Fitzgerald v IAG New Zealand Limited

[2018] NZHC 640

IN THE HIGH COURT OF NEW ZEALAND

CHRISTCHURCH REGISTRY

CIV-2016-404-000779

[2018] NZHC 640

BETWEEN

STEPHEN PATRICK FITZGERALD, NICOLA MARY FITZGERALD AND HAMISH ALEXANDER SCOTT

Plaintiffs

AND

IAG NEW ZEALAND LIMITED

Defendant

Counsel:	S P Rennie for Plaintiffs C Jamieson for Defendant
Judgment:	11 April 2018

JUDGMENT OF GENDALL J

(As to Costs – Determined on the papers)

[1]                   On 2 November 2017 I gave an oral judgment in this proceeding which granted to the defendant leave to bring further evidence in this matter. A trial at that point was scheduled to commence on 6 November 2017 and necessarily that trial date had to be vacated.

[2]                   In a minute which followed dated 6 November 2017, I noted that a further issue had arisen over a possible claim which might be brought for wasted costs as a result of the trial date being vacated. In that minute I made directions for the filing of memoranda by counsel for the parties with respect to any claim for wasted costs.

[3]                   Counsel for the plaintiffs has now filed a memorandum dated 15 November 2017 which seeks amounts set out therein for wasted costs. The amounts concerned are $7,693.50 on the basis the plaintiffs say the defendant was granted an indulgence to have the hearing adjourned. In addition, the plaintiffs seek additional wasted costs associated with what is described as the aborted trial totalling $13,380. Finally,

FITZGERALD v IAG NEW ZEALAND LIMITED [2018] NZHC 640 [11 April 2018]

counsel for the plaintiffs suggests that their structural engineering expert, Mr McGill, confirms likely wasted costs he has incurred will be in the region of $2000 to $3000.

[4]                   This 15 November 2017 memorandum from counsel for the plaintiffs has been met by a lengthy response from counsel for the defendant dated 13 December 2017.

[5]                   In essence, it is the defendant’s position that no order for wasted costs should be made here as there has effectively been no default on the part of the defendant. Costs should simply lie where they fall according to the defendant but, in any event, if the Court decides otherwise, any order for wasted costs should be limited to those costs which are truly “thrown away” as a direct result of the trial being adjourned. This, it is said, should represent a nominal amount only.

[6]                   Rule 14.8 High Court Rules clearly contemplates that costs are addressed following the determination of an interlocutory application. And, as McGechan on Procedure at HR Pt 14.16A(4) notes: “only costs directly thrown away as a result of the vacating or discontinuing of the hearing are awarded. When a fixture is vacated beforehand these comprise “trial focused” costs – costs thrown away because they will have to be incurred all over again in preparation for the fresh fixture.” Here, the plaintiff says the Court granted the defendant an indulgence following its default in meeting earlier timetable directions to allow new and supplementary briefs of evidence to be introduced.

[7]                   Accordingly, the plaintiffs maintain it is appropriate for wasted costs to be fixed now in their favour and paid. The plaintiffs also seem to hint that costs on the leave application should also be awarded in their favour and these be paid now as well.

[8]                   In response, counsel for the defendant suggests that what has occurred here does not represent a proper circumstance for issues over wasted costs to arise. Much is made of a timeline of events leading up to November 2017 but I have no wish to analyse this moment for moment at this interim stage of events and under all the other circumstances here.

[9]                   Counsel for the defendant submits too that it is not appropriate to describe the defendant as having been granted an indulgence here. Leave to adduce this additional evidence, it is said, was granted purely because it was in the interests of justice that the Court be assisted by the relevant expert evidence on key issues which were at issue. Filling these gaps in the expert evidence, the defendant says, was essential in this case.

[10]               In considering all  the  circumstances  relating  to  the  need  to  adjourn  the  6 November 2017 trial in this matter, I am of the view that this has been brought about by the very late realisation from the defendant that this additional evidence was required. That being so, I find that if the plaintiffs have truly incurred wasted costs for this adjournment, then these are recoverable against the defendant.

[11]               On that issue, however, I reject the plaintiffs’ claim for costs involved in preparing their briefs of evidence, the common bundle or indeed preparation for the hearing. These were amounts claimed by counsel for the plaintiffs totalling $13,380. This work is not wasted and was required in any event for the ultimate hearing in this matter which is still scheduled. Generally, they will not need to be incurred again in preparation for the fresh fixture.

[12]               As to the balance of the plaintiffs’ wasted costs claim, these are set out at para 8 of the 15 November 2017 memorandum from counsel for the plaintiffs. They total

$7693.50, representing 3.45 days at the category 2B scale rate of $2230 per day. A portion of these costs, in my view, however, could not be truly described as wasted costs in the sense that, again, much of the work involved to which the costs relate will not need to be repeated when preparation for the final trial in this matter is undertaken.

[13]               That said, the plaintiffs, as I see it, are entitled to 2B costs for work that is truly wasted as follows:

Notice of Opposition

0.6 days

Appearance

0.5 days

Second counsel – 50%

0.25 days

Total 1.35 days

@ $2230

$3010.05

[14]               Although it is somewhat unclear from the memorandum filed by counsel for the plaintiffs, it seems that the plaintiffs are also seeking “the likely wasted costs he [Mr McGill] has incurred” of $2000 to $3000. This appears to be supported by a letter to Mr Fitzgerald dated 14 November 2017 from the plaintiffs’ engineering expert, Mr McGill. The letter is brief and provides no explanation or breakdown as to why these costs would be truly wasted. Nevertheless, I do place on record now the plaintiffs’ suggestion that Mr McGill, as an expert witness engaged by them, will be claiming certain additional costs said to relate to his need to review the file and refamiliarise himself for the aborted November 2017 trial when this matter does finally reach trial. That is noted at this point and it is a matter, no doubt, that will be before the trial Judge at that time.

[15]               In the meantime, I confirm that the plaintiffs are entitled to an amount by way of wasted costs against the defendant with respect to the indulgence provided to the defendant by adjourning the November 2017 trial date.

[16]That amount, as noted at para [13] above is $3010.05.

[17]               The defendant is therefore to pay to the plaintiffs by way of wasted costs this amount of $3010.05.

...................................................

Gendall J

Solicitors:

Rhodes & Co, Christchurch

Young Hunter Lawyers, Christchurch