Fairview Park Limited v Harrison Grierson Consultants Limited HC Auckland CIV 2006-404-6588

[2010] NZHC 958

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2006-404-006588

BETWEEN  FAIRVIEW PARK LIMITED Plaintiff

ANDHARRISON GRIERSON CONSULTANTS LIMITED First Defendant

ANDRAYMOND GRANT ULYATE AND STANLEY IAN ROBERT BORWICK ULYATE

Second Defendants

ANDHICKS BROS LIMITED Third Party

(On the papers) Counsel:          SL Abdale for plaintiff

NJ Carter for second defendant

Judgment:      16 June 2010 at 4:30pm

JUDGMENT OF ASSOCIATE JUDGE FAIRE [on costs]

This judgment was delivered by me on 16 June 2010 at 4:30pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Hesketh Henry, Private Bag 92 093, Auckland for plaintiff

Kennedys, PO Box 3158, Auckland for first defendant

`  Carter & Partners, PO Box 2137 Auckland for second defendants

Simpson Western, Private Bag 93 533, Takapuna for third party

FAIRVIEW PARK LIMITED V HARRISON GRIERSON CONSULTANTS LIMITED AND ANOR HC AK CIV 2006-404-006588  16 June 2010

[1]      I gave judgment on the second defendants’ application seeking leave to file and serve an amended statement of claim and counterclaim on 4 May 2010.   The application was heard with a number of other applications involving other parties to this proceeding.  Those applications were subject to separate judgments.

[2]      In  my  judgment  I  concluded  at  [22]  “the  result  is,  however,  that  the amendments not opposed, that is to the statement of defence, may be made but the amendments to the counterclaim may not”.

[3]      On the question of costs, I recorded in  my judgment the following:

As this was part a series of applications heard on 28 April 2010 there was no time to hear counsel on costs.   The second defendants have failed on the principal matter advanced on the application. That, in normal circumstances, would justify an order for costs on the application in favour of the plaintiff. My preliminary view is that Category 2 should apply and on a Band B basis to this application.  However, I leave it to counsel in the first place to agree on costs and, if they cannot agree, then memoranda in support, opposition and reply shall be filed and served at seven-day intervals.

[4]      The plaintiff’s counsel seeks costs.  She advises that counsel for the second defendant does not agree with her assessment of what the costs should be.  The costs sought by the plaintiff’s counsel in her first memorandum are as follows:

(i)     Schedule 2 High Court Rules: Category 2B – daily rate $1600 (ii)    Schedule 3 High Court Rules: Time allocations:

4.11	Appearance at tele-conference	0.3 per day
4.13	Preparing & filing notice of opposition	0.6 per day
4.14	Preparation for hearing	½ day
4.15	Appearance at hearing	½ day

Total  1.9 days

1.9 days @ $1600  $3040.00

[5]      The second defendant was late in filing a memorandum in opposition.  The plaintiff invites the court to ignore the memorandum filed by the second defendant. Non-compliance with a court direction is unacceptable.  However, in this case, the matter can be dealt with either within the general discretion vested in the court on costs  pursuant  to  r 14.1  or  pursuant  to  r 14.6.    This  is  because  there  are  two

consequences flowing from the second defendant’s default.  In the first place, it has led to additional memoranda being filed by the plaintiff’s counsel.   In the second place, it has led to a small delay in the resolution of the costs application.

[6]      The  second  defendant  in  his  counsel’s  first  memorandum  in  opposition opposes costs because:

a)       As a result of a subsequent conference the trial was adjourned thus removing  one  of  the  reasons  for  not  granting  the  amendment. Because of that, counsel submitted that costs should simply be reserved;

b)That this particular application was heard with two other matters and some time was spent on pre-trial matters.  It was submitted that a ¼- day allowance, rather than a ½-day allowance, for the hearing should be made.

[7]      I  reject  the  first  ground  by  the  second  defendant.    Costs  arising  from subsequent events, including amendments to pleadings must be determined on their own merits and at the appropriate time.  I therefore do not take the matter that I have identified in [6]a) of this judgment into account in this application.

[8]      With  respect  to  the  second  matter,  Mr Carter,  for  the  second  defendant, calculated that the appropriate allowance, based a ¼-day as follows:

4.11      Teleconference  0.1 per day

4.13Preparing and filing opposition (no affidavits)

0.3 per day

4.14     Preparation for hearing  0.25 per day

4.15     Appearance at hearing  0.25 per day

Total  0.9  day

0.9 of a day @ $1,600  $1,440.00

[9]      Subsequent memoranda have been filed by counsel.  The plaintiff’s counsel was, of course, entitled to reply to the second defendant’s memorandum, but her memorandum has raised new matters.  Mr Carter’s response to that memorandum in the circumstances is understandable.

[10]     From the defendants’ perspective the additional matters that were raised in the further memorandum are:

a)       Some  reduction  in  costs  should  be  allowed  pursuant  to  r 14.7(f) because an amended notice of opposition to the second defendant’s application  was  filed  necessitating  some  research  on  the  former ground of opposition being wasted;

b)Because other matters were discussed in the course of the hearing some reduction in costs should be made pursuant to r 14.7(g); and

c)       That the court should fix the quantum of costs but reserve liability to await the outcome of the trial.

[11]     From the plaintiff’s perspective, the plaintiff seeks:

a)        An  increase  in  the  costs  sought  because  of  an  amendment  to

Schedule 2 to the High Court Rules; and

b)That an allowance be made for additional memoranda filed of $2,256 based on 1.2 days at $1,880 per day.

The principles applicable in awarding costs

[12]     Rule 14.1 gives the Court a discretion to order costs in relation to a step taken in a proceeding.  That discretion is generally to be exercised in accordance with the specific Rules contained in rr 14.2-14.10:  Glaister v Amalgamated Dairies Ltd.[1]   In Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd[2] it was said of the costs regime contained in what is now rr 14.2-14.10 that:

[1] Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 [19].

[2] Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd (2002) 16 PRNZ 662 at 668 (CA).

there is a strong implication that a Court is to apply the regime in the absence of some reason to the contrary

The test to be applied is entirely an objective and not a subjective one.   The only reference which  it is necessary to make towards actual costs is to be found in r 14.2(f), namely that an award of costs should not exceed the costs incurred by the party claiming the costs: Glaister v Amalgamated Dairies Ltd.[3]

[3] Glaister v Amalgamated Dairies Ltd, above n 1, at 610[14].

[13]     Rule 14.2 lists the principles applying to determination of costs. Subrule (a) affirms the principle that the losing party should pay the costs to the successful party. Subrule (b) requires that the costs reflect the complexity and significance of the proceedings and refers specifically, therefore, to the categorisation of a proceeding which is provided for in r 14.3.  Subrule (c) requires a consideration of each step for which costs are sought and an application of the daily rate having regard to the appropriate band which is to be applied after a consideration of r 14.5(2) and the Third Schedule to the High Court Rules.

The appropriate Schedule 2 rate

[14]     Prior to 24 May 2010, the daily rate applicable in respect of a Category 2 case was $1,600 per day.  The High Court Amendment Rules 2010 came into force on 24 May 2010.  Rule 5 deals with the transitional position and provides as follows:

5        Transitional provision

(1)Costs in a proceeding commenced after the coming into force of these rules must be determined in accordance with the High Court Rules as amended by these rules.

(2)Costs in a proceeding commenced before the coming into force of these rules must be determined,—

(a)in  the  case of a  step in the  proceeding taken  before  the coming into force of these rules, in accordance with the High Court Rules as in force immediately before the coming into force of these rules:

(b)in the case of a step in the proceeding taken after the coming into force of these rules, in accordance with the High Court Rules as amended by these rules.

(3)For the purposes of subclause (2), a step in a proceeding described in the first column of Schedule 2 of these rules is taken on the date appearing opposite that step in the second column of that schedule.

[15]     Schedule 1 to the High Court Amendment Rules 2010 provides as follows:

Schedule 1

New Schedule 2 substituted

r 4

“Schedule 2

Appropriate daily recovery rates

r 14.4

“Note:  The  following  are  the  appropriate  daily  recovery  rates  for  the categories of proceedings referred to in rule 14.3.

Category of proceedings referred to in rule 14.3

Appropriate   daily   recovery rate

Category 1 proceedings  $1,250 per day Category 2 proceedings  $1,880 per day Category 3 proceedings  $2,780 per day”

[16]     Schedule 2 to the High Court Amendment Rules 2010 provides as follows:

Schedule 2

Dates on which steps taken for purposes of rule 5(3)

r 5

Step in proceeding  Date on which step taken

1   A step that requires the filing of a document or a number of documents

The date on which the document or the first of the documents is filed

2   Appearance in court or in chambers for each day or part of a day

The  date  of  the  actual appearance

3   Production    of     documents     for inspection

The date on which the affidavit listing those documents is filed

4Inspection of documents  The  date  on  which  the affidavit listing those documents is filed

5Preparation for hearing  The   first   day   of   the hearing or, if the hearing does not eventuate, the hearing date allocated

Rebecca Kitteridge, Clerk of the Executive Council.

[17]     Save  for  the  question  of  subsequent  memoranda,  the  hearing  and  the judgment issued were all taken before the amendment to the Schedule introducing the higher daily rates was introduced.   Accordingly, the previous daily rate is the applicable rate in this case and not that advanced by the plaintiff’s counsel.

[18]     I now rule specifically on the various issues raised by this application for costs.

a)        The  applicable  category  for  this  proceeding  in  terms  of  r 14.3  is

Category 2;

b)The daily rate that is applicable in respect of all steps taken by the plaintiff is $1,600 save for two cost memoranda;

c)       The allowance for hearing time and preparation for this application should be based on ½ a day;

d)A reduction in the costs allowed for a telephone conference should be made  pursuant  to  r 14.7(g)  because  matters  additional  to  those required for this particular application were discussed.  The allowance I make is .1 of a day in respect of this proceeding for that attendance;

e)       A reduction in the allowance for the notice of opposition should be made pursuant to r 14.7 because, clearly, there was some wastage involved in the filing of an amended notice of opposition and the need to research the grounds in opposition originally pleaded.  I allow .3 of a day for the preparation of the notice of opposition to reflect that reduction;

f)        I am satisfied that costs should be payable now.  No special reasons are present in terms of r 14.8 which would justify any order to the contrary; and

g)       Costs should be allowed for the memoranda seeking costs because an opportunity to agree was provided.  This reflects the position applied

in a number of cases: Auckland Regional Council v Arrigato Investments Ltd.[4]    The second defendant did not agree and has been largely unsuccessful in the opposition mounted to the quantum of costs sought.   Having said that, the appropriate band for the costs memoranda, I consider, is Band A and not Band B having regard to r 14.5(2).

[4] Auckland Regional Council v Arrigato Investments Ltd (2002) 16 PRNZ 217 at 221.

[19]     I now apply the above determinations to this case as follows:

a)	Appearance at telephone conference	.1 of a day
b)	Preparation of notice of opposition	.3 of a day
c)	Preparation for the hearing	.5 of a day
d)	Hearing	.5 of a day
Total days	1.4 days
Applicable rate - $1,600 a day - Total due	$2,240.00
e)	One costs memorandum – allowance .2 of a day based on $1,600	320.00
f)	Two later memoranda – allowance .2 of a day based on the new daily rate of $1,880	752.00
Total costs due	$3,312.00

[20]     I order that the second defendants pay the plaintiff’s costs on this application

in the sum of $3,312 plus disbursements as fixed by the Registrar

JA Faire

Associate Judge