Gowdey v Heseltine

[2021] NZHC 1303

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2020-404-129

[2021] NZHC 1303

BETWEEN

DAVID RUSSELL GOWDEY

Plaintiff

AND

JOHN DAVID HESELTINE

First Defendant

BRIDGET ALISON MCNEIL
Second Defendant

CB TRUSTEES (2013) LIMITED

Third Defendant

Hearing:

On the papers.

Counsel:

S E Russell for Plaintiff

C Upton for First Defendant
CJR Baird for Second and Third Defendants

Judgment:

3 June 2021

COSTS JUDGMENT OF DUFFY J

This judgment was delivered by me on 3 June 2021 at 4:00pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors/Counsel:

Russell Legal, Auckland Castle Brown, Newmarket

Lee Salmon Long, Auckland CJR Baird, Barrister, Auckland

GOWDEY v HESELTINE [2021] NZHC 1303 [3 June 2021]

[1]    The plaintiff, David Gowdey, was unsuccessful in obtaining summary judgment in New Zealand to enforce a foreign sealed judgment from the state of California, United States of America (the US judgment). This is because the Court of Appeal of the State of California subsequently delivered a judgment overturning the US judgment (the US appellate judgment). Accordingly, there was no longer a foreign judgment that was capable of enforcement. This led me to strike out Mr Gowdey’s statement of claim and to dismiss the proceeding pursuant to r 15.1(1) of the High Court Rules.

[2]    The defendants now seek costs in accordance with the leave I granted to the parties to file memoranda on costs.

[3]    The defendants have filed a joint memorandum in which they seek several costs awards:

(a)for their opposition to the summary judgment application they seek costs calculated on a 2B basis and disbursements, which come to

$31,962; and

(b)an uplift of 50 per cent on the hearing of their stay application, which was brought after the US appellate judgment was delivered and which they estimate to be $2,390; and

(c)costs for the preparation of their costs memoranda which come to $956.

This comes to a total of $35,308.

[4]    The plaintiff opposes the costs awards and argues that costs should lie where they fall.

[5]    The plaintiff’s arguments address the merits of the plaintiff’s actions in the US in seeking to pursue enforcement of a debt he contends he is owed by the defendants. The issues regarding the plaintiff’s ability to enforce the debt were covered in the US judgment and the US appellate judgment. The merits and strength of the substantial arguments relating to enforcement of the US debt are not for this Court. The focus of

this Court is, and always has been, on whether the US judgment could be enforced in this country as a foreign sealed judgment. Once the Court of Appeal of the State of California allowed the defendants’ appeal against the US judgment, the legal effect of the US judgment relevant to its enforcement in this country was extinguished.

[6]    The defendants opposed the summary judgment application on the basis the US judgment was under appeal and may be overturned. The plaintiff opposed that argument and sought to have the US judgment enforced here. Before I delivered my judgment, the US judgment was overturned by the US appellate judgment. Once that happened, everything changed. There was no longer a question of whether enforcement should be delayed pending delivery of the US appellate judgment; there was simply no longer a foreign judgment to be enforced. From the outset the plaintiff was aware the defendants opposed summary judgment on the basis the US judgment was subject to appeal. The plaintiff took the risk that the appeal may have been successful.

[7]    I am satisfied that the defendants are entitled to the costs they seek for opposing the summary judgment application. The outcome of the appeal in California vindicates the stance they took in opposing the summary judgment application.

[8]    I am also satisfied that the defendants are entitled to an uplift of 50 per cent in relation to their stay application which led instead to me striking out the plaintiff’s statement of claim and dismissing the proceeding pursuant to r 15.1(1). The defendants gave the plaintiff the opportunity either to consent or not oppose their application to stay the summary judgment proceeding following the delivery of the US appellate judgment. I consider it should have been obvious to the plaintiff that there was no longer a foreign judgment capable of being enforced and for that reason the summary judgment application seeking enforcement should be brought to an end.

[9]    The plaintiff’s reason for opposing this course of action was based on the arguments it made at the time of the stay application, that irrespective of there being no judgment that is now capable of enforcement in New Zealand, the loan which led to the plaintiff bringing proceedings in the Californian Courts is repayable, albeit for different reasons than were relied on before the Californian Courts.  Therefore, the

plaintiff will be taking new steps in California to enforce payment of that loan. For this reason, he sought to have the present summary judgment proceeding stayed until he obtained a new judgment in California, at which time his intention was to amend the summary judgment application to reflect the change of circumstances.

[10]   I refused to take that approach because I could see no basis for allowing a proceeding based on enforcement of a specific foreign judgment to continue once that foreign judgment no longer existed. I consider this was an outcome that should have been obvious to the plaintiff. The defendants have produced sufficient evidence of their attempts to persuade the plaintiff to recognise the inevitable outcome of any attempt by him to seek to keep the summary judgment application alive. I accept that it is the plaintiff’s intransigent stance that has required the defendants to apply and prepare for an opposed hearing (albeit by telephone conference) on the need for this proceeding to be stayed. Accordingly, I am satisfied that the defendants are entitled to the uplift of 50 per cent that they seek. I am also satisfied that the defendants have been put to the trouble of making extensive arguments in their costs memoranda to support their application for costs following the summary judgment application hearing and their stay application. In those circumstances, I consider they should receive costs for their costs memoranda. It follows that I find the defendants are entitled to the costs award they seek.

Result

[11]   The defendants are awarded the costs and disbursements set out at [3](a), (b) and (c) herein, which come to a total of $35,308.

Duffy J