Ballantyne Trustees Limited v HFK Limited
[2022] NZHC 1104
•19 May 2022
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2015-409-000173
[2022] NZHC 1104
BETWEEN BALLANTYNE TRUSTEES LIMITED, A N HEAD, B R HEAD, CALMWATER ENTERPRISES PTY LIMITED and
S B KEUNG as trustees of the GBR Trust First Plaintiffs
AND
SENG BOU KEUNG
Second Plaintiff
AND
HFK LIMITED
First Defendant
AND
KEIRAN ANNE HORNE
Second Defendant
Hearing: On the papers Counsel:
J P Nolen for Plaintiffs
J E Eckford for Defendants
Judgment:
19 May 2022
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
(On Costs and Security for Costs)
This judgment was delivered by me on 19 May 2022 at 11.00 am pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
BALLANTYNE TRUSTEES LTD v HFK LTD [2022] NZHC 1104 [19 May 2022]
[1] This proceeding is set down for trial commencing on 3 October 2022. This judgment is concerned with three outstanding matters, namely:1
(a)a request by the defendants for a third tranche of security for costs;2
(b)costs on the plaintiffs’ application that the defendants answer interrogatories; and
(c)costs on the plaintiffs’ application for particular discovery.3
[2] Counsel provided written submissions on these matters in accordance with directions I made on 6 December 2021. They requested that a decision be given on the papers. I expressed reservations about that and advised counsel I would consider their respective memoranda and either issue a decision on the papers or advise if a hearing is required. In respect of one matter, a further hearing is required.
Security for costs
Background
[3] The background to the proceeding can be found in earlier judgments of the Court.4 It is unnecessary to repeat here.
[4] At an early stage of the proceeding, the defendants applied for security for costs. On 6 May 2016, Associate Judge Osborne ordered the plaintiffs to give security of $25,000 for costs and disbursements incurred to the point when trial directions were made. The defendants’ application for security was adjourned to be brought on for resolution of any second tranche of security.
1 I made directions to deal with these three matters in a minute of 6 December 2021. In counsels’ submissions filed in accordance with those directions, I was invited to deal with other matters which I decline to do. Any other unresolved issues of costs on steps taken in the proceeding will be determined upon the conclusion of the proceeding in the usual manner.
2 I reserved leave for the defendants to apply for further security for costs in relation to experts’ fees and counsels’ appearances at trial in a judgment of 31 July 2020, Ballantyne Trustees Ltd v HFK Ltd [2020] NZHC 1911 at [30](d).
3 Both the plaintiffs’ applications for particular discovery and that the defendants answer interrogatories were subject to a judgment on 5 March 2021, Ballantyne Trustees Ltd v HFK Ltd [2021] NZHC 388. All issues of costs were reserved.
4 See for instance Ballantyne Trustees Ltd v HFK Ltd, above n 3, at [3]-[5].
[5] There was then considerable delay in the proceeding until February 2020. New life was breathed into the proceeding as a result of intervention by the Court. Since then, the parties have been involved in a series of interlocutory skirmishes including, but not limited to, those referred to in this judgment.
[6] Following a telephone conference on 28 April 2020, I timetabled the filing of interlocutory applications. The defendants filed an application for a second tranche of security for costs. That application was opposed and heard on 24 July 2020. On 31 July 2020, I issued a judgment requiring the plaintiffs to provide a second tranche of security for costs. The reasons for doing so are set out in the judgment, but the following matters are relevant for present purposes:
(a)The defendants had sought security for costs in an amount of $81,979 made up of legal costs ($30,114) and disbursements of $51,865. The disbursements were comprised almost entirely of anticipated expert witnesses’ fees.
(b)For security for costs purposes, I allowed the items sought by the defendants for the pre-trial conference, preparation of briefs/list of issues/common bundle and preparation for hearing totalling $25,095 (rounded to $25,000).
(c)I did not require the plaintiffs to provide security for experts’ fees because of the absence of evidence to support that claim.
(d)I reserved leave for the defendants to apply for further security for costs in relation to experts’ fees and counsels’ appearances at trial.
This application and submissions
[7] The defendants seek further security to take the case to trial. They contend that, given the “standing order” of 6 May 2016 that security is to be paid, the only question to be determined is how much more is required. The amounts sought as additional security are significant.
[8]The defendants argue security should be provided in respect of:
(a)further past and future legal costs;
(b)expert witnesses’ fees; and
(c)costs relating to counsels’ appearances at trial.
[9] The further legal costs are claimed on a 2C basis and amount to $31,787 relating specifically to:
(a)three past case management conferences and one corresponding memorandum relating to issues other than discovery; and
(b)an estimated six further case management conferences and accompanying memoranda.
[10]In respect of experts’ fees, the defendants have claimed an amount of
$132,984.50 in respect of three proposed witnesses.
[11] At the present time, the defendants do not seek security for costs in respect to counsels’ appearances at trial, on the basis that such a claim would be premature. The defendants intend to come back to the Court and seek a further tranche of security in respect of those costs.
[12] The plaintiffs oppose the application. They say the effect of my judgment of 31 July 2020 was that the second tranche of security was to cover all costs up to trial, excluding experts’ fees and counsels’ appearances at trial. They argue any claim for security in respect of other past or future legal costs are not subject to the leave that was reserved to the defendants to apply for a third tranche of security.
[13] The plaintiffs also submit it would not be appropriate to revisit matters already determined, and this is particularly so in circumstances where there has been no evidence of any change of material circumstances justifying that.
[14] The plaintiffs argue there is an insufficient basis for the Court to determine the reasonableness of the experts’ fees sought as security and say it is surprising that no affidavit evidence has been filed to support the claim.
[15] They also contend it is premature for the defendants to seek further security given the timetable for the trial. At present, the pleadings have been finalised, but the plaintiffs’ briefs will not be provided until 23 June 2022.
My assessment.
[16] In my judgment of 31 July 2020, the second tranche of security related to all steps in the proceeding to trial other than in relation to experts’ fees and counsels’ appearances. I am not satisfied there has been any material change of circumstances which would justify me revisiting that assessment.
[17] While there have been a large number of unanticipated attendances since 31 July 2020, these were largely in relation to the plaintiffs’ applications in respect of discovery and interrogatories, which are the subject of separate costs applications.
[18] I do not consider, for instance, that the original trial dates in June 2021 were vacated has inevitably caused substantial further costs to be incurred as the defendants have submitted. Additionally, the further security sought relates, in large part, to further case management conferences prior to trial which are not timetabled in the comprehensive directions that have been made and should not be required.
[19] Importantly, the reason I did not order the plaintiffs to provide security for experts’ fees in my earlier judgment of 31 July 2020 was because the defendants had not provided sufficient evidence to support the claim. Notably, I said:
[23] It appears likely that the defendants will be required to call at least one expert witness, but I would not be justified in making any allowance for this at the present time on the state of the evidence. I will adopt the approach suggested by Mr Tingey in his written submission to require the defendants to provide further evidence.
[20] Related to this, in my minute of 6 December 2021, I expressed reservations about dealing with this application on the basis of counsels’ submissions because
“there may be a need for affidavit evidence in support of an application for further security and a hearing”.5
[21] Surprisingly, given my earlier judgment, the 6 December minute, and the very large sum which the defendants seek as security for experts’ fees, there is still no affidavit evidence before me from which I can make an assessment of the reasonableness of what is being sought. This application suffers from the same objection as the previous one. All that has been provided are wide-ranging estimates (unsupported by affidavit evidence) for two of the three proposed witnesses which, in their terms, raise questions about what information has been provided to the experts and whether they have sufficient information to make any assessment of their likely fees.
[22] The defendants consider it premature to seek further security at this time in respect of counsels’ appearances at trial, which is difficult to understand when the proceeding has been set down for a seven-day hearing, thereby providing a solid basis upon which such costs could be assessed.
[23] While my judgment of 31 July 2020 anticipates the plaintiffs would provide further security, I am not presently in a position to make an assessment of what further sum should be required. I am not, therefore, prepared to order further security at this time. Leave is reserved to the defendants to make further application and seek a hearing on the matter noting, however, that if such application is made, it must be supported by appropriate affidavit evidence.
The interrogatories application
Background
[24] The plaintiffs sought interrogatories by notice dated 7 September 2020. Responses were provided by Ms Horne in her affidavit dated 23 September 2020. The plaintiffs were not satisfied with some of Ms Horne’s responses. They applied, by application dated 23 October 2020, that the defendants answer those interrogatories.
5 Ballantyne Trustees Ltd v HFK Ltd High Court Christchurch CIV-2015-409-173, 6 December 2021 (Minute).
The interrogatories in question are set out in schedule B to my judgment of 5 March 2021.6 The application was heard on 3 February 2021, along with the discovery application.
[25]For present purposes, my relevant findings were:
(a)Ms Horne purported to answer interrogatories on behalf of herself and the first defendant (HFK), but she had not shown any authority on behalf of HFK to do so, nor what enquiries she had made to prepare answers on its behalf. 7
(b)In certain instances, Ms Horne had not provided specific answers to the interrogatories.8
(c)The interrogatories were poorly crafted compound questions that, in some instances, created an unacceptable burden and were oppressive or not amenable to a meaningful response.9
(d)The Court would not recast the interrogatories within satisfactory limits.10
(e)Only five interrogatories were allowed in full. In 11 instances the interrogatories were disallowed. In a further four instances the interrogatories were allowed, but only in part.11
Submissions
[26] The plaintiffs submit they must be considered to have been successful on the application and are thus entitled to costs. They submit the defendants were advised that Ms Horne’s affidavit of 30 September 2020 did not adequately answer the notice
6 Ballantyne Trustees Ltd v HFK Ltd, above n 3. Each interrogatory was in several parts.
7 At [50] and [52].
8 See for instance [59].
9 At [53].
10 At [53].
11 At [76].
of interrogatories before the application was filed, and the failure to provide proper responses necessitated the application.
[27] While recognising that several interrogatories were disallowed in whole or in part, the plaintiffs rely on the principle that success on more limited terms is still success.12 Further, they say that as the hearing (including the discovery application) consumed only half a day of hearing time, it could not be said the interrogatories that were not upheld significantly increased the costs of the defendants.
[28] The net result of the hearing, the plaintiffs say, was the defendants were required to file further answers, in compliance with r 8.39, which demonstrates the plaintiffs were justified in filing their application and achieved success.
[29] As far as the quantum of costs is concerned, they seek “an uplift” to scale 2C costs on the basis they should not have been put to the cost of the application had the defendants complied with their obligations in response to the notice to answer.
[30] The defendants say the plaintiffs are not entitled to costs because all the issues raised by them were capable of resolution by agreement, and extensive correspondence that passed between the parties’ lawyers supports an inference that any requests would have been considered and appropriately responded to.13
[31] The defendants argue that, in any event, the plaintiffs were not successful because the Court found the majority of the requests for interrogatories were drafted too widely, were oppressive, or were otherwise unnecessary.
[32] The defendants also contend the upheld interrogatories disclosed no further information than had previously been provided in Ms Horne’s initial response.
[33] The defendants, therefore, submit they are the successful parties and are consequently entitled to costs on a 2C basis, but with a 50 per cent uplift because the
12 Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].
13 Morell v World Solar Ltd [2018] NZHC 518.
plaintiffs unnecessarily contributed to the time and expense by pursuing an unnecessary step or argument that lacked merit.14
General principles
[34] The general principles governing the Court’s approach to costs are not contested. All matters of costs are discretionary, but the discretion must be exercised on a principled basis.15 The determination of costs, so far as possible, should be both predictable and expeditious.16 The party that has lost should pay the costs of the party that has won unless there are exceptional reasons to the contrary.17 Costs on an opposed interlocutory application should generally be fixed when the application is determined and become payable when they are fixed.18 Costs awards should reflect the complexity and significance of the proceeding and be assessed by applying the appropriate daily rate to the time considered reasonable for each step required in the proceeding.19 The Court may, in its discretion, refuse an order of costs or reduce the costs otherwise payable by the losing party to the successful party in any of the circumstances set out in r 14.7. Similarly, the Court may award the successful party indemnity or greater costs relative to scale in circumstances set out in r 14.6.
My analysis
[35] The first issue I must decide, and the one that resolves the matter, is which party was successful on this application.
[36] Often, particularly in cases for the recovery of money, the successful party in a proceeding will be obvious. However, things are not so straightforward where, as in a case like this, something other than a sum of money is in issue, and both parties share some degree of success.
14 High Court Rules 2016 (the Rules), r 14.6(3)(ii).
15 Rule 14.1(1).
16 Rule 14.2(1)(g).
17 Rule 14.2(1)(a) and Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 2 NZLR 523 at [19].
18 Rule 14.8(1).
19 Rule 14.2(b) and (c).
[37] I do not accept the plaintiffs’ position that because the defendants were required to provide further answers to some of the interrogatories they must be regarded as the successful party. This is an unnuanced and absolutist approach. I prefer (and consider the weight of authority generally supports) the view that the Court must take a realistic and holistic approach to the question of success. It must have regard to all the circumstances, including what was sought to be achieved by the proceeding/application and the positions taken by the parties.20
[38] Relevant in this regard, in Karaka v Ngai Tai Ki Tamaki Tribal Trust, Katz J said:21
[22] Where both sides have had some success in the proceedings, the proper approach was set out by the Court of Appeal in Packing In Ltd (in liq) v Chilcott. The Court said at [5]-[6]:
In a case ... where in broad terms each party has had similar success, we do not consider it helpful to focus too closely on the question which party has failed and which has succeeded. Costs in a case such as this should rather be based on the premise that approximately equal success and failure attended the efforts of both sides. To that starting point should be added issues such as how much time was spent on each transaction or group of transactions in issue, and any other matters which can reasonably be said to bear on the Court’s ultimate discretion on the subject of costs. In the end, as in all costs matters, the Court must endeavour to do justice to both sides, bearing in mind all material features of the case.
…
Success or failure ... is better assessed by a realistic appraisal of the end result rather than by focusing on who initiated what step, and the extent to which that step succeeded or failed.
[39] In my view, the only realistic assessment is that neither party won nor lost on this application. The plaintiffs obtained orders that the defendants provide answers to some of the interrogatories and therefore could be said to have achieved some success. However, the plaintiffs’ interrogatories were poorly crafted, and it was only at the hearing that its counsel appears to have recognised this fact, reflected in the request that the Court redraft the interrogatories found wanting. The defendants also achieved success in that over half of the interrogatories were disallowed. While I do not entirely
20 See the discussion in David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2002) at [2.2]-[2.5]; Karaka v Ngai Tai Ki Tamaki Tribal Trust [2014] NZHC 603; Young v Tower Insurance Ltd [2017] NZHC 482; Lawrence v Glynbrook 2001 Ltd [2015] NZHC 1005; Emmons Developments New Zealand Ltd v Mitsui Sumitomo Insurance Company Ltd [2020] NZHC 932.
21 Above n 20.
accept the defendants’ submission that their further answers provided the plaintiffs with no further information than had been contained in their initial response to the interrogatories, it does appear the additional information was not significant. Broadly assessed, I find each party achieved an equal degree of success overall. It is appropriate that costs lie where they fall.
The discovery application
Background
[40] On 5 February 2016, Associate Judge Osborne ordered the parties to provide standard discovery. The defendants’ list of documents was dated 28 April 2016. It was not until 7 September 2020 that the plaintiffs filed their application for further discovery.
[41] The orders sought by the plaintiffs were that the defendants file an affidavit stating:
(a)that their discovery obligations had been completely met;
(b)whether they had any documents in some 11 broad categories of documents in their control; and
(c)that the defendants review their discovery index, and the labels of all documents, and provide the plaintiffs with electronic discovery afresh.
[42] On 23 September 2020, the defendants filed their opposition to the application on the grounds the documents sought did not exist, or were not relevant, or were privileged, and that the application was oppressive and disproportionate.
[43] Also, on 23 September 2020, Ms Horne filed a supplementary affidavit of documents on behalf of the defendants which disclosed 21 further documents.
[44] The application was heard by me on 3 February 2021 and was the subject of my judgment of 5 March 2021.22
[45]For present purposes, my primary findings in that judgment were that:
(a)the categories of documents sought by the plaintiffs were relevant to the matters in issue;23
(b)there was some basis for the plaintiffs’ position the defendants’ search for documents was inadequate and that documents disclosed had not been reviewed for relevance;24
(c)the heft of the plaintiffs’ concern related to the defendants’ failure to provide meaningful particulars of the steps taken to fulfil their discovery obligations;25
(d)whether the defendants had failed to comply with their obligation to make a reasonable search for documents within the standard discovery order was the overarching consideration on the application;26
(e)the defendants’ affidavit of documents did not comply with the requirements of the Rules, insofar as it did not give proper particulars of the steps the defendants had taken to fulfil their discovery obligations;27
(f)the defendants would be required to file a further affidavit stating what steps had been taken to search for documents in the 11 categories identified in the plaintiffs’ application and the parties were required to liaise in order to reach agreement regarding an appropriate search
22 Ballantyne Trustees Ltd v HFK Ltd, above n 3.
23 At [22].
24 At [26].
25 At [28].
26 At [30].
27 At [31].
methodology, insofar as the plaintiffs considered such search to be inadequate;28
(g)in the event the parties could not reach agreement on an agreed search methodology, the matter would be determined by the Court;29 and
(h)the plaintiffs’ application that the defendants provide discovery afresh was both unnecessary and disproportionate and would not be ordered.30
[46] Subsequently, the parties were unable to agree on what was the appropriate search methodology to be adopted by the defendants. There were a series of memoranda and affidavits filed, case management conferences convened, and directions made as to what further searches were to be undertaken by the defendants. It is unnecessary for me to set out each step in this process, but certain matters are particularly relied upon by the plaintiffs which I should mention.
[47] On 20 April 2021, the defendants filed an affirmation of Ms Heath, an employee of HFK, in which she stated a new IT system was put in place by HFK in 2016/2017, and emails from prior to that time were held offsite on backup tapes with a third party.
[48] On 14 May 2021, I issued a minute directing the defendants to undertake further searches and provide further information, including in relation to the backup tapes.
[49] Further memoranda were exchanged, and in a minute of 12 July 2021, I recorded the further searches the defendants had undertaken and the plaintiffs’ position that yet further searches should be undertaken beyond those previously ordered. I considered that except in one respect, the defendants had undertaken all reasonable searches. I directed the defendants to undertake a search of 11 boxes held by its offsite provider which might contain relevant backup files/tapes for email accounts of identified former employees of HFK. I noted that if such files/tapes were located they
28 At [75](a) – (b).
29 At [75](d).
30 At [41].
needed to be searched, but if they could not be located, I considered the defendants had taken all reasonable steps to locate the backup tapes/files.
[50] A further affidavit of Ms Heath was affirmed on 29 July 2021, in which she deposed the backup files/tapes could not be located.
The submissions
[51] The plaintiffs argue they were the successful parties. The discovery application was made, they say, so as to hold the defendants to their discovery obligations, notably rr 8.14 and 8.15, rather than to seek discovery of specific further documents.
[52] The plaintiffs note that, as a result of the discovery application, the defendants filed five further affidavits, three of which were ordered to be filed by the Court, to address their failure to undertake appropriate searches for relevant materials.
[53] From the plaintiffs’ perspective, the final outcome of the discovery application was that the defendants disclosed further documents31 and were forced to acknowledge they had failed to preserve relevant documents held on the backup files/tapes, in breach of r 8.30.
[54] As to quantum, the plaintiffs argue the defendants’ persistent, ongoing failure to comply with discovery obligations and unmeritorious defence of the discovery application justify an uplift on scale costs. They seek costs calculated on a 2C rather than a 2B basis for this reason.
[55] The defendants consider they were the successful parties and are entitled to costs. They submit the application was wholly unsuccessful. While further documents were discovered as a result of the application (21 HFK invoices), the defendants say those documents had not previously been sought by the plaintiffs, were not considered relevant and were disclosed well in advance of the hearing. Insofar as the applications sought confirmation the defendants had complied with their discovery obligations, the defendants say this was provided in Ms Horne’s affidavit in opposition to the
31 The further 21 documents disclosed in the supplementary affidavit of documents sworn by Ms Horne and filed on 7 October 2020.
application dated 23 September 2020. Insofar as the plaintiffs requested that discovery be undertaken afresh, that was refused by the Court and was not seriously pursued at the hearing. The application was therefore, in the defendants’ view, wholly redundant.
[56] The defendants also argue that the plaintiffs were advised multiple times in correspondence prior to making the application that no further documents were available, as well as in Ms Horne’s affidavit in opposition to the application.
[57] The defendants also contend the scope of the application significantly widened during the course of hearing. They say it was only at the hearing that, for the first time, the plaintiffs put in issue technical matters concerning compliance of Ms Horne’s initial affidavit of documents with the requirements of the Rules.
[58] As far as the missing backup files/tapes are concerned, the defendants say the disclosure in Ms Horne’s initial affidavit of documents comprised all electronic and hardcopy documents in relevant files as well as all relevant emails of significant personnel. They contend the only documents that might have been excluded from this disclosure are documents that had been misfiled, either in hard copy or electronic files, but there was no evidence of documents having been misfiled, and ultimately, no such misfiled documents were identified, despite extensive further searches. There is no reason, they say, to consider the backup tapes might contain relevant documents that had not already been discovered.
[59]In further submissions the defendants also argue:
(a)There was considerable unexplained delay between the filing of their affidavit of documents in 2016 and the making by the plaintiffs’ application challenging the adequacy of their discovery in 2020.
(b)The plaintiffs’ search requirements developed into a “moveable feast” to which the defendants had, at all times, tried their best to respond.
(c)The plaintiffs failed to cooperate on practical matters concerning discovery due to the changing nature of the discovery application, which is wholly inconsistent with the spirit of r 8.2(1).
(d)In circumstances where few additional documents were disclosed following extensive searches, the burden of costs on the application should be shifted to the plaintiffs under r 8.22.
[60] In terms of quantum, the defendants seek costs on a 2C basis with a 50 per cent uplift.
My analysis
[61] In my view both parties take an unrealistic approach, the plaintiffs as to the quantum of costs sought and the defendants insofar as they claim to be the successful parties.
[62] The plaintiffs were the successful parties on this application and are entitled to costs. The defendants’ initial affidavit of documents did not comply with the requirements of the Rules. The orders I made were required because of the inadequacies in the affidavit, particularly in relation to the absence of adequate detail as to steps taken by the defendants to diligently search for all documents to be discovered, and because, on the basis of the evidence, there were reasonable grounds to believe that documents in the categories sought may exist and had not been discovered.
[63] I do not accept the argument that the plaintiffs were not successful because few further documents were discovered as a result of the application. Some further documents were provided, the significance of which I cannot assess. Further, I accept it is also possible that had the backup tapes been found, there may have been further emails discovered. However, this misses the point that the orders made were necessary to hold the defendants to their discovery obligations as ordered by the Court. Further, while the defendants argue the focus of the application widened during the course of
the hearing to include what are described as “technical aspects”, I consider these were sufficiently put in issue in the notice of application.
[64] Having found that the plaintiffs are entitled to costs, the next issue is what is the appropriate cost category for the proceeding. This has previously been dealt with in the case management minute of Associate Judge Osborne dated 5 February 2016. He determined the proceeding is appropriately a category 2 matter. This was a standard application and I see no basis to depart from that determination.
[65] The next issue is what steps have been taken in the proceeding and what time allocations are objectively appropriate for each of those steps. I consider a normal amount of time was required for each step taken; that is, band B in schedule 3 of the Rules is appropriate. The plaintiffs have submitted a schedule of costs sought. On a scale 2B basis, the steps taken and the amounts claimed are as set out in the table below.
Step Description Time
Allocation (2B)
Amount (2B) 22 Filing interlocutory application 0.6 $1,434 24 Preparation of written submissions 1.5 $3,585 25 Preparation of bundle for hearing 0.6 $1,434 26 Appearance at hearing (sole counsel) 0.5 $1,195 11 Memoranda for case management conference x 8 (22, 28 & 30
October 2020, 16 & 29 March, 7
& 21 April, 22 June 2021)
3.2 $7,648 13 Appearance at case management conference x 4 (29 October, 21
April, 14 May, 12 July)
1.2 $2,868 Total 7.6 $18,164
[66]I do not accept all of these allowances are appropriate. In particular:
(a)The allowance for the appearance of counsel at the hearing is 0.5 days, but the hearing related to both the discovery and interrogatories applications. I allocate 0.25 days accordingly.
(b)In respect to the preparation of memoranda, these did not all relate to case management conferences, and in some cases were not directly concerned with the discovery application or compliance with the directions made as a result of it. The memoranda of 22, 28 and 30 October 2020 and 16 March 2021 are in this category. I do not make any allowance for them.
(c)In respect to case management conferences, I have no record of an appearance by counsel at a case management conference on 29 October 2020. I make no allowance for that.
[67] It follows that my assessment of the relevant steps taken in relation to the discovery application, the time allocations that are objectively appropriate for each of those steps, and the calculation of costs (on a category 2 basis), is as follows:
Step Description Time Allocation (2B) Amount (2B) 22 Filing interlocutory application 0.6 $1,434 24 Preparation of written submissions 1.5 $3,585 25 Preparation of bundle for hearing 0.6 $1,434 26 Appearance at hearing (sole counsel) 0.25 $597.50 11 Memoranda for case management conference x 4 (29 March, 7 & 21
April, 22 June 2021)
1.6 $3,824 13 Appearance at case management conference x 3 (21 April, 12 May,
23 June 2021)
0.9 $2,151 Total 5.45 $13,025.50
[68] The next matter to consider is whether there are circumstances requiring a departure from scale costs.
[69] I do not accept the plaintiffs’ submission that the defendants persistently failed to comply with their discovery obligations, even in the face of the discovery application and resulting directions. In my view, once the application was made, the defendants were proactive in responding to it and in their compliance with the directions of the Court requiring them to undertake further searches. There shall be no uplift on scale costs.
[70] Similarly, I cannot see anything that would justify a reduction in the plaintiffs’ costs. The plaintiffs can be rightly criticised for the delay in bringing their application and also for seeking an order that the defendants provide discovery afresh, but neither of these matters significantly added to the defendants’ costs. The fact that few additional documents were discovered as a result of the application is also not, in my view, a sufficient reason to deprive the plaintiffs costs, (or shift the burden of costs). The plaintiffs were entitled to expect compliance with the discovery order. I was satisfied the defendants’ affidavit of documents did not comply with the Rules and that there were grounds for belief that adequate searches had not been undertaken. In those circumstances the plaintiffs could not be satisfied that further discoverable documents may not exist justifying their application.
[71] The final step is to consider whether the plaintiffs are entitled to disbursements. The only relevant disbursement is the filing fee on the discovery application of $500, which I allow.
Result
[72]The result is:
(a)I do not make any order the plaintiffs are to provide further security for costs at this time. Leave is reserved to the defendants to make a further application.
(b)In relation to the plaintiffs’ application that the defendants answer interrogatories, costs will lie where they fall.
(c)In relation to the plaintiffs’ application for discovery, the plaintiffs are entitled to costs of $13,025.50 and disbursements of $500.
O G Paulsen Associate Judge
Solicitors:
Claymore Partners Limited, Auckland Parker Cowan, Queenstown
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