Auckland Trotting Club Incorporated v Lane Neave

[2023] NZHC 704

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-002011

[2023] NZHC 704

BETWEEN

AUCKLAND TROTTING CLUB INCORPORATED
Plaintiff

AND

LANE NEAVE

First Defendant

VERO LIABILITY INSURANCE

LIMITED as insurer of N-Compass Limited (in liquidation)

Second Defendant

VERO LIABILITY INSURANCE

LIMITED as insurer of Max Russell Consultancy Limited

Third Defendant

WHITE ASSOCIATES LIMITED

Fourth Defendant

Hearing:

On the papers

Appearances:

M C Black for the Plaintiff / Respondent

J Bierre / L G Cox for the Second Defendant / Applicant

Judgment:

3 April 2023

COSTS JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 3 April 2023 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

AUCKLAND TROTTING CLUB INC v LANE NEAVE [2023] NZHC 704 [3 April 2023]

[1]                  The second defendant applied for leave to appeal the interlocutory decision to join it to the proceeding pursuant to s 9 of the Law Reform Act 1936.1 The application was opposed by the plaintiff and was set down for a hearing on 8 March 2023.

[2]                  The second defendant withdrew its application for leave to appeal after receiving the plaintiff’s submissions in opposition in which it was indicated that the basis of the claim against the second defendant was to be re-pleaded. The second defendant accepted that the indicated amended claim met the threshold for joinder under s 9 and agreed to withdraw the application, provided that the indicated amendments would be included in a future statement of claim to be filed in the proceedings.2 The application was withdrawn by consent on that basis, with costs to be determined by the Court.

[3]                  The second defendant submits that costs should lie where they fall as the plaintiff’s indicated amended claim (and commitment to include those amendments into a formal amended statement of claim in due course) rendered the originally filed application nugatory. The second defendant says that if those developments had not occurred, the application would not have been withdrawn and the second defendant would have maintained the position set out in its synopsis of submissions for the hearing.

[4]                  The plaintiff seeks its costs on a 2B basis of $5,497 plus the $110 filing fee. The plaintiff argues that the fact that the application was withdrawn, rather than determined by the Court, does not limit the applicability of the general principle that a party who fails with respect to a proceeding or interlocutory application should pay costs to the party who succeeds.3 The plaintiff also submits that the position is akin to a discontinuance, for which r 15.23 provides the principle that the discontinuing plaintiff will pay costs to the defendant, this principle having been applied where an applicant has terminated an interlocutory application.4

1      Auckland Trotting Club Inc v Lane Neave [2022] NZHC 2208.

2      Joint memorandum of counsel dated 6 March 2023 at [1](b).

3      High Court Rules 2016, r 14.8.

4      Rocket Surgery Ltd v Goodwin [2013] NZHC 2667; MV Celebre Ltd v Airwork Flight Operations Ltd [2015] NZHC 1400.

[5]                  The plaintiff says that it should not be precluded from recovering its costs simply because it did not provide an amended statement of claim earlier. The plaintiff submits that the second defendant was unduly focused on the drafting of the original pleading, that the plaintiff had made it clear that it would amend its pleading following discovery, and its ability to do so was hampered by the second defendant’s failure to comply with its discovery obligations.

[6]                  Costs are at the discretion of the Court.5 In some situations it is appropriate to follow by analogy the general principle that a plaintiff who discontinues a proceeding should pay costs to the defendant up to that point.6 However, whether that is appropriate in a particular case depends on a range of factors including the reason why the interlocutory application was withdrawn.

[7]                  Here, the draft amended statement of claim provided by the plaintiff with its submissions in opposition to the application for leave to appeal substantially reframes the claim and addresses the basis for the second defendant’s opposition to the plaintiff’s application for leave to join the second defendant to the proceeding and its application for leave to appeal the interlocutory decision granting that leave. While strictly speaking the application for leave to appeal needed to be dealt with based on the original pleading, it should have been readily apparent to the plaintiff that this procedural step might have been avoided if it had provided the second defendant with its intended amended statement of claim promptly after the interlocutory decision. In the absence of a firm indication of the intended amendments I do not think the second defendant can be criticised for pursuing its application for leave to appeal.

[8]                  The draft amended statement of claim rendered the application for leave to appeal nugatory as it satisfied the second defendant that the threshold for joinder was met. As the costs associated with the application for leave to appeal might have been avoided had the draft amendments been provided sooner, I find that it is appropriate that costs lie where they fall.

5      High Court Rules 2016, r 14.1.

6      High Court Rules 2016, r 15.23.

[9]                  The second defendant’s delay in providing its discovery is irrelevant. Self- evidently the plaintiff’s ability to amend the claim was not dependent on discovery from the insurer.

Result

[10]              Costs in relation to the second defendant’s application for leave to appeal the interlocutory decision to join it to the proceeding will lie where they fall.

Associate Judge Gardiner

Solicitors:

Gilbert Walker, Auckland McElroys, Auckland Morgan Coakle, Auckland