Houghton v Saunders - [2020] NZHC 265

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2008-409-348

[2020] NZHC 265

BETWEEN
ERIC MESERVE HOUGHTON

Plaintiff

AND

TIMOTHY ERNEST CORBETT SAUNDERS, SAMUEL JOHN MAGILL, JOHN MICHAEL FEENEY, CRAIG

EDGEWORTH HORROCKS, PETER DAVID HUNTER, PETER THOMAS and JOAN WITHERS
First Defendants

CREDIT SUISSE PRIVATE EQUITY INCORPORATED

Second Defendant

CREDIT SUISSE FIRST BOSTON ASIAN MERCHANT PARTNERS LP

Third Defendant

On papers

Judgment:

25 February 2020

JUDGMENT OF DOBSON J

[Wasted costs on adjournment of stage two hearing]

[1] On 25 October 2019, the plaintiff somewhat belatedly applied for an adjournment of the five week hearing of stage two of this proceeding, scheduled to commence on 4 November 2019.

HOUGHTON v SAUNDERS [2020] NZHC 265 [25 February 2020]

[2] In a judgment issued on 7 November 2019, I provided reasons for granting the adjournment.1 I will not review the reasons set out in that judgment.

[3] In arguing for the adjournment, counsel for the plaintiff acknowledged that any adjournment granted would be subject to an order in favour of the defendants for their wasted costs in preparing for the stage two hearing, effectively right up to the date on which it was scheduled to commence. I directed the parties to file memoranda. I have subsequently received and considered:

· memoranda on behalf of the first defendants, and the second and third defendants, both dated 25 November 2019;

· a memorandum in response on behalf of the plaintiff dated 16 December 2019.

[4] In addition to pursuing their claim for an order for wasted costs, on 29 November 2019 the defendants filed a joint application for costs against Joint Action Funding Limited (JAFL) and Mr Anthony Gavigan (Mr Gavigan). Mr Gavigan has responded on his own behalf, and for JAFL. I deal with that aspect of these issues at [28] to [42] below.

[5] Orders for wasted costs as a condition of granting an adjournment of trials serve a dual purpose:2

· to compensate the parties that are not in default who have genuinely wasted costs; and

· as a sanction to the defaulting party in order to avoid future wastage of costs and judicial and court resources.

1 Houghton v Saunders [2019] NZHC 2906.
2 Robert Osborne and others McGechan on Procedure (online ed, Thomson Reuters) at [HCR 14.16A(1)], Bligh v Earthquake Commission [2017] NZHC 3179 at [11].

Submissions for defendants

[6] Counsel for the first defendants submit that due to the duration of the fixture and the complexity and significance of the issues to be determined, category 3 and band C are appropriate to calculate costs for their stage two hearing preparation. All counsel submit that the 3C allowance for a five week trial based on step 33 in sch 3 of the High Court Rules 2016,3 is 16.25 days, at $3,530, totalling $57,362.50.

[7] However, counsel for the first defendants have submitted that this total would be inadequate. They have suggested that the preparation allowance should be extended to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Houghton v Saunders

Details

AGLC: Houghton v Saunders [2020] NZHC 265
Case: [2020] NZHC 265
Decision Date: 25 February 2020

CaseChat Overview and Summary

The plaintiff, Eric Meserve Houghton, sought an adjournment of the hearing of stage two of this proceeding, which was initially scheduled for five weeks, starting on 4 November 2019. The defendants opposed the adjournment but conceded that if granted, the adjournment would be subject to an order in their favour for their wasted costs in preparing for the hearing. The defendants argued for a substantial increase over the presumptive scale cost entitlement for the preparation stage of a hearing that was then adjourned. The plaintiff argued that the quantum of wasted costs claimed by the defendants was excessive and unrealistic. The court was required to decide the appropriate quantum of wasted costs to be awarded to the defendants and whether the non-parties, Joint Action Funding Limited (JAFL) and Mr Anthony Gavigan, should be jointly and severally liable for the wasted costs.

The court considered the nature of the case, the scale of the hearing that had been adjourned, and the length of the warning that the defendants had that preparation should either be scaled back or put on hold. The court also considered the technical nature of the expert evidence and the range of individual circumstances of the claimants on which the defendants may wish to cross-examine them. The court found that a substantial portion of the preparatory work would retain much of its utility for the adjourned hearing little more than six months later. The court considered the appropriate order for wasted costs to be one in the sum of $110,000 for all of the first defendants, to be shared between the majority and the two directors who had elected to be separately represented, as counsel agreed between themselves. The court also ordered the second and third defendants to be entitled to an award of $100,000 for wasted costs. The court found that the non-parties, JAFL and Mr Gavigan, should be jointly and severally liable for the wasted costs and disbursements. The ultimate disposition in respect of costs obligations and entitlements remained unclear, and the enforcement of the costs order was stayed until the fate of the adjourned fixture was known.

Orders