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Firm forced to pay legal fees in own case

Firm forced to pay legal fees in own case

A New Zealand law firm has been ordered to foot the bill for legal costs in a lengthy court battle. _x000D_

A New Zealand law firm has been ordered to foot the bill for legal costs in a lengthy court battle. 


Property finance firm Home Bond's case to retrieve money lent to a client of law firm Davenports West, has ended with the law firm itself footing the court bill.


The case took off when New Zealand Home Bond's provided home bonds worth $92,600 to a couple in August 2005 and in return had taken security. In September 2006, Davenport West had undertaken to have NZHB release the security – the law firm was to hold $92,600 in trust until the security had been released. 


Associate judge Rob Osborne said the couple subsequently cancelled their purchase of the property, but because the cancellation was disputed, NZHB was still required to pay the developer the money. 


“It is not disputed that the plaintiff was legally obliged to make the payment,” he added.


NZHB then pursued Davenport West for the sum of money that the firm has in trust, as they were representing the couple.  


The firm settled with NZHB when the case went to the Court of Appeal and it found in NZHB’s favour. However, NZHB  then took  Davenports West back to court to have a decision over whether interest should be given and if it should pay its legal costs.


Associate Judge Osborne said “I am satisfied that this is a truly exceptional case and one in which the defendant pursued a wholly unmeritorious and hopeless defence.”


“I order that the defendant pay indemnity costs to the plaintiff,” he added.


He also awarded NZHB 8.4 per cent interest per year from 1 December, 2008.


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Firm forced to pay legal fees in own case
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