Bligh v Earthquake Commission

[2017] NZHC 2964

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2013-409-001333 [2017] NZHC 2964

BETWEEN

DEREK RICKY BLIGH

Plaintiff

AND

EARTHQUAKE COMMISSION First Defendant

AND

IAG NEW ZEALAND LIMITED Second Defendant

Hearing:

27, 28 November 2017

Appearances:

R J Lynn for Plaintiff
N S Wood for First Defendant
P M Smith for Second Defendant
J Moss and G P Davis for Claims Resolution Service Limited

(a non-party)

P J Napier for Grant Shand (a non-party)

Judgment:

30 November 2017

JUDGMENT OF ASSOCIATE JUDGE OSBORNE [on costs]

Introduction

[1]      In this proceeding, Derek Bligh sues his insurer, IAG New Zealand Ltd (IAG), and the Earthquake Commission (EQC) in respect of damage said to have been caused

in the Canterbury Earthquake Sequence.

BLIGH v EARTHQUAKE COMMISSION [2017] NZHC 2964 [30 November 2017]

[2]      An eight-day trial was set down to commence on 31 October 2016.  Clark J entered judgment for EQC and IAG under r 10.8 High Court Rules which entitles a defendant to judgment where the plaintiff does not appear.1

[3]      Mr Bligh applied under r 10.9 for an order setting aside the judgment.  IAG and EQC opposed the application.  Following a hearing, Associate Judge Matthews granted the application and set aside the judgment.2

[4]      The Court reserved the costs of the application and reserved issues relating to matters of wasted costs arising from the aborted trial.

[5]      Costs issues arose not only as between the defendants and the plaintiff but also as between all those three parties and two non-parties being Mr Bligh’s solicitor up to the trial (Grant Shand) and Mr Bligh’s litigation funder, Claims Resolution Service Ltd.

[6]      I heard a number of ensuing applications last week.

[7]      This judgment focuses solely on the costs of the setting aside application as between the defendants and the plaintiff.   The Court’s judgment on other matters remains reserved.

The defendants’ applications

[8]      The defendants apply for their costs on the setting aside application.

[9]      Mr Bligh accepts that the defendants are entitled to such costs.  In his separate application, he seeks contribution or indemnity from the non-parties, a matter which will be dealt with in a judgment to follow.

[10]     For costs purposes, this is a Category 2 proceeding.  The defendants apply for costs on a 2B basis.3  A 2B approach is appropriate having regard to the nature of the

1      Bligh v Earthquake Commission [2016] NZHC 2619.

2      Bligh v Earthquake Commission [2017] NZHC 995.

3      High Court Rules, Category 2 under r 14.3(1) and band B under r 14.5(2).

setting aside application, the issues raised and the hearing.  Mr Lynn (for Mr Bligh)

responsibly did not suggest otherwise.

Justification for the award of costs

[11]     Counsel recognised that, in the circumstances of this case, Mr Bligh’s success in having the default judgment set aside should not lead to adoption of the primary principle whereby costs follow the event.4

[12]     The significant feature of this case is that Mr Bligh through his application obtained an indulgence, namely the setting aside of a default judgment which had been obtained by the defendants in circumstances where they had not contributed to the plaintiff’s default.

[13]     Counsel referred me to the judgment of the Court of Appeal in Cunningham v Butterfield.5   In that case, the Court under a heading “Relief an indulgence” referred particularly to cases where lessees had obtained relief against forfeiture subject to orders that costs be paid to the lessor who had opposed the grant of relief.  The Court rejected any concept of an absolute rule as to such an approach, emphasising that cases may require an analysis of facts to see what gave rise to the litigation and to take into account whether parties had contributed to costs or engaged in other conduct that should influence the costs decision.6

[14]     The circumstances of this case justify an award of costs in favour of the defendants.

Disbursements

[15]     I provide a certificate for the reasonable costs of travel and accommodation of counsel for each defendant. There is no certificate in relation to second counsel.

4      Under r 14.2(1)(a) High Court Rules.

5      Cunningham v Butterfield [2014] NZCA 213, (2014) 22 PRNZ 521.

6      Cunningham v Butterfield, above n 5, at [57].

Timing of payment of costs

[16]     In a separate application, Mr Bligh seeks orders that the non-parties jointly and severally pay any costs award made against him as a result of the setting aside application and the aborted trial.  Mr Lynn did not submit on Mr Bligh’s behalf that he is other than primarily liable for the costs of the setting aside application.  Given that I will be determining all matters of costs as between Mr Bligh and the non-parties in a later judgment, I have considered whether the order which I now make as to costs should come into effect after I determine whether there should be orders of contribution or indemnity against the non-parties.  In the circumstances of Mr Bligh’s primary liability, I find it appropriate to make the present costs order speak immediately.

Additional costs

[17]    The resolution of the costs issues dealt with in this judgment has been straightforward.  Submissions on the subject were dealt with briefly in the context of much broader submissions covering other applications.  It would be inappropriate to make any additional award in relation to the presentation of submissions on this issue.

Orders

[18]     I order the plaintiff to pay to each of the defendants on the setting aside application costs on a 2B basis together with disbursements to be fixed by the Registrar.

Associate Judge Osborne

Solicitors:

GCA Lawyers, Christchurch

Duncan Cotterill, Auckland

Chapman Tripp, Wellington

Keegan Alexander, Auckland

Counsel: Jai Moss, Christchurch