Architecture and Project Management Limited v Windowmakers Limited

[2016] NZHC 700

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-003023 [2016] NZHC 700

BETWEEN

ARCHITECTURE AND PROJECT

MANAGEMENT LIMITED Plaintiff

AND

WINDOWMAKERS LIMITED First Defendant

MARTIN ERIC BAMFORD Second Defendant

PLATINUM PACIFIC HOMES LIMITED Third Defendant

Hearing:	On the papers
Judgment:	15 April 2016

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 15 April 2016 at 3.00 pm

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date………………………

ARCHITECTURE AND PROJECT MANAGEMENT LTD v WINDOWMAKERS LTD [2016] NZHC 700 [15

April 2016]

Introduction

[1]      Following the plaintiff ’s discontinuance of this proceeding the defendants sought costs from a non-party, Terence Brown, who is the director of the plaintiff. Associate Judge Christiansen made a costs order against Mr Brown.1   I reviewed that decision and set aside the costs order.2     The defendants seek leave to appeal my decision.  In addition, they seek an order requiring the plaintiff to disclose the details

of the funding arrangement it had for the original proceeding.  Mr Brown seeks costs on the review hearing.

Disclosure of the funding arrangement

[2]      The Associate Judge’s determination proceeded on the basis of Mr Brown’s own evidence which included the fact that he had engaged a lawyer for APM on a contingency basis.    Details  of  the  contingency  arrangement  were  not,  however, before the Court and there was no application for disclosure of those details.  The defendants now seek full disclosure of the funding arrangement on the basis that it is potentially relevant in relation to the proposed appeal (whether Mr Brown was the real plaintiff), to other possible non-parties and to Mr Brown’s costs application.

[3]      The defendants relied on Waterhouse v Contractors Bonding Ltd , in which the Supreme Court said that the existence and terms of a litigation funding agreement may be relevant to an application for security for costs and to an application for costs.3 However, the Supreme Court also made it clear that it was not considering conditional fee arrangements by solicitors, which are subject to the Lawyers and Conveyancers Act 2006 and the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care Rules) 2008, rr 9.8 – 9.10.4

[4]      I do not consider that there is any basis on which to require disclosure of the

plaintiff’s funding arrangements.  Whether details of the funding arrangement could be used to impugn a factual finding of mine is not a matter that is live before me; if

1      Architecture and Project Management Ltd (in liquidation) v Windowmakers Ltd [2014] NZHC

3318.

2      Architecture and Project Management Ltd v Windowmakers Ltd [2015] NZHC 2268.

3      Waterhouse v Contractors Bonding Ltd [2013] NZSC 89 at [76](d).

4      See also Kain v Wynn Williams & Co [2012] NZCA 563, [2013] 1 NZLR 498; Kain v Wynn

Williams [2013] NZSC 26.

leave to appeal were granted then it would be a matter for the Court of Appeal in the context of an application to adduce further evidence. Nor is the possible existence of other non-parties relevant. The present application only addresses Mr Brown’s position.  Finally, since the funding arrangement was known of before the Associate Judge made his order that was the appropriate time for seeking disclosure of those details.

Leave to appeal

[5]      The circumstances in which a second appeal may be brought are well settled and were summarised in the Court of Appeal’s decision in  Waller v Hider; the proposed appeal must raise some question of law or fact that is capable of bona fide and  serious  argument  in  a  case  involving  some  interest,  public  or  private,  of

sufficient importance to outweigh the cost and delay of the further appeal.5   The test

in  Waller v Hider was confirmed in Payne v Attorney-General as applicable to applications for special leave brought under s 26P(1AA) of the Judicature Act 1908 in relation to the determination of the High Court on a review of an Associate Judge’s decision.6

[6]      The defendants do not accept that the Waller v Hider test is the appropriate test and assert that the Payne decision was wrong.  Their reasoning is that the test in Waller v Hider was developed for appeals from inferior courts under s 67 of the Judicature Act but that the present case does not involve a decision of an inferior court.  However, on the basis of Payne v Attorney-General, which is binding on this Court, the correct approach is that stated in Waller v Hider.  I should only grant leave if I am satisfied that the criteria stated in that case are satisfied.

[7]      The defendants’ alternative position is that, in the event that Waller v Hider is the correct test, that test would be met in this case.   First, they say that the jurisdictional point that I decided (that the Associate Judge’s decision was amenable to review rather than appeal) is a question of law that justifies a second appeal.  I do

not accept that. Whether decisions of Associate Judges are amenable to review or

5      Waller v Hider [1998] 1 NZLR 412 (CA).

6      Payne v Attorney-General (2005) 17 PRNZ 723 (CA).

appeal is a question that arises not infrequently and depends largely part on the particular kind of decision in issue. So the question that I determined is not of particular significance. More importantly, such significance as the question of law might have does not outweigh the cost and delay of a second appeal in this matter. the only matter at stake is the costs order against Mr Brown which is not large. Moreover, even if the proposed appeal were to succeed the result would simply be that the parties would be returned to the point of having to embark on an appeal against the Associate Judge’s decision at which all the same issues will be canvassed. The matter simply does not justify such expense.

[8]      Secondly, the defendants say that their application was either brought under r

15.23 (and therefore was not an interlocutory application) or that they were entitled to treat it as having been brought under r 15.23 and that had it been made plain to them that they were required to file an interlocutory application they would have done so and would have provided affidavits in support. Neither is correct.

[9]      Rule 15.23 provides for a plaintiff to pay costs on a discontinuance unless the Court otherwise orders. The defendants say that they were entitled to costs with the only question being whether Mr Brown was “the real plaintiff”.   This approach suggests a misapprehension as to the meaning of “real plaintiff”.   APM was the plaintiff and the inquiry as to whether Mr Brown was the “real plaintiff” is a metaphorical one, being an inquiry as to who instigated and benefited from the litigation.  Where costs are sought against a non-party there is no “entitlement as of right” to have those costs determined under 5 15.23, as claimed.

[10]     Nor do  I accept  that  the  defendants  misunderstood  their right  to  adduce further evidence. It is obvious from Associate Judge Christiansen’s minute of 18

November 2014 that the defendants could, if they wished, have provided additional material for the purposes of the application for costs against the non-party. But they did not wish to do so; in the joint memorandum of defendants’ counsel dated 26

August 2013, in which the defendants set out the basis for their claim for costs against Mr Brown, they specifically relied on Mr Brown’s own evidence as showing that he initiated, controlled and funded the proceeding.

[11]     The other grounds relied on are challenges to the inferences I drew from the facts that appeared in the affidavit evidence that had been available to the Associate Judge.  None of these questions of fact are sufficiently serious to justify the cost to the parties and the delay of a second appeal.  For those reasons, the application for leave to appeal is dismissed.

Costs on the review hearing

[12]     Mr Brown has sought costs on the review hearing.  The calculation of costs on a 2B basis by the defendants’ solicitors (excluding the preparation of the bundle which was extremely limited) totalled $5,620 plus the $500 filing fee.  Mr Brown’s counsel advised that the contingency fee arrangement did not relate to the review hearing  and  that  the  actual  fees  incurred  were  $4,600  (GST  inclusive)  which, together with the filing fee, came to $5,100.

[13]     Given my decision regarding the leave to appeal, there is no reason that I should not make the costs order as sought.  Nor am I satisfied that costs should be reserved as to payment.   The general rule is that costs in respect of interlocutory matters should be paid and not reserved.  The costs in this case are modest and I see no reason to depart from that rule. There are to be costs in Mr Brown’s favour on the

review hearing of $5,100.

P Courtney J