Glanz v JL Management Limited

[2020] NZHC 1273

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2018-419-0181

[2020] NZHC 1273

UNDER

s 94A Judicature Act 1908, s 74A Property

Law Act 2007 and the Fair Trading Act 1986

IN THE MATTER OF

a building contract

BETWEEN

RUSSELL and ROBYNNE GLANZ

Plaintiffs

AND

JL MANAGEMENT LIMITED

First Defendant

JOHN RICHARD LLOYD

Second Defendant

Hearing:

On the papers

Appearances:

MJ Matthew for the Plaintiffs

No appearance for the Defendants

Judgment:

10 June 2020

JUDGMENT (NO.2) OF ASSOCIATE JUDGE SMITH - COSTS

This judgment was delivered by me on 10 June 2020 at 3.30pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Rennie Cox, Auckland Purnell Law, Thames

Copy to:
Mr J. Lloyd

Glanz v JL Management Ltd [2020] NZHC 1273 [9 June 2020]

[1]    In my judgment given on 2 March 2020 on the plaintiffs’ application for summary judgment, I entered summary judgment for the plaintiffs against the first defendant (JLM) for a total of $234,657.78. I also gave summary judgment for the plaintiffs on JLM’s counterclaims. I directed that certain other claims made by the plaintiffs were to proceed to trial.

[2]    There was one cause of action against both JLM and the second defendant (Mr Lloyd), under the Fair Trading Act 1986 (the FTA). I entered judgment for the plaintiffs for liability on certain of the pleaded breaches of the FTA, and directed that the others, and all issues of quantum, proceed to trial.

[3]    Provision was made for the parties to submit memoranda on costs. The plaintiffs duly submitted a costs memorandum, but Mr Lloyd has not filed any memorandum in reply. JLM was not represented, and did not participate in the summary judgment hearing.

The plaintiffs’ costs claim

[4]    The plaintiffs accept that costs should be awarded under Category 2 of Schedule 2 of the High Court Rules. However they say that the time allocations for each step taken (as identified in Schedule 3 of the High Court Rules) should be assessed under Band “C”. Under r 14.5 2(c), Band C will apply if the Court considers that a comparatively large amount of time for a particular step is considered reasonable.

[5]    Alternatively, the plaintiffs ask for an order that JLM pay the plaintiffs’ costs on a 2C basis on all or part of the proceeding, and on a 2B basis1 on the balance, with costs against Mr Lloyd reserved.

[6]    For the plaintiffs, Ms Matthew submits that the plaintiffs were substantially successful on their claims against JLM, and all of JLM’s counterclaims were dismissed. While judgment was only entered against Mr Lloyd (under some of the

1      Under 14.5(2)(b), Band B will be appropriate if a normal amount of time is considered reasonable for a particular step.

FTA pleadings) for liability, the main issues still to be determined on the cause of action under the FTA are limited to quantum issues.

[7]    Ms Matthew submitted that the circumstances of the case were complex, and that an uplift to Band 2C would be appropriate. She submitted that the nature of the proceeding was such that the time attendances required were significantly in excess of those contemplated by Band B, due to the factual complexity of the background to the dispute, the number of issues that were unnecessarily disputed by the defendants, and the need to prepare detailed schedules of invoices, supported by copies of each and every invoice.

[8]    Ms Matthew submitted that Mr Lloyd was given the opportunity to review revised versions of the schedules before the affidavit in support of the summary judgment application was filed, with a view to identifying what was disputed. However, no clear response was received from Mr Lloyd. Ms Matthew noted that on 18 September 2018 Mr Lloyd provided a detailed letter, denying any liability and claiming, without providing detail, that there were inaccuracies in the plaintiffs’ schedules. Mr Lloyd indicated that the payment claims and invoices would need to be included in the evidence. But at the hearing, and following the hearing, Mr Lloyd accepted that Schedules 3, 4, 6 and 8 were accurate in their entirety.

[9]    Had Mr Lloyd admitted the content of Schedules 3, 4, 6 and 8 at an earlier stage, some of the costs of preparing for the hearing could have been avoided – in particular the costs of including, in the bundle, copies of all of the invoices which were referred to in those schedules. Further, the plaintiffs were put to unnecessary costs in responding to JLM’s “meritless and unsustainable” counterclaims.

[10]   Ms Matthew did not provide with her submissions a breakdown of the costs claimed by the plaintiffs, with references to particular items in Schedule 3 of the High Court Rules 2016.

Discussion and conclusions

Costs against JLM

[11]   The plaintiffs are clearly entitled to a costs award against JLM. They were completely successful in obtaining summary judgment on JLM’s counterclaims, and they succeeded to the extent of roughly 73 per cent on their own claims against JLM.

[12]   An ordinary summary judgment claim in this Court usually attracts a costs award for the successful party on a Category 2, Band B, basis, and in this case I am satisfied that “comparatively large amounts of time” were not required, at least on the earlier steps relating to the filing of the original claim, the statement of defence to JLM’s counterclaim, and the reply to JLM’s and Mr Lloyd’s statement of defence. However, I think there is a basis for allowing Band C costs in respect of two particular steps in the proceeding so far, being items 22 and 25 in Schedule 3 of the High Court Rules (respectively, filing the interlocutory application for summary judgment, and preparation by the applicant of the bundle for the hearing). Under Band C, two days is allowed for filing the interlocutory application, and one day for preparing the bundle.2 Ms Matthew’s written submissions for the hearing were not particularly long or detailed, and I am not prepared to award costs for the submissions on a Band C basis.

[13]   So with the exception of filing the interlocutory application for summary judgment and preparing the bundle of documents for the summary judgment hearing, costs against JLM will be awarded on a 2B basis. For the filing of the interlocutory application and preparation of the bundle, costs will be allowed on a 2C basis.

[14]   All costs up to 31 July 2019 will be awarded at what was then the Category 2 costs rate of $2,230 per day. Costs awarded in respect of attendances from 1 August 2019 will be awarded at the Category 2 rate that applied from 1 August 2019 ($2,390 per day).

2      On a Band B basis, the comparative time allowances would be 0.6 days for filing the interlocutory application, and the same amount of time for preparing the bundle.

[15]   I set out in the table below my calculation of costs against JLM calculated at the rates of $2,230 per day up to 31 July 2019, and $2,390 from and after 1 August 2019. There will need to be some adjustment to the total set out in the table, to reflect the fact that the plaintiffs were not totally successful on their summary judgment application against JLM.

Schedule 3, High Court Rules Item No:	Step in the proceeding	Days allocated	Amount
Item 1	Commencement of proceeding	3	$6,690
Item 2	Defence to counterclaim	2	$4,460
Item 3	Filing a reply	0.8	$1,784
Items 10 & 11	Preparation for case management conferences/mentions hearings, and filing memoranda for case management conferences	1.6	$3,568
Item 12	Telephone (mention hearing) 20 August 2019	0.2	$478
Item 22	Filing application for summary judgment	2	$4,460*
Item 24	Written submissions for summary judgment application	1.5	$3,345
Item 25	Preparation of bundle for hearing	1	$2,230*
Item 26	Appearing at hearing of summary judgment application	1	$2,390
Item 11	Post-hearing joint memorandum	0.4	$956
Item 11	Preparing costs memorandum	0.4	$956
TOTAL	$31,317

*Band C costs allowed

[16]   It is appropriate to reduce that sum to reflect the fact that the plaintiffs originally sought summary judgment for a total sum of approximately $321,900, but they did not recover that sum in full; summary judgment was entered for approximately $234,657. Against that, the plaintiffs succeeded fully on their application for summary judgment on JLM’s counterclaims. Allowing for those factors, I think the justice of the case will be met if costs are awarded against JLM, covering all attendances to the date of this judgment, at 90 per cent of the total set out in the table at paragraph [15] of this judgment. There will accordingly be an order for costs in favour of the plaintiffs against JLM, in the total sum of $28,185.30, together with disbursements as fixed by the Registrar.

Costs against Mr Lloyd

[17]   Mr Lloyd was only sued on one cause of action, being the cause of action under the FTA. I entered judgment against Mr Lloyd on liability on parts of that cause of action, with other parts, and quantum, to be reserved for trial. I noted in the judgment that any precise quantification of the plaintiffs’ losses caused by JLM’s misleading or deceptive conduct was impossible at this stage, as a determination of loss would require consideration of losses (if any) caused by the plaintiffs’ reliance on each misleading progress claim. I noted that in some cases the loss might only have been paying for a particular item before the plaintiffs should have been required to pay for it.3

[18]   Although the plaintiffs must have suffered some loss as a result of Mr Lloyd’s breaches of the FTA, it is conceivable that those losses might not be very great. In those circumstances, I think the best course is to make an order that Mr Lloyd is jointly and severally liable with JLM for all of the plaintiffs’ disbursements, but otherwise the costs claim against him is reserved. There will be orders accordingly.

Result

[19]I make the following orders:

3      Paragraph [191] of the judgment.

(1)JLM is to pay costs of $28,185.30 to the plaintiffs.

(2)JLM and Mr Lloyd are to pay the plaintiffs’ disbursements, as fixed by the Registrar. As between themselves, JLM and Mr Lloyd are jointly and severally responsible for payment of the disbursements.

(3)The plaintiffs’ claim for costs against Mr Lloyd (in addition to the disbursements referred in order 2 above) is reserved.

Associate Judge Smith