DGL Manufacturing Ltd v Simmonds

[2022] NZHC 1434

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-167

[2022] NZHC 1434

BETWEEN

DGL MANUFACTURING LIMITED

(formerly CHEMPRO NZ LIMITED) Plaintiff and First Counterclaim Defendant

AND

RODNEY WAYNE SIMMONDS

Defendant and Counterclaim Plaintiff

SIMON HENRY

Second Counterclaim Defendant

Hearing:	On the papers
Counsel / Parties:	R B Hucker for the Defendant and Counterclaim Plaintiff G A Cooper for the Second Counterclaim Defendant
Judgment:	17 June 2022

JUDGMENT OF GAULT J

(Costs)

This judgment was delivered by me on 17 June 2022 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors:

Mr R B Hucker, Hucker Associates, Auckland Mr G A Cooper, Cavell Leitch, Christchurch

DGL MANUFACTURING LTD v SIMMONDS [2022] NZHC 1434 [17 June 2022]

[1]    The defendant and counterclaim plaintiff, Mr Simmonds, seeks costs following the adjournment of an eight day trial scheduled to commence on 7 March 2022.1   The matter was referred to me as a subsequent Duty Judge to deal with the issue on the papers.

[2]    Mr Simmonds seeks 2B scale costs in relation to responding to the adjournment application and preparing a costs memorandum, and wasted costs of trial preparation, totalling $14,041.25 plus disbursements of $6,210.

[3]    The second counterclaim defendant, Mr Henry, opposes the application for wasted costs and submits that costs on the adjournment application should be reserved and dealt with by the trial Judge.

Adjournment application

[4]The trial date was allocated on 19 November 2020.

[5]Mr Henry applied for the adjournment on 4 February 2022 on two grounds:

(a)he was in Australia and would be unable to return to New Zealand until 7 March 2022, at  which  point  he  would  be  required to undertake 10 days in self-isolation in accordance with Government COVID-19 announcements; and

(b)an expert engaged by the plaintiff/first counterclaim defendant (DGL) had not been able  to  complete  his  expert  report  in  response  to  Mr Simmonds’ expert’s brief of evidence.

[6]    Justice Campbell’s minute of 10 February 2022 records that Mr Hucker, for Mr Simmonds, advised that, given  the  first  ground  set  out  in  the  application,  Mr Simmonds abided the decision of the Court. He did not accept the second ground.

1      Minute of Campbell J dated 10 February 2022.

[7]    Without expressing any view on the second ground, Campbell J adjourned the trial on the basis that DGL and Mr Henry would be prejudiced if Mr Henry were in self-isolation during the trial. He reserved leave to Mr Simmonds to file and serve a memorandum seeking wasted costs on the adjournment.

[8]    Mr Hucker submits that the adjournment was because Mr Henry voluntarily left New Zealand in mid-November 2021. Mr Hucker submits the trial date was known at the time and the risk of not being able to return to New Zealand for trial preparation and the trial was a risk that must also have been known to, and accepted by, Mr Henry but that risk  was  not  known  to, nor  accepted  by,  Mr  Simmonds. Mr Hucker says Mr Henry did not raise the possibility of not being able to attend the trial until 19 January 2022.

[9]    Mr Cooper, for Mr Henry, resisted an award of costs by reference to both grounds for adjournment, not only the basis relied on by Campbell J. On this costs application, I decline to engage on whether the adjournment may have been granted on the separate basis of late disclosure by Mr Simmonds.

Costs of adjournment application

[10]   Mr Simmonds seeks 2B costs of $3,465.50 in relation to the adjournment application. The application was opposed in respect of the second ground and an affidavit was filed. As indicated, Campbell J did not express any view on that ground. In relation to the first ground, Mr Simmonds abided but Mr Hucker did submit that Mr Henry voluntarily departed New Zealand on 17 November 2021 and must have known the risk. In the event, the adjournment was granted.

[11]   Costs on an opposed interlocutory application must be fixed when the application is determined unless there are special reasons to the contrary. I do not accept there are special reasons here such that costs on the adjournment application should be reserved and dealt with by the trial Judge.

[12]   The general principle is that costs follow the event, including on interlocutory applications. The position is different where an adjournment is the result of an indulgence, such as the grant of leave to adduce further evidence. However, this

should not be conflated with an application for wasted costs in relation to a vacated fixture, which I address below.

[13]   Here, the adjournment was due to Mr Henry’s absence from New Zealand and his inability to return due to changing COVID-19 border arrangements. Mr Hucker submits that Mr Henry’s actions in leaving the country for business reasons represented a significant risk that he must have taken with full knowledge that he may encounter difficulties returning to New Zealand, meaning that as a result the trial may be required to be adjourned. The limited affidavit evidence does not lead me to draw that  inference.  Mr Henry’s  counsel  also  raised  the  issue  with  the  Court  and  Mr Simmonds’ counsel on 19 January, before the application was filed on 4 February. While Mr Henry could have raised the issue earlier in January when he arranged a flight from Australia back to New Zealand via Dubai, the parties share responsibility for broadening the scope of the adjournment application, which was ultimately granted without criticism of Mr Henry. The adjournment was not an indulgence to Mr Henry in  the  sense  indicated warranting an  award of  costs against  the  party  applying.   I consider the costs of the application should lie where they fall.

Wasted costs

[14]   Mr Simmonds seeks wasted costs of $10,575.75 plus $6,210 calculated for additional expert work.

[15]   The Court has jurisdiction to make an order for wasted costs against a party whose default causes a fixture to be vacated. As Venning J said in Jeffreys v Morgenstern,2 default that leads to vacation of fixtures leads to inconvenience and cost not only to the other parties to that proceeding but to other parties awaiting fixtures in the Court. Fixtures allocated by this Court are commitments of limited judicial and court resources. Time is booked for the case. Other parties who might otherwise have had their cases allocated hearing time are disadvantaged by default which leads to late vacation of fixtures. Where the Court is required to consider wasted costs, it involves a matter of impression and best judgment of the Court at the time.3

2      Jeffreys v Morgenstern [2013] NZHC 1361 at [31].

3      At [34], citing Simpson v Hubbard [2012] NZHC 3020.

[16]   The first issue is whether default caused the fixture to be vacated. I do not consider that Mr Henry’s decision to travel to Australia for business in November 2021, intending to return when he understood MIQ spots would become available from 17 January 2022, amounts to a default warranting an award for wasted costs. As indicated, the adjournment application was granted without criticism of Mr Henry. This is not a case involving breach of Court timetable or other orders or a belated application expanding the scope of the trial or other indulgence which results in prejudice to another party necessitating an adjournment. It is unfortunate for the parties, the Court and other litigants that the fixture had to be vacated, as others have been due to COVID-19. I accept the parties will have incurred trial preparation costs, some of which will need to be incurred again for the adjourned trial. But this is not a case where a party’s default has caused the fixture to be vacated.

[17]   It follows that Mr Simmonds is not entitled to a wasted costs award for trial preparation by his counsel or expert.

Costs on costs

[18]   Mr Simmonds also seeks $1,434 for preparation of a costs memorandum. While the Court has power to award costs in relation to costs matters, costs are often dealt with by way of exchanging memoranda and the Court is reluctant to award costs on costs.4 In any event, Mr Simmonds is not entitled to costs.

Result

[19]I decline to award costs.

Gault J

4      Jeffreys v Morgenstern [2013] NZHC 1361 at [40]; Barry Park Investments Ltd v Body Corporate Number 95388 [2016] NZHC 1527 at [25]; Epsom Woods Ltd v Waitakere Farms Ltd [2020] NZHC 3137 at [4]; and Norrie v Crown Range Holdings Ltd [2022] NZHC 898 at [28].