Kauapepe Forest Limited v Scott
[2021] NZHC 1837
•20 July 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-000004
[2021] NZHC 1837
BETWEEN KAUAPEPE FOREST LIMITED
Plaintiff
AND
PETER WILFRED SCOTT
Defendant
Hearing: On the papers Counsel:
J Baguley for Plaintiff
A Gilchrist for Defendant
Judgment:
20 July 2021
JUDGMENT OF WOOLFORD J
[Costs]
This judgment was delivered by me on Tuesday, 20 July 2021 at 4:00 pm pursuant to r 11.5 of the High Court Rules.
Solicitors:Atlas Legal Limited (J S Baguley), Kerikeri Kiely Thompson Caisley, Auckland
Counsel: A Gilchrist, Auckland
KAUAPEPE FOREST LIMITED v SCOTT [2021] NZHC 1837 [20 July 2021]
[1] On 27 May 2021, I awarded damages to the plaintiff, Kauapepe Forest Limited (KFL), against the defendant, Peter Scott, in proceedings concerning a putative grant of a forest right.1 KFL invested considerable funds developing the forestry land, before it became apparent that the promised grant could not be formalised because Mr Scott was unable to provide a valid registerable instrument.
[2] I ordered that costs would follow the event and gave the parties leave to file memoranda if they were unable to agree.2 This decision is now made on the papers.
[3] These proceedings were categorised (by consent) as ordinary defended proceedings in a minute issued by Associate Judge Andrew on 20 August 2020.
Legal principles
[4] Costs are at the discretion of the Court.3 This discretion should be exercised in accordance with the guidance provided in the High Court Rules 2016.4
[5] The general principle is that costs follow the event; that is, the successful party in a proceeding is entitled to costs from the unsuccessful party.5 Ultimately, the overriding consideration when exercising the Court’s discretion to award costs is that any award ought to do justice between the parties.6
Submissions
[6] The parties have conferred on the issue of costs. The parties agree that KFL is entitled to disbursements of $12,683.10. The parties also agree that if costs are calculated on a 2B basis under the High Court Rules 2016, then KFL is entitled to costs of $29,994.50.
[7] However, counsel for Mr Scott contends that the costs order should be lower for the following reasons:
1 Kauapepe Forest Ltd v Scott [2021] NZHC 1215.
2 At [79].
3 High Court Rules 2016, r 14.1(1).
4 Rules 14.2–14.7.
5 Rule 14.2(1)(a).
6 Packing In Ltd (in liq) v Chilcott (2003) 16 PRNZ 869 (CA) at [5].
(a)The matter should be calculated at the District Court rate; and
(b)the award should be reduced because the plaintiff failed to comply with an order for a tailored discovery of documents.
[8] Rule 14.13 provides that a successful plaintiff may not recover costs which exceed those which would have been recoverable in the District Court, had the matter been heard there instead. Counsel for Mr Scott submits that the proceeding was misdirected due to the overlapping nature of the causes of action which lead to double or triple counting of the heads of loss. This purported error is borne out by the fact that the substantive judgment identified three alternative routes for determining the quantum of damages, and ultimately awarded damages ($162,065) well within the jurisdiction of the District Court. If KFL’s costs are calculated as District Court scale costs for a full trial, the correct figure for the award is $22,347.
[9] Rule 14.7 provides that an award of costs may be reduced if the party claiming costs has failed to comply with the Rules or failed without reasonable justification to comply with an order for discovery. Counsel for Mr Scott submits that KFL breached the Rules by failing to effectively comply with Associate Judge Andrew’s order (by consent) for a tailored discovery of documents.7 Mr Scott provided his list of documents promptly. KFL failed to provide discovery as directed, or file an affidavit clarifying its position. However, KFL then produced many documents in the common bundle. Counsel for Mr Scott submits that KFL’s breach constituted serious non- compliance and caused Mr Scott detriment or prejudice.
[10] In response, counsel for KFL submits that the quantum of the claim was outside the District Court’s jurisdiction. The fact that the plaintiff did not succeed on every head of loss does not mean that the High Court was the inappropriate forum for the proceeding.
[11] As to discovery, KFL provided documents as required in the initial list of documents when filing the proceeding. A handful of documents were produced later
7 Kauapepe Forest Ltd v Scott HC Auckland CIV-2020-404-000004, 20 August 2020 (Case Management Review Minute).
(by consent) at the evidence stage. These were additional invoices and an email, which were brief and uncomplicated. Counsel concedes that a formal affidavit for discovery was not sworn. However, counsel submits that this caused no prejudice to the defendant. Further, had KFL sworn a list of documents that would have entitled it to a further 2.5 days of costs (amounting to $5,975 on a 2B basis at the High Court). Mr Scott has thereby benefitted from KFL’s procedural oversight in this regard.
Discussion
[12]Rule 14.13 provides:
Costs ordered to be paid to a successful plaintiff must not exceed the costs and disbursements that the plaintiff would have recovered in the District Court if the proceeding could have been brought there, unless the court otherwise directs.
[13]Some proceedings within the jurisdiction of the District Court (currently
$350,000) are properly brought in the High Court. Amounts claimed and recovered are not the only relevant consideration when determining the appropriate forum for a proceeding; the nature and complexity of the proceedings, the types of issues raised, and the attitudes and financial resources of the parties, are also factors relevant to the decision.8
[14]In this proceeding, KFL’s statement of claim sought damages in excess of
$700,000. For this reason, the matter could not have been brought in the District Court, and r 14.13 therefore does not apply. As the matter was properly heard in the High Court, costs are now governed by the High Court Rules. I acknowledge that KFL, although successful overall, did not succeed on all heads of loss. This does not, in itself, warrant a retrospective redirection of the proceeding to the District Court.
[15] As to whether KFL’s award ought to be reduced pursuant to r 14.7, I accept that KFL provided documents as required at the point of filing the proceeding, and later produced certain invoices and emails in evidence, by consent. I am not persuaded that this caused Mr Scott any detriment or prejudiced his case. I concur with counsel
8 RA McGechan McGechan on Procedure (online loose-leaf ed. Thomson Brookers) at [HR 14.13.01].
for KFL that, even if the plaintiff admits fault in relation to this procedural failing, the result is entirely to the benefit of Mr Scott.
[16] In conclusion, I find that KFL’s costs are properly calculated on a 2B basis under the High Court Rules. This amount has already been agreed between the parties and I find there is no basis for discounting the agreed figure.
Costs order
[17]In summary, I make the following orders:
(a)The defendant, Mr Scott, is to pay the plaintiff, KFL, 2B scale costs of
$29,994.50 plus disbursements of $12,683.10.
Woolford J
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