A Wellington property dispute over court costs of a few thousand dollars was chased all the way to the High Court, leading an exasperated judge to question such a disproportionate use of legal resources. While he does hold an undergraduate degree in drama, Justice Isac was unimpressed by legal theatrics surrounding the dispute.
It started in 2020 when Mr Blair agreed to buy a Wellington residential property being sold by a family trust, then withdrew. It progressed through colourful correspondence between lawyers with allegations of sophistry and pained expressions of distaste about unwanted lectures in basic principles of contract law. It ended with arguments over legal costs.
Mr Blair’s purchase was conditional on a satisfactory building report. After getting a building report, Mr Blair withdrew from the contract. Trustees then found a new buyer, paying a better price.
Vendor trustees asked for a copy of Mr Blair’s building report, as permitted by terms of the now cancelled sale contract. He immediately provided a three page ‘client summary’ received as part of the full report. Trustees demanded the full report. Mr Blair said he had been told the client summary would suffice, and in any event, his building inspector specified the full report was not to be released to third parties without consent.
The High Court was told the trustees repeatedly asked for a copy of the full report. Legal threats followed. Their dispute came to a head with trustees asking the District Court to order release of the full report. Mr Bair immediately handed it over. No court hearing was necessary. The two sides then argued over who paid the trustees’ legal costs. Trustees had threatened they would demand full legal costs, indemnity costs, if the District Court was involved.
As a general rule, the winning litigant in a court case is awarded only a contribution towards legal costs calculated on a set scale. Full recovery, or indemnity costs, are awarded as a sanction for blatant failures to comply with court directions.
The District Court ordered Mr Blair pay trustees’ full legal costs of $13,581. Mr Blair appealed. The High Court was told that even before this District Court decision, the two sides had been negotiating about how much Mr Blair would contribute to the trustees’ continuing legal costs. Negotiations fizzled out with two sides only $1500 dollars apart.
In the High Court, Justice Isac ruled the trustees were not entitled to indemnity costs, they get scale fees only. Mr Blair gets a partial refund. Indemnity legal costs are reserved for any misconduct in failing to follow court directions, Justice Isac said. Mr Blair did not act in contempt of any District Court directions; he handed over the full report as soon as legal action was filed. Mr Blair was awarded scale costs for legal fees on his successful appeal.
Blair v. Street – High Court (8.06.22)
22.099