EA v Rennie Cox Lawyers
[2024] NZHC 1417
•31 May 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-000861
CIV-2023-404-000870 [2024] NZHC 1417
BETWEEN EA
Appellant
AND
RENNIE COX LAYWERS
Respondent
Hearing: On the papers Appearances:
RJ Hollyman KC for the Appellant (Defendant)
SP Bryers for the Respondent and Cross-Appellant (Plaintiff)
Judgment:
31 May 2024
COSTS JUDGMENT OF BECROFT J
This judgment was delivered by me on 31 May 2024 at 11 am Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors/Counsel:
Friedlander & Co Ltd, Auckland Rennie Cox Lawyers, Auckland
RJ Hollyman KC, Auckland S Bryers, Auckland
EA v RENNIE COX LAYWERS [2024] NZHC 1417 [31 May 2024]
The history of the proceeding
[1] Behind this costs application sits a substantial, if not enormous, litigation history.
[2] On 29 March 2012, Rennie Cox filed a claim in the North Shore District Court to recover unpaid barrister’s fees of $95,738.51 from Ms EA. Since 2012, Ms EA has repeatedly tried to have the proceedings struck out on technical and/or procedural grounds. At least 15 judgments have been issued across all levels of the courts. In fairness to Ms EA, I record that some of these proceedings related to an unsatisfactory judgment by default that was obtained by Rennie Cox and was subsequently set side as a result of her application.
[3] The consistent theme in these proceedings is the persistent pursuit of (often fruitless) interlocutory applications of a procedural nature. That comes at the expense of judicial time and resources, not to mention the cost being incurred by the parties. And still the substantive claim remains unresolved. That is despite the Court of Appeal’s insistence in 2021 that “the proceeding should be heard and determined on its merits in the District Court without further delay.”1 Judge Sinclair echoed that concern in 2022 when she said, it is “now imperative that this matter gets on for hearing without further delay as was envisaged by the Court of Appeal in December 2021.”2
My decision on the two appeals
[4] On 24 November 2023, I delivered my judgment in this matter. In that judgment I dismissed Ms EA’s two appeals against interlocutory decisions made in the District Court. I found that both appeals were without merit.
[5] The first appeal, amongst other things, concerned whether Rennie Cox properly and timeously filed and served a statement of claim, as directed by the Court of Appeal, given it was filed using the wrong email address for the North Short District Court. The email address used was monitored by the North Shore Registry, and
1 Rennie Cox Lawyers v EA [2021] NZCA 648 at [3].
2 Rennie Cox Lawyers v EA [2022] NZDC 5499 at [33].
opposing counsel and the instructing solicitor did receive a copy of the documents. I concluded that the email used did not constitute a “fatal defect” in the filing of the statement of claim; and even if it did, r 1.10 of the District Court Rules 2009 would cure that irregularity.
[6] The second appeal was against the decision of Judge Sinclair refusing to strike out the statement of claim and to permanently stay the proceedings. I concluded the the Judge’s decision was impeccable and without flaw.
[7] In my judgment I observed that Ms EA came perilously close to an award of indemnity costs against her. The technical arguments (and in many cases the microscopically technical arguments) advanced on her behalf were without merit.
Costs on the two appeals
[8] Unfortunately, but perhaps unsurprisingly given the history of this matter, the parties have been unable to agree on costs.
Respondent’s submissions
[9] Counsel for Rennie Cox, Mr Bryers, seeks an award of costs in the respondent’s favour. He says that a copy of the respondent’s calculation of scale costs was sent to the appellant’s lawyers on 4 December 2023 accompanied by a without prejudice proposal for settlement of the costs issue. It is said that no response was received.
[10]The respondent calculated 2B scale costs at $19,120.00 with disbursements of
$647.79,3 totalling $19,767.79.
[11] The respondent seeks an uplift on scale costs pursuant to r 14.6(3) of the High Court Rules 2016. The respondent says that increased costs are warranted on the basis that the grounds of appeal were weak and Ms EA applications and subsequent appeal were “prosecuted in defiance of the Court of Appeal’s instruction in 2021” that the
3 The disbursements include the filing fee of the cross appeal, the sealing fee for the judgment and a courier fee for service.
proceeding should be heard and determined without delay. The respondent says that Ms EA has persistently pursued procedural arguments of a highly technical nature to prevent a hearing of the case on its merits. Mr Bryers submits that the instant appeals come very close to the sort of vexatious, frivolous, improper, or unnecessary conduct that would justify an award of costs on an indemnity basis.
Appellant’s submissions
[12] Counsel for Ms EA, Mr Hollyman KC and Mr Friedlander, take issue with the respondent’s calculation of scale costs. They maintain that scale costs would total
$14,930. That excludes the following two steps, included by the respondent:
(a)Preparing the case on appeal: counsel say that the case was prepared by the appellant without any input from the respondent.
(b)The commencement of a response to Ms EA’s appeals. Counsel submit that the High Court Rules only provide for the costs of a respondent having filed a notice of cross-appeal in these circumstances.
[13] Counsel also submit that there is no basis for an uplift. First, they say there is nothing to show that the time required substantially exceeded the time allowed under band B. And second, they say that Ms EA did not act frivolously.
[14] Ms EA is of the view that there are grounds for reducing costs or allowing no costs against her, or in fact, for awarding costs against Rennie Cox.
[15] Ms EA’s counsel submits that costs are not an opportunity to revisit earlier decisions. Counsel argue that it is “simplistic” to attribute the matter’s history to Ms EA and it is “telling that [Rennie Cox] did not respond to EA’s invitation to settle the matter before progressing either appeal”.4
[16] On balance, the appellant says that increased costs are not justified and there are good grounds for letting costs lie where they fall.
4 I accept this was a form of Calderbank offer.
Further submissions
[17] On 18 January 2024, the respondent sought leave to respond to two matters raised in the appellant’s submissions to “ensure the Court was not misled” on the issues of the respondent’s claim for the step of preparing the case on appeal, and the Calderbank offer referred to by the appellant.
[18] As to the case on appeal issue, Mr Bryers explains that on the morning of Thursday 13 July 2023, he received a draft list of documents that the appellant proposed to include in the case on appeal. That list contained some 117 items. The appellant’s lawyer requested a response by 5:00 pm that day. Mr Bryers emailed in reply that he would respond by 5:00 pm the following Tuesday due to his pre-existing commitments (Monday was a public holiday)—and he did so. His comments were not accepted by the appellant’s lawyers, and accordingly he prepared a supplementary case on appeal. In these circumstances, the respondent submits it is appropriate for costs to be awarded in respect of the step of preparing the case on appeal.
[19] Turning to the issue of the Calderbank offer, Mr Bryers says that he had not seen the email making the offer prior to receiving counsel’s submissions. Upon further investigation, it appears that the offer was sent to the address for Rennie Cox’s reception (and it was not brought to the attention of Mr Bryers or the instructing solicitor). Mr Bryers also confirms that had the offer been duly received it would not have been accepted. However, instructions would have been obtained and a counteroffer would have been likely. Accordingly, Mr Bryers submits that the offer has no relevance to the costs issue.
[20] Counsel for Ms EA say that the respondent’s request for leave to make further submissions is not warranted because the memorandum does not evince any mistakes by Ms EA. Instead, counsel categorise the submissions as attempting to “explain away the respondent’s oversights with more evidence from the bar.” In the event that the Court is minded to read the submissions, Ms EA clarifies the following:
(a)Mr Bryers did not assist with the preparation of the case on appeal and “perusing or commenting” on a draft list and tendering a supplementary case do not amount to preparing the case.
(b)The Calderbank offer was sent to the email address listed as the address for service in the proceeding. Counsel invite the Court to consider that the letter meant that settlement was possible (although it did not eventuate).
[21]I record that I accept and have considered all the further submissions.
Decision
[22] As in the substantive appeal, there is implacable disagreement on the issue of costs and a descent into highly detailed arguments that I would have hoped could have been resolved by negotiation and compromise. As that has not been the case, I set out my decision.
[23] I remind myself that while costs are at the discretion of the Court,5 the legislative regime provides guidance on the exercise of that discretion.
[24] The normal principle that costs follow the event applies in this case. The starting point should be costs on a 2B scale in favour of Rennie Cox—being the successful party on appeal.
[25] I note that the parties are not agreed on the steps of preparing the case on appeal and commencing a response to the appeals.
[26] In relation to the step of preparing the case on appeal, I propose to award half of the costs claimed for this step to the respondent. That award recognises the time Mr Bryers spent responding to the appellant’s draft list, and then subsequently preparing the supplementary materials. I can go no further given the factual disagreement between counsel.
[27] I have considered the appellant’s opposition to the steps of commencing a response to the appeals. I have concluded that there is nothing in it. This Court has previously clarified that this step exists to allow a respondent to recover for the time
5 High Court Rules 2016, r 14.1(2).
taken to review the decision under appeal, assess the notice of appeal, and consider the merits of the appeal. 6 Accordingly, the respondent is plainly entitled to costs on this step.
[28] Turning to the relevance of the Calderbank offer, I cannot help but observe that this particular point of debate arises from yet another wayward email. The letter dated 31 May 2023 was sent by Mr Friedlander via email to [email protected]. I understand that this address is associated with the firm’s reception. The relevant exert reads:
Our client does not wish to be embroiled in the litigation and would like to move forward. Without prejudice to the position that she is not liable, was entitled to actual costs, and has already paid more than what she can recover because Mr M did not particularise his fee, she would consider agreeing to discontinue both proceedings with no issue as to costs.
We invite you to consider this as a means to finally conclude all matters before any more costs are incurred.
[29] I accept Mr Bryers’ assurance that the offer would not have been accepted. Given Ms EA was not the successful party on appeal, I consider that this offer is of limited relevance to the issue of costs. I put it to one side.
[30] On the face of it this is a case where a costs award could significantly exceed the scale. I say that, given the history and the clear direction from the Court of Appeal that the matter proceeds to substantive hearing rather than being continually derailed by technical side issues.7 I also reiterate my comments from the substantive judgment that, these appeals raised “yet more technical and entirely procedural arguments” which in fairness would have been none the worse for being technical if they were correct. Instead, they were devoid of merit.8
[31] In this case, I propose to approve costs in excess of scale by what I consider to be a nominal amount, being 10 per cent. That increase reflects the appellant’s pursuit
6 QBE Insurance (International) Ltd v Steward Motorsports European Ltd [2014] NZHC 886, (2014) 22 PRNZ 117. Justice van Bohemen also adopted Asher J’s reasoning in Body Corporate 199380 v Cook [2018] NZHC 2356 at [14]–[15].
7 Rennie Cox Lawyers v EA, above n 1.
8 EA v Rennie Cox Lawyers [2023] NZHC 3370 at [7].
of a meritless technical procedural skirmish at the expense of the just, speedy, and inexpensive determination of the substantive claim.
[32] I go no further than a 10 per cent increase because I wish to avoid a situation where costs itself becomes a further litigated issue between the parties. The parties should now focus on resolving the substantive matters rather than again being derailed in any further arguments regarding costs.
[33] In short, an even higher award might have been well and truly justified. But on a purely pragmatic basis, I limit the increase to 10 per cent with the strong enjoinder to the parties that as soon as possible the substantive issues must now be resolved once and for all.
[34] Accordingly, Ms EA is liable to Rennie Cox for costs of $17,925.00 uplifted by 10 per cent to $19,717.50 plus disbursements of $647.79.
Becroft J
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