Green & McCahill Holdings Limited v Williams

[2024] NZHC 480

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1247

CIV-2020-404-1385 [2024] NZHC 480

BETWEEN

GREEN & MCCAHILL HOLDINGS LIMITED
Plaintiff

AND

EVAN CHRISTOPHER WILLIAMS

First Defendant

ARA WEITI DEVELOPMENT LIMITED
Second Defendant

ARA WEITI BAY DEVELOPMENT LIMITED

Third Defendant

ARA WEITI INVESTMENTS LIMITED
Fourth Defendant

continued: …/2

Hearing:

On the papers

Appearances:

JWA Johnson and S T Dymond for the Plaintiff

D J Chisholm KC, MHL Morrison and CJH Fraser for the First to Fourth Defendants
R J Gordon and Ms A S Kirk for the Fifth Defendant
D T Broadmore and M G Smol for the Sixth Defendants

Judgment:

8 March 2024

JUDGMENT OF HARVEY J

[Costs]

This judgment is delivered by me on 8 March 2024 at 11.30 am pursuant to r 11.5 of the High Court Rules.

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

Registrar / Deputy Registrar

GREEN & MCCAHILL HOLDINGS LTD v WILLIAMS [2024] NZHC 480 [8 March 2024]

/2

LAMBTON QUAY PROPERTIES NOMINEE LIMITED

Fifth Defendant

CLEARWATER CAPITAL PARTNERS DIRECT LENDING OPPORTUNITIES FUND LP and CLEARWATER NZ1 SMA LIMITED

Sixth Defendants

Solicitors:	Lindsay & Francis, Auckland (K Francis)
Morrison Mallett, Auckland (M Morrison)
MinterEllisonRuddWatts, Wellington
MinterEllisonRuddWatts, Auckland
Buddle Findlay, Auckland (D Broadmore)
(M Smol)
Counsel:	David Chisholm King’s Counsel, Auckland
Jeremy Johnson, Barrister, Auckland
S T Dymond, Barrister, Auckland

Introduction

[1]    On 7 December 2023, I issued judgment on the first to fourth defendants application ordering the plaintiff to file all its briefs of evidence by 15 December 2023.1 Counsel were invited to submit costs memoranda by 21 December 2023.

[2]    The first to fourth defendants  seek  costs  on  a 2B  basis  with an  uplift of 50 per cent, and disbursements, totalling $6,798.16. They submitted that they were successful and are entitled to costs. Regarding the 50 per cent uplift, the defendants contended that the plaintiff had contributed unnecessarily to the time and expense of the proceeding by failing to comply with the Court’s directions and failing without reasonable justification to comply with an order for discovery or other similar requirement under the rules.2

[3]    The defendants argued that the plaintiff delayed in responding to the discovery judgment and changed solicitors twice in as many months despite upcoming deadlines for filing evidence. The defendants submitted that the plaintiff’s conduct caused delays prejudicing their trial preparation, and that this had been acknowledged in the interlocutory judgment.3

[4]    The plaintiff filed a costs memorandum dated 20 December 2023. Counsel submitted that there is no basis for the defendants to seek costs on the interlocutory application as the plaintiff was overall the successful party. Further, counsel contended that any costs award should be reserved pending determination of the substantive proceeding.

Legal principles

[5]    It is trite that costs awards are at the discretion of the Court.4 This discretion is guided by the general principles in rr 14.2 to 14.5 of the High Court Rules 2016. Rule 14.2(1) provides that the party who failed with respect to a proceeding should generally pay the costs of the successful party.  The rules are intended to create a

1      Green & McCahill Holdings Ltd v Williams [2023] NZHC 3576. High Court Rules 2016, r 7.48.

2      High Court Rules 2016, r 14.6(3).

3      Green & McCahill Holdings Ltd v Williams, above n 3, at [34]–[35].

4      High Court Rules 2016, r 14.1

framework for determining costs in individual cases that is both “predictable and expeditious”.5 The overriding consideration is that any award ought to do justice between the parties.6

[6]    The Court’s jurisdiction to grant increased costs is derived from r 14.6 of the High Court Rules 2016. Rule 14.6 relevantly provides:

14.6     Increased costs and indemnity costs

[…]

(3)  The court may order a party to pay increased costs if—

…

(b)  the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)  failing to comply with these rules or with a direction of the court; or

(ii)  taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii)   failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

(iv)   failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or

(v)  failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or

…

(d) some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.

[7]    The extent to which a failure to act reasonably contributed to the time and or expense of the proceeding must be considered when determining a percentage uplift.7

5      Rule 14.2(g).

6      Middeldorp v Avondale Jockey Club Inc [2021] NZCA 238 at [31].

7      AAI Ltd v 92 Lichfield Street (in req and in liq) [2016] NZHC 90 at [20], citing Rembrandt Custodians Ltd v Pro-Drill (Auckland) Ltd HC Auckland M337/IN03, 13 June 2003 at [38].

The maximum increase of 50 per cent on scale costs is reserved for the most serious conduct contemplated under s 14.6(3).

Discussion

Who was the successful party?

[8]    The plaintiff claims that it was the successful party overall but says that it will not seek costs. That is a sensible submission as costs would not be appropriate in the context of the plaintiff being granted an indulgence.8

[9]    The defendants, in contrast, were successful in their application for enforcement, including being granted unless orders. Those orders would not have been required if the plaintiff had complied with its discovery obligations, as outlined in my previous judgment.9 I consider that the overall interests of justice point to a costs award in favour of the defendants with respect to this interlocutory matter.

Are increased costs appropriate?

[10]   As mentioned, the defendants seek increased costs, pointing to the acknowledged fact that the plaintiff has conducted itself in a manner which has prejudiced the defendants by delay, and prolonged an already complex proceeding. The fact that there has been delay is inherent to the relief granted under the application. However, the delay and prejudice caused by the plaintiff’s conduct goes to the overall proceedings, not to its conduct in defending the interlocutory application. At this point in the proceedings, I am not satisfied that an award of increased costs on this application is appropriate.

[11]   So while I agree that ordinary costs are payable, as the successful party is entitled to the fruit of its success, the question of increased costs is best considered following final determination of the proceedings.10 The Court will at that stage be able to take a complete view. I do not consider that there will be prejudice to the

8      See Mailley v Shaw [2021] NZHC 3433 at [43] and David Bullock and Tim Mullins The Law of Costs in New Zealand (Lexis Nexis, Wellington, 2022) at [2.6].

9      Green & McCahill Holdings Ltd v Williams, above n 3, at [32].

10     See High Court Rules 2016, r 14.8 and Peterberic v Eady [2020] NZHC 2079 at [7].

defendants with that deferral. As the plaintiff submitted, the trial is set for May 2024, two months away.

Decision

[12]    The plaintiff must pay the defendants reasonable costs of $3,286.25, as calculated on a 2B basis, and disbursements of $110.

[13]The defendants’ application for increased costs is adjourned.

Harvey J