Crummer Trustees no.83 Limited v Bank of New Zealand
[2015] NZHC 2687
•30 October 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-000571 [2015] NZHC 2687
BETWEEN CRUMMER TRUSTEES NO.83
LIMITED Plaintiff
AND
BANK OF NEW ZEALAND First Defendant
PARK ROAD CONSOLIDATED LIMITED
Second Defendant
XFHNZ LIMITED Third Defendant
CLASSIC BUILDERS GROUP LIMITED Fourth Defendant
PETER DESMOND COONEY Fifth Defendant
MERIDIAN TRUSTEE SERVICES LIMITED AND CLM TRUSTEES LIMITED
Sixth Defendants
Hearing: On the papers Judgment:
30 October 2015
COSTS JUDGMENT OF WYLIE J
This judgment is delivered by Justice Wylie on 30 October 2015 at 4.30pm
pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:………………………………..
CRUMMER TRUSTEES NO.83 LIMITED v BNZ & ORS [2015] NZHC 2687 [30 October 2015]
Introduction
[1] On 8 September 2015, in a reserved judgment, I:
(a) Struck out each of the three causes of action brought by the plaintiff, Crummer Trustees No.83 Limited, against the first defendant – the Bank of New Zealand;
(b) Dismissed Crummer Trustees’ application for discovery and related
orders;
(c) Ordered that Crummer Trustees pay BNZ’s reasonable costs; and
(d)Reserved judgment as to the quantum of costs payable, and invited the parties to reach agreement on that issue, or to file memoranda.
[2] Counsel did discuss costs, but were unable to reach agreement on the same.
[3] The BNZ has filed a memorandum. It seeks costs on a 2B basis in relation to its summary judgment/strike out application. In relation to the discovery application brought by Crummer Trustees, it seeks costs on a 2B basis, together with an uplift of
50 per cent. It also seeks its reasonable disbursements.
[4] Crummer Trustees resists aspects of BNZ’s costs application. It argues that recognition needs to be given to the fact that BNZ was not successful on its summary judgment application, it considers that some of the cost items claimed by BNZ are inappropriate, and/or have been claimed at the wrong rate.
Relevant cost rules
[5] Costs are at the discretion of the Court – r 14.1. The discretion is not however unlimited. In particular it is constrained by the various rules dealing with costs. Relevantly r 14.2(a) provides that costs follow the event, unless particular considerations, such as partial success by both parties, dictate otherwise. Further an award of costs should reflect the complexity and significance of the proceedings – r 14.2(b). Costs are ordinarily assessed by applying the appropriate daily recovery
rate to the time considered reasonable for each step required in the proceedings – r
14.2(c).
[6] The Court can award increased costs if the party opposing has contributed unnecessarily to the time or expense of the proceeding, or a step in it, by taking or pursuing an unnecessary point or advancing an argument that lacks merit – r
14.6(3)(b).
[7] Disbursements may be awarded to the extent that they were reasonably necessary for the conduct of the proceeding, and reasonable in amount.1
Analysis
[8] In my judgment, I expressed the preliminary view that costs would be assessed on a 2B basis, with allowance for one counsel only.
[9] BNZ agrees with this preliminary view in respect of its summary judgment/ strike out application. Crummer Trustees does not appear to dissent from it. Rather it argues that BNZ was unsuccessful in its application for summary judgment, albeit successful in its application for strike out.
[10] I am not persuaded that it is appropriate to discount the costs which should be payable in BNZ’s favour as a result of the fact that it did not obtain judgment on a summary basis. This is not an example of partial success by both parties. Rather BNZ made a conjoint application, either for summary judgment or strike out, and the application for both forms of relief proceeded on the same grounds. Such conjoint applications are not unusual. In my view, and looked at in the round, BNZ was the successful party.
[11] Crummer Trustees asserts that, in their schedule of claimed costs, BNZ has claimed twice for the preparation of submissions.
[12] BNZ accepts that it has claimed twice for preparation but takes the view it is entitled to do so, because Crummer Trustees belatedly filed an amended statement of
1 Rule 14.12.
claim, after BNZ had already prepared its initial submissions. Crummer Trustees denies that BNZ is entitled to the payment of costs for preparing both sets of submissions. It argues that BNZ was or should have been aware from an application that Crummer Trustees made for discovery that additional causes of action were to be pleaded.
[13] In my view it is appropriate to allow BNZ to recover costs for both sets of written submissions. The original statement of claim filed by Crummer Trustees alleged only breach of mandate. BNZ’s synopsis of argument in support of its interlocutory application for summary judgment/strike out was due to be filed by 28
July 2015. On 24 July 2015 Crummer Trustees filed an amended statement of claim, amending the breach of mandate cause of action, and adding two new causes of action – breach of fiduciary duty and negligence. There was only one working day left within which BNZ could alter its submissions, and it was in practice too late for it to do so. Accordingly, BNZ sought directions from the Court, which allowed it additional time to prepare supplementary submissions. As a result BNZ filed two sets of submissions – first a synopsis in relation to the breach of mandate cause of action on 28 July 2015, and secondly, a supplementary synopsis in relation to the breach of fiduciary duty and negligence causes of action on 3 August 2015. Both sets of submissions were reasonable and necessary, and the fact that BNZ was required to file two sets of submissions was attributable only to Crummer Trustees’ delay in filing the amended statement of claim.
[14] Crummer Trustees is on stronger ground when it protests that BNZ is seeking costs at the rate of $2,230 per day for all steps taken in the summary judgment/strike out application. As Mr Black, on Crummer Trustees behalf, points out, the daily rate was increased as from 1 July 2015 by r 19 of the High Court Amendment Rules
2015. Any items claimed which occurred prior to that date should be assessed at the old scale - $1,990 per day. Subject to that exception, I approve schedule 1 attached to the BNZ’s costs memorandum.
[15] I now turn to the discovery application. That application was successfully resisted by the BNZ. However it seeks not only 2B costs, but also an uplift pursuant to r 14.6. It argues that it was unnecessary for Crummer Trustees to file the
application, given that BNZ’s application for summary judgment proceeded on the basis that summary judgment/strike out could be given without the need for discovery. Further it argues that Crummer Trustees took advantage of the discovery application to file further evidence in relation to the summary judgment/strike out application, despite being out of time to do so. It also says that the application was nothing more or less than a fishing expedition.
[16] Crummer Trustees argues that costs on the discovery application should not be granted to BNZ, or discounted, for a number of reasons. Relevantly, it argues that the discovery application was an inherent component of the summary judgment application which BNZ did not succeed on. It says that arguments about discovery did not take any substantial time at the hearing. It disagrees that it took the opportunity to file further evidence in relation to the summary judgment/strike out application out of time.
[17] In my view, BNZ is entitled to its costs in successfully resisting Crummer Trustees’ application for discovery. It is not however entitled to an increase or uplift in those costs. I am not persuaded that Crummer Trustees’ conduct in applying for discovery contributed either unnecessarily, or to any great extent, to the time or expense of the hearing of the interlocutory applications, or that Crummer Trustees’ application was mischievous. Had the application for strike out failed, it would have been necessary to deal with the discovery application. I do not consider that Crummer Trustees acted unreasonably in seeking discovery.
[18] I do however consider, contrary to Crummer Trustees’ submission, that BNZ is entitled to claim costs for its appearance at the mentions hearing held in relation to the discovery application. That mentions hearing was convened at Crummer Trustees’ request. Further, costs follow the success or otherwise of an application as a whole, and not the individual steps taken in the proceeding.
[19] I approve the costs set out in schedule 2 under the heading ‘Discovery
Application – 2B Costs’.
[20] There does not appear to be any dispute in relation to the disbursements claimed by the BNZ, and I approve the same in the sum of $1,158.
[21] Counsel should be able to finalise the costs payable with the benefit of this judgment. Any dispute is to be referred to the Registrar.
Wylie J
Solicitors:
Craig, Griffin & Lord, Auckland for Plaintiff
Buddle Findlay, Wellington for First Defendant
J K Hamilton, Tauranga for Second to Sixth Defendants
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