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Post Properties Ltd v Sproat Solutions Ltd [2016] NZDC 3862

Published 17 August 2016

Costs — indemnity costs — damages — failure to mitigate — commercial lease — landlord and tenant. In the exercise of the Courts’ discretion and despite some success by the defendant, although indemnity costs were refused, the landlord was entitled to costs on a standard 2B basis. In the substantive decision the tenant plaintiff had admitted liability to pay damages after a re-entry and termination of lease by the landlord defendant. At issue was the quantum to be paid. The landlord relied on a clause in the lease to support a claim for indemnity costs, however, the finding of fact that the landlord was more interested in upholding a capital value than being realistic as to a rent and the fact the tenant had succeeded in some extent in their defence that the landlord failed to reasonably mitigate its losses resulted in the refusal of this claim. Although costs usually follow upon success taking a principled approach, exception can be made in special circumstances. Taking a principled approach and having consideration to all of the matters the court came to a result that was overall fair as between the parties.

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