Brian Dorset Wilken New and Liston Trustee Services v Charlton
[2021] NZHC 3603
•22 December 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-2178
[2021] NZHC 3603
BETWEEN BRIAN DORSET WILKEN NEW AND LISTON TRUSTEE SERVICES (AS THE TRUSTEES OF THE NEW FAMILY
TRUST)
PlaintiffsAND
STUART ROSS CHARLTON
First Defendant
AND
MICHAEL BRIAN TIPLADY
Second Defendant
AND
WAYNE LEONARD BIRCHALL
Third Defendant
AND
SAMUEL GORDON WHITE
Fourth Defendant
AND
TCL MANAGEMENT LIMITED
Fifth Defendant
AND
COMPANY 1207753 LIMITED (FORMERLY TEAK CONSTRUCTION LIMITED)
Sixth Defendant
AND
TEAK CONSTRUCTION GROUP LIMITED
Seventh Defendant
AND
TEAK PROPERTY AND DEVELOPMENT LIMITED
Eighth Defendant
AND
TEAK MAINTAIN LIMITED
Ninth Defendant
AND
SIX C PROPERTY LIMITED
Tenth Defendant
BRIAN DORSET WILKEN NEW AND LISTON TRUSTEE SERVICES (AS THE TRUSTEES OF THE NEW FAMILY TRUST) v STUART ROSS CHARLTON [2021] NZHC 3603 [22 December 2021]
Hearing: On the papers Counsel:
N L K Stone & J E G San Diego for Plaintiffs J T Burley & K R Narayan for Defendants
Judgment:
22 December 2021
JUDGMENT OF PAUL DAVISON J
This judgment was delivered by me on 22 December 2021 at 4pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Doug Cowan, Auckland McVeagh Fleming, Auckland
[1] On 4 October 2021 I granted an application by the defendants for an adjournment of the trial fixture scheduled to commence on 11 October 2021 and directed the Registrar to allocate a new fixture, which has since been set for 17 April 2023.
[2] The defendants now apply for scale 2B costs in the sum of $2031.50 and disbursements of $500.00 for their successful adjournment application. The plaintiffs say that, at the hearing of the adjournment application, and following an oral application by the defendants for an order for costs, I said that costs were reserved in respect of the adjournment application pending the outcome of the trial. My 4 October 2021 minute granting the application for adjournment did not address costs. The plaintiffs seek indemnity or increased costs for their preparation of written submissions opposing the defendants’ application for costs.
[3] Having reviewed the Court’s audio recording of the 4 October hearing, I note that at the conclusion of the hearing I said:
“I am also not minded to make an order for costs at this stage and will reserve the issue of costs.”
Submissions
Defendants
[4] Notwithstanding my above statement, the defendants filed submissions on costs. Mr Burley on behalf of the defendants says that the parties had been engaged in settlement discussions from mid-September 2021 in an attempt to resolve the litigation by way of private mediation. He says that the parties agreed on a mediator and dates for conducting the mediation had been circulated.
[5] Counsel says that the defendants consider that in-person mediation is fundamental to obtain resolution on all matters, and inquiries were made regarding the possibility of in-person mediation occurring during COVID-19 Alert Level 3. However, this proposal was rejected by the mediator. With the likelihood of attending an in-person mediation diminishing — correlating to a diminishing likelihood of “shifting down” alert levels, the defendants anticipated that the trial itself would likely
be adjourned. The fact that the trial involved multiple witnesses, cross-examination and expert evidence, supported their view. They were of the view that an adjournment would allow the parties to focus on organising, preparing for and attending a mediation.
[6] The defendants submit that they therefore sought the plaintiffs’ consent to an adjournment of the trial scheduled to commence on 11 October 2021 on the basis that the COVID-19 Alert Level 3 would likely be extended, and for the reasons relating to the proposed mediation. However, when the plaintiffs would not consent to an adjournment the defendants made the application for adjournment under rule 7.42 of the High Court Rules 2016.
[7] As the application for an adjournment was opposed by the plaintiffs, appearances were required. This application was successful. The defendants say that the costs involved in making the application and the appearance of counsel could all have been avoided if the plaintiffs had consented to the adjournment. Accordingly, and having regard to the likelihood of the trial being adjourned in the COVID-19 environment that then existed, the defendants now seek costs on a scale 2B basis and disbursements as follows:
Item
Step
Allocation
Amount
22
Filing
interlocutory application
0.6
$1,434.00
26
Appearance
0.25
$597.50
Total
0.85
$2,031.50
Step Type
Amount
Interlocutory application for adjournment
Filing fee
$500.00
Plaintiffs
[8] The plaintiffs’ fulsome submissions opposing the costs application cover 17 pages exclusive of appendices. The initial portion of their costs memorandum covers the background of the matter and a chronology surrounding the adjournment application. They submit that the defendants’ application for costs is “fundamentally flawed” on two bases:
(a)The High Court has performed its function in respect of the issue of costs concerning the application for adjournment of the trial.
(b)The plaintiffs’ position was reasonable having regard to the unpredictability and uncertainty around COVID-19 lockdowns.
[9] As regards the first, the plaintiffs submit that the correct avenue for the defendants to overturn the relevant costs decision (made orally) is to appeal that decision. Counsel submits that the High Court has now performed its function (“functus officio”) and the defendants have exhausted their rights in front of the High Court for any application for costs arising from the adjournment application. The plaintiffs state that to revisit my oral decision would be an abuse of process as it would relitigate the existing decision subsuming the general rule of finality.
[10] Secondly, the plaintiffs say that while accepting the Court’s decision granting the application for an adjournment of the 11 October 2021 trial fixture, the reasonableness of their position in opposing the adjournment is a factor to be taken into account. The plaintiffs say that mediation has already occurred and they are indifferent as to whether it proceeds in person or not. They say that there was great uncertainty as to the status of the proceeding in the context of changing and
unpredictable COVID -19 alert levels, and that the status of the trial ought to have been left to the registry.
[11] In support of their application the plaintiffs submit that by pursuing an application for costs, the defendants are acting “…improperly, or unnecessarily in …, continuing, … a step in [the] proceeding”,1 and that they have “ignored … an order or direction of the court”.2
[12] The plaintiffs accordingly apply for an order for indemnity costs of $9.008.10 against the defendants, and if an order for indemnity costs in their favour is not made, in the alternative they submit that an award of increased costs (25% uplift) of
$4,481.25 is appropriate.
Approach
[13] Matters relating to costs remain at the discretion of the Court.3 However, it must exercise its discretion on a principled basis.4 The determination of costs, so far as possible, should be both predictable and expeditious.5
[14]Rule 14.6(3) of the High Court Rules 2016 relevantly provides:
The court may order a party to pay increased costs if—
(a)the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C;
…
[15]Rule 14.6(4) of the High Court Rules 2016 relevantly provides:
The court may order a party to pay indemnity costs if—
1 High Court Rules 2016, r 14.6(4)(a).
2 Rule 14.6(4)(b).
3 Rule 14.1(1).
4 Huakiwi Copenhagen Lot 4 Orchard Ltd v Te Moana [2019] NZHC 1582 at [13]. Bi v Westcoast Mining Ltd [2020] NZHC 2940 at [14].
5 High Court Rules 2016, r 14.2(1)(g).
…
(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
…
[16] Indemnity costs are awarded where a party has behaved either badly or very unreasonably, for example where their misconduct has been “flagrant”.6 As the party claiming increased or indemnity costs, the plaintiffs carry the onus of persuading the Court that an award of indemnity costs is justified.7
Discussion
[17] The defendants as the successful party in their application for adjournment which was opposed by the plaintiffs, would ordinarily be entitled to costs. However, in my view the issue of costs is more appropriately addressed following trial, and for that reason at the conclusion of the hearing on 4 October 2021, and having heard the defendants’ oral application for costs, I ruled that costs would be reserved. That was my final decision on the matter.
[18] Accordingly as I have already determined that costs on the application for the adjournment are reserved, it is not appropriate to determine the issue of costs at this stage and before determination of the outcome of the proceeding.
[19] Although I did not address the issue of costs in my minute of 4 October 2021, at the conclusion of the hearing I had ruled that costs would be reserved, and I did not direct the parties to file costs memoranda in relation to the adjournment application. If the defendants were in any doubt about the matter following receipt of my Minute of 4 October 2021, the appropriate course would have been for counsel to file a memorandum with the Court to request clarification of the status of the costs issue.
[20] The plaintiffs have not persuaded me that the defendants’ actions in applying for an order for costs approach the necessary level of “flagrancy” such that they should
6 Bradbury v Westpac Banking Corp [2009] 3 NZLR 400 (CA) at [28]; Prebble v Huata [2005] NZSC 18 at [6].
7 Strachan v Denbigh Property Ltd HC Palmerston North CIV-2010-454-232, 3 June 2011 at [27].
receive indemnity or increased costs with respect to their opposition to this current costs application. While the Court has power to award such costs on costs, it is generally reluctant to do so,8 and I decline to award the plaintiffs’ application for costs.
[21]The issue of costs as regards the defendants’ application for adjournment of the
11 October 2021 trial is reserved until determination of the proceeding at the substantive trial, and costs in relation to the parties respective and current applications for costs are to lie where they fall.
Paul Davison J
8 See for example Jeffreys v Morgenstern [2013] NZHC 1361 at [40]; Epsom Woods Ltd v Waitakere Farms Ltd [2020] NZHC 3137 at [4]; and Combined Property Maintenance Limited v Singh [2021] NZHC 621.
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