Katavich v District Court at Nelson
[2015] NZHC 956
•7 May 2015
IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY
CIV-2013-442-277 [2015] NZHC 956
UNDER the Judicature Amendment Act 1972 IN THE MATTER OF
an application for judicial review of the Nelson District Court’s decision to decline to swear and file an information and issue
a summons
BETWEEN
TONY WAYNE KATAVICH Applicant
AND
THE DISTRICT COURT AT NELSON First Respondent
MIA MARIE NELSON Second Respondent
On papers Judgment:
7 May 2015
JUDGMENT OF DOBSON J
[1] The second respondent (Ms Nelson) has sought costs following the discontinuance of judicial review proceedings by the applicant (Mr Katavich). The application for costs is opposed on the basis that Ms Nelson was not the true defendant to the judicial review application and had unnecessarily involved herself in the proceedings.
Background to the proceeding
[2] Mr Katavich carries on business through a company that had previously employed Ms Nelson. In June 2012 Ms Nelson was summarily dismissed for allegedly lying about her previous work experience and harbouring anti-Semitic
views. Ms Nelson pursued a personal grievance against Mr Katavich and his
KATAVICH v DISTRICT COURT AT NELSON [2015] NZHC 956 [7 May 2015]
company before the Employment Relations Authority, where she was awarded damages for unjustified dismissal.1
[3] Mr Katavich then attempted to commence a private prosecution against Ms Nelson by filing an information at the Nelson District Court on 9 April 2013. He alleged that Ms Nelson had obtained her position of employment by deception contrary to the Crimes Act 1961. On 11 April 2013, the Nelson District Court declined to issue a summons to Ms Nelson. Judge Zohrab concluded that it was inappropriate for a summons to issue because the summary of facts failed to disclose criminal offending.
[4] Mr Katavich then filed an application for judicial review of the Nelson District Court’s decision not to issue a summons, alleging errors of fact and law and a denial of natural justice. He sought relief by way of declaration, Mandamus requiring the District Court to issue the summons filed, and an injunction to prevent Ms Nelson from falsely representing her previous employment.
[5] The District Court was the only respondent cited. It indicated it would abide the Court’s decision and suggested the appointment of counsel to assist the Court in the role of contradictor. There was no objection from Mr Katavich and Mr Webber was duly appointed as counsel to assist the Court.
[6] Counsel for Ms Nelson initially sought to avoid the necessity of her being joined as a party to the proceeding by having her called by Mr Webber to give evidence. Her evidence would include her claim that the intended prosecution was vexatious. However, Mr Webber indicated that he would not call Ms Nelson as a witness. He assessed it as inappropriate for him, as counsel assisting the Court, to be seen as defending the application. Ms Nelson therefore needed to be joined as a party for her to give evidence in relation to Mr Katavich’s intended private prosecution. Her application to be joined as second respondent was initially opposed by Mr Katavich, but was later agreed to by a consent memorandum dated
5 December 2014 and confirmed by judicial minute on 5 February 2015.
1 Nelson v Katavich [2013] NZERA Christchurch 35.
[7] Mr Katavich filed a notice of discontinuance on 4 March 2015. The first respondent did not seek costs, but Ms Nelson has.
Costs
[8] Rule 15.23 establishes a presumption that a plaintiff who discontinues a proceeding must pay costs to the defendant:
Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.
[9] This presumption can be displaced if the Court finds there are circumstances that make it just and equitable for the presumption not to apply.2 The High Court in FM Custodians Ltd v Pati summarised the factors that the Court will take into account when deciding whether the presumption is displaced:3
(a) As the general rule the Court will not consider the merits of the respective cases (unless they are so obvious that they should influence the costs issue).
(b) The Court will consider the reasonableness of the stance of both parties in the proceeding (whether it was reasonable for the plaintiff to bring and continue the proceedings, and for the defendant to oppose and continue to oppose it, up to the point of discontinuance).
(c) Conduct prior to the commencement of the proceeding may be relevant (for example, if any conduct by a defendant has precipitated the litigation), as may be the reason for discontinuing (for example, where a change of circumstances has made the proceedings unnecessary).
[10] This is not an exhaustive list of factors that may be relevant.
Is the presumption displaced?
[11] Mr Katavich’s essential argument is that Ms Nelson was an unnecessary party to the proceedings. On behalf of Mr Katavich, Mr Berry submitted that the judicial review proceedings did not require Ms Nelson to be a party at all. That is because
the High Court would not have decided the substantive issue, but would have
2 FM Custodians Ltd v Pati [2012] NZHC 1902 at [10] (citations omitted).
3 At [11].
remitted the decision back to the District Court to reconsider. If the Court took this route, Ms Nelson would not have been directly affected by the outcome of the proceeding.
[12] I do not accept that argument. Mr Katavich’s application for judicial review sought relief in the form of an order for the District Court to issue a summons to Ms Nelson, and an injunction requiring Ms Nelson to stop falsely representing her previous employment. It was reasonable for Ms Nelson to anticipate that she could be adversely affected by the outcome of the proceedings. She took reasonable steps to avoid the necessity of having to become a party. However, the circumstances of the case warranted Ms Nelson being joined as a party for her to give evidence. I therefore do not agree that Ms Nelson was an unnecessary party. In addition, her joinder could hardly be opposed when the relief sought, if granted, would be adverse to her interests.
[13] There is nothing unreasonable in Ms Nelson’s stance that might justify reversal of the presumption that she is entitled to costs.
Costs on interlocutory application
[14] Ms Nelson sought costs on her interlocutory application for joinder. Mr Katavich submitted that costs on the application should lie where they fall because it was settled by way of a consent memorandum.
[15] Rule 14.2 provides that the party who loses a proceeding or interlocutory application should pay the costs of the party who succeeds. Although the interlocutory application was resolved by a consent memorandum, the outcome was that Ms Nelson was successful in being joined as a party. Also, by drawing an analogy with r 15.23, it is appropriate for a party who discontinues an interlocutory
application to pay the other party’s costs.4 On this occasion, Mr Katavich abandoned
his opposition to the interlocutory application. This was done after Ms Nelson’s
submissions and affidavits had already been prepared. This is a case where it is
4 i-Health Ltd v iSoft NZ Ltd HC Auckland CIV-2006-404-4502, 31 July 2009 at [22].
appropriate to exercise the Court’s discretion to grant costs to Ms Nelson on the application for joinder.
Scale costs
[16] Mr Katavich also disputed a number of items for which Ms Nelson claims scale costs. He made the following points:
(a) costs for the memorandum of 5 December 2014 should not be granted, as it was a joint memorandum prepared and filed by his solicitor;
(b)no affidavits were filed for the substantive hearing so Ms Nelson cannot claim costs in this respect;
(c) the 1.5 days claimed for submissions as to costs is excessive; and
(d) the filing fee for the interlocutory application was $500, not $640 as
Ms Nelson claims.
[17] I accept Mr Katavich’s point that the memorandum of 5 December 2014 was prepared and filed by his counsel. Costs for that step are therefore inappropriate.
[18] While no affidavits were filed in relation to the substantive hearing, it is reasonable that Ms Nelson would have started preparing evidence before being advised of Mr Katavich’s intention to discontinue the proceedings. However, Ms Nelson’s involvement in the proceeding was limited and the preparation of affidavits would not have been extensive. I would allow costs for the preparation of affidavits on a 2A basis.
[19] In respect of the 1.5 days claimed for submissions as to costs, I accept that is more than appropriate for what is a relatively straightforward proceeding. I would instead allow 0.5 days.
[20] Finally, the fee paid for the interlocutory application was in fact $640. A
copy of the receipt is on the court file.
[21] Accordingly, Ms Nelson is entitled to costs and disbursements totalling
$10,391, as set out in the table below:
Step Description Time Cost 11 Filing memorandum on 22 February 2014 0.4 $ 796 12 Appearance at mentions hearing 1 December
2014
0.2 398 22 Filing interlocutory application 0.6 1,194 24 Preparation of written submissions 1.5 2,985 29 Sealing orders 0.2 398 30 Preparation of affidavit evidence for
substantive hearing
1.5 2,985 36 Submissions as to costs 0.5 995 Subtotal $9,751
Disbursement Filing fee for interlocutory application 640 Total $10,391
Dobson J
Solicitors:
C & F Legal Ltd, Nelson for applicant
Bamford Law, Nelson for second respondent