Dunajtschik v Garnham - [2024] NZHC 1199

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-000159

[2024] NZHC 1199

BETWEEN
MARK DUNAJTSCHIK

First Plaintiff

DOROTHY MYRTLE SPOTSWOOD
Second Plaintiff

AND

MICHAEL ROBERT GARNHAM

First Defendant

BALLANTYNE BARKER HOLDINGS LIMITED
Second Defendant

MICHAEL BRIAN SPACKMAN in his

capacity as former trustee of the MIRO TRUST

Third Defendant

MGCG TRUSTEES LIMITED in its

capacity as current trustee of the MIRO TRUST

Fourth Defendant

Hearing: On the papers

Counsel:

R L Pinny and D Qiu for Plaintiffs J L Verbiesen for Defendants

Judgment:

15 May 2024

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

(Costs)

This judgment was delivered by me on 15 May 2024 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:

DUNAJTSCHIK v GARNHAM [2024] NZHC 1199 [15 May 2024]

[1] This judgment concerns an application for costs by the plaintiff, Mr Dunajtschik, on his successful applications for further discovery and an unless order against the first, second and fourth defendants.

[2] Associate Judge Skelton made a tailored discovery order on 15 August 2023 requiring the parties to file affidavits and exchange open documents by 10 October 2023.1 The defendants failed to comply with that order despite extensions to 1 December 2023 and then 15 December 2023. The first defendant, Mr Garnham, did file an affidavit of documents on 30 November 2023, but acknowledged the affidavit was incomplete. He said he expected to provide further discovery within 10 working days. He did not do so.

[3] Mr Dunajtschik’s application for particular discovery and an unless order was filed on 29 January 2024 in accordance with a direction of Associate Judge Skelton.

[4] In a judgment of 12 March 2024, I granted Mr Dunajtschik’s applications.2 I allowed counsel to file memoranda in relation to costs. Memoranda have been received.

[5] Mr Dunajtschik seeks increased costs on the applications on a scale 2B basis with a 50 per cent uplift, including costs in relation to judicial telephone conferences that predate the making of the applications but are said to have been necessary due to the defendants’ failure to comply with their discovery obligations.

[6] Mr Garnham does not oppose an award of scale costs being made in favour of Mr Dunajtschik but says increased costs are not warranted in principle or as to the quantum sought.

1 Dunajtschik v Garnham HC Wellington CIV-2022-485-159, 15 August 2023, Associate Judge Skelton (Minute).
2 Dunajtschik v Garnham [2024] NZHC 506.

Costs principles

[7] All matters of costs are discretionary,3 but the discretion must be exercised on a principled basis and having regard to the relevant provisions of the High Court Rules 2016.4

[8] The determination of costs, so far as possible, should be both predictable and expeditious.5

[9] The party that fails should pay the costs of the party that succeeds unless there are exceptional reasons to the contrary.6

[10] The amount of an award of costs is usually determined by an appropriate daily recovery rate to the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dunajtschik v Garnham

Details

AGLC: Dunajtschik v Garnham [2024] NZHC 1199
Case: [2024] NZHC 1199
Decision Date: 15 May 2024

CaseChat Overview and Summary

This case concerns an application for costs by the plaintiff, Mr Dunajtschik, on his successful applications for further discovery and an unless order against the first, second and fourth defendants. The defendants failed to comply with a tailored discovery order requiring them to file affidavits and exchange open documents by a certain date, despite being granted extensions. Mr Dunajtschik subsequently filed an application for particular discovery and an unless order, which was granted by the court.

The legal issues the court was required to decide included whether Mr Dunajtschik was entitled to increased costs on the applications on a scale 2B basis with a 50 per cent uplift, including costs in relation to judicial telephone conferences that predated the making of the applications but were said to have been necessary due to the defendants' failure to comply with their discovery obligations. The court considered the arguments advanced by Mr Garnham, one of the defendants, who did not oppose an award of scale costs being made in favour of Mr Dunajtschik but said increased costs were not warranted in principle or as to the quantum sought.

The court's reasoning and outcome was that there were good grounds for awarding Mr Dunajtschik increased costs under r 14.6(3)(i) and (ii) of the High Court Rules 2016. The defendants' default was serious and had the potential to put the trial in jeopardy. Even if the court was to accept the submission that Mr Garnham's supplemental affidavit complied with his discovery obligations, the defendants were by that date five months in default of the Court's tailored discovery order despite indulgences that had been extended to them. The court also did not accept the submission that costs should not be awarded for the judicial telephone conferences, as they were necessary because of the defendants' breach of the tailored discovery order. The court decided that the uplift should be 30 per cent on scale 2B costs.

The final orders were that the plaintiff is awarded costs against the first, second and fourth defendants on a category 2 band B basis of $10,994 with an uplift on scale costs of 30 per cent making a total of $14,292.20, along with any disbursements reasonably incurred as fixed by the Registrar.

Orders