Auto Net v Tyler

[2021] NZHC 886

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2019-419-000327

[2021] NZHC 886

BETWEEN

AUTO NET

Plaintiff

AND

MICHAEL STEVEN TYLER

Defendant

CIV-2020-419-000142

BETWEEN

ROBERT DEVON STONE
Plaintiff

AND

MICHAEL STEVEN TYLER

First Defendant

AND

AUTO NET

Second Defendant

Hearing:	On the papers filed 7 and 8 April 2021
Counsel:	S D Campbell and J R Halligan for Plaintiff T M Braun for Defendant
Judgment:	23 April 2021

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 23 April 2021 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

AUTO NET v TYLER [2021] NZHC 886 [23 April 2021]

Auto Net’s claim for costs

[1]    In my judgment dated 17 March 2021, I granted Auto Net’s interlocutory application for leave to appeal against the decision of Associate Judge Smith declining Auto Net’s application for summary judgment against Mr Tyler.1

[2]    Mr Tyler opposed the application for leave to appeal and my judgment followed a defended hearing.

[3]    In my judgment, I reserved the question of costs and directed counsel to confer and attempt to reach agreement on costs. If agreement could not be reached they were to file memoranda.2 They did not agree and memoranda have been filed.

[4]    Auto Net is seeking costs on the application. Mr Tyler opposes Auto Net’s claim for costs.

The principles and the issues

[5]    The principles relevant to costs are well settled. All matters of costs are discretionary. The discretion must be exercised on a principled basis. Generally, the party who has lost will be ordered to pay the costs of the party that has won.3 The loser pays costs unless there are exceptional reasons to the contrary.4 The determination of costs, so far as possible, should be both predictable and expeditious.5 Costs on an opposed interlocutory application should, unless there are special reasons to the contrary, be fixed when the application is determined.6

[6]    Auto Net says it was the successful party and therefore entitled to costs. It seeks costs calculated on a 2B basis (along with disbursements) as the application was of average complexity. I agree 2B costs are appropriate in this case.

1      Auto Net v Tyler [2021] NZHC 542.

2 At [47].

3      High Court Rules 2016, r 14.2(1)(a).

4      Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].

5      High Court Rules, r 14.2(1)(g).

6      Rule 14.8(1).

[7]    Auto Net’s calculation of costs and disbursements sought is set out in the table that is attached to this judgment.

[8]    Mr Tyler accepts Auto Net was successful. He agrees to Auto Net’s calculation of costs and disbursements for the steps identified. He does not, however, accept his liability for those costs and disbursements. The arguments he advances are as follows:

(a)costs should be reserved until the conclusion of the appeal;

(b)if costs are to be fixed now he should only be liable for costs and disbursements relating to steps necessary and taken by Auto Net in response to his opposition to the application for leave to appeal;

(c)he should not be ordered to pay costs for preparing the bundle of documents as it was not available for the hearing; and

(d)he should not have to pay for counsel’s travel costs from Christchurch as counsel from Auckland was available.

[9]    In addition, Mr Tyler argues that if costs are fixed now they should not be immediately payable.

[10]I deal with each matter raised seriatim.

Should costs be reserved?

[11]   Mr Tyler argues there are special reasons to reserve costs. I understand those reasons to be first, the appeal is from the refusal of a summary judgment application where costs were reserved and second, that the merits of the appeal and the leave application are linked so that until Auto Net’s appeal is determined there cannot be a proper assessment of the merits or the “success” of the parties. I do not accept these submissions.

[12]   An application for leave to appeal under s 56(3) and (4) of the Senior Courts Act 2016 is required to be brought by way of an interlocutory application. Rule 14.8(1) of the High Court Rules 2016 provides:

Costs on an opposed interlocutory application, unless there are special reasons to the contrary, ---

(a)must be fixed in accordance with these rules when the application is determined; and

(b)become payable when they are fixed.

[13]   As counsel for Auto Net correctly submits, the effect of this rule is that generally costs in respect of interlocutory applications will be dealt with at the time the applications are determined rather than being held over until the outcome of the proceeding is known.

[14]   Costs on Auto Net’s summary judgment application were reserved. This is in accordance with usual practise on such applications and r 14.8(3).7 The leave application was not an application for summary judgment under r 12.1. It does not fall within the exception in r 14.8(3).

[15]   I do not accept that the merits of the leave application and the appeal are linked. The merits of the leave application have been determined in favour of Auto Net. This will not change regardless of whether ultimately Auto Net is successful on the appeal. In any event, I note the Court’s power to reverse, discharge or alter an order for costs if subsequently satisfied the order was wrongly made.8

Necessary steps

[16]   Here, the argument is the requirement to obtain leave to appeal an interlocutory application of the High Court is a filtering exercising and one that Mr Tyler could not consent to under r 1.8 of the High Court Rules. He argues, therefore, that Auto Net should only be able to claim for costs that were the result of his opposition and not costs that Auto Net would have incurred regardless of whether he consented to or

7      NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA).

8      High Court Rules, r 14.8(2).

opposed the application. Mr Tyler argues he should not therefore be liable for costs and associated disbursements for the preparation or filing of the application for leave and the steps taken to prepare submissions and the bundles because the application would need to be filed in any event, as would the submissions and the bundle notwithstanding his opposition. I do not accept these submissions.

[17]   It may be the case that Mr Tyler could have avoided a liability for costs if he had not opposed the application or simply abided the decision of the Court. He did not take that course of action and what might have been is irrelevant.

[18]   While the argument that Auto Net would have been put to some cost in any event has superficial attraction, the same could be said for any interlocutory application required by the Rules. The Courts have held in other cases that costs on opposed applications for leave to appeal should be awarded,9 and no instance has been cited to me where the issue has been approached on the basis advanced by Mr Tyler.

[19]   In addition, the approach Mr Tyler contends for is objectionable as contrary to the objective that the determination of costs be predictable and expeditious. To allow it would be an invitation to counsel to embark on a granular analysis of costs claims.

The bundle of documents

[20]   Mr Tyler argues he should not have to pay for the preparation of the bundles of documents as at the hearing I did not have the bundle of documents before me. There is nothing in this.

[21]   The bundles were not before me because they were delivered to the Hamilton Court where the application was filed and it was understood the case would be heard there. In fact, the hearing proceeded by VMR with me in Christchurch and counsel attending at the Hamilton Court. The bundles were subsequently provided and referred to by me in making my decision.

9      Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679 at [18]; Mudajaya Corporations Berhad v Keng [2019] NZHC 1693 at [18]; and Coffey v Walker [2020] NZHC 605 at [35].

Counsel’s travel costs

[22]   Auto Net has claimed counsel’s travel costs from Christchurch. The amount involved is modest. The genesis of Mr Tyler’s objection to this disbursement appears to be a misunderstanding over the time the hearing was to commence. The hearing was scheduled to take place at 10 am at Hamilton. It was intended that Auto Net would be represented at the hearing by  Ms Hanafin  who works  from Christchurch  and  Mr Halligan who works from Auckland. However, Auto Net’s counsel incorrectly thought the hearing was in the afternoon. Ms Hanafin was on route for the afternoon session and arrived at the Court around 11.30 am and conducted the hearing.

[23]   Mr Tyler argues that whether engaging out of town counsel is reasonable and whether travel expenses are a proper disbursement is case dependent and the cost of travel will not be allowed where there is no special justification for instructing out of town counsel.10 It is submitted that as Mr Halligan was available there was no need for Ms Hanafin to travel from Christchurch and the disbursement for travel expenses for her air travel from Christchurch to Hamilton (return) is not reasonable and should not be allowed.

[24]   Wynn Williams have offices at Christchurch and Auckland. Ms Hanafin and Mr Halligan are both involved in working on this file. Mr Tyler has not advanced anything to suggest to me that it was not appropriate for Wynn Williams to have been retained for Auto Net in this matter.

[25]   Implicit in Mr Tyler’s submission is the premise that while it might be reasonable for Auto Net to engage Auckland counsel to appear at the hearing it was not reasonable to engage Christchurch counsel. I do not accept that submission. Whether counsel attended from Auckland or Christchurch I would expect a claim for travel expenses to attend the hearing would be made.

10     Buis v Accident Compensation Corp (2010) 19 PRNZ 585 (HC).

Costs reserved until the conclusion of the appeal

[26]   Finally, Mr Tyler argues if the quantum of costs is fixed the amount should not be payable until the conclusion of the appeal when there can be a “mutual accounting” or wash up of costs on all applications. It is said that this strikes a balance between the principle that costs of an interlocutory application are best fixed contemporaneously by the Judge or Associate Judge who decided the matter and the interests of both parties.

[27]   No authority was provided in support of this submission which is contrary to the clear intent of r 14.8(1)(b) and I do not accept it.

Result

[28]   Auto Net is awarded costs on its successful application for leave to appeal on a 2B basis along with its reasonable disbursements. I fix the costs at $9,082 and disbursements at $1,116.78.

O G Paulsen Associate Judge

Solicitors:

Wynn Williams, Auckland

Braun Bond & Lomas, Hamilton

TABLE

No.	Description	Time Allocation	Amount ($2,390 p/d)
22	Filing interlocutory application	0.6	$1,434
11	Filing joint memoranda for teleconference x 2 (13 and 18 November 2020)	0.4	$956
24	Preparation of written submissions	1.5	$3,585
25	Preparation by applicant of bundle for hearing	0.6	$1,434
26	Appearance at hearing of defended application for sole or principal counsel	0.5	$1,195
29	Sealing order or judgment	0.2	$478
Total costs	$9,082

Disbursements

Description	Amount
Filing fee (application for leave to appeal)	$500.00
Travel – Christchurch to Hamilton (return) (Cecil Hanafin)	$595.49
Courier – Hamilton High Court (application for leave to appeal)	$11.71
Courier – Hamilton High Court (submissions and bundles of documents)	$9.58
Total disbursements	$1,116.78