EA v Rennie Cox Lawyers

[2018] NZHC 3320

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-1122

[2018] NZHC 3320

BETWEEN

EA

Appellant

AND

RENNIE COX LAWYERS

Respondent

Hearing:	On the papers
Appearances:	R J Hollyman for Appellant S P Bryers for Respondent
Judgment:	14 December 2018

JUDGMENT OF LANG J

[re costs]

This judgment was delivered by me on14 December 2018 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

EA v RENNIE COX LAWYERS [2018] NZHC 3320 [14 December 2018]

[1]    On 24 February 2017, I issued a judgment dealing with the issue of costs in relation to the unsuccessful appeal to this Court from the judgment of the District Court.1

[2]    I directed that costs should lie where they fall in relation to steps taken up to the first hearing  on  2 August  2016,  and  in  relation  to  the  second  hearing  on  25 November 2016. I awarded the appellant costs in relation to the hearing that commenced on 2 August 2016 and had to be aborted after counsel then appearing for the respondent accepted he was in a position of conflict. I awarded the appellant costs on a category 2B basis in respect of a half-day hearing together with a further day to reflect wasted preparation.

[3]    I subsequently granted EA leave to appeal to the Court of Appeal2 and her appeal was ultimately successful.3 The Court of Appeal directed that EA was entitled to costs in the High Court on her appeal, with costs to be fixed by this Court.4

[4]    The parties have again been unable to reach agreement regarding costs in this Court. I am therefore required to determine that issue on the basis of the memoranda filed.

The arguments

[5]    For the appellant, Mr Hollyman submits that EA should receive an award of increased costs to reflect the fact that EA eventually succeeded on all issues and the respondent adopted a stance that was not reasonable in all the circumstances. He contends this will enable EA to be restored to the position she would have been in but for the respondent’s conduct. On Mr Hollyman’s calculations this will result in an

1      EA v Rennie Cox Lawyers [2017] NZHC 260.

2      EA v Rennie Cox Lawyers [2017] NZHC 770.

3      EA v Rennie Cox Lawyers [2018] NZCA 33, [2018] 3 NZLR 202.

4      EA v Rennie Cox Lawyers, above n 3, at [51].

award of costs on a category 2B basis of $35,011. An uplift of 50 per cent would result in an award of costs in the sum of $52,516.50.

[6]    Mr Bryers for the respondent opposes any award of increased costs. He agrees that costs are appropriately calculated on a category 2B basis but submits the amounts claimed by EA in relation to the substantive appeal and the application for leave to the Court of Appeal appear to be extraordinarily high. He also questions whether EA should receive an award of costs in relation to the application for leave to appeal to the Court of Appeal given the fact that the respondent abided the decision of the Court on that application.

[7]    As Mr Bryers points out, the amount claimed seems very large for a civil appeal of no particular complexity that was ultimately completed within a day. The schedule prepared by Mr Hollyman shows, however, that the bulk of the claim is made up of attendances that relate to interlocutory issues or issues that arose after I delivered my substantive judgment.

Decision

[8]    I am satisfied that EA is entitled to costs on a category 2B basis in respect of all steps taken in relation to both the appeal and the application for leave to appeal.

[9]    I do not propose to alter the award I made in relation to the aborted hearing on 2 August 2016. Costs for that hearing will be fixed at one half day for the hearing together with one day for wasted preparation. I presume the latter is what Mr Hollyman refers to when he says EA received increased costs in my original judgment. I do not, however, view that award as being one of increased costs. It merely reflects the fact that EA would undoubtedly have suffered some wasted costs because her counsel was required to prepare  again  for  the  second  hearing  that  occurred  on 25 November 2016.

[10]   EA was required to apply for leave to appeal against my substantive judgment and her appeal was ultimately successful. EA was therefore the successful party in relation to the application for leave to appeal even though the respondent abided the decision of the Court in relation to the application for leave. The High Court Rules

2016 apply to that application and not the Court of Appeal (Civil) Rules 2005 as suggested by Mr Bryers. As Mr Hollyman points out, the latter apply to cases in which the Court of Appeal is required to determine an application for leave to appeal.

[11]   I do not consider, however, that an award of increased costs is justified. Costs in this context are governed by Part 14 of the High Court Rules 2016. The circumstances in which an award of increased costs may be made are set out in r 14.6, which relevantly provides:

14.6 Increased costs and indemnity costs

(1)Despite rules 14.2 to 14.5, the court may make an order—

(a)      increasing costs otherwise payable under those rules (increased costs); or

(b)      that the costs payable are the actual costs, disbursements, and witness expenses reasonably incurred by a party (indemnity costs).

(2)The court may make the order at any stage of a proceeding and in relation to any step in it.

(3)The court may order a party to pay increased costs if—

(a)      the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or

(b)      the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)failing to comply with these rules or with a direction of the court; or

(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii)failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

(iv)failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or

(v)failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule

14.10 or some other offer to settle or dispose of the proceeding; or

(c)      the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or

(d)      some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.

…

[12]   Although the respondent ultimately failed, I cannot say that it advanced arguments that completely lacked merit or that any of the other grounds set out in r 14.6(3) have been established. In particular, I do not consider increased costs should be payable under r 14.6(3)(d). The case relied upon by Mr Hollyman in this context, Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd,5 was a decision made under Australian rules of civil procedure. I do not consider it to be a helpful precedent for that reason. I note also that the Court of Appeal directed in the present case that costs were to be payable for a standard appeal. It did not see fit to make an award of increased costs.

[13]   The problem that arose in this case related to the steps taken by the respondent when it obtained judgment against EA in the District Court. It did not extend to the manner in which the respondent conducted the present appeal other than in relation to its choice of counsel at the hearing on 2 August 2016. I consider the orders I have made in relation to that hearing adequately compensate EA in relation to that issue. An award of increased costs for the remaining steps taken in this Court would in my view be inappropriate.

[14]   EA is therefore entitled to costs on a category 2B basis in respect of all steps taken in relation to the appeal in this Court, including the application for leave to appeal. She is also entitled to the costs originally awarded in relation to the hearing on 2 August 2016, as well as disbursements to be fixed by the Registrar.

5      Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd [2009] WASC 10.

[15]   I do not propose to deal with the issue of quantum at this stage. If counsel cannot reach agreement regarding that issue they should refer disputed issues in the first instance to the Registrar (Mr Tony Mortimer) setting out their respective positions in relation to those issues. If either party does not accept the Registrar’s decision on any issue it should be referred to me for determination.

Lang J

Solicitors:

Friedlander & Co Ltd, Auckland Rennie Cox Lawyers, Auckland R J Hollyman, Auckland

S P Bryers, Auckland