Ayers v LexisNexis New Zealand Limited

[2015] NZHC 1845

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2010-485-1274 [2015] NZHC 1845

BETWEEN

DANIEL FRANCIS AYERS

First Plaintiff

ELEMENTARY SOLUTIONS LIMITED Second Plaintiff

AND

LEXISNEXIS NEW ZEALAND LIMITED

Defendant

On the Papers
Counsel:	J Sumner and S Eglinton for the Plaintiffs D McLellan QC for the Defendant
Judgment:	5 August 2015

COSTS JUDGMENT OF ASSOCIATE JUDGE SMITH

[1]      On 15 June 2015 I gave judgment on the defendant’s applications for orders striking out Elementary’s claims for damages as set out in its fourth amended statement of claim, and for security for costs.  Costs on the application for security were reserved.  While I indicated that I was not then inclined to award costs beyond a scale 2B award on the strike-out application, I invited counsel to file submissions on that application if agreement could not be reached.  LexisNexis now asks that I fix costs on that application

[2]      LexisNexis had also applied for an order for further and better discovery, directed to the steps Elementary claimed to have taken in attempting to mitigate its losses. At the hearing on 27 May 2015, Elementary’s position was that there were no such  documents.    Mr  McLellan  accepted  that  if  Mr  Ayers  were  to  make  an affirmation deposing that that was the position, he would not seek to pursue the

further discovery application, except on the issue of costs.

DANIEL FRANCIS AYERS v LEXISNEXIS NEW ZEALAND LIMITED [2015] NZHC 1845 [5 August 2015]

[3]      I made no orders on the further discovery application, but reserved leave to LexisNexis to request a fixture for the hearing of that application if required, by memorandum filed within 14 days of the hearing.

[4]      Mr Ayers subsequently did provide an affidavit confirming that the plaintiffs held no documents relevant to the mitigation issue, but the issue is now moot – I made  an  order  striking  out  the  relevant  part  of  Elementary’s  pleading  in  my judgment given on 15 June 2015.

[5]      LexisNexis seeks costs on the strike-out application on a 2B basis, and costs on the further discovery application, limited to the initial steps of filing the further discovery application and preparing written submissions on it.   Disbursements are sought in the total sum of $1,387.10, including costs incurred by counsel travelling from Auckland to Wellington for the hearing.

Application for costs on the strike-out application

[6]      Mr Sumner opposes the application for costs.   He submits that LexisNexis was not in fact successful in having Elementary’s damages claim struck out, and relies on the observations in my judgment of 15 June 2015 that (i) the deficiencies in the  plaintiffs’ fourth  amended  statement of claim  were  not  likely  to  cause  any significant prejudice to LexisNexis at trial and (ii) the real issue was whether Elementary had pleaded more than was sufficient for a general damages claim.  He submits that any degree of success achieved by LexisNexis on the strike-out application was so minor that costs ought not to be awarded.

[7]      I do not accept those submissions.   While Elementary’s general damages claim remains,  LexisNexis was successful in obtaining orders striking out three separate subparagraphs of Elementary’s damages claim.   It was substantially successful in having those parts of the pleading which effectively pleaded particulars of special damage struck out.   I bear in mind too the nature of LexisNexis’ application, which was an application arising out of Elementary’s failure to comply with my judgment given on 28 November 2014.

[8]      In  my  judgment  given  on  15  June  2015,  I  accepted  Mr  McLellan’s submission that Elementary had reached the end of the road as far as indulgences on its pleadings were concerned, and that the appropriate response was to strike out the parts of Elementary’s pleading which I had held were deficient.1    In my view that sentiment must be reflected in an appropriate award of costs on the strike-out application.  Subject to one matter to which I now refer, those costs should be scale

costs, assessed on a 2B basis.

[9]      LexisNexis’ three  applications  were  combined  in  one  document,  and  the strike-out and security for costs applications were heard together.  A single bundle of documents was prepared for the hearing, covering both the strike-out application and the security for costs application There was also only one set of written submissions, covering in roughly equal proportions the two applications that were argued on 27

May 2015.

[10]     And LexisNexis was not awarded costs on the security for costs application: costs were reserved.  There were no doubt some savings for LexisNexis in having the two applications heard together.   In those circumstances, costs should not be awarded  on  a  full  2B  basis,  as  if  there  were  only  one  application  on  which LexisNexis was wholly successful.

[11]     LexisNexis seeks the following costs, on a 2B basis:

Item	Item Description	Allocated days or half days	Total Recovery
22	Filing interlocutory application	0.6	$1,194
24	Preparation of written submissions	1.5	$2,985
25	Preparation by applicant of bundle for hearing	0.6	$1,194

1      Ayers v LexisNexis New Zealand Ltd [2015] NZHC 1348 at [51].

26	Appearance at hearing of defended application for sole or principal counsel	0.5	$995
Total	3.2	$6,368

[12]     A significant part of the hearing (and LexisNexis’ affidavit evidence) was devoted to the security for costs application.  While costs on that application were reserved, I think the nature of the strike-out application (substantially successful application based on Elementary’s failure to comply with a Court order) puts it in a different category, and that some costs should be awarded on it now.  In my view an appropriate award is the sum of $4,000 plus one half of the disbursements to which LexisNexis would otherwise have been entitled.

[13]     The following disbursements are claimed:

Description

Amount

Court filing fee for applications

$500.00

Counsel’s  travel  costs  (comprising  flights,  accommodation  and

taxi fares to and from the airports)

$887.10

Total

$1,387.10

[14]     There is no dispute over the quantum of the filing fee.  But Mr Sumner did challenge the claim for counsel’s travel costs.  In the circumstances of this case I am prepared to accept that the travel costs were properly incurred.   The claim has a substantial history, with no fewer than four judgments of this Court now having been given on the issue of the adequacy of Elementary’s damages pleadings.  That lengthy background, together with the relatively specialised subject matter of the proceeding, justified Mr McLellan’s travel from Auckland for the hearing.   (I note also that in previous hearings the plaintiffs’ Christchurch-based counsel have travelled to Wellington for interlocutory hearings of a similar nature.)

[15]     In the result, I make an order for costs in favour of LexisNexis on the strike- out application in the sum of $4,000, together with disbursements of $694 – total

$4,694.00

Application for costs on further and better discovery application

[16]     Although in the end no order was sought on this application, Mr McLellan asked for an award of $4,179 on a 2B basis, being costs of $1,194 for filing the interlocutory application and $2,985 for the preparation of written submissions.

[17]     Mr  McLellan  submits  that  LexisNexis’ application  for  further  and  better

discovery relating to the claimed mitigation losses was justified on three bases:

(1)None of the documents discovered after that claim was introduced to the    plaintiffs’    pleadings    (in    the    plaintiffs’    third    amended statement of claim  dated  28  July  2014)  appeared  to  relate  to  the mitigation steps;

(2)Prior  to  LexisNexis  filing  its  application  for  further  discovery, Elementary had not filed an affidavit of documents deposing to the searches it had made to identify documents relevant to the mitigation loss claim; and

(3)Mr Ayers’ affidavit in opposition to LexisNexis’ application did not provide that information.   It said only that documents on which the plaintiffs intended to rely would be discovered.

[18]     In opposition, Mr Sumner submits that the application for further discovery was not necessary.  It was opposed on that basis. And since the hearing the plaintiffs have filed a further affidavit as to discovery, in which Mr Ayers deposes that the plaintiffs have no documents in the relevant category.

[19]     Mr Sumner also notes that LexisNexis was required to file a memorandum within  14  days  of  the  27 May 2015  hearing  if  it  wanted  orders  on  the  further

discovery  application,  so  that  a  further  fixture  could  be  allocated.     No  such memorandum was filed.

[20]     In the end, I think the best course is to reserve costs on this application.  The application was not in the end pursued and, at least initially, that appears to have been because LexisNexis accepted that there were no further documents in the relevant  category  to  be  discovered.    And  while  Elementary’s  specific  pleading relating to mitigation steps was later struck out, I do not think I am in a position on this costs application to find that any documents which might have existed in the category would not have had  some  relevance  on Elementary’s  general  damages claim.

[21]     In those circumstances, costs on the further and better discovery application are best reserved, to be dealt with following the trial.  I make an order accordingly.

Results

[22]     I make the following orders:

(1)On LexisNexis’ application for costs on the strike-out application, there will be an order for costs of $4,000 against Elementary, plus disbursements of $694.00 – total $4,694.00

(2)Costs on LexisNexis’ application for further and better discovery are reserved.

Associate Judge Smith

Solicitors:

Ford Sumner, Wellington for the Plaintiffs

Bell Gully, Auckland for the Defendant