G K Shaw Limited v Green

[2023] NZHC 1009

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2021-404-2385

[2023] NZHC 1009

BETWEEN

G K SHAW LIMITED

Applicant

AND

JOHN GREEN

First Respondent

AND

CENTREPORT LIMITED

Second Respondent

On the Papers
Judgment:	1 May 2023

JUDGMENT OF ISAC J

[Costs]

Introduction

[1]                 In a judgment of 24 March 2023, I declined G K Shaw’s application for judicial review of an adjudicator’s decision n in a dispute under a construction contract.1

[2]                 The successful respondent, CentrePort Ltd, now seeks costs of $40,689.75, being 2B costs of $27,126.50 with a 50 per cent uplift. CentrePort says that an increased costs award is appropriate because G K Shaw’s claim was without merit and inherently unlikely to succeed.2 Further, it contends that the proceeding was a continuation of the abuse of process in the underlying proceeding whereby G K Shaw, having failed in a first adjudication, sought to litigate the same claim a second time before a different adjudicator.

1      G K Shaw Ltd v Green [2023] NZHC 605.

2      Pursuant to r 14.6(3)(b) of the High Court Rules 2016.

G K SHAW LTD v GREEN & ANOR [2023] NZHC 1009 [1 May 2023]

[3]                 G K Shaw agrees that costs should be awarded on a 2B basis, but takes issue with CentrePort’s claim for increased costs. It says that CentrePort’s 2B costs ought to be $24,354.15. G K Shaw submits that its behaviour in bringing and conducting the proceeding was entirely appropriate, and that the high threshold for increased costs has not been met. In the alternative, it suggests that the Court consider ordering that costs lie where they fall on the grounds that the proceeding concerned a matter of public interest.

Consideration

[4]                 All matters relating to costs are discretionary,3 although that discretion must be exercised on a principled basis. So far as possible the determination of costs should be predictable and expeditious.4

[5]                 While G K Shaw’s argument was novel and in an area not often litigated, I do not consider that the proceeding involved any significant public interest or important matter of public policy. Certainly, there was nothing to justify a departure from the ordinary principle that costs should follow the event.5 The question then is quantum. In that respect, the parties agree that the appropriate scale is 2B.

[6]                 The difference between the parties’ positions is less than $3,000. In essence, G K Shaw argues that CentrePort cannot claim costs for the preparation of case management conferences that did not occur (because they were vacated by consent in advance or were never scheduled), and should not be awarded the full scale in relation to the filing of joint memoranda which G K Shaw helped to prepare and file. In my view, CentrePort is entitled to costs for preparation for case management conferences which did not proceed on the basis of joint memoranda that were filed. It follows that I accept its claim for costs for the first case management conference. However, CentrePort is not entitled to claim costs under item 10 of Schedule 3 of the High Court

3      High Court Rules 2016, r 14.1.

4      Rule 14.2(1)(g).

5      See for example New Zealand Maori Council v Attorney-General [1994] 1 NZLR 513 (PC) at 525 (no costs ordered where there was “an undesirable lack of clarity … in an important area of the law); and Taylor v District Court at North Shore HC Auckland CIV 2009-404-2350, 13 October 2010 at [9] (the public interest exception requires that the proceeding “concern a matter of general public interest, have merit, and be of general importance beyond the interests of the particular unsuccessful litigant”).

Rules 2016 in relation to a second case management conference. It follows that costs in this proceeding on a 2B basis are $26,170.50.

Increased costs?

[7]                 Increased costs may only be awarded where there has been a failure to act reasonably.6 The onus is on CentrePort to persuade the court that increased costs are justified.7 I respectfully adopt the observations of Associate Judge Johnston in Driver v Radio New Zealand Ltd:8

[11]              It is true that the Court retains an overarching discretion, and there is provision for increased and decreased costs. However, it appears to me to be important in achieving the objective of the regime for the Court to resist making orders for increased or decreased costs other than in exceptional circumstances. Certainly, the fact that one side has been wholly successful and the other side wholly unsuccessful is not a basis for departure from scale costs, even if, with the benefit of hindsight, it appears the Court had little difficulty in dismissing the case for the unsuccessful party.

[12]              Any other approach it seems to me would risk costs becoming unpredictable and another regular source of contention that would only lead to further costs being incurred.

[8]                 While ultimately I found that G K Shaw’s challenge should be declined, and that its conduct involved a collateral challenge to the first adjudication, there was nothing inappropriate in the applicant’s conduct of the proceeding before this Court and it could not be said that its argument was inherently unlikely to succeed. The applicant raised a legitimate question regarding the jurisdiction of adjudicators under the Construction Contracts Act 2002 that was capable of bona fide argument based on the facts and available authorities. I am not therefore satisfied that the high threshold for the award of increased costs has been made out.

6      Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27].

7      Strachan v Denbigh Property Ltd HC Palmerston North CIV-2010-454-232, 3 June 2011 at [27].

8      Driver v Radio New Zealand Ltd [2020] NZHC 3398.

Conclusion and result

[9]                 G K Shaw is to pay CentrePort’s costs on a 2B basis of $26,170.50, plus disbursements of $110.

Isac J

Solicitors:

Badcock Law, Rotorua for Applicant

Kensington Swan, Wellington for Second Respondent