Colville v Colville
[2024] NZHC 861
•19 April 2024
IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY
I TE KŌTI MATUA O AOTEAROA MĀWHERA ROHE
CIV-2021-418-17
[2024] NZHC 861
BETWEEN MATHEW ROBERT COLVILLE
Plaintiff
AND
ADAM KEITH COLVILLE
First Defendant
PETER JONATHON BLIGHT
Second Defendant
Hearing: On the papers Appearances:
A R B Barker KC and H P Short for Plaintiff First Defendant in Person
A D Marsh for Second Defendant
Date:
19 April 2024
JUDGMENT OF MANDER J
This judgment was delivered by me on 19 April 2024 at 12.30 pm pursuant to Rule 11.5 of the High Court Rules 2016
Registrar/Deputy Registrar Date: .
COLVILLE v COLVILLE [2024] NZHC 861 [19 April 2024]
[1] The plaintiff, Mathew Colville (Mathew), was successful in his claim of breach of a restraint of trade against the first defendant, his brother Adam Colville (Adam). The second defendant, Peter Blight (Peter), was also found liable for having knowingly induced and encouraged Adam to breach the restraint. Judgment was entered against both defendants in the sum of $252,000 (payable in equal amounts), together with interest to be calculated from the date of judgment. Adam and Peter were also found liable to pay Mathew’s costs on a 2B basis in equal shares.1
[2] Following delivery of the judgment, Mathew filed a memorandum attaching a schedule of proposed costs, calculated on a 2B basis, in the total sum of $152,134.60. The Court was advised that Mathew had written to each of the defendants attaching the costs schedule and inviting any comment. Adam, in reply, advised that he would await the Court’s order and advice from “other lawyers”, which I interpret to be Peter’s solicitors. For his part, Peter provided no formal response to Mathew directly but has since filed submissions in response to Mathew’s memorandum. Various aspects of Mathew’s schedule of proposed costs are disputed.
[3] In response to an invitation from the Court to file submissions regarding the claimed costs, Adam advised that, as at trial, he remains unrepresented. He does not consider he is in a position to comment “on what is correct and what’s not”. However, Adam did raise an objection to costs associated with the disclosure of Hammer Down Developments Ltd’s (Hammer Down) documents, as he maintained “they had nothing to do with the restraint”. I will address that issue and Peter’s objections in turn.
Disputed costs
[4] Peter acknowledges that costs have been awarded against the defendants on a 2B basis. However, he disputes a number of the items listed in the schedule of costs claimed by Mathew.
1 Colville v Colville [2023] NZHC 2659.
Non-party discovery
[5] Mathew claims his costs in respect of an interlocutory application for non-party discovery. Peter argues the application did not result in any orders being made and effectively lapsed. It is therefore submitted no costs are recoverable, nor can the filing fee for this application be claimed for the disbursement.
[6] The application involved Mathew seeking non-party discovery from the national franchise owner, Stonewood Homes NZ Franchisor Ltd (Stonewood Homes NZ). Documents were sought from Stonewood Homes NZ relating to the establishment of a new franchise on the West Coast and the involvement of Adam or mention of him in such documentation. On 23 March 2022, Associate Judge Lester recorded in his minute of a telephone conference involving the parties that there is overlap between this application and an application for further and better discovery. Mr Barker KC, counsel for Mathew, is recorded as having advised that he is having discussions with counsel for the non-party and that it appears the application may be resolved by agreement.
[7] In the Associate Judge’s subsequent judgment of 12 April 2022, concerning cross-applications for further and better discovery, it is noted the application for non- party discovery against the head franchisee is being worked through by Mathew’s counsel with counsel for Stonewood Homes NZ.2 The application was adjourned for further mention on 22 June 2022.3 A telephone conference took place on 5 July, but this only concerned issues of non-compliance with orders regarding further discovery and disclosure of information held on computers. No mention is made of the non- party discovery application, nor is there any further record of any involvement by the Court in the disposition of the application.
[8] It appears therefore that the application was not pursued and did not result in any formal outcome. In those circumstances, I consider the costs of this application (including the filing fee and disbursements) should lie where they fall.
2 Colville v Colville [2022] NZHC 766.
3 At [11] and [34](3)(c).
Application for interim injunction
[9] Mathew seeks to recover the costs of his application for an interim injunction, dated 25 August 2022, in which he sought orders prohibiting breaches of the restraint of trade, which were denied by the defendants. That application was set down to be heard on 9 November 2022. However, a joint memorandum filed by the parties, on 31 October 2022, advised that agreement had been reached, in respect of which consent orders were subsequently made by the Court. While submissions were filed regarding costs arising on the application for the interim injunction, Eaton J declined in a minute of 21 December 2022 to make any award pending the final determination of the substantive proceeding.
[10] Mathew argued in his original cost submissions regarding the interim injunction that there could be no issue he was the successful party as the defendants had ultimately consented to the orders which he had sought, or at least to a reasonable variation of them. It was submitted the application was necessary in light of the concerns of ongoing breaches in respect of Hammer Down and documents suggesting that Adam was still involved in the business. It was further argued that an alleged criticism of a lack of prior consultation regarding the application could not affect the incidence of costs.
[11] In response, Peter disputed that Mathew had been successful on his application. He submitted an agreed position had been reached involving the provision of limited undertakings that were no more than the obligations to which Adam was bound under the restraint. Peter argued Mathew’s claim that the application was necessary due to the nature of documents that had recently been discovered could not be correct, as those documents related to the period up to July 2021, which he submitted was when the relevant disputed activities ceased. He maintained the other documents relied upon by Mathew did not support his claims and that there had been no basis for an interim application to be made at this time.
[12] I consider that Mathew was the successful party on the application for the interim injunction and that the consent orders largely achieved what was sought in that application. As I determined in my substantive judgment, up until this approximate
point in time Mathew had proper grounds to seek the interim relief to reinforce his contractual rights with court orders while awaiting the ultimate outcome of the litigation. Accordingly, I determine that Mathew is entitled to recover his costs in respect of this interlocutory application, in addition to the filing fees paid.
Interlocutory hearing — 21 March 2023
[13] Mathew has claimed a half day for the interlocutory hearing that took place before Associate Judge Lester on 21 March 2023. Peter argues only a quarter day was required. The Court records confirm the matter was set down for one and a half hours. An adjustment can be made to reflect the reduced hearing time required.
Preparation time
[14] Mathew claims five days for preparation for the hearing and five days for the drafting of briefs of evidence and compilation of bundles and authorities. Peter argues that only four days’ hearing time was required.4 In the schedule of costs claimed by Mathew, the calculation for both heads of preparation is premised on “one per day for the first to fifth hearing days”. Only four hearing days were required.
[15] Schedule 3 distinguishes between what can be claimed for “Preparation for hearing” and “Preparation of briefs, listed issues, authorities and agreeing common bundle”. For the former, two days can be claimed for the first hearing day and one day for the second to fifth hearing days. For the latter, only one day can be claimed for the first to fifth hearing days. It follows that Mathew’s claim of $11,950 for the preparation for hearing is correct. However, the claim for preparation of briefs, list of issues, authorities and agreeing common bundle should be reduced by $2,390.
Second counsel
[16] Mathew claims for second counsel’s appearance at the hearing. Peter argues this is unjustified. He cites Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd, where the observation was made that changes to the rules which provided for greater
4 Three days’ hearing time spent hearing evidence in Greymouth (Monday–Wednesday), a fourth hearing day was spent hearing expert evidence and counsel’s submissions in Christchurch.
preparation time before the hearing greatly reduced the need for second counsel.5 In assessing the question of second counsel, Chambers J stated that:6
The approach is always objective and is focused on the nature of the proceeding, not the actual counsel involved and how he or she or they chose to conduct the litigation. Elders may well have received considerable value from having Mr Crossland as second counsel. That is irrelevant, however, to the question I have to determine, namely whether the nature of this proceeding, given the way the trial was conducted, was such as to justify requiring the losing party to contribute to the winning party’s cost in having a junior counsel present.
[17] Generally, a category 2 case must have some exceptional feature to justify a second counsel allowance.7 The default position in sch 3 of the High Court Rules (the Rules) is that provision is made for one counsel in a proceeding.8 The ordinary approach to the question of second counsel’s costs was summarised by Brewer J in Northwest Developments Ltd v Zhang as follows:9
[23] The rules do not provide guidance as to when allowance for second counsel ought to be made. The structure of the rules suggests that the norm is only one counsel will be provided for. Whether the Court will depart from that norm is influenced by the complexity of the proceedings including the issues involved, the range of evidence, the number of witnesses, and the volume of evidence involved.
(footnotes omitted)
[18] Peter opposes an allowance for second counsel on the basis this was not a complex matter and that the hearing time for the evidence comprised less than three and a half days. The case was not without its difficulties in terms of the legal and evidential issues to which it gave rise, but the conduct of the hearing was relatively straightforward and was conducted expeditiously. It did not, in my view, have any particular exceptional features that would justify a cost allowance for second counsel.
5 Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155.
6 At [21].
7 Prattley Enterprises Ltd v Vero Insurance NZ Ltd [2017] NZHC 1599, (2017) 23 PRNZ 484 (HC) at [44], citing Andrew Beck Principles of Civil Procedure (3rd ed, Thomson Reuters, Wellington, 2012) at [13.3.].
8 At [44].
9 Northwest Developments Ltd v Zhang [2019] NZHC 2146 at [23], citing Brady v Presbyterian Church of Aotearoa New Zealand [2013] NZHC 2300 at [2].
Hearing fees
[19] Mathew claimed for hearing fees for a five-day trial. As submitted by Peter, the trial only occupied four days. Any fixture fee for a fifth day can be recovered from the registry. The claim is therefore reduced by a day.
Hammer Down documents
[20] Regarding the issue raised by Adam raising the relevance of documents pertaining to Hammer Down, I do not accept the information sought in respect of that company was irrelevant. All documents pertained to the operation of Hammer Down, how it was set up and subsequently dissolved or disestablished by Adam and Peter, and were a relevant line of enquiry for Mathew to pursue in the circumstances. The establishment and operation of Hammer Down and how it was ultimately dealt with as between the two defendants was a matter relevant to the proceeding. Insofar as the pursuit of information relating to Hammer Down was sought to be advanced by Mathew by applications for further and better discovery, I consider those costs were legitimately incurred.
Result
[21] The following adjustments should be made to the schedule of costs claimed by Mathew:
(a)the costs item for filing an application for non-party discovery, dated 18 March 2022, ($1,434) should be removed;
(b)the claim for preparation of briefs, list of issues, authorities and agreeing the common bundle should be reduced by one day ($2,390);
(c)the allowance for second counsel should be removed ($4,780);
(d)the claim for the hearing of the application for further and better discovery on 21 March 2023 should be reduced by one-quarter day ($597.50); and
(e)the claim for a five-day hearing fee should be reduced by $2,880.
[22] As a result of those adjustments, the total costs award is reduced to $87,115.50 and disbursements payable reduced to $52,937.60. Based on those figures, Mathew is awarded costs on a 2B basis in the sum of $87,115.50 and disbursements in the sum of $52,937.60. Those amounts are payable by each defendant in equal shares.
Solicitors:
Malloy Goodwin Harford, Auckland
Copy to:
A Barker QC and J Palairet, Barristers, Auckland Anthony Harper, Auckland
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