Jindal v OM Financial Limited

[2020] NZHC 2444

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-004-00628

[2020] NZHC 2444

UNDER

Lawyers and Conveyancers Act 2006 and Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008

BETWEEN

GAUTAM JINDAL

Intended Appellant

AND

OM FINANCIAL LIMITED

Intended First Respondent

NZX LIMITED
Intended Second Respondent

MINTER ELLISON RUDD WATTS

Intended Third Respondent

Hearing:	On the papers at Auckland
Judgment:	18 September 2020

JUDGMENT OF POWELL J

[Costs]

This judgment was delivered by me on 18 September 2020 at 3 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

JINDAL v OM FINANCIAL LIMITED [2020] NZHC 2444 [18 September 2020]

[1]    In my decision of 7 August 2020, I dismissed the application of Gautam Jindal seeking leave to file an appeal out of time.1 In my decision I confirmed the intended respondents, OM Financial Ltd (“OM Financial”), NZX Ltd (“NZX”) and Minter Ellison Rudd Watts, were entitled to costs on the application and set out timetable directions. OMF and NZX have now sought costs:2

(a)OM Financial has applied for costs in the sum of $10,755, being costs calculated on a 2B basis with a 50 per cent uplift and disbursements of

$110. OM Financial seeks increased  costs  on  the  basis  that  both Mr Jindal’s application for an extension of time and intended appeal were without merit, and Mr Jindal unnecessarily contributed to the time and expense of the proceeding.

(b)NZX a non-party to the proceeding, was named as the second respondent to the intended appeal. As a non-party NZX seeks indemnity costs totalling $7,864.96, a sum it calculates is equivalent to 2B scale costs with a 9 per cent uplift.

[2]    In response Mr Jindal does not dispute  that  costs  should  be  payable  to OM Financial, however, he says that his impecuniosity justifies a 50 per cent reduction in the scale costs, resulting in a sum of $3,585. He does not make any references to the costs sought by NZX. As evidence of his impecuniosity Mr Jindal has filed an affidavit stating that he has been granted legal aid to appeal my decision to the Court of Appeal, which required him to show he possesses less than $3,500 in disposable capital. Mr Jindal asserts that his disposable capital is in fact below zero, and that he will be unable to afford any costs award against him.

Discussion

[3]    It is well established that costs ordinarily follow the event so that the loser will pay the winner’s costs.3 There can be no doubt that OM Financial was successful and on the face of it is entitled to costs in accordance with the scale set out in the High

1      Jindal v OM Financial Ltd [2020] NZHC 1993.

2 At [22].

3      Rules 14.2 – 14.5.

Court  Rules  2016.   However,  costs  remain  at  the  discretion  of  the  Court  and  r 14.6(3)(b) provides that increased costs may be ordered if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding by: failing to comply with these rules or with a direction of the court; or taking or pursuing an unnecessary step or an argument that lacks merit.

[4]    In this case I am satisfied that the uplift sought is justified. Mr Jindal’s application for an extension of time was fundamentally flawed, given it was filed eight weeks late and with no satisfactory explanation  given for the delay.  In addition,   Mr Jindal failed to comply with timetable orders. Finally, Mr Jindal refused a Calderbank offer that would have seen costs lie where they fall and in circumstances where he was warned that such an offer would be used to seek increased costs if the application for an extension of time failed, which it inevitably did.

[5]    As a non-party who was put to expense by the current proceedings NZX is also entitled to costs on the basis that “third parties brought in by a sidewind should not be left meeting their own expenses”.4 In the absence of good reasons to the contrary a non-party will be entitled to recover full and reasonable costs.5

[6]    Although I therefore agree in principle that OM Financial is entitled to increased costs and NZX to indemnity costs respectively, in the present case where Minter Ellison Rudd Watts acted for both OM Financial and NZX, in the absence of time sheets or other evidence to confirm the breakdown of what was done, I am unable to be satisfied that there is in fact no overlap in the costs incurred and/or claimed by the two intended respondents. This is of particular concern given that only one notice of opposition, one set of submissions and a single costs memorandum and supporting affidavit were prepared and only one set of counsel made appearances at the hearing on behalf of all respondents. In these circumstances the Court must not allow the recovery of more than one set of costs, rather, costs awarded must reflect those that were reasonably incurred in the joint opposition.6

4      Clear Communications Ltd v Telecom Corporation of NZ Ltd (1994) 8 PRNZ 200 (HC).

5      At 4.

6      Rule 14.15 of the High Court Rules 2016 provides that where multiple defendants defend a claim separately only one set of costs are recoverable. By analogy, where a claim against multiple parties is jointly defended or opposed, there cannot be double recovery of the sums spent in defending the claim.

[7]    To avoid dragging out the determination of this issue by seeking further detail which would inevitably result in putting all parties to extra costs, I prefer to apply a global discount to the costs sought by OM Financial and NZX to take into account what I consider to be a high probability of overlap. In this respect I am satisfied total costs of $10,000 are appropriate together with disbursements as fixed by the Registry.

[8]    The issue now turns to whether those costs ought to be reduced on account of Mr Jindal’s claimed impecuniosity. This Court may decline to award costs where the party liable to pay is impecunious.7 Typically, however financial hardship will not be an answer to a claim for costs.8 Only in exceptional circumstances will a party’s financial position animate the Court’s discretion to reduce costs.9 This position is driven by the fact that it is “[un] desirable for this Court to make (what will always be essentially arbitrary) adjustments to costs awards to reflect financial circumstances when the purpose of a scale is meant to ensure that costs can be quickly and efficiently determined”.10 Although I have sympathy for Mr Jindal, I do not think this is an appropriate case to reduce costs by some arbitrary amount to reflect his financial position.

Decision

[9]    OM Financial and NZX are each entitled to costs against Mr Jindal in the sum of $5,000 together with any disbursements as fixed by the Registry.

Powell J

7      Under r 14.7(g) this Court may reduce costs or decline to award costs for “some other” reason beyond those listed in r 14.7(a)-(f) where that reason is capable of justifying refusal. This catch all ground has been interpreted to include financial hardship or impecuniosity. See Craig v Keith [2017] NZHC 2664, [2017] NZFLR 899 at [23]; Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2011] NZCA 640 at [7]; Simister v Tauranga Cruise Tourism Operators Association Inc [2015] NZHC 2133 at [15]; and Howard v Accident Compensation Corporation [2014] NZHC 3141.

8       Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2011] NZCA 640 at [7].

9      HA v Refugee and Protection Officer [2018] NZHC 1011 at [14].

10 At [16].