HEIDI DALE OLIVER, HARRY JAMES DALE KENT, JOSEPHINE KATHLEEN CLARK, MICHELLE ANNE TILLOTSON in their capacities as the Administers of the deceased estate of Harry Dale Kent s AND UPPER HUTT CITY COUNCIL

[2024] NZHC 3250

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2023-485-262

[2024] NZHC 3250

UNDER

the Declaratory Judgments Act 1908

IN THE MATTER

of pt 18 of the High Court Rules

BETWEEN

HEIDI DALE OLIVER, HARRY JAMES DALE KENT,

JOSEPHINE KATHLEEN CLARK, MICHELLE ANNE TILLOTSON in their
capacities as the Administers of the deceased estate of Harry Dale Kent
Plaintiffs

AND

UPPER HUTT CITY COUNCIL

Defendant

Hearing:	On the papers
Appearances:	P Murray and P Daniels for Plaintiffs G Neil for the Official Assignee
Judgment:	5 November 2024

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[Costs]

[1]    The Official Assignee seeks indemnity costs in the total sum of $22,811.43 (incl GST) in relation to the plaintiffs’ discovery application and compliance with that order on the basis that he is a non-party.1 The plaintiffs accept that the Official Assignee is entitled to costs but oppose indemnity costs on the basis that the Official Assignee was not truly a non-party. The plaintiffs say that costs on a 2B basis for the Assignee’s discovery would be $5,975 and that reasonable costs would be

1      Less GST, service fee and disbursements, the sum claimed is $19,106.05.

OLIVER v UPPER HUTT CITY COUNCIL [2024] NZHC 3250 [5 November 2024]

approximately $9,000, but contend that the Official Assignee is estopped from claiming costs in excess of $5000.

[2]    Costs are ultimately a matter of the court’s discretion, the overall objective being to achieve an outcome that best meets the interests of justice.2 However, that discretion is qualified by the applicable costs rules,  contained  in  pt  14  of  the  High Court Rules 2016 (HCR). The primary principle applying to the determination of costs is that costs follow the event – meaning that a party who is unsuccessful pays costs to a party who is successful.3 Costs are usually to be assessed on the basis of the schedule by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application.4

[3]With regard to the costs of discovery, r 8.22 of the HCR provides that:

(1)If it is manifestly unjust for a party to have to meet the costs of complying with an order made under this subpart, a Judge may order that another party meet those costs, either in whole or in part, in advance or after the party has complied.

(2)Despite subclause (1), the court may subsequently discharge or vary an order made under that subclause if satisfied that a different allocation of those costs would be just.

(3)If an order is made under rule 8.20(2) or 8.21(2), the Judge may, if the Judge thinks it just, order the applicant to pay to the person from whom discovery is sought the whole or part of that person's expenses (including solicitor and client costs) incurred in relation to the application and in complying with any order made on the application.

Assessment

[4]    In the memorandum of counsel for the Official Assignee dated 26 September 2024, it seems to be acknowledged that, pursuant to the HCR, the Official Assignee is a “defendant” and a “party” as a result of being served under r 18.8.5 The Official

2      High Court Rules 2016, r 14.1; Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7] and [16]; Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [21]–[24] and [28]; and Mansfield  Drycleaners  Ltd  v  Quinny’s  Drycleaning (Dentice Drycleaning Upper Hutt) Ltd (2002) 16 PRNZ 662 (CA) at [27].

3      Rule 14.2(1)(a).

4      Rule 14.2(1)(c).

5      Rule 1.3.

Assignee filed a notice of appearance in the matter after being served. Rule 18.6 provides that a person who becomes a party by being served under a direction of the Court need not be named as a defendant.

[5]    The discovery order was made under r 8.5, not r 8.21 which provides for non-party discovery. In a joint memorandum dated 12 September  2023,  the  Official Assignee did not oppose the order but abided the decision of the Court. The Official Assignee contended that he ought properly to be treated as a non-party for discovery purposes and have his costs met by the plaintiffs. The joint memorandum recorded that the parties had agreed “that the matter of the Assignee’s reasonable expenses, including legal costs and his time charges, would be deferred for consideration and (if necessary) determination in the context of other costs matters at the conclusion of the proceeding”. The Assignee reserved all rights to seek indemnity costs in relation to the application for discovery and in complying with any order made on the application.

[6]    The Official Assignee submits that, to the extent that he is technically a “defendant” and therefore a “party”, then r 8.22(1) should apply and it is manifestly unjust for him to have to meet the costs of complying with the discovery order, and those costs ought to be met, either in whole or in part, by the plaintiffs. Alternatively, to the extent that it is found that the Official Assignee is not a party for the purposes of discovery, then r 8.22(3) applies and it is just for the plaintiffs to pay the whole of the Assignee’s costs and expenses of discovery.

[7]    First, I consider that the costs of the application itself should lie where they fall. The plaintiffs were successful, but the Official Assignee did not oppose the application and abided the decision of the Court.

[8]    With regard to the costs of complying with the discovery order, I consider that r 8.22(1) applies. The Official Assignee is a “defendant” and a “party” in accordance with the HCR. However, the Assignee became involved in the proceedings by way of service under r 18.8, and then engaged in the proceedings to assist the Court and to protect his position. Although there was no claim by the plaintiffs against the Assignee, the Assignee says that the plaintiffs made “what was in substance allegations

of professional negligence against him”. The Assignee also expressly reserved his position on costs in not opposing and abiding the decision of the Court on the discovery order. In the circumstances, it would be manifestly  unjust  for  the  Official Assignee to have to meet the whole of his costs and expenses of complying with the discovery order.

[9]    I do not accept the plaintiffs’ contention that the Official Assignee is estopped from claiming costs in excess of $5000. It is apparent that counsel for the Official Assignee provided by way of email a “rough estimate” that was made before the full extent of what was being sought by discovery and the volume of discovery required was analysed and understood, and did not cover all the relevant steps, and made clear that instructions were yet to be formally taken from the Assignee. It is also apparent that the email communicating the estimate was part of a without prejudice exchange between counsel.

[10]   However, I do not consider that the plaintiffs should have to bear the whole of the Assignee’s costs. It is apparent that the plaintiffs did not expect that the Assignee’s costs would be at the level claimed and might have reconsidered the extent of discovery sought if they had been made aware of the level of costs required to be incurred either at the time the order was made or subsequently. In my view, taking a broad approach, an appropriate award of costs is $12,000 which is double the 2B scale costs allowance for discovery (step 20), and approximately 65% of the Assignee’s actual costs incurred in complying with the order.

[11]   The plaintiffs seek a reduction in costs of $2000 under r 8.7 because the Assignee raised “irrelevant matters” and “improper allegations” in his memorandum dated 26 September 2024 and therefore “contributed unnecessarily to the time or expense of the claim for costs”. However, I do not consider that the allegations raised in the context of submissions on costs and seeking the exercise of the court’s discretion are such that they warrant a reduction in costs.

[12]   The Assignee has claimed costs for preparing his reply to the plaintiffs’ memorandum. However, as the Assignee has not been entirely successful on his

application for costs, I do not consider that there is any basis for the Assignee to be awarded costs on his reply.

Result

[13]   The Official Assignee is awarded costs in the sum of $12,000 together with disbursements in the sum of $445.09 (for the LawFlow discovery platform costs), to be paid by the plaintiffs.

Associate Judge Skelton

Solicitors:

Quantum Law, Auckland for Plaintiffs Meredith Connell, Auckland for Defendant