Linton v Bellaney

[2024] NZHC 2382

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-379

[2024] NZHC 2382

UNDER

the High Court Rules 2016

IN THE MATTER

of an application for an injunction under HCR 7.53

BETWEEN

ANDRE LUKE McBRIDE LINTON

First Applicant

ANDRE LUKE McBRIDE LINTON and MOLLY ANN LINTON, and HP HANNA &

CO TRUSTEES (2016) LIMITEDas trustees of the Andrew and Molly Linton Family Trust

Second Applicants

NATURAL HEALTH CLINICS 1987 LIMITED

Third Applicant

AND

CLIFFORD FALCONER BELLANEY
First Respondent

continued….

Hearing:	(On the papers)
Counsel:	G A Cooper and E L Pearce for Applicants C R Johnstone for Respondents
Judgment:	23 August 2024

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

LINTON v BELLANEY [2024] NZHC 2382 [23 August 2024]

AND  FLEX FX LIMITED

Second Respondent

ANDCLIFFORD FALCONER BELLANEY and KATHLEEN MARY FRANCIS GRAHAM and JAW TRUSTEES

LIMITED, as trustees of the Skye Trust Third Respondent

[1]                 On 3 July 2024, I recorded in a Minute that the injunction application set down for  6 August 2024  was  withdrawn  by  the  plaintiffs/applicants.   In  that  Minute,  I timetabled costs submissions as Mr Johnstone, counsel for the respondents, submitted that the fixing of costs now in respect of that application would be consistent with r 14.8 of the High Court Rules 2016 (the Rules).

[2]                 Costs submissions have now been filed. Mr Johnstone’s submissions are founded on the basic cost principle that costs should follow the event.

[3]                 Under r 14.8 of the Rules, in relation to the fixing of costs on interlocutory applications, costs are to be fixed when they are “determined” which can be by agreement or by way of withdrawal by leave, as well as court decision.1

[4]                 As the injunction application was withdrawn, the application is taken to have been determined in the respondents favour meaning that the starting point under r 14.8 of the Rules, is that costs should be fixed now and pursuant to r 14.2(1)(a), costs should follow the event. That is the orthodox position which I intend to adopt.

[5]                 Mr Johnstone seeks, on behalf of the respondents, that costs be fixed on a 2B basis.

[6]                 Ms Pearce, counsel for the applicants, goes through a line-by-line analysis of the steps for which costs are sought, sets out the applicants’ reason why particular

1      Morley v Browne [2019] NZHC 3170 at [11].

costs for particular steps are opposed and takes issue with the adoption of costs on a 2B basis.

[7]                 The scale was intended to make costs predictable and to avoid a painstaking analysis of each individual claim. That said, it is not objectionable for a party resisting costs to suggest that a departure from Band B costs is appropriate.

[8]                 Before turning to that issue in detail, one challenge to the claim for costs is that the applicants for injunction submit the respondents unreasonably  failed to accept    a settlement proposal. However, that proposal was on the basis that the application would be withdrawn, with costs to lie where they fall.

[9]                 The Court is cautious in awarding or declining costs where the only offer made was a ‘walk away’ or ‘drop hands’ offer. Ms Pearce’s memorandum advising that the injunction application was withdrawn was dated 2 July 2024. The last of the applicants’ proposals to withdraw the application on a ‘drop hands’ basis was, or at least was, on the basis that costs would be resolved following the substantive hearing.

[10]              The applicants had, in the form of the injunction, a ‘tiger by the tail’ once they decided not to continue with the application. By offering to withdraw the injunction on the basis that costs would be dealt with when the substantive hearing was concluded they signalled they did not intend to pursue the injunction. The respondents, who considered the injunction application was without merit, were not unreasonable in declining the offer of withdrawal that deferred the fixing of costs. I do not consider that the settlement offer should have any bearing on costs.

[11]              Accordingly, it follows from what I have said that I am satisfied costs should be fixed now and in favour of the respondents. There is no basis for the applicants to seek costs in respect of a step they abandoned — their claim for costs in respect of the abandoned application is declined.

[12]              There is an award of costs in favour of the applicants. The award is in terms of the items set out in the schedule to Mr Johnstone’s memorandum of 12 July 2024. However, in respect of the item 11 claim for memoranda, the claims in respect of those

items is to be on a 2A basis for the reasons given by Ms Pearce in schedule 2 to her submissions of 19 July 2024. The short reason for that adjustment is that most of the memoranda were very brief and a 2A allowance provides for some memoranda being only one page and some being four pages. Save for that adjustment, costs are confirmed on the above basis.

Associate Judge Lester