Hook v Callaghan Innovation

[2024] NZHC 3430

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2024-485-000243

[2024] NZHC 3430

BETWEEN

CHRISTOPHER RUSSELL HOOK

Appellant

AND

CALLAGHAN INNOVATION

Respondent

Hearing:

(On the papers)

Counsel:

Appellant in person

C R Langstone for Respondent

Judgment:

18 November 2024

JUDGMENT OF LA HOOD J

(Costs)

[1]                 In my substantive judgment I dismissed Mr Hook’s appeal against the decision of the District Court striking out his negligence claim against Callaghan Innovation (Callaghan).1

[2]                 Callaghan seeks indemnity costs against Mr Hook. Mr Hook submits that costs should lie where they fall.

[3]                 Callaghan’s claim  for  indemnity  costs  is  in  the  sum  of  $34,495.50  (GST exclusive) and a disbursement for an airfare for counsel’s travel to Wellington for the hearing in the sum of $380.88 (GST exclusive). Callaghan initially claimed a GST inclusive sum but accepts that is inappropriate as it can recover GST. I note, however, that the costs ordered in the District Court were GST inclusive. Unless

1      Hook v Callaghan Innovation [2024] NZHC 2240 [Substantive judgment].

HOOK v CALLAGHAN INNOVATION [2024] NZHC 3430 [18 November 2024]

Callaghan’s GST position has changed since the District Court decision, this was clearly an error caused by counsel’s failure to direct the Court to a well-established legal principle of plain relevance. If it is correct that Callaghan’s GST position is unchanged, Callaghan should make an application to the District Court to recall and correct its costs decision.2

Legal principles

[4]                 Indemnity costs are governed by r 14.6(1)(b) of the High Court Rules 2016. In the leading case on indemnity costs of Bradbury v Westpac Banking Corp, the Court noted there are several categories of conduct in which indemnity costs have been awarded:3

We therefore endorse Goddard J’s adoption in Hedley v Kiwi Co-operative Dairies Ltd (2002) 16 PRNZ 694 at [11] (HC) of Sheppard J’s summary in Colgate v Cussons at [24]. While recognising that the categories in respect of which the discretion may be exercised are not closed (see r 14.6(4)(f)), it listed the following circumstances in which indemnity costs have been ordered:

(a)the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;

(b)particular misconduct that causes loss of time to the court and to other parties;

(c)commencing or continuing proceedings for some ulterior motive;

(d)doing so in wilful disregard of known facts or clearly established law;

(e)making allegations which ought never to have been made or unduly prolonging a case by groundless  contentions,  summarised  in French J’s “hopeless case” test.

[5]                 In terms of the “hopeless case” category, the Court of Appeal has explained that it is unnecessary that there be flagrant misconduct.4 The phrase “totally without merit” can be equated with “bound to fail” or “hopeless”. A conclusion that a case is hopeless is not one that can be based on “fine distinctions or complex reasoning”.5

2      Uhrle v R [2020] 1 NZLR 286, [202] NZSC 62.

3      Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [29]; applied in TheCircle.co.nz Ltd v Trends Publishing International Ltd (in liq and in rec) [2021] NZCA 235, (2021) 25 PRNZ 766 at [32].

4      TheCircle.co.nz Ltd v Trends Publishing International Ltd (in liq and in rec), above n 3, at [34].

5 At [34].

[6]                 Callaghan successfully obtained a near indemnity costs award against Mr Hook and Surface Micro-Guard Ltd in the District Court (reduced to take account of duplication of work) totalling $101,970.52 (GST inclusive). The Judge concluded that the case was “hopeless from inception and is a matter that the plaintiffs should have known from Judge Rowe’s earlier decision, had no chance of success”.6

Decision

[7]                 I accept Callaghan’s submissions that the following matters justify an award of indemnity costs:

(a)For the reasons set out in my substantive decision, Mr Hook’s case was hopeless and bound to fail.7 Mr Hook’s claim misapprehended the law of negligence. And his conduct supports the District Court’s conclusion that he is using the proceeding to circumvent the orders restraining him from bringing proceedings in relation to cancellation of the licence,8 and that he is only pursuing this claim against Callaghan because he was unable to pursue his claim against Cross Slot IP and Dr Baker.

(b)Mr Hook filed detailed and lengthy material through which he attempted to make arguments and introduce information relating mainly to the commercial relationship between himself and Dr Baker. The memoranda were lengthy and appeared to be filed to relitigate issues he had already unsuccessfully attempted to litigate in Hook v Scott.9 This required counsel for Callaghan to expend considerable time deciphering and responding to these documents.

(c)Mr Hook made allegations in the High Court that the District Court Judge was “biased” and was using his position as a Judge to “punish” Mr Hook and ensure his claim was struck out. These are serious allegations against the Judge, which were irrelevant and unfounded.

6      Surface Micro-Guard Ltd v Callaghan Innovation [2024] NZDC 10085 at [31].

7 Substantive judgment, above n 1, at [24].

8      Hook v Scott [2023] NZDC 2299 at [26].

9      Hook v Scott [2024] NZHC 2071.

[8]                 The amount claimed for indemnity costs is $34,495.50 (supported by invoices). I note that scale costs calculated on a 2B basis would be $15,774. An indemnity costs award must be for actual but reasonable costs. I consider some reduction to the actual costs is required to reflect a number of factors, namely: that there have been errors in the calculation of the amounts claimed that required further clarification; Mr Hook is self-represented and not well placed to dispute the reasonableness of the costs; and the principle that scale costs should normally be two-thirds of the daily recovery rate. Standing back and taking all matters into account, including the extra cost caused by Mr Hook’s conduct of the case, I consider a reasonable sum of indemnity costs to be

$30,000 (GST exclusive).

[9]                 I therefore order Mr Hook to pay indemnity costs in the sum of $30,000 (GST exclusive) and disbursements of $380.88 (GST exclusive).

La Hood J

Solicitors:
Fee Langstone, Auckland for Respondent