POIKE LANDFILL LIMITED V WAITAKERE ORGANIC CENTRE LIMITED FORMERLY KNOWN AS PERRY ENVIRONMENTAL LIMITED HC TAU CIV 2007-470-370

POIKE LANDFILL LIMITED V WAITAKERE ORGANIC CENTRE LIMITED FORMERLY KNOWN AS PERRY ENVIRONMENTAL LIMITED HC TAU CIV 2007-470-370 22 July 2008IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY CIV 2007-470-370BETWEEN POIKE LANDFILL LIMITED Plaintiff AND WAITAKERE ORGANIC CENTRE LIMITED FORMERLY KNOWN AS PERRY ENVIRONMENTAL LIMITED Defendant Hearing: (On papers) Appearances: R Kettelwell for the Plaintiff M Branch for the Defendant Judgment: 22 July 2008 at 11:00 a.m.JUDGMENT OF WOODHOUSE J (costs)This judgment was delivered by me on 22 July 2008 at 11:00 a.m. pursuant to r540(4) of the High Court Rules 1985. Registrar/Deputy Registrar Solicitors: Mr R Kettelwell, Sharp Tudhope, Solicitors, Tauranga Mr M Branch, Harkness Henry & Co., Solicitors, Hamilton[1] The defendant, having obtained judgment, seeks increased costs. The defendant submits that costs and disbursements on a 2B basis would be $23,740. Its actual costs were $39,033.51. The defendant submits that it is entitled to increased costs "at a level close to its actual costs". [2] The plaintiff accepts that costs should be awarded on a 2B basis and accepts the quantum. The plaintiff opposes the application for increased costs. [3] The defendant has advanced two grounds for increased costs: a) The plaintiff made allegations of dishonesty against the defendant and independent truck drivers contracted to the defendant. b) The defendant made a Calderbank offer on 4 April 2008, approximately one month before the hearing commenced. The offer was to settle on the basis that the plaintiff discontinue with no issue as to costs either way. On 9 April the plaintiff rejected that offer and made a counter offer to settle for $189,880. [4] I am not persuaded that the grounds advanced by the defendant justify increased costs. [5] The allegations of dishonesty were not established. However, I would not consider it appropriate in this case to allow increased costs because allegations of dishonesty were made unless those allegations resulted in the defendant incurring costs it would not otherwise have incurred, and the incurring of those additional costs was justified in the circumstances. The defendant has not demonstrated those matters. And my assessment of the way in which the case was run for the defendant is that, had the allegations of dishonesty not been made, with the argument confined to a dispute as to the terms of the contract, the defendant's approach would not have been much different. Only one witness was called for the defence. The focus was on the terms of the contract and the quantum issue.[6] The applicability of the Calderbank offer in respect of increased costs is governed by r 48C(3)(b)(v):Failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 48G or some other offer to settle or dispose of the proceeding.The words of relevance on the present application are "without reasonable justification". The defendant has not advanced any matters indicating an absence of reasonable justification; it simply seems to be implied that the failure to accept the offer was unreasonable. In the absence of clear grounds I would not be prepared to regard this as a reason for allowing increased costs. [7] In addition, one of the general principles under r 47 applying to determination of costs is relevant. Rule 47(g) provides:So far as possible the determination of costs should be predictable and expeditious.Predictability is the relevant consideration here. In deciding whether or not to accept the defendant's Calderbank offer, to discontinue without costs, the plaintiff was entitled to take account of the costs it was likely to incur by refusing the offer. A reasonable assessment then for the plaintiff would be costs on a 2B basis from the date that the defendant's offer was made. There is no indication of anything in the way the plaintiff went about its decision to outweigh the predictability principle in its favour.Result[8] The defendant is entitled to costs on a 2B basis of $23,520 and disbursements of $220. ______________________________ Peter Woodhouse J