ASB Bank Limited v Sgargetta

[2018] NZHC 3333

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-000788

[2018] NZHC 3333

BETWEEN

ASB BANK LIMITED

Plaintiff/Respondent

AND

ELLIOT DANIEL SGARGETTA

Defendant/Applicant

Hearing:	On the papers
Judgment:	14 December 2018

JUDGMENT OF WYLIE J

[Costs]

This judgment was delivered by Justice Wylie On 14 December 2018 at 2.00pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:

MinterEllisonRuddWatts, Auckland

Copy to:

Mr E D Sgargetta

ASB BANK LTD v SGARGETTA [2018] NZHC 3333 [14 December 2018]

[1]                   This matter has been referred to me as Duty Judge. The trial Judge – Woodhouse J – has retired.

[2]                   On 13 December 2017, the plaintiff – ASB Bank Ltd (ASB) – was granted an order for summary judgment by Woodhouse J against the defendant – Mr Sgargetta – in the sum of $598,340.50 together with interest and costs.1 Directions were made to expedite the quantification of the interest and costs claimed.

[3]                   On 14 August 2018, Woodhouse J delivered a further judgment which, inter alia, found that ASB was entitled to indemnity costs and disbursements in the sum of

$119,019.30.2 The Court held that costs in this sum had been reasonably incurred.3

[4]Mr Sgargetta then applied for a stay of the judgments.

[5]                   On 17 August 2018, Woodhouse J issued a judgment dismissing the application for a stay of enforcement of the judgments, and confirming that ASB was entitled, pursuant to a guarantee given by Mr Sgargetta, to its actual legal expenses and disbursements, reasonably incurred, but excluding GST.4

[6]                   ASB then applied for further costs in relation to the unsuccessful application for a stay. It sought solicitor/client costs totalling $38,649.46, together with disbursements of $160 for filing and sealing fees. That these were the costs incurred was confirmed in an affidavit from Hazel Meikle-Downing.

[7]                   Mr Sgargetta responded with a memorandum dated 19 November 2018. Inter alia, he referred to a minute issued by Woodhouse J on 13 August 2018. He also argued that the costs claimed were unreasonable and excessive.

[8]                   The costs application was considered by Lang J as Duty Judge on 26 November 2018. By that time, Mr Sgargetta had applied for an extension of time to apply for the allocation of a hearing date to appeal Woodhouse J’s substantive decision of 13

1      ASB Bank Ltd v Sgargetta [2017] NZHC 3097.

2      ASB Bank Ltd v Sgargetta [2018] NZHC 2066.

3 At [16].

4      ASB Bank Ltd v Sgargetta [2018] NZHC 2061.

December 2017. Lang J declined to deal with the issue of costs on the stay application until such time as the outcome of the proceeding in the Court of Appeal was known.

[9]                   The Court of Appeal’s judgment was issued on 3 December 2018.5 The Court of Appeal allowed Mr Sgargetta an extension of time to apply for the allocation of a hearing date and to file a case on appeal, but declined his application for a stay.6

[10]               ASB, by memorandum dated 5 December 2018, asked that costs on the stay application should now be determined by this Court, on the basis of its contractual entitlement to be indemnified for its actual legal costs.

[11]               Mr Sgargetta responded with a memorandum on 9 December 2018. He referred back to a minute of 13 August 2018 issued by Woodhouse J, and also to a minute issued by Brown J in the Court of Appeal on 17 August 2018. He also signalled his intention to apply to the Court of Appeal under r 12 of the Court of Appeal (Civil) Rules 2005 seeking a stay from that Court.

[12]               ASB responded on 12 December 2018, noting that Woodhouse J’s minute of 13 August 2018 had been superseded by his judgment of 17 August 2018. It also argued that ASB was not seeking to act on the judgment, but rather was asking the Court to determine costs following on from Mr Sgargetta’s unsuccessful application in this Court for a stay.

[13]               Mr Sgargetta filed a further memorandum dated 12 December 2012, repeating arguments he had already made.

[14]               I can see no reason why this Court should not now fix costs on Mr Sgargetta’s unsuccessful application to this Court for a stay. Woodhouse J’s minute of 13 August 2018 has been superseded by his costs judgment of 17 August 2018. That has been confirmed by two Judges already, Lang and Muir JJ. Any application Mr Sgargetta wishes to make to the Court of Appeal is a matter for him. I simply note that the Court

5      Sgargetta v ASB Bank Ltd [2018] NZCA 540.

6      At [15]-[17].

of Appeal has already declined his application for a stay. The fact that he is proposing to file a fresh application does not affect the jurisdiction of this Court to award costs.

[15]               ASB has a contractual entitlement to be indemnified in respect of its actual costs – as long as they are reasonable. I have read the affidavit from Ms Meikle- Downing and I am satisfied that the costs claimed are reasonable. While they are rather higher than I would expect for a party opposing what is a relatively routine interlocutory application seeking a stay of execution of a judgment, I am satisfied that the primary reason for the higher costs is Mr Sgargetta’s conduct in dealing with the application. I note the following:

(a)Mr Sgargetta filed no evidence in support of his application. As a result, ASB’s counsel were required to file two affidavits – from Stuart Dunlop and Hazel Meikle-Downing – with the Court to produce relevant documents, which could then be relied on at the hearing.

(b)Mr Sgargetta was required to prepare a common bundle for use at the hearing under the High Court Rules. He did not do so. As a result, ASB had to prepare the bundle.

(c)Mr Sgargetta filed numerous memoranda. ASB had to respond and it incurred costs in doing so.

(d)Mr Sgargetta breached his timetable obligations. In particular, he filed additional submissions one working day before the hearing. That required ASB’s counsel, at the last minute, to review the late submissions and to prepare submissions in reply.

[16]               The rates charged – ranging from $220 to $510 an hour – are in line with those approved by this Court on other occasions. Further, the majority of the work required was carried out by a solicitor and special counsel, which ensured, as far as practicable, cost efficiency for ASB. This minimised the cost impact on Mr Sgargetta as the unsuccessful party.

[17]               I am satisfied that the costs claimed by ASB are reasonable and that it has a contractual entitlement to the same. Accordingly, I make an order for costs in favour of ASB, and against Mr Sgargetta, in the sum of $38,649.46, together with disbursements of $160.

Wylie J