DDL Investments Limited v McDonagh HC Auckland CIV 2010-404-3964

[2011] NZHC 1782

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-3964

BETWEEN  DDL INVESTMENTS LIMITED Plaintiff

ANDPATRICK MCDONAGH Defendant

ANDSTEPHEN JOHN DAVIES Third Party

Hearing:         15 December 2011

Appearances: No appearance

Judgment:      15 December 2011 at 10:41 AM

(ORAL) JUDGMENT OF ASSOCIATE JUDGE FAIRE [on costs]

Solicitors:           Daniel Overton & Goulding, PO Box 13 017, Onehunga

Thomas & Co, 3 Totara Avenue, Waitakere City 0600

Davies Law, PO Box 15 547, Waitakere 0640

DDL INVESTMENTS LIMITED V MCDONAGH HC AK CIV 2010-404-3964 15 December 2011

[1]      There was no appearance when this proceeding was called before me in chambers  list  on  15 December  2011  to  finalise  the  question  of  costs.    I  have, however, received memoranda from the plaintiff’s counsel and from the solicitor for the defendants.  The solicitor for the defendants has advised the court that he has no further instructions.

[2]      The  defendant  seeks  costs  consequent  upon  the  discontinuance  of  the proceeding by the plaintiff.

[3]      Rule 15.23 of the High Court Rules provides:

Costs

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[4]      The rule raises a presumption that a discontinuing party will be liable for costs: North Shore City Council v Local Government Commission[1], Kroma Colour Prints Ltd v Tridonicatco NZ Ltd.[2]      Generally, the court will not inquire into the merits of the case unless the answer is clear and obvious.

[1] North Shore City Council v Local Government Commission 9 PRNZ 182.

[2] Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973 at 975.

[5]      Once the above considerations are taken into account the matter is to be considered pursuant to the costs regime contained in Part 14 of the High Court Rules.

[6]      It is appropriate that I refer briefly to the approach which the court must take on an application for costs.  Rule 14.1 gives the Court a discretion to order costs in relation to a step taken in a proceeding.  That discretion is generally to be exercised in  accordance  with  the  specific  Rules  contained  in  rr 14.2-14.10:    Glaister  v

Amalgamated Dairies Ltd.[3]    In Mansfield Drycleaners Ltd v Quinny’s Drycleaning

[3] Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 at [19].

(Dentice Drycleaning Upper Hutt) Ltd it was said of the costs regime contained in what is now rr 14.2-14.10 that:[4]

[4] Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd

(2002) 16 PRNZ 662 (CA) at 668.

there is a strong implication that a Court is to apply the regime in the absence of some reason to the contrary

The test to be applied is entirely an objective and not a subjective one.   The only reference which  it is necessary to make towards actual costs is to be found in r 14.2(f), namely that an award of costs should not exceed the costs incurred by the party claiming the costs: Glaister v Amalgamated Dairies Ltd.[5]

[5] Glaister v Amalgamated Dairies Ltd, above n 1 at 610[14].

[7]      Rule 14.2 lists the principles applying to determination of costs. Subrule (a) affirms the principle that the losing party should pay the costs to the successful party. Subrule (b) requires that the costs reflect the complexity and significance of the proceedings and refers specifically, therefore, to the categorisation of a proceeding which is provided for in r 14.3.  Subrule (c) requires a consideration of each step for which costs are sought and an application of the daily rate having regard to the appropriate band which is to be applied after a consideration of r 14.5(2) and the Third Schedule to the High Court Rules.  Subrule (f) provides that an award of costs should not exceed the costs incurred by the party claiming costs.

[8]      The defendant has been granted legal aid in respect of these proceedings. Counsel advises that the costs that the defendant will have incurred, including disbursements, total $11,293.09.

[9]      Counsel has carried out a careful exercise applying Category 2 Band B in accordance with Schedules 2 and 3 of the High Court Rules.  That exercise would otherwise have justified an order for costs in the sum of $20,492.  I have reviewed the file, and indeed, Category 2 is the appropriate the category for the proceeding. Band B is appropriate for each step that has been undertaken.  However, the order

for costs must necessarily be restrained by r 14.2(f).

[10]     When I take all of the above matters into account, I reach the conclusion that the appropriate order for costs is that the plaintiff pay the defendant’s costs and disbursements totalling $11,293.09.

[11]     I order accordingly.

JA Faire

Associate Judge