitled to wasted costs with interest at the prescribed rate. This is quantified in accordance with schedules 8, 4 and 5 as set out above at [67].[108] The plaintiffs are entitled to legal costs and disbursements together with disbursements as set out above at [100].[109] The plaintiffs are to file final tables of quantum and costs in accordance with these orders within five workings days.[110] Mr Lukascewicz is entitled to disbursements in the sum of $22,686 together with court fees of $220.Annexure AAnnexure BAnnexure CAnnexure D