Bhanabhai v Lowndes

[2019] NZHC 2885

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2019-404-0214

[2019] NZHC 2885

BETWEEN

MANU CHHOTUBHAI BHANABHAI as

sole trustee of the YI LU FA TRUST Plaintiff

AND

PETER HILTON LOWNDES

Defendant

Hearing:	On the papers
Counsel:	A Gilchrist for the plaintiff
Judgment:	6 November 2019

JUDGMENT OF JAGOSE J

[Costs]

The judgment was delivered by me on 6 November 2019 at 3.30pm.

Pursuant to Rule 11.5 of the High Court Rules

……………………………… Registrar/Deputy Registrar

Solicitors/Counsel:

A Gilchrist, Auckland

P H Lowndes, Auckland

BHANABHAI v LOWNDES [2019] NZHC 2885 [6 November 2019]

[1]                 As duty judge, I am to determine Mr Bhanabhai’s application for indemnity costs.1 The costs were incurred on his application to hold Mr Lowndes in contempt,2 for the latter’s failure to give vacant possession of a property in Auckland’s Epsom to Mr Bhanabhai in accordance with this Court’s orders.3

[2]                 Mr Bhanabhai claims costs and disbursements in the amount of $29,772.15 (comprising solicitors’ fees of $13,104.25, counsel’s fee of $15,323.90, and disbursements of $1,344.00) including GST.  I am to determine the application on  Mr Bhanabhai’s 2 September 2019 memorandum, and anything filed by Mr Lowndes by 1 November 2019.4 Nothing was filed by Mr Lowndes by that date.

[3]                 The precise foundation for Mr Bhanabhai’s costs application is unclear. His counsel, Andrew Gilchrist, proceeds on the basis this Court determined the contempt application in Mr Bhanabhai’s favour. Edwards J’s order for Mr Lowndes’ arrest – as separate enforcement relief sought by Mr Bhanabhai, and in referring to Mr Lowndes’ failure to comply with an original order5 – implicitly relies on HCR 17.84(2). The Judge expressly only listed the contempt application for mention.6 But that subsequent mention proceeds as if there already had been a finding of contempt.7

[4]Rule 14.6(4) of the High Court Rules 2016 relevantly provides:

The court may order a party to pay indemnity costs if—

…

(b) the party has ignored or disobeyed an order or direction of the court or breached an undertaking given to the court or another party; or

…

(f) some other reason exists which justifies the court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious.

1      Minute of Lang J, 30 October 2019.

2      Minute of Edwards J, 1 August 2019.

3      Bhanabhai v Lowndes [2019] NZHC 1441.

4      Minute of Lang J, above n 1, at [3]–[4].

5 At [8].

6      Minute of Edwards J, above n 2, at [11].

7      Minute of Whata J, 7 August 2019, at [1] and [3].

[5]                 Non-compliance with orders alone may not carry the ‘ignorance’ or ‘disobedience’ weight necessary for an award of indemnity costs. But the threshold for an arrest order is a party has not complied with a preceding order, in a manner which shows wilful and inexcusable disregard of it.8 That rider brings such non- compliance within the “flagrant” range attracting indemnity costs.9

[6]                 The indemnity costs sought by Mr Bhanabhai include a $200 “Office Administration” charge and GST. Uniform service charges are not recoverable disbursements.10 I deduct $200 from the claim. Indemnity costs and disbursements ordinarily exclude any GST component, for which the GST-registered party may recover a GST input credit from the Commissioner of Inland Revenue.11 I do not know if the Yi Fu La Trust or Mr Bhanabhai are GST-registered; if either is, I also would deduct those amounts.

[7]                 Otherwise, Mr Bhanbhai may recover from Mr Lowndes his actual legal expenses, reasonably incurred. I see nothing to suggest Mr Bhanabhai’s actual legal expenses were other than reasonably  incurred,  particularly  in  circumstances  of  Mr Lowndes’ implicit wilful and inexcusable disregard for this Court’s original order. Except for any GST component, I approve the other disbursements as paid or incurred for the purposes of the proceeding.

[8]                 I therefore order Mr Lowndes to pay Mr Bhanabhai $29,572.15, less any GST component recoverable from the Commissioner of Inland Revenue.

—Jagose J

8      Horowhenua 11 (Lake) Part Reservation Trust v Taueki [2017] NZHC 4 at [3].

9      Prebble v Huata [2005] NZSC 18, [2005] 2 NZLR 467 at [6].

10     Opus International Consultants Ltd v Colac Bay Vision Ltd [2015] NZHC 2702 at [7].

11     New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282, (2016) 27 NZTC 22-058 at [6] and [12].