Lip v Pandey
[2025] NZHC 2504
•29 August 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-241
[2025] NZHC 2504
UNDER rule 4.24(a) of the High Court Rules 2016 BETWEEN
ALADDIN BIN MOHAMMED LIP and NORCHIL BINTI ABDUL RAHIM
Plaintiffs
AND
PRAKASH PANDEY
Defendant
AND
BAKER TILLY STAPLES RODWAY as
liquidators of Viaduct Quays Hotel Limited Non-Party
ASB BANK LIMITED
Non-Party
Hearing: On the papers Appearances:
SVA East and S L Cahill for the Plaintiffs W Revell and V Hansen for the Defendant
Judgment:
29 August 2025
JUDGMENT OF GAULT J
(Costs following trial adjournment)
This judgment was delivered by me on 29 August 2025 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
Solicitors / Counsel:
Ms SVA East and Ms S Cahill, Bell Gully, Auckland
Mr W Revell and Ms V Hansen, Farry Law Ltd, Auckland Copy to:
Mr G Neil and Mr R Hindriksen, Meredith Connell, Auckland
LIP and RAHIM v PANDEY [2025] NZHC 2504 [29 August 2025]
[1] This matter was referred to me as Civil List Judge following the defendant’s interlocutory application dated 14 April 2025 for an order adjourning the two-week trial set to begin on 1 September 2025.
[2] Following minutes, a telephone conference and receipt of written submissions, on 16 May 2025 I vacated the fixture and related timetable orders, and made directions to determine the plaintiffs’ claim for indemnity or increased costs on the papers.
[3]The parties have been unable to agree on costs.
[4] The plaintiffs seek indemnity costs of $156,246.97 comprising its actual legal costs (and disbursements of $559.13) in relation to their various steps to pursue the defendant to provide compliant discovery and in relation to their opposition of the defendant’s application to adjourn the trial. Alternatively, the plaintiffs seek increased costs and disbursements of $19,559.63 representing a 50 per cent uplift on 2B scale costs.
[5]The defendant submits the parties should bear their own costs.
[6]Thus, the parties could not be further apart.
Applicable principles
[7] The applicable costs principles are well settled. One general principle is that costs follow the event, including on interlocutory applications.1 The position is different where an adjournment is the result of an indulgence. Following adjournment of a trial under r 10.2 of the High Court Rules 2016, costs are often awarded against the party seeking an adjournment even though the application could be characterised as successful. This is almost invariably the case where that party’s fault has led to the need for an adjournment, but costs may be awarded even where the applicant is not at fault, recognising the inevitable additional consequential cost to other parties. This also reflects the Court’s approach to wasted costs (referred to below).
1 High Court Rules 2016, r 14.2(1)(a).
[8] Another general principle is that costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required,2 that is, applying the scale in the High Court Rules. So far as possible the determination of costs should be predictable and expeditious.3
[9] However, r 14.6 provides for indemnity and increased costs in prescribed circumstances.
Indemnity costs
[10]Indemnity costs are provided for in r 14.6(4), which relevantly provides:
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
…
(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.
[11] As the Court of Appeal said in Bradbury v Westpac Banking Corporation, “unnecessarily” in the context of r 14.6(4)(a) takes its meaning from the adverbs which precede it: “vexatiously, frivolously, improperly”.4 Indemnity costs may be ordered where a party has behaved either badly or very unreasonably.5 The Court went on to say that indemnity costs, which depart from the predictability of the Rules Committee’s regime, are exceptional and require exceptionally bad behaviour. That is why to justify an order for such costs, the misconduct must be “flagrant”.6
[12] Rule 14.6(4)(f) requires specific circumstances overcoming the principle that the determination of costs should be predictable and expeditious.
2 Rule 14.2(1)(c).
3 Rule 14.2(1)(g).
4 Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [26].
5 At [27](c).
6 At [28].
[13] The onus is on an applicant for indemnity costs to persuade the Court that such an award is justified.7
Increased costs
[14]Increased costs are provided for in r 14.6(3), which relevantly provides:
…
(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
…
(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.
[15] As the Court of Appeal said in Bradbury in the context of r 14.6(3)(b)(ii), increased costs may be ordered where there is failure by the paying party to act reasonably.8
[16] Rule 14.6(3)(d) also requires specific circumstances overcoming the principle that the determination of costs should be predictable and expeditious.
[17] Again, the onus is on an applicant for increased costs to persuade the Court that such an award is justified.9
7 Phillips v Heremaia [2025] NZCA 394 at [16]; citing SPAK (1996) Ltd v LeRoy [2022] NZCA 564; (2022) 23 NZCPR 769 at [189]; and Corrick v Silich [2018] NZCA 221; [2018] NZCCLR 21 at [14].
8 At [27](b).
9 See n 7 above.
Wasted costs
[18] In addition, the Court has jurisdiction to make an order for wasted costs against a party whose default causes a fixture to be vacated. As Venning J said in EBR Holdings Ltd (in liq) v Van Duyn,10 a wasted costs award is to compensate a party who has incurred costs that are wasted and for which any ultimate cost award will not compensate. It recognises that the issues will need to be revisited and some steps repeated. As he earlier explained in Jeffreys v Morgenstern,11 default that leads to vacation of fixtures leads to inconvenience and cost not only to the other parties to that proceeding but to other parties awaiting fixtures in the Court. Fixtures allocated by this Court are commitments of limited judicial and Court resources. Time is booked for the case. Other parties who might otherwise have had their cases allocated hearing time are disadvantaged by default which leads to late vacation of fixtures. Where the Court is required to consider wasted costs, it involves a matter of impression and best judgment of the Court at the time.12
Discussion
[19] In accordance with these principles, the starting point is consideration of the costs of the defendant’s adjournment application itself. Such costs should not be reserved unless there are special reasons.13
[20] The plaintiffs are entitled to costs on the adjournment application. Adjournment of the trial was required because the defendant had outstanding discovery. The plaintiffs were entitled to oppose adjournment to test whether the defendant could complete its outstanding discovery in time for the fixture. Although ultimately adjournment was required as the defendant could not do so and the plaintiffs were understandably not willing to proceed to trial without the discovery, the defendant should pay costs as the party at fault.
10 EBR Holdings Ltd (in liq) v van Duyn [2018] NZHC 1065 at [14]. See also Burgess v Monk [2015] NZHC 1881 at [15] and Alexander v Southern Response Earthquake Services Ltd [2020] NZHC 1660 at [13].
11 Jeffreys v Morgenstern [2013] NZHC 1361 at [31].
12 At [34], citing Simpson v Hubbard [2012] NZHC 3603.13 Rule 14.8.(1).
[21] It does not automatically follow that the plaintiffs are entitled to indemnity or increased costs on the adjournment application. That requires assessment of whether r 14.6(3) or (4) apply. Before addressing that, I refer to the scope of the plaintiffs’ costs application.
[22] Given the adjournment occurred several months before trial, there is no claim for wasted costs in respect of work preparing for trial. Instead, the scope of the plaintiffs’ (indemnity) costs application extends to the various steps they have taken to pursue the defendant to provide compliant discovery. As this is outside the scope of the adjournment application itself, it needs to be assessed separately either on the basis that these steps relate to earlier interlocutory applications, the costs of which I am in a position to address now or the steps themselves give rise to wasted costs. Otherwise, the adjournment is not a vehicle to seek costs on earlier interlocutory steps which should have been addressed at the time by another presiding Judge or reserved where appropriate. That is especially so in relation to issues of indemnity or increased costs which depend on the conduct relevant to the particular application.
[23] The various preceding interlocutory steps for which the plaintiffs seek (indemnity) costs are their:
(a)interlocutory application pursuing further discovery;
(b)application to lift the stay regarding the further discovery (which was necessary when it was clear the defendant was not going to cooperate as he had indicated); and
(c)application for unless orders regarding discovery, including various call memoranda and teleconferences.
[24] I consider that I am seized of the interlocutory application pursuing further discovery and the related application to lift the stay. It appears from the file that although the discovery application was originally filed on 3 April 2024, it was stayed by consent on 14 May 2024 until the stay was lifted and a hearing date allocated on 23 October 2024, as requested in the plaintiffs’ memorandum dated 17 October 2024.
The allocated hearing date was 3 March 2025. On 26 February 2025, I made consent orders on the papers in respect of that application and vacated the interlocutory fixture. Costs were not addressed. In the circumstances, I consider the plaintiffs are entitled to costs on that discovery application for the steps taken up to 26 February 2025. I do not accept the defendant’s submission that costs should be limited to attendances since 19 February 2025.
[25] I also accept that the costs of filing memoranda for and appearing at the subsequent case management conferences on 21 and 27 March, and 4 and 7 April 2025 amount to wasted costs. It was evident the defendant could not comply with the consent orders. However, the plaintiffs’ application for unless orders was made within one such memorandum and was declined as premature. It does not warrant a separate costs allocation.
[26] Indemnity and increased costs are sought too often. That is discouraged. Here, however, I am satisfied that the defendant’s conduct in relation to these steps warrants an award of increased costs. The defendant has contributed unnecessarily to the time and expense of these steps by failing to comply with the rules and Court timetabling directions and in particular failing without reasonable justification to comply with an order for discovery.14 The conduct might come close to flagrant, but I am not satisfied on the material provided that indemnity costs are appropriate. Nor could I be satisfied on the material provided that over $150,000 was necessarily incurred and reasonable in respect of these steps. A further reason is that the defendant’s discovery is ongoing. It may be premature to assess the egregiousness of the defendant’s earlier failures as flagrant before this outstanding discovery is complete. It remains open to the Court, despite fixing costs on an interlocutory application, to vary an order for costs if satisfied subsequently that the original order should not have been made.15 That could be addressed after substantive determination.
14 Rule 14.6(3)(b)(i) and (iv).
15 Rule 14.8(2).
[27] A 50 per cent uplift for increased costs is a very high uplift. It is effectively making up the final third of reasonable costs. As the Court of Appeal observed in Holdfast NZ Ltd v Selleys Pty Ltd:16
An increase of 50% on scale costs should … grant the costs-claiming party a fair recovery for the step unnecessarily forced on it, assuming that the time allocated to the step has been reasonably calculated ... Any greater recovery than that would mean that the party paying costs is contributing to the other party’s choice of special counsel.
[28] In the unsatisfactory circumstances of this case, I accept that a 50 per cent uplift on the identified steps is appropriate. The defendant’s discovery delays through the relevant period were unreasonable to say the least. Therefore, the plaintiffs are entitled to costs and disbursements of $19,559.63 in respect of these interlocutory applications.
Result
[29]The defendant is to pay the plaintiffs’ costs and disbursements of $19,559.63.
Gault J
16 Holdfast NZ Ltd v Selleys Pty Ltd [2005] 17 PRNZ 897 (CA) at [47].
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