JONES LANG LASALLE LTD v SOFT TECHNOLOGY JR LTD [2021] NZHC 3069

JONES LANG LASALLE LTD v SOFT TECHNOLOGY JR LTD [2021] NZHC 3069 [15 November 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2017-404-001654[2021] NZHC 3069BETWEEN JONES LANG LASALLE LIMITEDPlaintiffAND SOFT TECHNOLOGY JR LIMITEDDefendantHearing: On the papersCounsel: MC Harris and AGH Bradley for PlaintiffDR Bigio QC, MAH Macfarlane and AC Eager for DefendantJudgment: 15 November 2021JUDGMENT OF DOWNS J(Third judgment)This judgment was delivered by me on Monday, 15 November 2021 at 12 pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors/Counsel:Gilbert Walker, Auckland.Hesketh Henry, Auckland.DR Bigio QC, Auckland.[1] This, my third judgment in this case, addresses: (a) costs and (b) redactions inthe second judgment. Knowledge of the earlier judgments is assumed. I continue tocall the parties Jones Lang and Soft Tech.Costs[2] Jones Lang seeks indemnity costs under cl 19 of its agency agreement withSoft Tech. This reads:1Recovery of costs: All costs of and incidental to the recovery of fees andother payments due to Jones Lang LaSalle including, without limitation, legalcosts on a solicitor/client basis, shall be payable by the Lessor.[3] The leading judgment on contractual indemnity costs (as against indemnitycosts under the High Court Rules 2016) is Black v ASB Bank.2 The important questionis whether indemnity costs were reasonably incurred. In this context, "reasonablyincurred" does not import a discretion in the usual sense.3 Were it otherwise, "thiswould erode the contractual protection the indemnity was intended to provide".4"Robust judgment" is permissible on the question.5[4] Soft Tech contends Jones Lang's legal costs are not recoverable under cl 19.On its behalf, Mr Bigio QC contends:The indemnity relates to the "recovery of fees and other payments due". SoftTechnology submits that the intention of this clause is to allow Jones Lang theability to enforce payment where payment is not forthcoming – for example,initiating debt recovery proceedings. It is submitted that pursuing a claimwhere liability for paying the fees, as well as the quantum of those fees, isrequired to be determined pursuant to a detailed enquiry into facts andcircumstances giving rise to the claim goes beyond simple "recovery of fees".Given Soft Technology's genuine contest with respect to whether commissionwas payable it cannot be said there were fees "due". This is not a case ofhaving gone to extraordinary lengths to defend a simple debt, or claim forarrears of rent, by raising a technical quibble or a procedural challenge to aliquidated sum. Soft Technology faced a claim for a very substantial sum ofmoney which was dependent upon an intensive investigation of contestedfacts.1 Mr Ryoo's signature on behalf of Soft Tech is immediately beneath the clause.2 Black v ASB Bank [2012] NZCA 384 at [77]–[80].3 At [78].4 At [78], citing Beecher v Mills [1993] MCLR 19 (CA).5 At [81].[5] Mr Bigio cites no authority to support this submission. Black v ASB Bank andthe cases cited therein affirm the contractual recoverability of indemnity costsprovided these are reasonable. There is no reason to read down cl 19. To do so woulderode the protection it was intended to provide.[6] Mr Bigio contends Jones Lang's costs are not reasonably incurred because itsinitial claim was for a much, much higher amount. However, apart from the point thiswas because Soft Tech resisted quantum discovery, this aspect of the claim wasamended when Jones Lang marshalled its evidence for trial. Moreover, there is noreason to believe Soft Tech would have capitulated had Jones Lang's claim been forless from the outset. Soft Tech's conduct of the litigation—as to which see my firstand second judgments—tells otherwise.[7] Jones Lang seeks $400,000 costs.6 The amount is reasonable in theBlack v ASB Bank sense given, among other things, Jones Lang's actual costs werehigher; time for unsuccessful steps has been deducted; other time has been deductedtoo; and a reduced hourly rate utilised from 1 January 2021. Moreover, all costs soughtlie under cl 19, the indemnity provision of the agency agreement.[8] This leaves an argument not advanced by Soft Tech, which is this: the term"due" typically means owing or required as a legal obligation.7 Jones Lang's fee wasnot due in terms of cl 19 because its failure to provide a copy of the signed agencyagreement in accordance with s 126 of the Real Estate Agents Act 2008 precludedrecovery of its fee absent a Court order under s 126(3) of that Act. And, most ofJones Lang's associated legal costs predate that order.[9] The answer to this argument is that I gave in relation to the topic of interest inthe second judgment:8This leaves s 126. There is no reason in principle why interest should not berecoverable. The section refers to "commission or expenses that will berecoverable if the order is made".9 Again, s 126 does not invalidate an agencyagreement; it creates a barrier to recovery of commission. Plainly, interest or6 And associated interest under cl 1.4 of the agency agreement.7 Oxford University Press (2006) Concise Oxford English Dictionary (11th ed (revised), p 442).8 Jones Lang LaSalle Ltd v Soft Technology JR Ltd [2021] NZHC 2538 at [70]–[72].9 Emphasis added.any other expense must be fair and reasonable in the circumstances, and itmust be unjust were the order not made.There is no suggestion this aspect of the agency agreement is unfair orunreasonable, let alone oppressive. Had Mr Ryoo thought it any of thesethings, Soft Tech would not have entered the agency agreement. Moreover,Soft Tech has deployed s 126 as sword rather than shield; and with gusto.Soft Tech is, of course, entitled to raise s 126, just as it is entitled to defendJones Lang's claim. The point, however, is that it is hollow for Soft Tech tocomplain about interest when but for Jones Lang's modest inadvertence, therecould be no contest about the reasonableness or fairness of interest. Thestatutory test is met.Interest is payable, as claimed.[10] Jones Lang also seeks $42,491 in disbursements. This aspect is not contested.Redactions[11] At the request of Soft Tech and Auckland Tourism, Events and EconomicDevelopment Ltd, or ATEED, I redacted [57]–[59] and [73] of the second judgmentto protect commercially sensitive information, including Jones Lang's commission(as ordered). Jones Lang agreed to these redactions with this caveat: it contends itscommission at [73] should not be redacted.[12] Mr Harris observes as the successful party, Jones Lang has a legitimate interestin its commission being published. Information of this nature has been included injudgments here and elsewhere.10 Mr Harris says the presumption of open justice inrelation to commission is not outweighed by commercial sensitivity becausepublication of this detail does not permit anyone to deduce rent—the heart ofSoft Tech's and ATEED's concerns. Mr Harris also notes Auckland Council's latestfinancial figures "put into the public domain significant information about the totalamount of lease payments" to ATEED, including, albeit without specificity, paymentsin relation to Kumeū Film Studios.[13] The cases Mr Harris cites are distinguishable. All involve commission on salesof land. Nothing in them suggests commercial sensitivity. Publication of commission10 See, for example, Zest for Realty Ltd v Coumat Ltd [2015] NZHC 3130 at [85]; Coumat Ltd v Zestfor Realty Ltd [2016] NZCA 491 at [1] and [4]; Mackys Real Estate Ltd v Webster [2017] NZHC2546 at [11] and Al Maha Pty Ltd v Liu [2020] NSWCA 108 at [7]–[9].would enable (those with the requisite interest) to deduce approximate rentals, in turnpotentially compromising Soft Tech's position within the market and ATEED'snegotiations with prospective licensees. Again, Auckland Council's release ofinformation is not specific to Kumeū Film Studios. Importantly, the judgment—including Jones Lang's success—remains wholly intelligible despite suppressionof [73]. On this discrete aspect, the presumption of open justice is outweighed bycommercial sensitivity.Result[14] Soft Tech is liable for costs of $400,000; disbursements of $42,491; andassociated interest.11[15] Paragraphs [57]–[59] and [73] of the second judgment remain redacted...Downs J11 As noted, interest is payable under cl 1.4 of the agency agreement.