Commissioner of Inland Revenue v Livingspace Properties Limited

[2019] NZHC 3208

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2010-409-002323

[2019] NZHC 3208

BETWEEN

COMMISSIONER OF INLAND REVENUE

Plaintiff

AND

LIVINGSPACE PROPERTIES LIMITED

Defendant

Counsel:	A Ho for liquidator of Livingspace Properties Ltd (in rec and in liq) J Moss for K Buxton and respondents
Judgment	5 December 2019
(Determined on the papers)

JUDGMENT OF OSBORNE J

(wasted costs)

[1]Kristina Buxton applies for a wasted costs order.

The context

[2]                 Associate Judge Johnston made a number of interlocutory orders on 6 September 2019.1 Robert Walker, the liquidator of Livingspace Properties Limited (in rec and in liq) through his then solicitor (Mr Neil) applied for review of that judgment.2

[3]Kristina Buxton filed a notice of opposition to the review application.

[4]My Minute of 14 November 2019 records subsequent procedural matters:

1      Commissioner of Inland Revenue v Livingspace Properties Ltd [2019] NZHC 2213.

2      Under s 26P Judicature Act 1908, which continued to apply under transitional provisions.

COMMISSIONER OF INLAND REVENUE v LIVINGSPACE PROPERTIES LIMITED [2019] NZHC 3208 [5

December 2019]

[3]        Before its first call, the Court on 10 October 2019 made directions for the exchange of submissions in anticipation of the Registrar’s allocation of a prompt hearing date.

[4]        Beginning on 23 October 2019, the Registry offered hearing dates to the parties which were acceptable to Ms Buxton. Counsel for Mr Walker rejected the first date offered as being too early and initially did not respond to the second date offered (3 December 2019).

[5]        On 8 November 2019, Mr Neil, solicitor on the record for the liquidator, filed a memorandum “foreshadowing application for leave to withdraw as solicitor on the record.” Mr Neil explained that his firm, Meredith Connell, has ceased to act for the liquidator in relation to this proceeding. He indicated that if Mr Walker did not arrange for a notice of change of solicitor or change of address for service to be filed, he (Mr Neil) would make the appropriate interlocutory application under r 5.1(4) High Court Rules.

The basis of the wasted costs application

[5]                 The Court convened an urgent telephone conference to take place on 13 November 2019. Mr Moss, for Ms Buxton, filed a memorandum in advance of the conference.

[6]                 At the conference Mr Neil was able to advise the Court that he understood that Mr Walker had made contact with a barrister and that a notice of change of representation would be filed that day. The previously-directed timetable had to be significantly adjusted to accommodate the change of solicitor.

[7]                 Mr Moss identifies his attendance at the conference and his memorandum for the conference as wasted costs.

[8]Mr Ho (now Mr Walker’s counsel) opposes the application for wasted costs.

Discussion

The law

[9]I adopt what I stated in Bligh v Earthquake Commission:3

3      Bligh v Earthquake Commission [2017] NZHC 2179 at [9].

The determination of any award in relation to costs which have been wasted is, as with all cost matters, at the discretion of the Court.⁴ Jurisdiction to make a wasted costs order where a party’s default causes a trial to be vacated or adjourned is usually an exception to the usual rule that costs follow the event because there has usually been no “event”.⁵

[10]I adopt also what was further stated in Bligh v Earthquake Commission:6

Wasted costs awards have a two-fold purpose:

(a)to compensate parties not in default who have truly wasted costs (including disbursements); and

(b)to impose a sanction on a defaulting party in an effort to avoid future wastage of costs and of judicial and Court resources and disadvantage to other parties yet to be allocated trials.

(Footnotes omitted)

Mr Ho’s submissions

[11]              Mr Ho submits that this is not a case for a wasted costs order. He records that no fixture date had been allocated and the conference of 13 November was called to deal with that. Mr Ho submitted that there did not appear to have been any preparatory steps taken by Ms Buxton that appeared to have been “wasted”.

[12]              Mr Ho emphasised that the liquidator’s inability to respond to the Registry’s proposed fixture dates had been due to a change in the liquidator’s representation. Mr Ho observed that “while the timing of this was unfortunate, this was not intended to waste the resources of Ms Buxton or the Court. The parties are entitled to counsel of their choice”.

Application of the law

[13]              There clearly were wasted costs in this case for Ms Buxton, both in relation to the conference and Mr Moss’s memorandum for the conference. Ms Buxton had to incur those costs because Mr Walker, as applicant for review, had been unable to co-

4      High Court Rules, r 14.1(1).

5      A C Beck & Others McGechan on Procedure (online loose leaf ed, Thomson Reuters) at [HR Pt 14.16A(1)].

6      Bligh v Earthquake Commission above n 3, at [11].

operate in progress the application to a hearing and to meet the directed timetable for submissions.

[14]              While Mr Ho emphasises that any wasting of costs was not intended by Mr Walker, the Court’s focus in this regard is not on intention but on consequence. The Court seeks to protect from the burden of wasted costs the party who is not in default.

[15]              Here, of course, Mr Walker had his right to counsel of his choice. In that regard he was accommodated (to the concern and frustration of Ms Buxton) by the pushing out of the timetable and the pushing out of the target date for hearing. With the Court having accommodated Mr Walker’s intended change of representation in that way, it does not follow that the Court should ignore the fact that Ms Buxton’s costs incurred in that process had been truly wasted.

[16]              It is just, as between the parties, that Mr Walker pay in any event to Ms Buxton the costs of the two items claimed.

Order

[17]              I direct that Mr Walker pay in any event to Ms Buxton the wasted costs incurred on 12 November 2019 and 13 November 2019 which I fix in the sum of $1195.00.

Osborne J

Solicitors:

Norling Law Limited, Auckland Canterbury Legal, Christchurch J Moss, Barrister, Christchurch

Copy to: Mr R B Walker

This judgment was delivered by me on 5 December 2019 at          pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: