Grey District Council v Blain

[2014] NZHC 939

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

CIV-2011-418-000123 [2014] NZHC 939

BETWEEN

GREY DISTRICT COUNCIL

Plaintiff

AND

ANDREW SCOTT BLAIN First Defendant

KEVIN O'CONNOR & ASSOCIATES LIMITED

Second Defendant

CARTER HOLT HARVEY LIMITED Fourth Defendant

LHT DESIGN LIMITED Fifth Defendant

EVAN JONES CONSTRUCTION LIMITED

Third Party

Hearing:

7 May 2014  (Determined on the Papers)

Appearances:

No appearance for Plaintiff

S Lester for First and Second Defendants

D Valente for Fourth Defendant D J MacRae for Fifth Defendant G M Brodie for Third Party

CostsJudgment:

7 May 2014

COSTS JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      This judgment determines costs on the application of the defendants, who have succeeded  in  the  Court  of Appeal  on  their  opposition  to  the third party’s applications to strike out.

[2]      Memoranda have been filed on behalf of all defendants, jointly, and on behalf of the third party.

GREY DISTRICT COUNCIL v BLAIN and ORS [2014] NZHC 939 [7 May 2014]

[3]      There is no debate between the parties on the attendances for which costs should be awarded, nor on the scale which should apply to those attendances.  The sole issue between the parties is whether, as claimed by the successful defendants, they should each have costs or whether, as submitted by the third party, there should be one award of costs to all the defendants jointly.

[4]      The third party relies on High Court r 14.15 which provides:

14.15   Defendants defending separately

The court must not allow more than 1 set of costs, unless it appears to the court that there is good reason to do so, if –

(a)     several defendants defended a proceeding separately; and

(b)     it appears to the court that all or some of them could have joined in their defence.

[5]      This rule requires “the court to exercise some caution before awarding costs, without more, in favour of multiple parties, particularly when there is some overlap or community of interest in the litigation position of those parties:”.1

[6]      I also refer to Jordan v O’Sullivan (No 2):2

[8]   The extent to which the defendants’ interests were materially identical, as well as the extent to which one defendant did or could have relied upon the evidence or submissions of the others, are factors tending to suggest that the defendants could have joined in their defence.   Conversely, factors suggesting that defendants could not reasonably join in their defence include if the plaintiffs ran separate cases against the defendants, or sought separate relief,  the  defendants’ reputations  are  at  stake,  (for example  there  is  an allegation of fraud), a conflict of interest was likely in terms of the way the plaintiffs ran their case and/or the defendants’ relationship is such that they are justified in remaining at arms length from each other.

[7]      As noted by Winkelmann J in Financial Markets Authority v Hotchin:3

Rule 14.15 does not require parties to share one award; the Court has an overall discretion in relation to costs and, where appropriate, a discount may be given in order to reflect the extent to which a party could or should have relied on the submissions of another defendant.

1      North Trustee Co Ltd v Tattersfield Securities Ltd HC Auckland CIV-2004-404-3668,

30 March 2005 at [51].

2      Jordan v O’Sullivan (No 2) HC Wellington CIV-2004-485-2611, 1 May 2009 at [8].

3      Financial Markets Authority v Hotchin [2013] NZHC 2082.

[8]      In support of their application the defendants say that the third party filed and served a synopsis of submissions running to 36 pages in length, necessitating an application for an extension of time to file submissions in response which ultimately led (though not entirely for this reason) to the fixture being adjourned to a two day fixture in February.

[9]      Counsel refer to an exchange of correspondence, without prejudice except as to costs, which had the effect of placing the third party on notice that the defendants felt confident about their case and would seek costs for each opposition in the event of the third party proceeding.  Costs on a 2C basis would be sought.

[10]     Counsel also noted that the third party abandoned its application for summary judgment at the hearing.

[11]     In my opinion the defendants are entitled to separate awards of costs for filing their notices of opposition and appearing at conferences.  These attendances took  place  at  a time when  the defendants  were,  and  were quite  entitled  to  be, separately represented in relation to the applications for strike-out and for summary judgment brought by the third party.

[12]     To that extent, therefore, there is in my view good reason to award a set of costs to each defendant in respect of items 12 and 13 in the schedule of costs claimed by the defendants.  I agree that these costs should be on a 2B basis.

[13]     In  terms  of  the  hearing,  however,  the  position  is  different.    Whilst  the defendants put the third party on notice that they would claim three sets of costs, and the third party nonetheless continued with its application rather than abandoning it to avoid adverse costs, the defendants in fact quite responsibly divided their argument into separate parts for each counsel to deliver.  This avoided repetition and no doubt saved time.   But the defendants did not go the extra step of having one counsel deliver the entire submission in opposition to the application.  They say that it was appropriate for each of the defendants to have separate representation.  They say that separate affidavit evidence had been filed for the first/second defendants and the fifth defendant and the extent of the submission by the third party which the defendants

faced, over three and a half times the maximum provided for by the Rules, was such that even with the extended time for preparation which the adjournment  of the fixture allowed, it was still necessary for the work facing the defendants to be divided up.

[14]     In  my  view,  given  the  evident  cooperation  between  counsel  for  the defendants which led to the task of preparation and presentation of submissions being divided into three parts, they could well have agreed that one counsel would present all submissions on behalf of all defendants.  That would have been a task of considerable proportion,  but not a task by any standard insurmountable.   There would have been a significant saving of cost, consistent with the purpose of the High

Court Rules4 and this course would also have been consistent with the mandate in r

14.15.

[15]     I find that the defendants have not established good reason to depart from the mandate in r 14.15, in relation to preparation and delivery of submissions.  On items

24 and 26, therefore, I allow one set of costs.  Item 24 will be on a 2C basis, and item 26 on a 2B basis, as sought.

[16]     Disbursements are allowed in the sum of $3,022.28.

J G Matthews

Associate Judge

Solicitors:

Buddle Findlay, Christchurch. Duncan Cotterill, Christchurch.

Lee Salmon Long, Auckland.

Morgan Coakle, Auckland. G M Brodie, Christchurch.

4      Rule 1.2.