Johnson v Johnson
[2021] NZHC 2432
•16 September 2021
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-485-144
[2021] NZHC 2432
BETWEEN BRYAN EWART JOHNSON, DAVID HOUGHTON and CHRISTOPHER DAN WILLIAMS
Plaintiffs
AND
CRAIG BRYAN JOHNSON and MARIA BERNADETTE JOHNSON
First Defendants
LITTLE SCHOOL LIMITED
Second DefendantJOHNSON PRESCHOOL LIMITED
Third Defendant
CIV-2021-485-118 BETWEEN
MARIA BERNADETTE JOHNSON
ApplicantAND
CRAIG BRYAN JOHNSON
Respondent
Hearing (by VMR): 1 September 2021 Counsel:
C Stevens, T Mijatov and H Stanford for the Applicant M Wigley for the Respondent
Judgment:
16 September 2021
COSTS JUDGMENT OF GWYN J
JOHNSON v JOHNSON [2021] NZHC 2432 [16 September 2021]
Table of Contents Background
[2]
Context [8] Applicable law [11] The rescission application [15] Mr Johnson’s submissions [25] Ms Johnson’s submissions [30] Discussion [38] Did the interim injunction application create a false impression about the Global Hort proceeding? [42]
Did the memorandum in support of the application create a false impression about Mr Johnson’s compliance with Court directions? [44]
Was there a substantial risk of Mr Johnson deleting emails and WeChat
messages? [48]
Did the memorandum in support of the application adequately advise the Court of potential opposition or defences by Mr Johnson? [55]
Ms Johnson’s opposition to variation of the orders [57] Ms Johnson’s late withdrawal of opposition to the application for rescission [58] Conclusion [60]
The discovery application [62]
Mr Johnson’s submissions [64]
Ms Johnson’s submissions [74]
Discussion [81]
Conclusion [104]
Quantum of costs [105]
Discussion [107]
Result [110]
[1] Craig Johnson seeks indemnity costs of two interlocutory applications which were for hearing on 28 July 2021.
Background
[2] Craig Johnson and Maria Johnson were married, but separated in December 2014. As I understand it, they are now divorced.
[3] There are four proceedings in this Court, involving issues generally related to the relationship property dispute between Mr Johnson and Ms Johnson, set down for substantive hearing for eight days commencing on 8 November 2021:
(a)CIV-2018-485-144 (the “Abel Trust proceeding”);
(b)CIV-2020-485-421 (“the Life Learning Aotearoa proceeding”);
(c)CIV-2020-485-417 (“the Simla Crescent proceeding”); and
(d)CIV-2021-485-118 (“the PRA proceeding”).
[4] The various proceedings detailed above have given rise to a number of interlocutory applications between Mr Johnson and Ms Johnson, including an application by Ms Johnson for an ex parte interim injunction against Mr Johnson and Spark New Zealand Trading Limited (Spark), which was granted by Gault J on 26 May 2021.1 Mr Johnson applied to rescind that ex parte interim injunction on 24 June 2021 (the rescission application). The rescission was opposed by Ms Johnson. That is the first application that I am concerned with today.
[5] The second relevant application was made by Ms Johnson, on 21 June 2021, seeking 29 urgent orders relating to alleged “breach of discovery orders, consequences of breach and as to discovery” (the discovery application). The discovery application was opposed by Mr Johnson.
1 Johnson v Johnson HC Wellington CIV-2018-485-144 Minute of Gault J, 26 May 2021.
[6] Both applications were set down for hearing on 28 July 2021. On 27 July 2021 Ms Johnson abandoned the discovery application and consented to the rescission application (including on the basis that an application concerning the same subject-matter must not be repeated in these proceedings).
[7] Mr Johnson now seeks indemnity costs in relation to both applications. Ms Johnson seeks orders that costs lie where they fall.
Context
[8] This Court has previously commented on the multiplicity of proceedings between the parties and the conduct of that litigation. As Gendall J has remarked,2 the proceedings have spawned a vast amount of correspondence and communications between the parties and the level of animosity between them has been high.
[9] Similarly, Associate Judge Johnston observed in July 2020, in relation to this proceeding:3
Since it was commenced on 28 February 2018, the scope of the proceeding has expanded. Why that has happened is not difficult to discern. Craig and Maria appear to be engaged in a no-holds-barred relationship property dispute in which their liabilities and those of their businesses to the plaintiff trustees are relevant.
[10] That context is important because, in my view, it has influenced the conduct of the two applications with which I am concerned. Counsel for Ms Johnson, Mr Wigley, urged that I consider the applications without regard to the broader context of all the proceedings, which he says is peripheral to and not directly relevant to the issues I must consider. Mr Wigley says that, except for Associate Judge Lester’s judgment on Ms Johnson’s general discovery application, which I will come to, other judgments in these proceedings are not relevant. However, I note there is already agreement between the parties that evidence filed in one proceeding is available in relation to the other proceedings, and I have concluded that the issues arising in relation to these two applications are inextricably linked with the conduct of all of the proceedings as a whole.
2 Johnson v Johnson [2021] NZHC 1369 at [5]-[6].
3 Johnson v Johnson [2020] NZHC 1563 at [2].
Applicable law
[11] Costs are at the discretion of the Court,4 but that discretion is exercised on the basis of specified principles.5 The primary principle is that “costs follow the event” – “the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds”.6
[12] Other relevant principles include that an award of costs should reflect the complexity and significance of the proceeding; costs should be assessed 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; and an appropriate daily recovery rate is normally two-thirds of the daily rate considered reasonable in relation to the proceeding or interlocutory application.
[13] Despite rules 14.2-14.5, the Court may order increased costs or indemnity costs (the actual costs, disbursements, and witness expenses reasonably incurred by a party).7 Rule 14.6 relevantly provides:
(3)The court may order a party to pay increased costs if—
(a)the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or
(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
(i)failing to comply with these rules or with a direction of the court; or
(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or
(iii)failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or
(iv)failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or
(v)failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer
4 High Court Rules 2016, r 14.1.
5 Rule 14.2.
6 Rule 14.2(1)(a).
7 Rule 14.6(1).
under rule 14.10 or some other offer to settle or dispose of the proceeding; or
(c)the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or
(d)some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.
(4)The court may order a party to pay indemnity costs if—
(a)the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or
(b)the party has ignored or disobeyed an order or direction of the court or breached an undertaking given to the court or another party; or
(c)costs are payable from a fund, the party claiming costs is a necessary party to the proceeding affecting the fund, and the party claiming costs has acted reasonably in the proceeding; or
(d)the person in whose favour the order of costs is made was not a party to the proceeding and has acted reasonably in relation to it; or
(e)the party claiming costs is entitled to indemnity costs under a contract or deed; or
(f)some other reason exists which justifies the court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious.
[14] The provision which Mr Johnson invites me to apply is r 14.6(4)(a), which is related to situations where a party has behaved badly or very unreasonably. Misconduct, to justify indemnity costs, must be flagrant.8 “Unnecessarily” in r 14.6(4)(a) takes its meaning and flavour from the preceding adverbs “vexatiously, frivolously, improperly”.9 Examples of behaviour encompassed by r 14.6(4)(a) are:10
(a)Making allegations of fraud knowing them to be false, and making irrelevant allegations of fraud.
8 Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [26]-[28]; Prebble v Awatere Huata (No 2) [2005] NZSC 18, [2005] 2 NZLR 467 at [6].
9 Saunders v Winton Stock Feed Ltd [2009] NZCA 148 at [30], endorsed in Bradbury v Westpac Banking Corp, above n 8, at [26].
10 Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248, adopted in Hedley v Kiwi Co-operative Dairies Ltd (2002) 16 PRNZ 694 (HC) at [11], endorsed in Bradbury v Westpac Banking Corp, above n 8, at [29].
(b)Particular misconduct causing loss of time to the Court and to other parties.
(c)Commencing or continuing a proceeding for some ulterior motive.
(d)Commencing or continuing a proceeding in wilful disregard of known facts or clearly established law.
(e)Making allegations that ought never to have been made, or unduly prolonging a case by groundless contentions (the “hopeless case” situation, which is equated with “totally without merit” and “bound to fail”).
The rescission application
[15] Ms Johnson’s application for an ex parte interim injunction came before Gault J, as Duty Judge, on 28 May 2021. The application sought orders requiring Spark to copy and retain Mr Johnson’s emails on its server, and for Mr Johnson to retain emails and WeChat messages.
[16] The application alleged failure by Mr Johnson to comply with discovery orders made by Associate Judge Lester on 20 April 2021.11 The Associate Judge had made orders in the following terms:
[73] Following discussions with counsel, the following steps appear to be acceptable:
(a)Craig will provide to his counsel his email passwords and any other information required to access his Xtra email account;
(b)an IT expert within Craig’s firm of solicitors, with Craig’s counsel, will investigate whether recovery of the emails prior to December 2012 is possible;
(c)if recovery of the emails prior to December 2012 is possible, the emails will be downloaded/copied to enable a supplementary list of documents to be produced;
(d)Mr Wigley is to advise if he wishes his IT expert to be present during that exercise. For the avoidance of doubt, that would
11 Johnson v Johnson [2021] NZHC 840.
be at Maria’s cost. If Maria’s IT expert is present, then she will be able to view the process of investigating whether the emails can be accessed/recovered but not the contents of individual emails;
(e)while not discussed, I would envisage this process to be completed within 15 working days (that is by Wednesday 12 May 2021); and
(f)leave is reserved to apply for further directions in respect of the suggested means of investigating the recoverability of the emails.
[17] Associate Judge Lester also found that, in relation to the balance of Ms Johnson’s discovery application, there was nothing to suggest Mr Johnson’s claim that he had already produced all relevant material was incorrect.
[18] The interim injunction application expressed concern that Mr Johnson may withhold emails from Ms Johnson in three proceedings: the Abel Trust proceeding, the PRA proceeding, and a new proceeding known as the Global Horticulture proceeding. The application also said it was made ex parte “out of concern that notice may lead to Mr Johnson deleting emails.”
[19] The application was accompanied by a memorandum of counsel (the memorandum in support) from Mr Wigley. That memorandum asserted that the IT expert appointed pursuant to [73(b)] of Associate Judge Lester’s orders, although having Mr Johnson’s password, did not access his emails using the password, “contrary to the orders made” and simply accepted Mr Johnson’s “say-so” that they could not be accessed by server or on his computer. It also asserted that the expert did not access Mr Johnson’s computer remotely to see what was there, as was possible technically.
[20] The application also referred to production by Mr Johnson of an email which, Ms Johnson said, had not previously been disclosed by him, and which Mr Wigley says was contrary to Mr Johnson’s earlier affidavit where he stated he had disclosed all relevant documents. As well as asserting dishonesty on Mr Johnson’s part, Mr Wigley also asserted that production of that email implied the likelihood that Mr Johnson’s computer and/or server may have been configured to retain emails for many years.
[21] The memorandum in support observed that the orders sought “simply retain the status quo securely and are not intrusive beyond that”.
[22] Pursuant to Mr Wigley’s obligation to certify that the grounds alleged are made out, he said:
Matters to disclose against Maria’s application
The Abel Trust proceeding and the Global Hort circumstances have generated a great deal of unfortunate “man not ball” activity, in both directions, plus allegations that Maria and counsel have acted with ulterior motive by pushing the Global Hort claim to leverage a better outcome in the PRA proceeding (which is firmly denied). While it is not accepted that this is material to this application, Craig’s stance on this is illustrated, by way of disclosure, by his counsel’s submissions for the hearing earlier this month before Gendall J (and see also Maria’s submissions: Andrew Butler not this counsel appeared on that matter).
[23] Justice Gault heard the application for an ex parte interim injunction on 26 May 2021 and granted the orders sought. In the course of his judgment Gault J noted:12
[8] In circumstances where the Court has already directed steps to be followed in relation to discovery and an application for further discovery is signalled, I have some reservation about the appropriateness of a without notice application. However, I accept there is at least a concern about the deletion of discoverable documents. Without putting it higher, I accept there is a risk of prejudice insofar as notice of the application may lead Mr Johnson to delete emails or WeChat messages. I also accept that the orders sought are limited to securing and retaining documents and in that sense preserve the status quo.
[24] Following the granting of the interim injunction on 26 May, Mr Wigley filed a memorandum seeking urgent orders. Justice Gault convened a telephone conference on 28 May 2021. The Judge’s minute of that conference recorded:13
[2] While seeking clarification as to the further orders sought by Mr Wigley, Mr Stevens confirmed Mr Johnson’s instructions that nothing has been deleted from his laptop. That reassurance led Mr Wigley to confirm that no further orders are sought today.
[3] Mr Stevens emphasised the limited relevance of historic emails by reference to Associate Judge Lester’s judgment of 10 April 2021, and
12 Johnson v Johnson, above n 1, at [8].
13 Johnson v Johnson HC Wellington CIV-2018-485-144 Minute of Gault J, 28 May 2021 at [2].
indicated that the order made without notice required Mr Johnson to retain all emails and WeChats.
[4] By consent, I vary the order of 26 May 2021 requiring Mr Johnson to retain emails and WeChats so that it applies only to emails and WeChats that are relevant to the Abel Trust and PRA proceedings and the signalled Global Hort proceedings.
Mr Johnson’s submissions
[25] On 24 June 2021 Mr Johnson filed an application for rescission of the ex parte interim injunction (his counsel having signalled an intention to do so before Gault J on 28 May 2021). In support of that application and in submissions before me, counsel for Mr Johnson submitted that the injunction was sought and granted on selective and incomplete information; and there was no justified urgency and the allegation of a risk of Mr Johnson deleting emails was without foundation. The alleged concern about deletion of material relevant to a further proceeding imminently to be issued by Ms Johnson – the Global Hort proceeding – was, counsel said, baseless. That proceeding had been repeatedly threatened since November 2018 and, as at the date of the application for the ex parte interim injunction, had not been filed.
[26] Counsel for Mr Johnson, Mr Mijatov, also submitted that the application was made in breach of the duty of candour owed to the Courts, as embodied in r 7.23 of the High Court Rules. In particular, counsel says that the ex parte application did not make full and frank disclosure, in three respects:
(a)The application created a false impression that a further proceeding (the Global Hort proceeding) was imminent and there was reason for concern that Mr Johnson would withhold and delete relevant emails.
(b)The application created a false impression that Mr Johnson had not taken any steps in the existing Abel Trust proceeding until August 2020. Counsel for Mr Johnson, Mr Stevens says that this false impression may have reinforced the Court’s concern about Mr Johnson’s compliance with Court directions, and hence the need for an injunction to be issued without notice to him to ensure compliance
(c)The application created a false impression that emails were at risk of deletion by Mr Johnson. The application stated it was made ex parte “out of concern that notice may lead to Craig deleting emails, as to which there is reason to be concerned in the evidence provided in support”. The memorandum in support stated there was “substantial risk of email and WeChat deletion if the application for injunction is foreshadowed.”
(d)The memorandum in support of the application was inadequate in its presentation of Mr Johnson’s opposition or defences.
[27] Counsel for Mr Johnson also says that opposition to the application for rescission was needlessly continued. Counsel for Mr Johnson had indicated to the Court at an early stage after the ex parte orders were made that an application to rescind would be filed. Once that application was filed, Ms Johnson was on fair notice of the nature of the allegations, including that the ex parte application had omitted significant relevant information. Ms Johnson’s opposition required further costs being occurred. Her submissions on the opposition were, as counsel submits, “underdeveloped” and did not provide a basis for opposing rescission.
[28] Counsel submits that Ms Johnson also needlessly opposed steps along the way. She opposed Mr Johnson’s almost immediate request (pending the application to rescind) that the ex parte orders as drafted should be varied so that it only prohibited deletion of relevant emails, because the orders as drafted prevented even junk mail and subscriptions from being deleted. Her opposition was dismissed by Gault J and the orders were varied accordingly.14
[29] Counsel submits that the teleconference at which variation was sought was wasteful of Court time and Mr Johnson’s costs. It was urgently sought by counsel for Ms Johnson, through repeated requests of the registry by email. Once convened, it transpired on questioning by Gault J that counsel for Ms Johnson was not seeking any orders from the Court, but her counsel justified the urgent calling of the conference on
14 Johnson v Johnson, above n 13.
the basis of “optics” and indicated that he sought assurances by counsel for Mr Johnson that had already been provided to the Court.
Ms Johnson’s submissions
[30] The written submissions filed on behalf of Ms Johnson in opposition to this application for indemnity costs were brief and tended to deal with both applications interchangeably. They consist principally of renewed assertions as to Mr Johnson’s failure to comply with his discovery obligations and his alleged deceptions, and they do not address the central question of what information, whether disputed or not, was available and ought to have been put before the Court.
[31] Regrettably, in the context of explaining what was said to be a “core reason” why Ms Johnson sought an interim without notice injunction, the written submissions repeat the very serious allegation that counsel for Mr Johnson “breached a clear order of Lester AJ”, which required an IT expert within Mr Johnson’s firm of solicitors, with Mr Johnson’s counsel, to investigate whether recovery of Mr Johnson’s emails prior to December 2012 is possible. Mr Wigley’s submissions assert that the IT expert and Mr Johnson’s counsel did not do as directed but simply relied on Mr Johnson’s “say so” of what he had and did not have; they did not use the username and password given to them to log on to his email server to review and download emails.
[32] Accordingly, Mr Wigley says that allegations of a breach by counsel were properly made and it follows that the orders sought requiring remedial action were also properly sought.
[33] Mr Wigley notes first that the application should not be judged with the benefit of hindsight: “Maria was addressing what she had available to her”.
[34] As to the obligation of candour, Mr Wigley says that obligation is “contextual”. Here, the context is that the orders sought merely maintained the status quo and were “minimally intrusive”, simply requiring a retention of documents.
[35] As to why Ms Johnson opposed Mr Johnson’s almost immediate request, after the ex parte injunction had been granted, that the orders as drafted be varied so they
prohibited only deletion of relevant emails, Mr Wigley submits that opposition was appropriate while Ms Johnson had reason to believe that there may be improper deletion.
[36] Mr Wigley also disputes that the teleconference before Gault J on 28 May 2021, which he had sought, was wasteful of Court time and Mr Johnson’s costs. He says that, as recorded in the minute, he stated to the Court that nothing had been deleted from Mr Johnson’s laptop and it was that reassurance that led Mr Wigley to confirm that no further orders were sought at the teleconference.
[37] As to the late withdrawal of Ms Johnson’s opposition to the application for rescission, Mr Wigley says Ms Johnson was concerned about escalating costs and the personal acrimony that was reflected in the parties’ submissions and wished to defuse that, and for those reasons withdrew her opposition.
Discussion
[38] An applicant for ex parte orders has a heightened duty of candour to the Court. The duty arises because an “order made without notice is draconian, because it is issued in the absence of the party who is to suffer its consequences.”15 The need to certify “is not a mere technicality”:16
It serves the important purpose of bringing home to the person who signs the application … the requirement for full and frank disclosure of possible grounds of opposition and possible defences.
[39] As Campbell J noted in Green Way Ltd v Mutual Construction Ltd, the duty on the applicant to make full and fair disclosure is not discharged unless adverse aspects in the documents before the Court are expressly drawn to the Court’s attention:17
In a complex case with a large volume of documents, it is not enough if disclosure is made in some part of the material, even if amongst that which the judge is invited to read, if that aspect of the evidence and its significance is obscured by an unfair summary or presentation of the case.
15 Green Way Ltd v Mutual Construction Ltd [2021] NZHC 1704 at [33]-[34].
16 At [39].
17 At [41]-[42], citing Fundo Soberano de Angola v Dos Santos [2018] EWHC 2199 (Comm).
[40] The High Court is frequently presented with applications without notice that contain large quantities of material. As Campbell J observed, where an application is presented as urgent, the judge is likely to be under time constraints (I observe that the application here came before the Duty Judge in the course of a busy week) and it is essential that the memorandum in support identify relevant material and possible grounds of opposition or defence: “the memorandum [of counsel] is central to the without notice procedure, particularly where a large volume of material is put before the court in support of the application.”18
[41]I turn to the particular allegations made by Mr Johnson.
Did the interim injunction application create a false impression about the Global Hort proceeding?
[42] Global Horticulture Limited (Global Hort) is, as I understand it, an investment company connected with Mr Johnson and his father. The Global Hort proceeding had not been issued at the time the application for the ex parte interim injunction was filed or served, or at the time of Mr Johnson’s application for rescission of the interim injunction.19 The Global Hort proceeding had been threatened by Ms Johnson since Mr Wigley’s first letter to Mr Johnson and his father on 2 November 2018; that possibility was subsequently repeated in correspondence and conferences with the Court. It was a matter submitted in support of Ms Johnson seeking priority and advanced timetabling orders for the hearing of the Global Hort proceeding before it was issued, which was declined by Associate Judge Lester:20
In my Minute of 19 February 2021, I declined to make directions in respect of proceedings that have not yet been served, and that remains my position. However, I record the significant delay in issuing the foreshadowed proceedings and the failure to comply with timetabling directions made by consent in respect of those foreshadowed proceedings, means that a claim for priority if and when those proceedings are filed means it will be hard for the plaintiff to claim urgency.
18 At [41].
19 It appears that a summary judgment application was filed by Ms Johnson against Mr Johnson (as a director and shareholder of Global Hort at relevant times) and others, relating to Global Hort, in the Wellington High Court on 6 September 2021.
20 Johnson v Johnson HC Wellington CIV-2018-454-144 Minute of Associate Judge Lester, 12 March 2021 at [16].
[43] The application for interim injunction did not convey this information to the Court. I accept that this created a false impression, which had at least the potential to be materially adverse to Mr Johnson. As Mr Mijatov submitted, the Court may more understandably be concerned about a risk of deletion of emails in respect of a proceeding which is imminent and never previously foreshadowed. But that risk does not arise where a party has been on notice of the imminent proceeding for some three years. That in itself could not have necessitated the seeking of orders without notice.
Did the memorandum in support of the application create a false impression about Mr Johnson’s compliance with Court directions?
[44] Mr Wigley’s memorandum in support of the application for the ex parte interim injunction said: “Craig first entered an appearance in the [Abel Trust] proceeding in August last year [2020] by filing a statement of defence, and has not done general discovery in the usual way.”
[45] The statement of claim in the Abel Trust proceeding was filed on 26 February 2018. Mr Johnson’s statement of defence was filed on 17 August 2020. However, I accept counsel’s assurance that Mr Johnson has appeared at every step in the Abel Trust proceeding since 17 October 2019 and had filed a memorandum of counsel earlier than the date of the statement of defence.
[46]“Appearance” is defined in the High Court Rules:21
appearance means a document that states a person’s address for service, and is either—
(a)an appearance and objection to the jurisdiction of the court under rule 5.49; or
(b)an appearance for ancillary purposes under rule 5.50; or
(c)an appearance reserving rights under rule 5.51; or
(d)an appearance authorised by any other rule
[47] Having regard to that definition, I conclude that the statement in the memorandum of support is not accurate. On its own, I would not have put much
21 High Court Rules, r 1.3 definition of “appearance”.
reliance on that. However, in the overall context of an application seeking without notice urgent orders, it is of some significance. Coupled with the other matters, it does tend to create a false impression about Mr Johnson’s compliance with Court directions and may well have reinforced the Court’s view that it was necessary to issue the injunction without notice to Mr Johnson, to ensure compliance.
Was there a substantial risk of Mr Johnson deleting emails and WeChat messages?
[48] The memorandum in support of the application submitted there was “substantial risk of email and WeChat deletion if the application for injunction is foreshadowed”. The application itself was expressed in similar terms.
[49] Mr Stevens says that the application proceeded on a factually wrong summary of Mr Johnson’s evidence as to discovery. In fact, Mr Johnson’s affidavit of 2 November 2020 said he had provided all relevant documents in his possession, other than those discovered by the plaintiffs and those provided “in the case of financial records, to myself and Maria by the third defendant’s accountant”. The memorandum in support contains only a bare reference to those exceptions: “That is contrary to Craig’s affidavit that he has disclosed all that is relevant other than stated exceptions that are irrelevant”.
[50] I agree with Mr Stevens that the exceptions were in fact potentially highly relevant, particularly the express exception relating to financial records provided by the accountants for Johnson Preschool Ltd (JPL) that had been provided to both Mr Johnson and Ms Johnson. Mr Stevens says that the subsequently disclosed email, which Mr Wigley relied on as the “key email” showing Mr Johnson’s failure to meet his discovery obligations, was amongst those already sent to her by the accountant for JPL. Whether or not Ms Johnson accepted that she had previously received the email in question, or disputes that it comes within the category of financial records, this cannot support an allegation of lying or deception. The exceptions specified by Mr Johnson in his affidavit ought to have been brought to the Court’s attention. By not doing so, the Court may well have been left with the impression that disclosure of this email, supposedly at a late stage, was evidence of non-compliance by Mr Johnson with discovery orders which meant emails were at risk of deletion.
[51] Two other “substantial deceptions” were alleged against Mr Johnson in the memorandum in support accompanying the application. The first related to a tax deduction, which Ms Johnson alleged had been obtained by Mr Johnson on the basis of loss caused by the fraud committed by the Chinese party to the joint venture between JPL and Wuxi Preschool. Ms Johnson alleged that Mr Johnson had told her there was in fact no such fraud. The memorandum in support said: “But he had unequivocally claimed an IRD tax deduction specially based on that fraud.” In response, Mr Johnson says the matter had in fact been discussed with Ms Johnson, who was notified of the IRD’s ruling at the same time as he was; through the company JPL, for whose benefit the deduction was obtained, both Mr Johnson and Ms Johnson jointly obtained its benefit, so there was no deception of Ms Johnson by Mr Johnson, nor a unilateral benefit to Mr Johnson as implied by Mr Wigley’s statement.
[52] The memorandum in support also alleged that Mr Johnson had reactivated the joint venture without telling Ms Johnson. Mr Johnson says that he gave evidence in the PRA proceeding in an affidavit dated 30 September 2019, which rebutted that suggestion.
[53] The memorandum in support also alleged deception, forgery and fraud by Mr Johnson in respect of Global Hort. The memorandum did not alert the Court to potential opposition or defences to those allegations (some aspects of which are before the Takeovers Panel).
[54] I am not in a position to assess the substantive merit of these allegations, but on the face of it they are allegations that are disputed and known by Ms Johnson to be disputed. That ought to have been advised to the Court.
Did the memorandum in support of the application adequately advise the Court of potential opposition or defences by Mr Johnson?
[55] Mr Wigley says context is relevant to the assessment of what the duty of candour requires on an ex parte application. In his submission, the minimal intrusion caused to Mr Johnson by the orders sought impacted on the extent of the obligation. Even if I accept that the resulting intrusion was minimal, the application made serious allegations of dishonesty against Mr Johnson and implicit allegations of breach of the
Court orders by Mr Jorgensen, Mr Johnson’s IT expert, and Mr Johnson’s counsel. In those circumstances the ultimately limited ambit of the orders does not excuse the failure to advise the Court of information that was highly relevant to the serious allegations of deception by Mr Johnson and the stated risk of him deleting information if the application was on notice.
[56] The single paragraph of the memorandum addressing matters “against Maria’s application” was inadequate as information about the matters adverse to Ms Johnson, in a number of respects:
(a)Counsel failed to bring to the Court’s attention the judgments of Associate Judge Johnston,22 and Gendall J.23 Both judgments relate to the statement in the memorandum in support “allegations that Maria and counsel have acted with ulterior motive … (which is firmly denied). While it is not accepted that this is material to this application…”. What is described as an unfounded “allegation” by Mr Johnson was in fact a finding of Associate Judge Johnston in the High Court (not subsequently challenged) that Ms Johnson’s claim there was being pursued in order to advantage her as against Mr Johnson,24 and a finding by Gendall J that correspondence sent on behalf of Ms Johnson was an “explicit threat” that had reached the “high threshold of unambiguous impropriety”.25
(b)It made serious allegations of fraud, forgery and deception by Mr Johnson, without advising the Court that such allegations were hotly disputed.
Ms Johnson’s opposition to variation of the orders
[57] Mr Wigley’s submissions as to Ms Johnson’s refusal to agree to a variation of the orders as made by Gault J do not address the essence of the objection, which was
22 Johnson v Johnson, above n 3.
23 Johnson v Johnson, above n 2.
24 Johnson v Johnson, above n 3, at [47] and [48].
25 Johnson v Johnson, above n 2, at [27] and [29(c)].
that the orders as drafted were preventing even junk mail and subscriptions from being deleted. It is difficult to understand why Ms Johnson’s objection was continued at that stage. Justice Gault varied the orders by minute of 28 May 2021.26
Ms Johnson’s late withdrawal of opposition to the application for rescission
[58] I turn to Ms Johnson’s last-minute withdrawal of her opposition to the application for rescission. Mr Wigley gives two reasons: cost; and Ms Johnson’s wish to defuse the personal acrimony between the parties that was apparent on the submissions. I do not find these reasons compelling. Unfortunately, Ms Johnson and her advisers do not appear to have had any regard to the legal costs involved, both for her and Mr Johnson, up to that point. The expressed concern about “personal acrimony” is inconsistent with the nature of the allegations made by Ms Johnson and her counsel against Mr Johnson and his advisers. An increase in the level of acrimony was an inevitable consequence of those allegations. I infer that the late withdrawal of opposition (without conditions) was because Ms Johnson appreciated that her opposition would not succeed.
[59] Finally, it was significant that the discovery application heard by Associate Judge Lester had been made on notice and was fully argued. The High Court had reserved leave to the parties to seek to vary the discovery orders made. In all of the circumstances, this (on notice) procedure was plainly the appropriate mechanism for Ms Johnson to have used, rather than the ex parte procedure (as Gault J recognised in expressing his reservation about the appropriateness of a without notice application – see [23] above).
Conclusion
[60] For all of those reasons, I conclude that the ex parte application for injunction was improperly made and, it follows, Ms Johnson ought to have agreed to rescission of the orders when the application for rescission was foreshadowed before Gault J on 28 May 2021 or, at the latest, when the application for rescission was filed.
26 Johnson v Johnson, above n 13, at [3] and [4].
[61] I find that there are sufficient grounds under r 14.6(4)(a) for making an order for indemnity costs against Ms Johnson in respect of the rescission application.
The discovery application
[62] Ms Johnson’s discovery application, dated 21 June 2021, was directed to Mr Johnson, his counsel, Mr Jorgensen (Mr Johnson’s IT expert), and Spark. Ms Johnson sought urgency for the hearing of the application.
[63] The application ran to 11 pages and sought 29 specific orders, including orders requiring Mr Johnson’s counsel to swear affidavits as to why discovery orders had been breached; requiring Mr Johnson to “collaborate pragmatically and proactively in fulfilling these orders”; to appoint a “supervising solicitor” to supervise Mr Johnson’s solicitors and counsel obtaining the information; and extensive discovery orders, including that discovery be redone “using Peruvian Guano scope”, and an IT consultant be engaged (at Mr Johnson’s cost) to create a “mirror” of his hard drive; and that costs should be payable by Mr Johnson and his counsel on a full indemnity basis.
Mr Johnson’s submissions
[64] The essence of the argument advanced for Mr Johnson is that all of the orders sought rested on a false “house of cards”, that is, that emails had been deleted by Mr Johnson. Mr Stevens, as counsel, had given an assurance to the Court that no emails had been deleted, on 28 May 2021. That was followed by a memorandum of counsel dated 3 June 2021, which said:
6.… What was said, as an officer of the court (and having satisfied myself prior to the urgently convened conference) was that:
6.1Craig Johnson had inbox emails back to December 2021 and sent item emails as far back as a slightly later date which, because of the haste of the conference, I did not have at hand at that time (but had ascertained, and the relevant date is 13 May 2014); and
6.2There has been no deletion of relevant emails by Craig Johnson in relation to any proceedings including the threatened GHNZ proceeding.
[65] Subsequently, Mr Johnson filed an affidavit which set out the basis on which counsel’s assurance was able to be given. All of that was known to Ms Johnson and her legal advisors before the discovery application was filed on 21 June 2021.
[66] Notwithstanding those assurances, the application was wide-ranging and included numerous allegations which were groundless and ought never to have been made. It sought orders against Mr Johnson’s counsel and solicitors, including that they be required to swear affidavits and be supervised, and personally meet Ms Johnson’s costs, which were unjustified. The application made serious allegations that counsel had breached their duties to the Court and that Mr Johnson had made “false” affidavits and in other respects deceived the Court, all of those allegations known to be disputed.
[67] Some of the orders purported to apply to non-existent proceedings, the Global Hort proceedings, which were improperly included in the intitulment to the application, with one of the orders sought seeking that the order applied to “all intituled proceedings”.
[68] No proper legal basis was identified for many of the orders sought in the discovery application. The more orthodox orders sought for discovery were “draconian and unrestrained by relevance or proportionality”, for example orders seeking discovery to be redone using “Peruvian Guano” scope. A further example was an order sought because it “may provide evidence” of “Craig and his father” collaborating “against Maria’s interest”. Counsel says this was plainly a fishing expedition.
[69] Significantly, Mr Stevens alleges that Ms Johnson’s discovery application was brought for an ulterior purpose, seeking to have Mr Johnson’s solicitors and counsel “sanctioned” and to restrict or remove counsel and solicitors from acting for Mr Johnson. Mr Stevens makes that submission in the context of the decision of Gendall J, less than two weeks before the discovery application was made. The application heard by Gendall J was for orders and declarations against Mr Johnson and other parties (including his legal advisors) relating to what was said to be a breach of
privilege and misrepresentation. In his judgment, referring to allegations of actual malice on the part of Mr Johnson and his advisors, Gendall J said:27
[19] [All this, and attendant complaints from Mr Wigley made regularly in response, in my view, can only be seen ultimately as both unfortunate and unhelpful in resolving sensitivities held by all parties in this matter.
…
[22] … Read overall in the context of Mr Wigley’s “long letter”, which this email threatened to circulate to company shareholders in GHL and the Takeovers Panel, there is a reasonable argument as I see it that this constituted a threat to cause significant damage to a range of parties unless Ms Johnson achieves what is described as “a dollar resolution of all of her issues, wherever the funds come from.”
[70]Justice Gendall went on to find:28
In my judgment there is also some force in the argument that this email did intentionally contain an explicit and collateral “threat” otherwise to cause harm, by lodging a complaint against individuals with the Takeovers Panel and by widely circulating a detailed communication to all shareholders in GHL. In context, the bald unilateral proposition in the email might be seen as one of “pay or else”.
[71] Justice Gendall declined to make the declarations and orders sought by Ms Johnson in her application.
[72] Further, Mr Stevens says that application had followed a 23 page correspondence from Mr Wigley (copied to the Takeovers Panel) (the “long letter” referred to in Gendall J’s judgment) requiring Mr Johnson’s solicitors and counsel to cease acting.
[73] Mr Stevens says that the theme of seeking to remove Mr Johnson’s counsel of choice is also to be seen in Mr Wigley’s email of 4.50 am on 27 July 2021 (the day before the hearing of the two applications), suggesting that counsel for Mr Johnson ought not to act on those applications.
27 Johnson v Johnson, above n 2.
28 At [27].
Ms Johnson’s submissions
[74] The submissions filed in support of Ms Johnson’s discovery application were, as counsel for Mr Johnson has characterised them, underdeveloped. The same can be said of the submissions filed on this application. Both sets of submissions focus on Mr Johnson’s alleged deceptions and the alleged non-compliance by Mr Johnson’s IT expert and counsel with Associate Judge Lester’s order.
[75] Before me, Mr Wigley continued Ms Johnson’s assertion of deception by Mr Johnson in relation to the Wuxi Preschool and Global Hort matters.
[76] Mr Wigley put some emphasis on a change Mr Johnson made to his unsworn affidavit (of 19 May 2021) when he subsequently swore it (by AVL link) on 16 July 2021.
[77] In the May affidavit Mr Johnson said: “I no longer have access to any emails prior to December 2012.” In the 16 July affidavit, that paragraph is struck through and replaced with:
At the time that I settled this affidavit my honest belief was that I had no emails prior to December 2012. I did not have access to any before then on my computer. However since then I am aware that Spark on its server has located sent emails of mine from 31 August 2007. I have had my solicitors obtain a copy the emails that Spark holds and will discover any emails from that copy that are relevant and not previously discovered in affidavits or which fall within the exceptions listed at paragraph 2 of my affidavit dealing with discovery sworn on 2 November 2020.
[78] The 16 July affidavit was sworn after Ms Johnson’s discovery application was filed and appears to be a response to part of that application where Ms Johnson sought an order that:
Craig’s settled but unsigned affidavit of May 2021 is sworn or affirmed within 48 hours and that, in within 7 days, he explains by sworn or affirmed affidavit in sufficient detail without evasion where that affidavit and his 2 November 2020 are incorrect and why. Alternatively, as to his May 2021 affidavit, within 7 days he affirms or swears an affidavit verifying the statements he says are correct in that unsigned affidavit and stating where and why the other statements are wrong, the actual position that applies and why he gave his wrong evidence in the May affidavit including as to the information he provided to be given t Mr Jorgensen;
[79] Mr Wigley did not directly address the submission for Mr Johnson that the application was part of a concerted attempt by Ms Johnson to restrict or prevent Mr Johnson’s counsel from continuing to act for him.
[80] As to Ms Johnson’s late withdrawal of the discovery application, Mr Wigley repeats his earlier submission that this was justified by cost considerations and a wish by Ms Johnson to defuse personal acrimony between the parties.
Discussion
[81] It is necessary to set out the context to the application. It came two months after the judgment of Associate Judge Lester, in which he had considered Ms Johnson’s application for an order for general discovery against Mr Johnson.29 I have referred to the relevant directions of the Associate Judge at [16] above. Associate Judge Lester noted that the discovery obligation focussed on the issue of Mr Johnson’s emails prior to December 2012. He recorded “Craig says he no longer has access to emails prior to December 2012 and he refers to having changed computers over the past several years.”30
[82] The evidence from Ms Johnson’s IT expert was that, depending on how Mr Johnson’s email system was configured, it may be that emails prior to December 2012 have been retained on the Xtra Mail server and be recoverable. The Associate Judge affirmed the obligation on the party giving discovery to search for relevant documents extends to taking reasonable steps to confirm that emails or electronic documents believed to be unrecoverable are truly unrecoverable, including if necessary obtaining expert IT assistance to carry out a search.31
[83] Associate Judge Lester observed that the focus of the investigation in respect of Mr Johnson’s historical emails was a narrow one, being those emails prior to December 2012. It was on that basis that the Associate Judge made the orders referred to at [16] above.
29 Johnson v Johnson, above n 11, at [73].
30 At [69].
31 At [71].
[84] The discovery application included numerous allegations. For example, it asserted that “Craig has demonstrated he will lie and deceive … Contemporaneous documents are core to demonstrating his lack of veracity or otherwise.” It repeated the assertion that Mr Jorgensen, the IT expert referred to at [73(b)] of Associate Judge Lester’s orders, had not fulfilled his duties under the Code for Expert Witnesses by not logging into Mr Johnson’s Xtra email account directly and copying any emails there, but rather relying only on what Mr Johnson told him. The application alleged that Mr Johnson and his counsel had breached the Associate Judge’s orders and failed to give an explanation for that breach; and further that Mr Johnson and his counsel had “provide[d] information and justification contrary to known facts”. It further alleged that Mr Johnson’s affidavits were false.
[85] Some of the orders were sought against non-parties, namely counsel and solicitors, and included orders that they be required to swear affidavits and personally meet Ms Johnson’s costs. Some of the orders sought made serious allegations in relation to Mr Johnson, his counsel, and his IT expert.
[86]The orders sought in relation to counsel/solicitors were:
(a)“Within 7 days, Craig and Craig’s counsel comply with the orders made against them at [73(c)] of the judgement of Lester AJ dated 21 April 2021 (the Orders) and they report thereon in detail as to compliance by sworn or affirmed affidavit within that 7 days. …The affidavits to detail what steps have been taken to capture and retain data that was lost or may have been lost due to non-compliance”;
(b)“Craig, Craig’s counsel and Martin Jorgensen to file and serve affidavits within 7 days, as to, in relation to the Orders why they did not, and/or did not [sic] ensure that the Xtramail service was directly accessed, and in turn copies of emails were taken, as required by the Orders”;
(c)“The court appoints a supervising solicitor and an independent IT expert to (i) assist and supervise obtaining the information referred to
in these proposed orders and (ii) review and report on the information obtained in that way and thus far under the Orders”;
(d)“Costs payable by Craig and Craig’s counsel, as appropriate, on a full indemnity basis including as to expert evidence …”.
[87] All of the orders were premised on an assumption that emails had been deleted by Mr Johnson, when counsel had twice previously given assurances to the Court that no emails had been deleted and a subsequent email filed by Mr Johnson set out the basis by which that assurance was able to be given. All of that was known to Ms Johnson and her legal advisors before the application was filed.
[88] The more orthodox orders for discovery sought were draconian and unrestrained by relevance or proportionality.
[89] The application was abandoned without conditions, on the eve of hearing, once all preparation on behalf of Mr Johnson had been completed.
[90] Turning first to Ms Johnson’s allegations, I do not accept that the revision to Mr Johnson’s unsworn May 2021 affidavit, made when Mr Johnson did swear it on 16 July 2021, is consistent with an attempt to conceal or deceive, as Mr Wigley asserted. It plainly states an error, the reason for the error, and how Mr Johnson proposes to rectify the error.
[91] I find that the allegation that Mr Jorgensen, Mr Johnson’s IT expert, had breached his obligations to the court as an expert witness, was improperly made. Mr Jorgensen’s affidavit of 12 May 2021 set out clearly what steps he had taken in response to Associate Judge Lester’s orders. There was no attempt at concealment, or evidence of deliberate breach of or disregard for those orders. Mr Jorgensen’s supplementary affidavit of 22 June 2021 (affirmed the day after the discovery application was filed) states Mr Jorgensen’s understanding that it was sufficient for him to take reasonable steps to confirm that Mr Johnson’s emails believed to be unrecoverable (those dated prior to December 2012) are truly unrecoverable base on the information he was provided and the answers to any further questions he asked of
Mr Johnson. He said further that, in light of the criticisms made by Mr Wallmannsberger (Ms Johnson’s IT expert), he had gone on to remotely access Mr Johnson’s computer and to log in to Mr Johnson’s Xtra account via webmail. Both exercises revealed no emails earlier than 20 December 2012.
[92]Associate Judge Lester’s relevant orders were:32
(a)Craig will provide to his counsel his email passwords and any other information required to access his Xtra email account;
(b)an IT expert within Craig’s firm of solicitors, with Craig’s counsel, will investigate whether recovery of the emails prior to December 2012 is possible;
[93] The orders did not specify exactly how the investigation was to be undertaken. It was a matter of interpretation as to whether the orders required the IT expert to log on to Mr Johnson’s email account directly. That it was a matter of interpretation is reflected in Mr Wallmannsberger’s affidavit for Ms Johnson where, in criticising Mr Jorgensen’s response to the Court orders, he says “As I read the orders”/“that wasn’t the intention [of the Orders]”/“that also was intended”/“As envisaged by the orders”.
[94] Rather than impugning Mr Jorgensen’s honesty and integrity, the proper course for Ms Johnson would have been to go back to Associate Judge Lester to clarify what was required of Mr Jorgensen as an IT expert. The Associate Judge had specifically noted “leave is reserved to apply for further directions in respect of the suggested means of investigating the recoverability of the emails.”33
[95] The assertions made in relation to Mr Johnson’s counsel rested on the same premise, that Mr Jorgensen had failed to comply with his duties as an expert witness. Order (b) specified that the IT expert’s investigation should be carried out together with counsel. Ms Johnson’s assertion therefore was that, given the expert’s alleged failure, counsel too had acted contrary to the Court’s orders.
32 Johnson v Johnson, above n 11, at [73].
33 At [73(f)].
[96] It is regrettable that Ms Johnson and her counsel were prepared to impugn counsel’s integrity in such a cavalier way. I reiterate that if Ms Johnson held genuine concerns about whether the Associate Judge’s orders were being properly complied with, the proper course was to go back to him, pursuant to the leave reserved.
[97] That leads me to the submission for Mr Johnson that the application was brought for an improper purpose, seeking to remove Mr Johnson’s counsel of choice.
[98] Mr Wigley did not directly address this assertion, in either written or oral submissions. However, the effect of the orders sought in relation to Mr Johnson’s solicitors and counsel – orders which I have found ought not to have been sought – would likely have had the effect of requiring them to withdraw. The orders sought in relation to counsel were, as Mr Stevens characterised them, draconian. They were also in my view intemperate and improper.
[99] Given my findings above that the applications ought not to have been made, and in the absence of a response to the submission of improper purpose, I reluctantly conclude that removal of Mr Johnson’s counsel was at least one motive in Ms Johnson’s application and that such a purpose was improper.
[100] Finally, I consider the reference in the application to the Global Hort proceeding. As I have already noted, the Global Hort proceeding had been threatened by Ms Johnson since November 2018, in and out of court, but as at the date of the discovery application had not been filed. It was improper and misleading to include the proceeding in the intitulment of the application and to seek orders in respect of “all intituled proceedings”.
[101] Counsel for Mr Johnson also made submissions alleging that the way in which Ms Johnson conducted the application caused loss of time to the Court and Mr Johnson:
(a)She sought an urgent hearing for the application, thus depriving other genuine litigants from time in Court.
(b)Ms Johnson failed to comply with timetabling directions, for example by failing to enter an appearance at the call of the matter on 19 July 2021 (which had been set down on 25 June 2021).
(c)Further extended timetable deadlines were breached by Ms Johnson.
[102] Because of my findings above, I have not found it necessary to go on and consider these less significant matters.
[103] As to Ms Johnson’s late withdrawal of her discovery application, I repeat what I have said at [58] above in relation to the rescission application.
Conclusion
[104] Based on my conclusions in the preceding paragraphs, I find that the discovery application was improperly made and an award of indemnity costs under r 14.6(4)(a) against Ms Johnson is appropriate in respect of the discovery application.
Quantum of costs
[105] Mr Johnson seeks a total of $103,500 (as at 28 July 2021), excluding witness costs and expenses, in relation to both applications. Counsel submits those costs are reasonable having regard to:
(a)The wide-ranging, unfocussed and serious ethical and other allegations made against counsel and Mr Johnson, the urgency claimed by Ms Johnson, and the requirement for multiple lawyers to prepare multiple sets of submissions, a chronology and bundles of documents and authorities to prepare for the hearing.
(b)By way of a cross-check against scale costs, scale costs on a 2B basis with no uplift would amount to approximately $24,000.
(c)Mr Johnson attempted to resolve costs on 28 July 2021. No proposal, nor any response, was received from Ms Johnson. That then
necessitated further preparation for the hearing before me, although the costs of that are not included in the costs sought by Mr Johnson.
[106] Mr Wigley, while arguing that costs ought to lie where they fall, submits that the Court cannot award indemnity costs in the absence of considerably more detail from Mr Johnson as to the breakdown of the costs sought.
Discussion
[107] Awards of solicitor-client costs can reflect actual costs, but must nevertheless be reasonable. Costs are reasonably incurred if a reasonable observer would expect those costs to be incurred. They are calculated, not from the costs rules, but from a “reasonable allocation of actual costs, measured by reference to an appropriate time taken and allowing for the significance and complexity of the category of work.”34 Reasonableness is not to be assessed solely by comparison of costs charged against the sum at stake in the litigation; the Court must have regard to the kind of analysis detailed in Bradbury in order to satisfy itself that the costs were “reasonably incurred”.35 Where there is a dispute as to reasonableness of indemnity costs, the trial Court should make the decision as to the reasonableness of the costs claimed.36
[108] Counsel for Mr Johnson have filed a schedule of scale costs, for a cross-check against the indemnity costs of $103,500 which he claims. The schedule sets out the steps taken on Mr Johnson’s behalf in respect of the two applications and what he would be entitled to on the basis of 2B scale costs. It does not set out the calculation of the actual costs claimed in the manner that Bradbury specifies, in order that the Court can assess their reasonableness. For that reason I direct that counsel for Mr Johnson file a memorandum setting out his calculation of costs on a 2B basis and including a breakdown of the fees sought, having regard to the factors identified in Bradbury, by 30 September 2021.
[109] Finally, Mr Johnson seeks that the Court express the costs orders so as to make explicit that Ms Johnson is required personally to pay any costs award. That is said to
34 Bradbury v Westpac Banking Corp (2008) 18 PRNZ 859 (HC) at [209].
35 Edel Metals Group Ltd v Geier Ltd [2018] NZCA 494 at [62].
36 At [64].
be necessary because a previous costs award made against Ms Johnson was paid by her to Mr Johnson through a deadlocked company that is jointly owned by the two of them. I indicate at this stage that I will express the order in those terms.
Result
[110] Ms Johnson is directed to pay indemnity costs to Mr Johnson in respect of each of the rescission application and the discovery application.
[111] The amount of the costs award will be the subject of a supplementary judgment once the court has received the further breakdown of costs directed at [108] above.
Gwyn J
Solicitors:
Lane Neave, Wellington
DLA Piper New Zealand, WellingtonWigley and Company, Wellington
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