EBR Holdings Ltd (in liq) v McLaren Guise Associates Ltd

[2017] NZHC 1008

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2008 [2017] NZHC 1008

BETWEEN

EBR HOLDINGS LTD (IN

LIQUIDATION) Plaintiff

AND

MCLAREN GUISE ASSOCIATES LTD First Defendant

NIGEL DALE HARRISON Second Defendant

Hearing:	(On the papers)
Counsel:	P C Murray and K H Morrison for Plaintiff J N Bierre and L G Cox for Defendants
Judgment:	17 May 2017

JUDGMENT OF BREWER J

Solicitors:

Meredith Connell (Auckland) for Plaintiff

Morgan Coakle (Auckland) for Defendants

EBR HOLDINGS LTD (IN LIQUIDATION) v MCLAREN GUISE ASSOCIATES LTD [2017] NZHC 1008 [17

May 2017]

Introduction

[1]      This judgment deals with the aftermath of a Court of Appeal decision, namely who should meet the costs of the High Court decisions which preceded it.

[2]      In  my  judgment  delivered  on  21 August  2015,1   I  partially  allowed  an application for review of a decision of Associate Judge Christiansen (together “the High Court decisions”).2   The Associate Judge had refused to strike-out three of the plaintiff’s causes of action.  On review, I struck out two of those causes of action.

[3]      On 27 April 2016, I awarded the defendants costs at 50 per cent on a 2B basis in respect of both High Court decisions.3

[4]      The Court of Appeal subsequently set aside my judgment.4    It held that the defendants must pay the plaintiff costs for a standard appeal on a band A basis and usual disbursements.5    No order was made in relation to the High Court decisions. The fact that no order was made is not determinative.  Issues of costs are commonly reconsidered in the High Court following a successful appeal.6

[5]      Here, the plaintiff claims costs on the High Court decisions and the current application.   It is well-established that costs may be awarded in respect of an application for costs.7

[6]      The defendants submit that my initial decision on costs should be maintained.

The law

[7]      The general rule is that the party who fails with respect to a proceeding should pay costs to the successful party.8     The defendants were, therefore, prima

facie entitled to costs relating to the High Court decisions.

1      EBR Holdings Ltd (in liq) v McLaren Guise Associates Ltd [2015] NZHC 1996, [2016] 2 NZLR

96.

2      EBR Holdings Ltd (in liq) v McLaren Guise Associates Ltd [2015] NZHC 607.

3      EBR Holdings Ltd (in liq) v McLaren Guise Associates Ltd [2016] NZHC 803 at [17].

4      EBR Holdings Ltd (in liq) v McLaren Guise Associates Ltd [2016] NZCA 622.

5 At [57].

6      Americhip, Inc v Dean [2015] NZHC 1871 at [25].

7      Body Corporate Administration Ltd v Mehta (No 4) [2013] NZHC 213 at [85].

8      High Court Rules, r 14.2(a)

[8]      Nevertheless, r 14.8(2) of the HCR gives me jurisdiction to reconsider my costs order.  Costs remain at the discretion of the Court.9

[9]      There are no guidelines as to how costs should be re-assessed by a Court where its substantive ruling has been overturned on appeal.

[10]     The general principle is that applications ought to be treated as if the party who successfully appealed had been successful initially.10   But that general principle does not remove the Court’s overall discretion to award costs in the overall interests of justice.

The issues

[11]     In this case there are two issues:

(a)       Was the plaintiff the successful party on appeal?

(b)      If so, is there a good reason to depart from the general principle?

Successful party

[12]     The  plaintiff  submits  that,  as  a  consequence  of  the  Court  of  Appeal’s decision, there is ‘no doubt’ it was the successful party.

[13]     I agree.  The plaintiff wanted the matter to proceed to trial with all causes of action intact.  That is the result of the Court of Appeal’s decision.  The plaintiff was successful in opposing the defendants’ application to Associate Judge Christiansen for strike-out and, now, it is successful in opposing the defendants’ application to this Court for review.

Good reason

[14]     The plaintiff submits that there is no good reason to depart from the general principle that the successful party on appeal should be entitled to costs on the High

9      High Court Rules, r 14.1.

10     LSG Sky Chefs New Zealand Ltd v Pacific Flight Catering Ltd [2015] NZHC 685 at [30]. See also Haronga v Waitangi Tribunal [2011] NZCA 670; Americhip, Inc v Dean, above n 6, at [26].

Court decisions.  It submits that this is not a case where there has been mixed results on appeal.  The plaintiff consistently argued throughout each proceeding that the law on expert witness immunity requires a trial to ascertain its existence and scope.

[15]     The defendants submit to the contrary that there are good reasons to depart from the principle.  They submit they did not lose the appeal on the law, in that the legal findings of the High Court on the pleaded facts were not overturned.  They also point out that the Court of Appeal accepted many of their submissions surrounding United Kingdom developments on expert witness immunity.11

[16]     They further submit that the main reasons why the Court of Appeal found the causes of action unsuitable for strikeout were not put before the High Court.12

[17]     The defendants cite the decision of Commissioner of Inland Revenue v United Fisheries Ltd (No 2) as providing an example where there was a good reason to depart from the general principle.13    In my view, however, this case does not assist them.  In that case, the High Court allowed the appeal but did not make an order for costs because the Commissioner had presented a different argument from that presented to the Taxation Review Authority.

[18]     In this case, my ruling was that, following New Zealand Defence Force v Berryman14, expert witness immunity in New Zealand existed but was confined to evidence given in Court or its necessary preliminaries.15   I struck out two causes of action on that basis.

[19]     The Court of Appeal disagreed with my judgment of the state of law.  It held

that the law in New Zealand on expert witness immunity is in an “unsettled state”.16

It also held that Berryman “did not directly address the specific issue of expert

witness immunity”.17    The Court of Appeal found that I made an error of law in striking out two of the plaintiff’s three causes of action.  The legal findings I made in

11     EBR Holdings Ltd (in liq), above n 4, at [27].

12     At [43], [49] and [55].

13     Commissioner of Inland Revenue v United Fisheries Ltd (No 2) (1983) 6 NZTC 61,572 (HC).

14     New Zealand Defence Force v Berryman [2008] NZCA 392 at [68].

15 At [88].

a strike-out context were thus overturned.  As the defendants had relied upon expert witness immunity in their strike-out application on those causes of action, they lost the appeal.

[20]     I do not accept the submission that the Court of Appeal considered matters not before the High Court.   I considered the UK Supreme Court’s distinction in Jones v Kaney18 between ‘friendly’ and ‘adverse’ experts.19   I did not see it necessary to engage in an in-depth discussion of it, given my perception of New Zealand law on the issue.20

[21]     I accept that Christiansen AJ did not consider the distinction, but that alone is not a sufficient reason to justify departure from the general principle. The reality of the strike-out jurisdiction is that the defendants would either succeed in striking out the plaintiff’s causes of action or they would not.  The practical consequence of my decision being overturned is that the defendants have failed to achieve strike-out of any of the causes of action against them.

[22]     I will therefore give effect to the general principle.  The plaintiff is entitled to costs on the High Court decisions on a 2B basis.

[23]     The plaintiff is also entitled to 2B costs on the current application.

Orders

[24]     I order that:

(a)      The  defendants  are  to  pay  the  plaintiff ’s  costs  on  the  strike-out application before Christiansen AJ on a 2B basis.  I approve the sum calculated in the plaintiff ’s schedule, namely $5,572.

(b)      The  defendants  are  to  pay  the  plaintiff’s  costs  on  the  review

application before me.  This is on a 2B basis and I approve the sum

calculated in the plaintiff ’s schedule, namely $6,450.

18     Jones v Kaney [2011] UKSC 13, [2011] 2 AC 398.

(c)       The  defendants  are  to  pay  the  plaintiff ’s  costs  on  the  current

application, also on a 2B basis.   I approve the sum claimed by the plaintiff, namely $892.

Brewer J