Falloon v Earthquake Commission

[2020] NZHC 1966

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2013-409-1333

[2020] NZHC 1966

BETWEEN

G FALLOON AND R JENKINS AS

EXECUTORS OF THE ESTATE OF THE LATE DEREK RICKY BLIGH

Plaintiff

AND

THE EARTHQUAKE COMMISSION

First Defendant

IAG NEW ZEALAND LIMITED
Second Defendant

CLAIMS RESOLUTION SERVICE LIMITED

Non-Party

On the papers

Counsel:

K W Clay and H M Weston for Plaintiff/Non-Party N S Wood for EQC

S J Connolly for IAG

Judgment:

6 August 2020

JUDGMENT OF CULL J

[Costs on Application for Review]

[1]                  Claims Resolution Service Ltd (CRS) seeks an order for costs against the defendants  on  its  application  to  review  the  Associate  Judge’s  judgment  dated  6 September 2019. This application was determined in my judgment of 1 May 2020, in which CRS sought that the non-party costs order in favour of the Earthquake Commission (EQC) and IAG New Zealand Ltd (IAG) be quashed with either no costs against CRS or that the costs against CRS be varied and awarded on a several basis.1

1      Bligh v the Earthquake Commission [2020] NZHC 874 at [4].

BLIGH v THE EARTHQUAKE COMMISSION [2020] NZHC 1966 [6 August 2020]

[2]                  Of the eight grounds advanced by CRS, it seeks in summary an award of 2B costs on the basis that it was successful in quashing the Associate Judge’s finding that CRS was jointly and severally liable and as a result, CRS was subject to a significantly lesser award of costs than had been ordered, namely a reduction in the award of costs by approximately $90,000. Of the four issues for determination, CRS claims it succeeded in all but one, namely whether there was a causal connection between the incurred costs and CRS’s involvement.

[3]                  Both insurers oppose costs, principally on the basis that CRS was successful in part only and failed in its claim that the costs order against it be quashed, because there was no causal connection between its conduct and costs incurred by the defendants.

[4]                  This contest is not that costs should follow the event, but that each of IAG and EQC claim that they had greater success than CRS and therefore no costs should be made.

[5]                  I am unable to uphold the defendants’ submissions. It is plain from my judgment, that the issue of joint and several liability was the principal issue in contention in this review. I say so at [33] and the ensuing paragraphs in the judgment demonstrate the extent to which the parties engaged on r 14.14 of the High Court Rules 2016 and its application to this case. Albeit that CRS was unsuccessful in disputing that there was no causal connection between the incurred costs and its involvement, CRS had a significant measure of success, as set out above.

[6]                  I record that having canvassed both the defendants’ submissions and the authorities referred to, I distinguish this case from Hood v the Earthquake Commission.2  This is not a situation where neither side has been entirely successful. I consider CRS’s success here was important in resolving the joint and liability issue under r 14.14 leading to a significant reduction in the award of costs against it. Costs therefore should follow the event.

2      Hood v the Earthquake Commission [2019] NZHC 349.

[7]                  I note that no issue is taken with CRS’s calculation of 2B costs and reasonable disbursements, with the exception of CRS’s claim for second counsel. I agree. I do not consider that costs for second counsel is appropriate.

[8]                  Accordingly, 2B costs are awarded to CRS. No allowance is made for second counsel. Reasonable disbursements are ordered subject to the Registrar’s approval.

Cull J

Solicitors:

Chapman Tripp, Wellington for EQC Duncan Cotterill, Auckland for IAG

Canterbury Legal, Christchurch for CRS