Mark Nieklaas Miedema, JULIE Miedema and ALH Trustee Co Ltd as trustees of the Miedema Family Trust And Loukas Soteri Petrou Canam Construction (BOP) Limited Stephen Ward Jones
[2025] NZHC 1015
•1 May 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-001205
[2025] NZHC 1015
BETWEEN MARK NIEKLAAS MIEDEMA, JULIE MIEDEMA and ALH TRUSTEE CO LTD as
trustees of the MIEDEMA FAMILY TRUST Plaintiff
AND
LOUKAS SOTERI PETROU
First Defendant
CANAM CONSTRUCTION (BOP) LIMITED
Second Defendant
STEPHEN WARD JONES
Third Defendant
On the papers Counsel:
M A Corlett KC, A G Needham and D S Howell for Plaintiff D L Bennington for First Defendant
J L Land and S Nicolson for Second Defendant
D A Campbell and N M Thompson for Third DefendantJudgment:
1 May 2025
COSTS JUDGMENT OF ANDERSON J
This judgment was delivered by me on 1 May 2025 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules 2016.
………………………………
Registrar/Deputy Registrar
Solicitors: Holland Beckett Law, Tauranga Duncan Cotterill, Auckland Lowndes Jordan, Auckland
Dentons Kensington Swan, Auckland
MARK MIEDEMA v LOUKAS PETROU [2025] NZHC 1015 [1 May 2025]
Introduction
[1] In my substantive judgment, I awarded the plaintiff trust (the Trust) $513,444 in compensation, having found that it had been subject to oppressive, unfairly discriminatory and/or unfairly prejudicial conduct by the first and third defendants, engaging s 174 of the Companies Act 1993. I also directed that the Trust transfer its shares in the second defendant, Canam Construction (BOP) Ltd (Canam BOP) to the first and third defendants, Loukas Petrou and Stephen Jones, for the nominal consideration of $1. The issue of costs now falls for determination.
The substantive judgment
Background
[2] Mark and Julie Miedema are trustees of the Miedema Family Trust. The Trust held a 33 per cent shareholding in Canam BOP, a construction company formed in 2012 as part of the Canam Group. The remaining 67 per cent was owned by interests associated with the first and third defendants, who were also directors of Canam BOP. Between 2012 and 2021, Mr Miedema headed up the management of Canam BOP. He too served as a director.
[3] The relationship deteriorated over a series of disputes about financial transparency, dividend payments, and the use of Canam BOP’s resources to support the broader Canam Group — particularly during a costly legal dispute and arbitration over a large construction project in Auckland that the Canam Group was undertaking. Mr Miedema resigned as both an employee and director in 2021, and Canam BOP’s operations dwindled. The company is no longer a going concern.
Claims
[4] The Trust brought four claims. Three of these claims were under s 174 of the Companies Act. They alleged that the first and third defendants had acted oppressively and/or unfairly prejudicially by:
(a)imposing a $2.1 million “Reimbursement Charge” on Canam BOP retrospectively for group support services (the Reimbursement Charge
claim), withholding dividends and using Canam BOP’s funds improperly;
(b)systematically diverting Canam BOP’s funds for improper purposes that were not beneficial to Canam BOP (referred to by the Trust, and here for convenience, as the Cash-stripping claim); and
(c)advancing shareholder funds without proper approval or benefit to Canam BOP (the Shareholder Funds claim).
[5] The Trust also brought a claim against Canam BOP itself under s 171 of the Companies Act. This claim pleaded that Canam BOP had breached duties to the Trust by failing to pay dividends and denying the Trust voting rights on major financial decisions.
[6] When proceedings were first filed in July 2020, only the claim against Canam BOP under s 171 and the Shareholder Funds claim were pleaded. The other two claims were only advanced in the plaintiffs’ amended statement of claim, filed on 21 March 2022.
Findings
[7] The Trust was successful in the Reimbursement Charge claim. I found that the charge constituted a major transaction under s 129 of the Companies Act and therefore engaged s 174. The Cash-stripping claim was only partially successful, as only the Reimbursement Charge and the charging of “head office costs” (Head Office Costs) engaged s 174. The shareholder advances claim and the claim against Canam BOP both failed. The first defendant’s affirmative defence also failed. This alleged that Mr Miedema’s conduct precluded the Trust from obtaining relief.
Relief
[8] I considered that the effect of the first and third defendants’ conduct was to remove approximately $2.3 million from Canam BOP, and that this required a remedial response. I directed that the first and third defendants pay $513,444 in
compensation, equivalent to 33 per cent of the Reimbursement Charge minus the tax that would have been due on the sum if it had been paid out as a dividend. I did not consider that liquidation was appropriate. However, given that the circumstances required the parties to be disentangled from joint ownership of Canam BOP, I directed the Trust to transfer its shares in Canam BOP to the first and third defendants for a nominal $1.
The costs claimed
[9] The parties have filed extensive costs submissions. For the sake of brevity, I address only the key arguments in my decision. By way of a brief summary, the Trust seeks $343,228.40 in costs and $164,327.34 in disbursements. It claims costs largely on a 2B basis, with some steps claimed at 2C. The Trust also seeks an uplift of 40 per cent on scale costs, wasted costs, and costs on the present costs application. The latter is sought on a 2C basis.
[10] For its part, Canam BOP seeks costs from the Trust for its successful defence of the cause of action against it. It suggests that indemnity costs are appropriate in the present case, totalling $875,000. It also seeks $71,938.47 in disbursements.
Costs as between Trust and first and third defendants
Incidence of costs
[11] Ordinarily, costs follow the event.1 An unsuccessful party is the party that is adjudged liable to pay money to the other.2 Even if a party fails on some claims or is only partially successful, success on these limited terms is still considered success. The limited nature of the success and the time and resources expended by the losing party in meeting ultimately unsuccessful arguments is to be reflected in an appropriate reduction of the costs.3 I consider that such an approach is appropriate in the present
1 High Court Rules 2016, r 14.2(1)(a).
2 Water Guard NZ Ltd v Midgen Enterprises Ltd [2017] NZCA 36 at [13].
3 Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].
circumstances.4 This is not a case in which the end result of the case might reverse the party deemed successful for the purposes of costs.5
[12] Ultimately, the Trust succeeded in this litigation. The first and third defendants were adjudged liable to pay compensation. However, as discussed above, the Trust succeeded fully in only one of their four claims and this claim was added some time after the proceeding was issued. The Cash-stripping claim succeeded only in part. I return to this point later, when I consider uplifts and reductions.
Categorisation
[13] The plaintiffs and defendants agree that the proceeding falls under category 2. I am of the same view.
Steps before and after 21 March 2022
[14] I consider that the plaintiffs should not receive costs for steps prior to 21 March 2022, when their amended statement of claim was filed. Before that, the only claims being pursued were claims on which the Trust was unsuccessful. The only exceptions to this are steps relating to discovery, several of which date from before 21 March 2022.
[15] For discovery/inspection, the documentation and associated evidence relating to the various claims were somewhat intermingled, in the sense that some of the material discovered before 21 March 2022 comprised the necessary factual background to the successful claims. I therefore consider that the material discovered is fairly viewed as related to the successful claims as well as the unsuccessful ones.
[16] However, as noted below, I make a reduction to costs for both pre-21 March 2022 discovery costs and all post-21 March 2022 costs to take into account the claims on which the Trust was unsuccessful.
4 See the alternative stream of authority on assessing success: Packing In Ltd (in liq) v Chilcott
(2003) 16 PRNZ 869 (CA).
5 Okey v Kingsbeer [2019] NZCA 419 at [14].
Second counsel
[17] The defendants say that the Trust should not be able to claim for second counsel. The Courts have held that there usually has to be some special feature to justify costs for a second counsel.6 Consideration must be given to whether the nature of the proceeding and the way the trial was conducted justifies requiring the losing party to contribute to the winning party's cost in having a junior counsel present.7
[18] As evidenced by the length of both the hearing and my substantive judgment, this was a case where the evidence and issues traversed were dense. The plaintiffs were justified in having second counsel.8
The third defendant’s costs
[19] The third defendant, Mr Jones, was only joined to proceedings in March 2022 when the plaintiffs filed their amended statement of claim. The first and third defendants say that he should not be liable for costs relating to steps taken before he was joined. Indeed, appendix 1 of the first and third defendants’ submissions characterise any costs award against them as being split between the first defendant, Mr Petrou, and the third defendant, Mr Jones. In short, the first and third defendants say that the presumption of joint and several liability should be displaced.
[20] The default position under the High Court Rules 2016 is that where is more than one party liable for costs, they are jointly and severally liable for a single costs award, subject to the Court’s overriding discretion.9 That discretion is usually exercised where the “case is out of the ordinary in some significant way”.10 Examples include taking a reduced part in opposing judgment, such as abiding the outcome or admitting the cause of action. No such circumstances exist here.11 Where losing parties broadly “hitch their wagons together” and neither takes a reduced part in the proceeding, the presumption of joint and several liability is not displaced.12 Mr Jones’
6 Body Corporate S73368 v Otway (No 2) [2018] NZHC 1761 at [4].
7 Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 155 PRNZ 155 (HC) at [21].
8 Raikes v Hastings District Council [2023] NZHC 794, [2023] ELHNZ 82 at [11].
9 High Court Rules, r 14.14.
10 Hong v Deliu [2016] NZCA 75, [2016] NZAR 667 at [24].
11 At [24].
12 Li v Wu [2020] NZHC 289 at [23].
late joinder does not affect the costs he is liable for because I have not allowed the plaintiffs costs for steps prior to March 2022. Accordingly, there is no reason why Mr Jones and Mr Petrou should not be jointly and severally liable.
Time allocation on scale costs
[21] The plaintiffs claim costs on a 2B scale, except for certain steps in respect of which they say a higher time allocation is appropriate:
(a)discovery and inspection of documents;
(b)pleading in response to the defendants’ amended statement of claim;
(c)preparation of the common bundle (an increased time allocation of seven days is sought, up from the 0.5 days ordinarily claimable under all bands); and
(d)filing of memoranda and preparation for and attendance at the two case management conferences prior to an aborted trial in February 2023 and the actual trial in November 2023.
[22] As to discovery/inspection, I accept that the volume of documents and material involved was substantial. However, in my view, in all the circumstances, band C costs are not justified. It is difficult in retrospect to assess to what extent the steps taken were reasonable, having regard to the intermingling of background material related to both the successful and unsuccessful claims. The same reasoning applies to the preparation of the common bundle for which increased allocation is sought. I have taken into account the parties’ opposing perspectives in who bears responsibility for increased common bundle costs and whether there is an element of wasted cost. Ultimately, in my view band B costs are appropriate.
[23] In respect of the pleading in response to the defendants’ amended statement of claim (at [21(b)] above), I do not consider that the matters raised in the defendants’ second amended statement of defence were so novel or complex that the reply warranted a band C allocation. Nor do I consider in respect of the preparation for the
case management conferences (at [21(d)] above) that the preparation of roadmaps, a common practice in preparing for trial, should reasonably warrant a band C allocation on the basis advanced, that counsel for the Trust had to liaise excessively with opposing counsel. Band B is appropriate for both steps.
Costs against the second defendant
[24] For reasons I return to below, I do not consider that Canam BOP should have to pay costs to the Trust. I disallow steps taken solely against Canam BOP.
Uplifts and reductions
[25] I do not agree with the Trust’s submission that an uplift of 40 per cent is warranted. As discussed above, the Trust succeeded fully only on the Reimbursement Claim, and only partially on the Cash-stripping claim. I consider that a reduction of costs is warranted to reflect the lack of success on the Shareholder Funds claim, and the partial success on the Cash-stripping claim.13
[26] To determine the appropriate reduction in costs, I make a broad-brush assessment of how much preparation and hearing time was devoted to the failed claims (as well as the unsuccessful aspects of the Cash-stripping claim).14 This is not a straightforward exercise in the present circumstances, where the subject matter of and factual background to the claims overlapped. I take into account the fact that for just under two years, the only pleaded causes of action were the two that failed outright. They continued to be pleaded in the amended statement of claim and were advanced at trial. The defendants will have incurred significant costs as a result of that.
[27] As regards the Cash-stripping claim, the Trust alleged that Mr Petrou and Mr Jones engaged in “cash-stripping” through several discrete forms of conduct, including the Reimbursement Charge, Head Office Costs, Canam BOP incurring unjustified legal fees of $754,986, provisioning in the Canam BOP accounts of
$460,000 for warranty claims, Canam BOP funds being used in the Alexandra Park arbitration, or withholding payment of dividends for that purpose, and unjustified
13 High Court Rules, r 14.7(d).
14 Semple v Wilson [2018] NZHC 1703 at [45].
salaries recorded for the first and third defendants. I found that only the Reimbursement Charge and the withdrawal of the Head Office Costs engaged s 174. Significantly, time and preparation was devoted to these claims by the defendants. This included cross-examination of Tobias Braun, an expert witness brought in by the Trust to address the allegedly unjustified legal fees. Weighed against that, however, is the fact that the plaintiffs received substantial compensation by way of relief.
[28] In all the circumstances, I consider that a 30 per cent reduction in costs incurred for steps after 21 March 2022 is warranted to reflect the complete failure of two of the plaintiffs’ causes of action, the only partial success of the cash-stripping claim, and the compensation ultimately awarded.
Wasted costs claim
[29] The trial was originally set down for ten days in February 2023. However, it was aborted when it became clear that the trial could not be completed within the allotted 10 days. The Trust seeks wasted costs for this aborted fixture. The Trust and the first and third defendants blame each other for the delay. The Trust says that the defendants overestimated the time necessary, and the defendants say that the plaintiffs failed to appreciate that there might not be enough time.
[30] The Court has the jurisdiction to order that wasted costs be paid when, through the fault of one or more parties, a trial has been postponed, to the detriment of others.15 The rationale is to compensate the other party who has wasted costs, and/or to impose a sanction on the defaulting party, to avoid wastage of costs, judicial and court resources and inconvenience to other parties awaiting fixtures.16
[31] Gault J’s minute of 16 February 2023 aborting the trial observes that it had become clear that a two-week fixture had become unsuitable given the amount of evidence and witnesses sought to be presented. I note the defendants’ submission that the Trust had expanded their case in its amended statement of claim in March 2022 by filing the Reimbursement Charge and Cash-stripping claims. However, I do not see a
15 Burgess v Monk [2015] NZHC 1881 at [15].
16 Marley New Zealand Ltd v Skellerup Rubber Services Ltd [2013] NZHC 3040 at [11].
clear connection between the conduct of any of the parties and the aborting of the trial. There was no failure to adhere to timetable orders by the defendants. The delay to trial was not the result of a party changing their position and wasting the work of other parties. Nor was it the result of any last-minute adjustments that jeopardised the trial date. As evidence briefs were filed, it became apparent that the trial would take longer than the two weeks originally allotted. That ultimately proved to be a cautious estimate, with the case concluding within around two weeks. Nevertheless, I find that costs should lie where they fall on the aborted trial.
Disbursements
[32] The Court can reduce a disbursement otherwise claimable if it is disproportionate in the circumstances of the proceeding.17 There is a discretion not to award disbursements in circumstances where the plaintiff has failed on a cause of action or relevant issue to which the disbursement in question is linked.18 I emphasise that this is a discretion. The recovery of disbursements is not limited only to issues on which a party succeeds.19
[33] As I noted before, the Reimbursement Charge claim and the Cash-stripping claim were only filed in March 2022 with the plaintiffs’ amended statement of claim. Neither of the claims that were originally filed in 2020 were successful. On that basis, I disallow all disbursements from before the amended statement of claim was filed on 21 March 2022. Consistent with my costs award, the exception to this is steps prior to 21 March 2022 related to discovery. I award these disbursements, less 30 percent.
[34] I disallow totally disbursements in respect of expert witness fees for Mr Braun, who gave evidence on an aspect of the Cash-stripping claim that failed.
[35] There were several other issues raised by the defendants about disbursements claimed, which I have considered. To address them briefly, I am of the view that accommodation costs for second counsel are appropriate disbursements, as are the
17 High Court Rules, r 14.12(3).
18 Advicewise People Ltd v Trends Publishing International Ltd [2016] NZHC 2999 at [24]; and Grant v Restructuring Insolvency & Turnaround Association New Zealand Inc [2021] NZHC 801 at [24]–[25].
19 At [24].
plaintiffs’ out-of-town costs and the other expert witness fees (apart from those of Mr Braun).
Summary of the plaintiffs’ costs claim and disbursements against first and third defendants
[36]Applying the above findings to the plaintiffs’ claimed costs, I award the Trust
$100,715.30 in costs against the first and third defendants20 and $91,969.54 in disbursements.21 In summary, with two exceptions, this is an award of costs on a 2B basis and disbursements for steps after 21 March 2022 reduced by 30 per percent. The exceptions are that I have awarded costs and disbursements for discovery/inspection for pre-21 March 2022 steps, with the same 30 per cent reduction applied.
Canam BOP’s claim for costs
Incidence of costs and general approach
[37] The Trust originally sought costs against the defendants jointly, including against Canam BOP. Canam BOP then claimed increased or indemnity costs against the Trust in turn. In its reply submissions dated 13 February 2025, the Trust now says costs should lie where they fall in respect of Canam BOP. In the alternative, it says that a Sanderson order should be made against the first and third defendants if costs are awarded to Canam BOP. It says that there should be a reduction of any such costs, and that increased and indemnity costs are not warranted.
[38] For its part, Canam BOP seeks increased or indemnity costs in its favour. It highlights the failure of the Trust’s sole claim against it. It says that the claim was meritless and, like the other defendants, points to the reasons given by the Court in denying the claim. It also says that the Trust ignored repeated correspondence setting out why the claims would fail and should be withdrawn. Canam BOP further says that it shouldered a “significant burden of discovery”. Finally, Canam BOP says that the plaintiffs only joined it to proceedings to avoid having to fund non-party discovery.
20 The full analysis is set out in Schedule A to this judgment.
21 The full analysis is set out in Schedule B to this judgment.
[39] Where one defendant is successful and others are not, there is no rule governing the question of costs; these remain at the discretion of the Judge.22 Courts have generally considered that it is only appropriate for an unsuccessful defendant to avoid liability for the costs of a successful defendant when it was not a reasonable and proper course for the plaintiff to have joined the successful defendant.23 This is to be assessed on the basis of the material available to the plaintiff’s advisors at the time the proceeding was brought.24 Other factors to be considered include:25
(a)whether the unsuccessful defendant did anything to contribute to the joinder of the successful defendant;
(b)how the proceedings developed; and
(c)whether the unsuccessful defendant was found liable for significantly less than the claim made against both itself and the successful defendant.
[40]Ultimately, the question is to be decided according to the justice of the case.26
[41] On one hand, it is ordinarily necessary to join a company to applications under s 174 in order to adjudicate and settle all questions involved in proceedings.27 Joinder of the relevant company ensures that the Court’s ability to grant a remedy is unhindered.28
[42] However, Canam BOP was joined as a defendant to a separate cause of action under s 171, separate from the claims under s 174. The claim itself was a weak one. It was not pressed with any great force during Mr Corlett’s closing. As I found in the substantive judgment, there is no general duty to declare dividends. Further, the Trust
22 Lane Group Ltd v DI & L Patterson Ltd [2000] 1 NZLR 129, (1999) 13 PRNZ 509 (CA) at [83]; cited by Lam v Mo [2018] NZHC 116 at [6].
23 Lam v Mo, above n 22, at [9], citing Public Trustee v Auckland Electric Power Board [1944] NZLR 782 (SC) at 833.
24 Lam v Mo, above n 22, at [9], citing Clarke v Avondale Transport Ltd [1969] NZLR 361 at 363.
25 Lane Group Ltd v DI & L Patterson Ltd, above n 26, at [84].
26 Brown v Heathcote County Council (No. 2) [1982] 2 NZLR 618 at 626.
27 Greymouth Holdings Ltd v Jet Trustees Ltd HC Auckland CIV-2011-404-5309, 19 December 2011 at [18].
28 At [19].
never had the right to vote on the operation of the Treasury Account, as management of a company is reserved for the Board under s 128 of the Companies Act and the payments in question where not pleaded as major transactions under s 129. This fundamental weakness was identified by the solicitors for Canam BOP to the solicitors for the Trust at the time proceedings were first filed in 2020.29 The fragility of the Trust’s case against Canam BOP was apparent from the outset. Nevertheless, the Trust persisted in its claim against Canam BOP. Ultimately, Canam BOP successfully defended the claim.
[43] In some cases where relief is not sought from the company in respect of an s 174 application, the Court has deemed joinder to be neither necessary nor desirable.30 However, in my view, Canam BOP’s involvement was required and appropriate including for the purposes of discovery and this is a case where its joinder in respect to the s 174 claims was desirable.31 I observe that counsel and solicitors for Canam BOP undertook work for the first and third defendants. Mr Land, Canam BOP’s counsel, carried the conduct of the proceeding at trial for all defendants, supported by Canam BOP’s solicitors. That reflects Mr Land’s seniority but undermines Canam BOP’s position that it should not have been joined at all.
[44] Further, Canam BOP concedes that many of the issues were common to the claims argued against the first and third defendants, and that some of the tasks undertaken by Canam BOP’s solicitors were on behalf of the first and third defendants.
[45] Taking all the above into account, I consider that it is appropriate for the Trust to pay some of Canam BOP’s costs. I do not consider that the plaintiff should pay all of Canam BOP’s costs, however. In addition to the common issues raised by the claims, Canam BOP would have borne a certain amount of costs anyway, had it been joined as a respondent to the s 174 claims. Accordingly, I do not consider that the Trust should be visited with Canam BOP’s discovery costs.
29 See the second defendant’s letter to the plaintiffs’ solicitors dated 4 December 2020.
30 See Greymouth Holdings Ltd v Jet Trustees Ltd, above n 31, at [19]–[20]; and Latimer Holdings Ltd v Sea Holdings New Zealand Ltd (2004) 17 PRNZ 552 (SC).
31 See High Court Rules, r 4.56(1)(b)(ii).
Categorisation, steps taken and time allocation
[46] I consider that for trial matters, Canam BOP should only receive a third of the costs they would otherwise be entitled to. This is to reflect the work that Mr Land and Canam BOP’s solicitors did on behalf of the first and third defendants.
[47] Further, I do not consider that Canam BOP should receive costs or disbursements relating to discovery. As discussed above, it was appropriate for Canam BOP to be joined and hence to undertake the discovery of company documents for the Trust and the first and third defendants, who were all shareholders in Canam BOP at that point.
Time allocation level
[48] Canam BOP supplies costs figures on both a 2B and 2C basis. I consider that 2B costs should apply across the board.
Increased of indemnity costs?
[49] Regardless of the applicable scale, Canam BOP seeks increased or indemnity costs because it says the claim against it was hopeless.
[50] Increased costs may be awarded where there is a failure by the paying party to act reasonably, for instance by pursuing an argument that lacks merit.32 Indemnity costs may be awarded where a party has behaved very unreasonably or badly, or where a case is so hopeless as to warrant indemnity costs.33 The threshold for indemnity costs in particular is a high one. As French J articulated in J Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA Branch) (No 2), indemnity costs may be awarded in cases where “a party persists in what should on proper consideration be seen to be a hopeless case”.34 The Court of Appeal in Bradbury v Westpac Banking Corporation characterised this as the making of allegations which
32 Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400 at [28].
33 At [28].
34 J Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA Branch) (No 2)
(1993) 46 IR 301 at 303.
ought never to have been made or unduly prolonging a case with groundless contentions.35
[51] As fragile as the claim was, I do not consider that is enough to engage the “hopeless case” test set out in J Corp and Bradbury v Westpac. Nor do I think that the plaintiffs acted unreasonably in pursuing the claim. The central issue that all four claims revolved around was that money was taken out of Canam BOP, money that the plaintiffs allege ought to have been paid out as dividends to it as a shareholder. The claim substantively engaged with that central issue. It does not fall into the category of groundless contention or an allegation that ought never to have been made. Indeed, the issue of dividends was clouded by much uncertainty for all parties involved during the period Mr Miedema was involved with Canam BOP. That weighs against the awarding of increased or indemnity costs.
[52] On the issue of indemnity costs, I also do not consider that Canam BOP has met the evidential onus incumbent on parties seeking to establish the quantum of indemnity costs in any event.36 Indemnity costs are those actual costs and disbursements that are reasonably incurred by a party.37 The Court is entitled to take a robust judgement as to what is reasonable in the circumstances.38 Past cases have required or considered desirable invoices detailing:
(a)full descriptions of the work undertaken in respect of each invoice, hourly rates applied and the number of hours undertaken in relation to the steps described;39
(b)a breakdown of the time spent on the litigation, hourly rates, a breakdown of disbursements and any additional evidence which shows that the rates charged and the work undertaken were reasonable;40 or
35 Bradbury v Westpac Banking Corporation, above n 37, at [29(d)].
36 CNP Holdings Ltd v Central Park Property Investment Ltd [2024] NZHC 3359 at [32].
37 High Court Rules, r 14.6(1)(b).
38 Kim v Christchurch City Council [2024] NZHC 486 at [12].
39 Ballantyne Trustees Ltd v GBR Investment Ltd [2017] NZHC 908 at [23].
40 Muir v Commissioner of Inland Revenue [2015] NZHC 2855 at [16].
(c)evidence from an independent lawyer who had reviewed the work carried out by counsel.41
[53] The invoices that Canam BOP have supplied fall well short of that standard. At best, the descriptions of the work undertaken extend to a few short and very generic words: for instance, “fee for professional attendances”. Some extend only to a single word, such as “advice”. Many invoices do not describe the hourly rate or the hours spent on the work in question.
[54] I note Canam BOP’s submission that a Calderbank offer was made on 3 June 2022. However, this offer was made on behalf of all three defendants — not just Canam BOP and the claim against it. Given the stage of proceedings (with briefs of evidence not having been filed yet), and the fact that the offer addressed all claims brought by the plaintiffs, two of which were ultimately successful (albeit one partially), it was reasonable for the plaintiffs to refuse the offer. It is not enough to say that the weakness of the claim against Canam BOP alone made it unreasonable to refuse the offer.
Canam BOP disbursements
[55] I award Canam BOP disbursements of $20,603.93.42 This comprises $330 in court fees and $20,273.93 in fees for Shane Hussey, an expert witness called by Canam BOP. This represents 15 per cent of Mr Hussey’s actual costs. I make this reduction to reflect the limited relevance of his evidence to the claim against Canam BOP.
Summary of Canam BOP’s costs
[56] I order 2B costs in favour of Canam BOP totalling $77,675, to be paid by the Trust.43 This sum does not include steps relating to discovery, costs for which lie where they fall. Costs for steps at trial are reduced by two-thirds. I also award
41 International Roofing Ltd v Global Roofing Solutions Ltd [2014] NZHC 2913 at [31]–[32]. This case concerned a non-party who sought costs for work done by their counsel on a non-party discovery order.
42 The full analysis is set out in Schedule D to this judgment.
43 The full analysis is set out in Schedule C to this judgment.
Canam BOP disbursements of $20,603.93 for the reasons outlined in the previous paragraph.
[57] I see no foundation for a Sanderson order, which was only raised belatedly in reply in any event. In the present circumstances, it is right that the Trust alone bears Canam BOP’s costs.44
Costs on costs
[58] The Trust also seek costs on its present application for costs. The Trust cites the complexity of the issues raised by its costs application.
[59] Awarding “costs on costs” is within the jurisdiction of this Court.45 Costs on costs are generally awarded in four situations:
(a)where a party has been wholly successful in its costs claim;46
(b)where an unsuccessful party has advanced a clearly unmeritorious argument;47
(c)where there is complexity/a genuine dispute as to availability of costs or their quantum and the successful party has gone to some length and expense addressing the issue in the face of reasonable opposition from the unsuccessful party;48 and/or
(d)where a party fails to accept or engage with a reasonable offer to settle costs.49
44 Whether an unsuccessful defendant is required to contribute to the costs payable by the plaintiff is, again, determined according to the justice of each case: see Brown v Heathcote County Council (No. 2), above n 30, at 626.
45 Harrington v Wilding [2019] NZCA 605 at [45].
46 Paper Reclaim Ltd v Aotearoa International Ltd [2007] NZCA 544, (2007) 18 PRNZ 743 at [62].
47 Fog v Frimley Estate Ltd (No 2) [2016] NZHC 314 at [17].
48 Little Republic New Zealand Ltd v Kum Fu Stainless Kitchen Equipment Ltd [2021] NZHC 1836 at [31].
49 North Eastern Investments Ltd v Auckland Council [2018] NZHC 1805 at [20].
[60] There will usually be no costs on costs where the parties are seen to both have had a measure of success, or to have both contributed to the inability to resolve costs issues without the assistance of the Court.50
[61] On one hand, the nature of this proceeding gives rise to some difficult questions regarding costs, particularly regarding the failed claim against Canam BOP. Nevertheless, each party has had some measure of success on the myriad issues that have arisen in this judgment; all have also advanced some plainly unmeritorious arguments. This is not an appropriate case to make an award of costs on costs. I also take into account that no attempt was made by the plaintiffs to negotiate costs.
Result
[62] The first and third defendants are ordered to pay the Trust $192,684.84, comprising $100,715.30 in costs plus $91,969.54 in disbursements.
[63]The Trust is ordered to pay Canam BOP $98,278.93, comprising costs of
$77,675 plus disbursements of $20,603.93.
Anderson J
50 Combined Property Maintenance Ltd v Singh [2021] NZHC 621 at [19].
SCHEDULE A
Step claimed Category 2 daily recovery rate
Time allocation (Band B unless
otherwise specified)
Scale costs claimed
Commencement and pleadings
Step 9 Pleading in response to amended pleading - Plaintiffs' reply to First Defendant's Amended Statement of
Defence 20 May 2022
$2,390
0.6
$1,434
Step 9 Pleading in response to amended pleading - Plaintiffs' reply to Third Defendant's Amended Statement of
Defence 20 May 2022
$2,390
0.6
$1,434
Step 9 Pleading in response to amended pleading - Plaintiffs' reply to First Defendant's Second Amended Statement of
Defence 8 September 2023
$2,390
0.6
$1,434
Pleading in response to
amended pleading - Plaintiffs' reply to Third Defendant's Second Amended Statement ofDefence
$2,390
0.6
$1,434
Case management
Step 11 Filing memorandum for first of subsequent case management conference or mentions hearing 6 May 2022 $2,390
0.4
$956
Step 11 Filing memorandum for first of subsequent case management conference or
mentions hearing 7 July 2022
$2,390
0.4
$956
Step 11 Filing memorandum for first of subsequent case management conference or
mentions hearing 11 October 2022
$2,390
0.4
$956
Step 11 Filing memorandum for first of subsequent case management conference or mentions hearing 18 October 2022 $2,390
0.4
$956
Step 14 Appearance at first of subsequent case management
conference 26 October 2022
$2,390
0.3
$717
Step 11 Filing memorandum for first of subsequent case management conference or
mentions hearing 3 November 2022
$2,390
0.4
$956
Step claimed Category 2 daily recovery rate
Time allocation (Band B unless
otherwise specified)
Scale costs claimed
Step 11 Filing memorandum for first of subsequent case management conference or
mentions hearing 22 December 2022
$2,390
0.4
$956
Step 11 Filing memorandum for first of subsequent case management conference or mentions hearing 8 February
2023
$2,390
0.4
$956
Step 15 Preparation for and appearance at pre-trial
conference 9 February 2023
$2,390
0.5
$1,195
Step 11 Filing memorandum for first of subsequent case management conference or mentions hearing 15 February
2023
$2,390
0.4
$956
Step 11 Filing memorandum for first of subsequent case management conference or mentions hearing 16 February
2023
$2,390
0.4
$956
Step 15 Preparation for and appearance at pre-trial
conference 16 February 2023
$2,390
0.4
$956
Step 11 Filing memorandum for first of subsequent case management conference or
mentions hearing 26 July 2023
$2,390
0.4
$956
Step 11 Filing memorandum for first of subsequent case management conference or mentions hearing 14 August 2023 $2,390
0.4
$956
Step 15 Preparation for and appearance at pre-trial
conference 12 October 2023
$2,390
0.5
$1,195
Step 15 Preparation for and appearance at pre-trial
conference (admissibility issues) 6 November 2023
$2,390
0.5
$1,195
Interrogatories, discovery and inspection
Step 16 Notice to answer interrogatories 11 October
2022
$2,390
1
$2,390
Step 20 List of documents on discovery - Plaintiffs' First Affidavit of Document 19 July
2021
$2,390
2.5
$5,975
Step 20 List of documents on discovery - Plaintiffs' Second
Affidavit of Documents 25 July 2022
$2,390
2.5
$5,975
Step claimed Category 2 daily recovery rate
Time allocation (Band B unless
otherwise specified)
Scale costs claimed
Step 20 List of documents on discovery - Plaintiffs' Third Affidavit of Documents 8 December 2022 $2,390
2.5
$5,975
Step 21 Inspection of
documents - Defendants' First
Affidavit of Documents 19 July 2021
$2,390
1.5
$3,585
Step 21 Inspection of documents - Defendants' Second Affidavit of
Documents 15 July 2022
$2,390
1.5
$3,585
Step 21 Inspection of
documents - Defendants' ThirdAffidavit of Documents 26 August 2022
$2,390
1.5
$3,585
Step 21 Inspection of documents - Defendants'
Fourth Affidavit of Documents 7 February 2023
$2,390
1.5
$3,585
Preparation for witness hearing
Step 33 Preparation of briefs, list of issues, authorities, and agreeing common bundle - 1
per day for first to fifth hearing days 6-9 November 2023, 20
November 2023
$2,390
5 (1 x 5)
$11,950
Step 33 Preparation of briefs, list of issues, authorities, and agreeing common bundle -
0.75 per day for sixth to tenth hearing days 21-23 November 2023, 27-28 November 2023
$2,390
3.75
$8,963
Step 33 Preparation of briefs, list of issues, authorities, and agreeing common bundle - 0.5
per day then on 30 November 2023, 1 December 2023
$2,390
1
$2,390
Step 33A Additional allowance for whichever party prepared
common bundle
$2,390
0.5
$1,195
Step 33B Preparation for
hearing - 1 per day for the first to fifth hearing days 6-9
November 2023, 20 November
2023
$2,390
5
$11,950
Step 33B Preparation for
hearing - 0.75 per day for sixth to tenth hearing days 21-23 November 2023, 27-28
$2,390
3.75
$8,963
33B Preparation for hearing -
0.5 per day from then on 30 November 2023, 1 December
2023
$2,390
1
$2,390
Step claimed Category 2 daily recovery rate
Time allocation (Band B unless
otherwise specified)
Scale costs claimed
Appearances at affidavit hearing or witness hearing and other steps
Step 34 Appearance at hearing for sole or principal counsel - time occupied by the hearing measured in quarter days (Full day(s): 6, 7, 9, November
2023, 20, 21, 22, 23, 27, 28, 30
November 2023 Half day(s): 8
December 2023, 1 December
2023)
$2,390
11
$26,290
Step 35 Second and
subsequent counsel if allowed by court (Full day(s): 6, 7, 9,
November 2023, 20, 21, 22,
23, 27, 28, 30 November 2023
Half day(s): 8 December 2023,
1 December 2023)
$2,390
5.5
$13,145
Step 36 Sealing order or judgment
$2,390
0.2
$478
Total
$143,879
With a 30 per cent reduction
$100,715.30
SCHEDULE B
Disbursements claimed
Amount claimed
Expert witness fees
$70,349.30
Counsel travel and accommodation
$13,239.90
Parties travel and accommodation
$3,025.50
Hyperlinking, printing and discovery platform expenses
$5,814.00
Printing expenses during trial
$2,453.63
LawFlow
$876.48
Auckland Legal Services Ltd
$316.25
Filing an amended statement of claim, 21 March 2022
$110.00
Hearing fees
$35,200.00
Total
$131,385.06
With a 30 per cent reduction
$91,969.54
SCHEDULE C
Step claimed
Category 2 daily recovery rate
Band B time allocation
Scale costs claimed
Commencement and pleadings
Commencement of the defence
$2,390
2
$4,780
Other pleadings and notices
Step 9 Amended statement of defence by the second
defendant in response to the plaintiffs’ amended statement of
claim, 28 April 2022
$2,390
0.6
$1,434
Step 9 Second amended statement of defence by the
second defendant, 21 August 2023
$2,390
0.6
$1,434
Case management
Step 10 Preparation for first case management conference,
30 October 2020
$2,390
0.4
$956
Step 11 30 October 2020
$2,390
0.4
$956
Step 11 23 April 2021
$2,390
0.4
$956
Step 11 10 August 2021
$2,390
0.4
$956
Step 11 22 September 2021
$2,390
0.4
$956
Step 11 7 March 2022
$2,390
0.4
$956
Step 11 3 May 2022
$2,390
0.4
$956
Step 11 27 July 2022
$2,390
0.4
$956
Step 11 14 October 2022
$2,390
0.4
$956
Step 11 14 December 2022
$2,390
0.4
$956
Step 13 Telephone conference before Associate Judge Andrew,
26 October 2022
$2,390
0.3
$717
Step 15 Joint memorandum of counsel, 8 February 2023, for pre-trial conference before
Lang J, 9 February 2023
$2,390
0.5
$1,195
Step 15 pre-trial teleconference, before Gault J, 16 February
2023
$2,390
0.5
$1,195
Step claimed
Category 2 daily recovery rate
Band B time allocation
Scale costs claimed
Step 15 Joint memorandum of counsel on trial road map, 26
July 2023
$2,390
0.5
$1,195
Step 15 Joint memorandum of counsel on trial matters, 14 August 2023 $2,390
0.5
$1,195
Step 15 Pre-trial teleconference before Anderson J, 12 October 2023 $2,390
0.5
$1,195
Preparation for witness hearing
Step 33 Preparation of briefs, list of issues, authorities, and agreeing common bundle
$2,390
9.75 (on the basis that there were 12 witness hearing
days)
$23,302.50
Step 33B Preparation for hearing
$2,390
9.75 (on the basis that there were 12
hearing days)
$23,302.50
Appearances at affidavit/witness hearing and other steps
Step 34 Appearance at hearing for sole or principal counsel
$2,390
48 (being the time occupied by the hearing measured
in quarter days)
$114,720
Total
$185,225
With trial costs reduced by two-thirds
$77,675
SCHEDULE D
Disbursements claimed
Amount claimed
Statement of defence
$110
Amended statement of defence
$110
Second amended statement of defence
$110
Expert witness fees for Shane Hussey
$135,159.50
Total
$135,489.50
With Mr Hussey’s fees reduced by 85 per cent
$20,603.93
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