Farr v Knowles

[2019] NZHC 2774

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-85

[2019] NZHC 2774

BETWEEN

GRAEME LESTER FARR

Appellant

AND

ALEX FERGUSON KNOWLES

Respondent

On the papers

Counsel:	J Porter for Appellant J Haig for Respondent
Judgment:	30 October 2019

JUDGMENT OF GRICE J

(Costs)

[1]        Mr Farr was successful in his appeal against the entry of summary judgment against him in the District Court.1

[2]        The appeal succeeded in a large part because Mr Farr was able to produce some email evidence dating back to 2010, which he had not been able to retrieve from his computer in time for the summary judgment hearing in the District Court. He said the difficulties encountered in retrieving this evidence were due to the fact that the claim by Mr Knowles had, due to procedural defects, not been properly pursued until May 2018, more than six years after the events giving rise to the proceedings.

[3]The evidence was adduced pursuant to leave granted in the appeal.

1      Farr v Knowles [2019] NZHC 2474.

FARR v KNOWLES [2019] NZHC 2774 [30 October 2019]

[4]        The proceedings were remitted back to the District Court for hearing on the ordinary proceedings track.2

[5]        Mr Farr now applies for costs as the successful appellant. He also applies for increased costs and indemnity costs as well as costs in relation to the District Court proceedings.

[6]        The basis for Mr Farr’s application for increased or indemnity costs is that he put Mr Knowles on notice that if the summary judgment was unsuccessful that Mr Farr would be seeking to recover costs on a solicitor/client basis. In addition, Mr Farr says that the reason he had to make the application to adduce the relevant documentary material was that Mr Knowles, who had had an obligation to put that material before the District Court, had failed to do so.

[7]        Mr Knowles opposes the costs application. He says that the successful argument raised by Mr Farr in the High Court was not squarely before the District Court and that the adducing of the late evidence was an indulgence that should not attract costs. He also says the affidavit in support of the application to admit the evidence was filed only five days before the hearing and there was no proper explanation as to why the new emails were not available prior to or at the time of the summary judgment hearing.

[8]        Mr Knowles also notes there was no calderbank offer made in the letter from Mr Farr’s lawyer to Mr Knowles’ lawyer which Mr Farr points to as support for his contention that Mr Knowles was notice that costs would be sought on a solicitor/client basis if the summary judgment was unsuccessful.

Analysis

[9]        The starting point is that the party who fails in a proceeding or an interlocutory application should pay costs to the party who succeeds.3 An award of costs should reflect the complexity and significance of the proceeding4 and costs should be assessed

2 At [66].

3      High Court Rules 2016, r 14.2.

4      Rule 14.2(1)(b).

by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the matter.5 In addition so far as possible the determination of costs should be predictable and expeditious.6 However, the Court retains a discretion as to costs.7

[10]      As I noted in my judgment, the evidence adduced on the appeal supported a disputed facts argument that is not suitable for summary judgment. However, the other grounds of appeal were unsuccessful.8

[11]      The correspondence that Mr Farr points to as putting Mr Knowles on notice that he would seek to recover costs on a solicitor/client basis if the appeal was successful contain neither calderbank offers nor settlement proposals.

[12]      In relation to the appellant’s contention that the respondent should not have opposed the adducing of the evidence, I do not consider that by itself it adds anything to a claim for increased or indemnity costs.

[13]      I turn to Mr Knowles’ claim that costs should not be awarded or costs should be awarded on a reduced basis as Mr Farr’s arguments on appeal evolved during the appeal hearing. It is not unusual for arguments to evolve during the appeal hearing. However, the successful grounds for appeal were within the grounds in the notice of appeal. In addition, the evidence allowed on appeal put a different complexion on the appeal.

[14]      Mr Knowles also argues that the leave to adduce evidence was an indulgence for the Court as the application was brought well after the summary judgment hearing without proper explanation. Nevertheless, I found that it was appropriate to allow the emails to be adduced and accepted the explanation given for the delay in production. In addition, the emails were addressed to Mr Knowles and he had not adduced them

5      Rule 14.2(1)(c).

6      Rule 14.2(1)(g).

7      Rules 14.2 and 14.7.

8      Farr v Knowles, above n 1, at [59] and [63]. These related to claims of procedural irregularity in the District Court and were dismissed on appeal.

in evidence. They were not referred to by him despite the fact they were relevant to possible defence.

[15]      In this case I can see no reason to depart from the usual rule that costs are awarded to the successful party on an appeal. Nevertheless, there is nothing out of the ordinary in relation to this appeal which should weigh in favour of increasing the costs above the recovery rate and time allocation calculated in accordance with the prescribed 2B rates under High Court Rules 2016. In my view, as I indicated at the conclusion of the hearing, the appropriate category is category 2. The proceedings were of average complexity requiring counsel with the skill and experience considered average in the High Court and the time allocations for an appeal on a “B” basis is appropriate. Mr Farr has provided a calculation of costs in accordance with the High Court Rules on that basis.

[16]      Mr Knowles has made no specific criticism of the calculations contained in the schedule.

[17]      Therefore, taking a view in the round, I consider that there is no reason to depart from the usual rule that costs be awarded to the appellant. The appropriate basis is in accordance with category 2B. Costs on that basis together with reasonable disbursements as claimed (excluding security for costs) are awarded to the appellant.

Grice J

Solicitors:

Sievwrights Law, Barristers and Solicitors, Wellington Nowland Gordon & Associates, Wellington