Eight Mile Farms Limited v Bradley

[2020] NZHC 2860

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2020-419-51

[2020] NZHC 2860

BETWEEN

EIGHT MILE FARMS LIMITED

Plaintiff

AND

SHARON BRADLEY

First Defendant

ROSS MICHAEL ALLEMAN

Second Defendant

Hearing:

On the papers

Appearances:

M Ferrier for the Plaintiff

S Moore for the First Defendant
No appearance for the Second Defendant

Judgment:

30 October 2020

JUDGMENT NO.2 OF ASSOCIATE JUDGE SMITH – COSTS & INTEREST

This judgment was delivered by me on 30 October 2020 at 4.30pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

MinterEllisonRuddWatts, Wellington Jourdan Griffin, Auckland

Eight Mile Farms Ltd v Bradley [2020] NZHC 2860 [30 October 2020]

[1]    On 16 July 2020 I gave summary judgment for the plaintiff against the first defendant, in the total sum of $2,002,332.51. I also directed that the plaintiff was entitled to an inquiry under r 16.2 of the High Court Rules 2016. I gave certain preliminary directions for the conduct of the inquiry, and reserved leave to the plaintiff to file a memorandum within 30 working days proposing further steps to be taken in the conduct of the inquiry.

[2]    The first defendant did not oppose the summary judgment application. She entered an appearance dated 14 April 2020 indicating her non-opposition, but advising that she wished to be heard on the Court’s determinations on costs and interest.

[3]    I declined to enter summary judgment for some of the relief sought by the plaintiff, including a claim for a declaration that the first defendant holds on a constructive trust for the plaintiff, or is liable to account for, assets now or previously in her possession acquired directly or indirectly with the plaintiff’s money. I reserved leave to the plaintiff to apply by memorandum for any further order for delivery up or transfer to the plaintiff of specific assets, following the provision of copies of bank statements by the first defendant, or the completion of the inquiry thereafter.

[4]    I directed that counsel could file memoranda on the issues of interest and costs, and both parties have now filed memoranda addressing those issues. I now give judgment on the plaintiff’s claims for costs and interest.

The plaintiff’s costs and interest claims

[5]    For the plaintiff, Mr Ferrier asks for costs on a 2B basis, and disbursements, totalling $15,696.81. He also asks for judgment for interest in the sum of $557,701.90 to the date of judgment, plus further interest until the judgment debt (including interest) has been repaid in full.

Costs

[6]The plaintiff’s costs claim, calculated on a ‘2B’ basis,1 is as follows:

1      High Court Rules 2016, Schedules 2 and 3.

Scale Costs
Item in Schedule 3	Description	Daily recovery rate	Allocated days	Total
1	Commencement of proceedings by plaintiff	$2,390	3	$7,170.00
22	Filing interlocutory application for summary judgment (2 March 2020)	$2,390	0.6	$1,434.00
24	Preparation        of        written submissions (27 May 2020)	$2,390	1.5	$3,585.00
26	Appearance at mentions hearing or callover (16 July 2020)	$2,390	0.2	$478.00
11	Filing memorandum addressing status of related freezing order proceeding	$2,390	0.4	$956.00
29	Sealing judgment	$2,390	0.2	$478.00
Subtotal				$14,101.00
Disbursements (excluding GST)
Description
Court filing fee – statement of claim				$1,173.91
Airfares – Wellington to Hamilton return for summary judgment appearance				$378.42
Sealing fee				$43.48
Sub-total				$1,217.39
Total				$15,696.81

[7]    Mr Ferrier submits that the plaintiff was successful in the proceeding, and that costs should follow the event in the usual way in accordance with the principle encapsulated in r 14.2(1)(a). He submits that costs on a 2B basis are appropriate, as although the first defendant did not oppose the claim, the proceeding was necessary

as she had not responded to the plaintiff’s demand for repayment. Also, the onus remained on the plaintiff to show that Ms Bradley had no defence to the claim, notwithstanding the absence of any notice of opposition.

Interest

[8]    The plaintiff asks for interest under s 10 of the Money Claims Act 2016 (the Act). Under that section, an award of interest on every money judgment is mandatory. The section provides:

10       Mandatory award of interest

(1)In every money judgment, a court must award interest under this section as compensation for a delay in the payment of money.

(2)Subsection (1) does not apply if this Act expressly provides otherwise.

(3)If, after a proceeding for a money claim is commenced but before a money judgment is given, any amount is paid so that the entire amount due, except for interest, is paid, then (unless this Act expressly provides otherwise)—

(a)the party who had the money claim is still entitled to interest under this section; and

(b)the court must award interest under this section although the judgment requires no other payment to satisfy the liability of a party.

[9]    Under s 9(1) of the Act, interest must be awarded for the period that begins on the day on which the cause of action arose and ends on the day on which the judgment debt (including all interest payable under the Act) is paid in full.

[10]   Mr Ferrier submits that, in respect of each of the unlawful cash transfers made by the first defendant from the plaintiff’s bank account, the cause of action arose on the date of the transfer.

[11]   The plaintiff provided in support of its interest claim an affidavit of Mr Zachary Barber, setting out a schedule showing the calculation of the plaintiff’s interest claim (using the Ministry of Justice’s civil debt interest calculator, as required by s 12 of the Act).

[12]   In the event, the first defendant does not take issue with the calculation of interest under the Act, and it is unnecessary to refer further to Mr Barber’s affidavit.

The first defendant’s response

[13]Mr Moore filed a memorandum for the first defendant dated 8 September 2020.

Costs

[14]   Mr Moore accepts that Category 2 is the appropriate costs category, but he submits that some of the steps for which costs are claimed should be dealt with under Band A,2 as opposed to the Band B claim put forward for the plaintiff. Mr Moore assesses an appropriate award of costs to the plaintiff at $10,755, excluding disbursements.

[15]   Mr Moore refers in his submissions to various principles relating costs awards, as set out in r 14.2 of the High Court Rules. He then submits that a claim for disbursements is in fact a claim for indemnity costs, as defined in r 14.6(1)(b) of the Rules. Indemnity costs are awarded only in certain limited circumstances, which do not apply in this case.

[16]   Mr Moore accepts that costs in respect of the commencement of the proceeding by the plaintiff (Items 1 and 22 in the table at paragraph [6] above) are properly claimed on a 2B basis in the sums of $7,170 and $1,434. However after that point, he submits that due account should be taken of the fact that the summary judgment application was not opposed by the first defendant. He says that Band A is appropriate for all remaining steps in the proceeding that have been properly claimed.

[17]   Mr Moore submits that one such item has not been properly claimed. He challenges the plaintiff’s claim for $956 for filing the memorandum addressing the possible effect on the orders sought by the plaintiff, of certain freezing orders made in a related proceeding involving the parties (Item 11 in the table at paragraph [6]). He submits that the need to file that memorandum arose out of the plaintiff’s own failure to adequately explain (in its application for summary judgment) the position relating to the freezing orders in the other proceeding. Without appropriately identifying and

2      As set out in Schedule 3 to the High Court Rules.

explaining the effect of the concurrent proceeding, there was a risk that the Court would be misled.

[18]The other item which Mr Moore challenges is the claimed disbursement of

$378.42, being the cost of airfares for the plaintiff’s counsel’s travel from Wellington to Hamilton and return for the summary judgment appearance. Mr Moore submits that the plaintiff could have engaged a local agent, and it would have avoided those travel costs.

Interest

[19]   As indicated above, the first defendant consents to the manner in which the plaintiff has calculated its interest claim, and she does not dispute that interest is payable in accordance with Mr Barber’s affidavit and Mr Ferrier’s memorandum.

Discussion and conclusions

Disbursements

[20]   First, I do not think there is anything in Mr Moore’s argument that disbursements are, in effect, indemnity costs governed by r 14.6. Disbursements are separately covered by r 14.12 of the Rules, and they are routinely awarded (where they are justified) without reference to r 14.6.

[21]   In this case, there can be no debate about the Court filing fee and the judgment sealing fee, so the only disbursement in issue is the claim for $378.42 for counsel’s travel from Wellington to Hamilton for the hearing. I am satisfied that the travel claim is fully justified. Although the claim was not opposed, it will be apparent from my judgment given on 16 July 2020 that the claims relating to declarations of trust and for an inquiry, in particular, had elements of complexity about them. Also, the claim was substantial, being for a sum in excess of $2 million. The alternative of briefing local Hamilton counsel to deal with those issues was not, in my view, realistic. Hamilton counsel would have been obliged to spend far more than $378 worth of time to come up to speed on the matter. This item has been properly claimed.

[22] The plaintiff’s table reproduced at [6] above does not provide a correct total for disbursements. By my reckoning, the three amounts claimed add up to $1,595.81. There will be a disbursements award in the plaintiff’s favour for that sum.

Costs

[23]   There is no dispute over the first two items in the table at paragraph [6] above. Nor can there be any dispute over the $478 claimed for the appearance on 16 July 2020 or the $478 claimed for sealing the judgment. Those figures are applicable regardless of whether Band A or Band B is applied.

[24]   The argument, then, relates to the preparation of written submissions, for which the plaintiff has claimed 1.5 days. Mr Moore submits, applying Band A, that only one- half day should be allowed. He also submits that no costs should be awarded for the memorandum addressing the effect of the freezing orders made in the related proceeding.

[25]   I do not consider this is a case for the application of Band A. As the judgment shows, there were elements of complexity in some of the relief sought by the plaintiff, and the amount in issue was substantial. Notwithstanding the absence of any opposition, I accept that it was appropriate for the plaintiff to file full written submissions as it did.

[26]   However the plaintiff did not succeed in obtaining summary judgment for all of the relief it sought, including in particular the declaration that the first defendant held certain assets on trust for the plaintiff. Having regard to that factor, I think the justice of the case does require some reduction in the amount claimed by the plaintiff for the written submissions. In my judgment, the appropriate award for the Item 24 claim is $3,000. There will be an order accordingly.

[27]   On the claim for the memorandum addressing the effect of the freezing orders in the related proceeding, I do not think there is any question of the plaintiff misleading the Court. The related proceeding was properly referred to by Mr Ferrier in the documents filed for the hearing on 2 June 2020, albeit not in sufficient detail. The Court was obliged to make further enquiry and I think the full details of the related

proceeding (including the question of whether the orders made in the related proceeding could impact on the relief sought on the summary judgment application), should have been before the Court at the hearing. I think in those circumstances that the plaintiff’s attendances associated with the post-hearing memorandum are sufficiently covered by the costs award of $3,000 already made for the written submissions. I decline to make any additional costs award in respect of the costs claimed under Item 11 of Mr Ferrier’s table.

[28]   The result is that the plaintiff is entitled to costs in the sum of $12,560, plus disbursements of $1,595.81.

Interest

[29]I accept the plaintiff’s claim for interest under the Act in the sum of

$557,701.90, calculated to the date of judgment (16 July 2020). There will be judgment for that sum, together with judgment under the Act for further interest from 17 July 2020 to the date or dates on which the judgment debt (including all interest payable under the Act) has been paid in full.

Results

[30]I make the following orders:

(1)Costs are awarded to the plaintiff against the first defendant in the sum of $12,560, together with disbursements in the further sum of

$1,595.81.

(2)Judgment is entered for the plaintiff against the first defendant for interest under the Act in the sum of $557,701.90, calculated to 16 July 2020. Judgment is also entered for the plaintiff against the first defendant for ongoing interest from 17 July 2020, calculated in accordance with the Act, up to the date or dates on which the judgment has been paid in full.

Associate Judge Smith