Fletcher v Lawlink Group Limited

[2022] NZHC 381

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2021-470-000071

[2022] NZHC 381

BETWEEN

DARRYL JOHN FLETCHER

Plaintiff

AND

THE LAWLINK GROUP LIMITED

First Defendant

AND

RESOLUTION LIFE AUSTRALASIA LIMITED

Second Defendant

Hearing:

On the papers

Counsel:

T C Gunn for Plaintiff

K S Deobhakta for First Defendant D J Friar for Second Defendant

Judgment:

7 March 2022

COSTS JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 7 March 2022 pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

FLETCHER v THE LAWLINK GROUP LTD [2022] NZHC 381 [7 March 2022]

[1]    In a judgment of 17 December 2021, I dismissed the second defendant’s application for summary judgment and reserved costs.1 Counsel have been unable to agree on costs. The plaintiff, Mr Fletcher, applies for costs, but not only in respect of the summary judgment application. He also seeks costs in respect of an earlier application by the second defendant to transfer the proceeding to the Auckland Registry of the High Court. That application was withdrawn at a case management conference on 21 September 2021.

[2]The second defendant opposes costs in respect of both matters.

[3]The first defendant has taken no active role in either matter.

The application to transfer proceedings

[4]    Both  defendants  have  their  principal  offices  of  business  in  Auckland. Mr Fletcher chose to file in the Tauranga High Court and relied upon r 5.1(2) and (3) of the High Court Rules 2016. He filed an affidavit of 18 June 2021 with reasons for his election.

[5]    The second defendant did not accept the proceeding was properly commenced in Tauranga and, when filing its statement of defence, applied for the proceeding to be transferred to Auckland.

[6]    Mr Fletcher filed a notice of opposition to that application on 13 August 2021, asserting Tauranga was the appropriate registry and that the transfer of the proceeding to Auckland would cause disproportionate inconvenience to him. The notice of opposition referred to an affidavit of Mr Fletcher to be filed.  It was not filed until  16 September 2021.

[7]    At a case management conference on 21 September 2021, the second defendant advised the Court the application would no longer be pursued and it was withdrawn.

1      Fletcher v The Lawlink Group Ltd [2021] NZHC 3543.

[8]    Mr Fletcher argues he was successful on the application and it was only withdrawn after he had taken steps to defend it. He contends costs should follow the event in the ordinary course.2 However, Mr Fletcher also argues he is entitled to increased, or even indemnity costs.3 He relies on two factors:

(a)His lawyers had written to the second defendant’s lawyers, raising the convenience issue on 11 August 2021, prior to the filing of his notice of opposition.

(b)When serving the transfer application, the second defendant’s lawyers had raised the issue of security for costs, which Mr Fletcher infers was an attempt to intimidate him.

[9]    The second defendant argues it should not have to pay Mr Fletcher’s costs because:

(a)The basis upon which he originally elected to file the proceeding in the Tauranga High Court was not sustainable.

(b)Mr Fletcher did not provide his evidence in a timely manner and the second defendant withdrew its application upon receipt of it.

[10]   In my view, Mr Fletcher was the successful party and should be awarded costs. I am not in a  position, without  the  benefit  of  submissions, to  finally determine  Mr Fletcher’s election to file in the Tauranga Court was not sustainable. On the face of what is before me, I do not accept that submission. I accept the second defendant withdrew its application promptly upon receiving Mr Fletcher’s affidavit, but it had prior notice the convenience issue would be raised. The fact that it waited until it received Mr Fletcher’s affidavit to withdraw the application shows the steps he took to oppose the transfer of the proceeding were necessary.

2      High Court Rules 2016, r 14.2(1)(a).

3      Rule 14.6.

[11]   Mr Fletcher has not made out any basis for increased or indemnity costs. None of the circumstances identified in r 14.6 are engaged by the matters he has raised. I certainly do not draw an inference there was an attempt to intimidate Mr Fletcher.

[12]   Mr Fletcher seeks costs on a scale 2B basis. A schedule of the costs claimed has been provided. I do not agree with the second defendant’s submission that costs of the 21 September 2021 case management conference are not claimable. That conference was convened to deal with the second defendant’s applications.

[13]   I do not, however, accept that 2B scale costs are justified. I consider an award on a scale 1A basis is appropriate, as a comparatively small amount of time was required to deal with this application. Further, the application was straight-forward, the documents prepared for Mr Fletcher in respect of it were extremely brief and the application was withdrawn immediately at  the  case  management  conference  of  21 September 2021.

[14]Mr Fletcher is awarded costs on a scale 1A basis in the amount of $1,912.

Summary judgment application

[15]   Once again, Mr Fletcher argues that as he was the successful party, he is entitled to costs.4 The second defendant was, he contends, able to assess the strength of its case prior to applying for summary judgment and was on notice that he considered there was a fundamental factual dispute between the parties that rendered the claim unsuitable for summary judgment.

[16]   Again, Mr Fletcher seeks increased or indemnity costs on this application and argues the second defendant has repeatedly failed to comply with the High Court Rules. He relies on the following matters:

(a)The affidavit filed by the second defendant did not attest or show why none of the causes of action in the plaintiff’s statement of claim could succeed, in breach of r 12.4(5)(c).

4      Judge v Dempsey [2014] NZHC 2864; and Schmidt v Registrar-General of Land [2015] NZHC 2438, (2015) 22 PRNZ 794.

(b)The second defendant’s affidavit in reply raised new matters, in breach of r 12.11(2)(a).

(c)The second defendant’s synopsis of submissions exceeded 10 pages, in breach of r 7.39(4).

[17]   It is submitted these breaches of the High Court Rules led Mr Fletcher to incur unnecessary costs.

[18]   The second defendant argues there is no settled practice as to the awarding of costs when a defendant fails to obtain summary judgment,5 and costs should be reserved pending the substantive hearing. It says I had discouraged the parties from seeking costs,6 and although the summary judgment was unsuccessful, it was properly brought and I was not critical of its conduct in doing so. To the contrary, the second defendant notes I identified several weaknesses in Mr Fletcher’s case.

[19]   I accept the usual rule, that costs on an opposed interlocutory application are to be assessed when the application is determined, does not apply to an application for summary judgment.7 It is also the case, as noted above, the Court of Appeal has held there is no settled practice as to the awarding of costs when a defendant fails to obtain summary judgment. The position is different when a plaintiff’s application for summary judgment fails where, in the usual case, costs will be reserved.8

[20]   In this case, I see no appropriate reason to reserve costs. Mr Fletcher has been successful and the second defendant’s application failed on a ground Mr Fletcher had put in issue in his notice of opposition. The second defendant was in a position to assess the strength of its application and decided to proceed with it. It was entitled to do so, but must accept it has costs consequences. I do accept that in my judgment I

5      Miah v National Mutual Life Association of Australasia Ltd [2016] NZCA 590, [2017] 2 NZLR 241 at [61] fn 39.

6      Fletcher v The Lawlink Group Ltd, above n 1, at [75].

7      Rule 14.8(3).

8      NZI Bank Ltd v Philpott [1990] 2 NZLR 403. For a discussion on the reasons costs are treated differently in respect to a plaintiff’s application for summary judgment and a defendant’s application, see Suharnan v Brookfields [2013] NZHC 586, (2013) PRNZ 790 at [13].

identified weaknesses in positions taken by Mr Fletcher but, on balance, this does not disentitle him to costs, nor does it justify a reduction in the sum awarded.

[21]   I do not accept Mr Fletcher’s submission for an award of increased or indemnity costs. The second defendant did not repeatedly fail to comply with the High Court Rules. In respect of the matters Mr Fletcher raises:

(a)The verification of the allegations in the statement of claim required under r 12.4(5)(c) does not apply to a defendant’s application for summary judgment.

(b)The second defendant’s reply affidavit responded to the matters raised by Mr Fletcher.

(c)While the second defendant’s synopsis did exceed 10 pages, and compliance with r 7.39(4) is not optional, I do not see that such non- compliance would have had any material impact on Mr Fletcher’s costs.

[22]   Mr Fletcher has attached a schedule of the costs that are claimed on a 2B basis. I accept the sums claimed are correct and appropriate. It follows he is awarded costs of $7,409 on the summary judgment application.

Result

[23]Mr Fletcher is awarded costs against the second defendant as follows:

(a)On the withdrawal of the application to transfer the proceeding to the Auckland High Court in the sum of $1,912.

(b)On the dismissal of the summary judgment application in the sum of

$7,409.

O G Paulsen Associate Judge

Solicitors:

TG Legal Services Ltd, Warkworth Morgan Coakle, Auckland

Bell Gully, Auckland