Marr v Parkin
[2015] NZHC 1390
•19 June 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2013-404-5102 [2015] NZHC 1390
UNDER the Declaratory Judgments Act 1908 BETWEEN
BERNADETTE MAKUINI MARR First Plaintiff
KEITH CHARLES BLUETT MARR and
CHARLOTTE RUBY MARR Second Plaintiffs
AND
BARRY IAN PARKIN Defendant
……………………………/continued
Hearing: On the papers Counsel:
EJ Werry for plaintiffs
KT Glover for defendantJudgment:
19 June 2015
JUDGMENT OF FAIRE J
Solicitors: Atmore Lawyers, Auckland (G Atmore) Graham Jones Law, Auckland (G Jones)
Marr v Parkin [2015] NZHC 1390 [19 June 2015]
CIV-2013-404-4313
IN THE MATTER of section 145 of the Land Transfer Act
1952
IN THE MATTER of Caveat No 9500165.1 (North
Auckland Registry)
BETWEEN KEITH CHARLES BLUETT MARR and CHARLOTTE RUBY MARR Applicants
ANDLINKLOAN TRUSTEES LIMITED First Respondent
BARRY IAN PARKIN Second Respondent
CONTENTS
Introduction ………………………………………………………. [1] The caveat proceeding ……………………………………………..[4] The principles applicable in awarding costs …………………….. [9] The caveat proceeding ………………………………………….. [13] The substantive proceeding ……………………………………….[24] The disputed steps ………………………………………………. [28]
The claim for increased costs ……………………………………..[30]
The caveat proceeding …………………………………………….[33] Non-payment of rent ……………………………………...…..[34] The late application to amend the statement of claim …..……[35] The plaintiffs’ reliance on the 2 August 2013 document ….…..[36]
Result of analysis …………………………………….……………[40] Disbursements …………………………………...………………..[42] Orders ………………………………………..……………………[45]
Introduction
[1] In my judgment of 17 December 2014 I entered judgment for the defendant in respect of all the plaintiffs’ causes of action. I reserved costs and directed that if counsel could not agree, memorandum were to be filed in support, opposition and reply at seven-day intervals.
[2] That proceeding followed a caveat proceeding, which involved the second- named plaintiffs and the defendant. It was agreed in the caveat proceeding that costs in that proceeding were to be dealt with as part of the substantive proceeding.
[3] The substantive proceeding is subject to a notice of appeal by the plaintiff. The appeal has a fixture date for 28 July 2015.
The caveat proceeding
[4] Although not a party to the caveat proceeding, the first plaintiff in the substantive proceeding is, nevertheless, jointly and severally liable for costs in the caveat proceeding having regard to an agreed position.1
[5] The defendant seeks disbursements of $150, which are not opposed by the plaintiffs.
[6] The defendant seeks increased costs beyond that which would be ordered on an application of Category 2 Band B. The defendant has quantified this claim by analysing the steps taken in the caveat proceeding and applying Category 2 Band B to those steps to produce a figure of $7,761. The defendant then submits that this is an appropriate case for increased costs and that an uplift of 50 per cent or $3,880.50 should be made.
[7] The plaintiffs challenge the defendant’s Band B calculation and say that certain steps should not be the subject of the allowance claimed with the result that
the maximum that should be allowed under Category 2 Band B is $5,572.
1 Joint memorandum of counsel in CIV-2013-404-5102, dated 6 June 2014.
[8] The plaintiffs challenge the defendant’s claim for:
(a) The amount claimed for an appearance on 8 October 2013, which is said to be overstated by 0.05 of a day;
(b) The amount claimed for a joint memorandum dated 15 November
2013, which is said to be overstated by 0.2 of a day;
(c) The amount claimed for a memorandum dated 17 February 2015, which is said to be overstated by 0.4 of a day;
(d) The amount claimed for an appearance in the High Court on
24 February 2015, which is said to be overstated by 0.05 of a day; and
(e) The amount claimed for a memorandum dated 9 March 2015; which is said to be overstated by 0.4 of a day.
The principles applicable in awarding costs
[9] Rule 14.1 gives the Court a discretion to order costs in relation to a step taken in a proceeding. That discretion is generally to be exercised in accordance with the specific rules contained in rr 14.2-14.10: Glaister v Amalgamated Dairies Ltd.2 In Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd the Court of Appeal said of the costs regime contained in what is now rr 14.2-14.10 that:3
there is a strong implication that a Court is to apply the regime in the absence of some reason to the contrary
The test to be applied is entirely an objective and not a subjective one. The only reference which it is necessary to make towards actual costs is to be found in
r 14.2(f), namely that an award of costs should not exceed the costs incurred by the
2 Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606(CA) at [19].
3 Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd (2002)
16 PRNZ 662 (CA) at [27].
party claiming the costs: Glaister v Amalgamated Dairies Ltd.4 These principles were endorsed by the Supreme Court.5
[10] Rule 14.2 lists the principles applying to determination of costs. Subrule (a) affirms the principle that the losing party should pay the costs to the successful party. Subrule (b) requires that the costs reflect the complexity and significance of the proceedings. By inference it refers to the categorisation of a proceeding which is provided for in r 14.3. Subrule (c) requires a consideration of each step for which costs are sought and an application of the daily rate having regard to the appropriate band which is to be applied after a consideration of r 14.5(2) and Schedule 3 to the High Court Rules.
[11] Rule 14.6 of the High Court Rules provides:
14.6 Increased costs and indemnity costs
(1) Despite rules 14.2 to 14.5, the court may make an order—
(a) increasing costs otherwise payable under those rules
(increased costs); or
(b) that the costs payable are the actual costs, disbursements, and witness expenses reasonably incurred by a party (indemnity costs).
(2) The court may make the order at any stage of a proceeding and in relation to any step in it.
(3) The court may order a party to pay increased costs if—
(a) the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or
(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
4 Glaister v Amalgamated Dairies Ltd, above n 2, at [14].
5 Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109.
(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
(v) failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or
(c) the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; 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.
(4) …
[12] In Holdfast New Zealand Ltd v Selleys Pty Ltd the court set out the approach to be adopted in determining whether to order increased costs as follows:6
(a) Categorise the proceeding under r 14.3;
(b)Pick out a reasonable time for each step in the proceeding, pursuant to r 14.5. That involves considering the three time bands A, B and C;
(c) Consider whether a step in the proceeding would substantially exceed the time allocated under Band C (r 14.6(3)(a)); and finally
(d)Step back and look at the cost award and determine whether any additional costs should be awarded. Generally, an increase of 50 per cent on scale costs will give the claiming party a fair recovery for any
step that is unnecessarily forced on it.
6 Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA).
The caveat proceeding
[13] I now analyse the caveat position.
[14] The caveat case is, in terms of r 14.3, a Category 2 proceeding. [15] That has been accepted in counsel’s memoranda.
[16] It is next necessary to consider what steps were appropriate to be taken and what band should be applied in respect of such steps, having regard to r 14.5.
[17] I now deal with the disputed matters:
(a) The defendant accepts that his claim for the appearance on 8 October
2013 is overstated by 0.05 of a day. Accordingly, I shall make an adjustment to reflect that position;
(b)In respect of the memorandum dated 15 November 2013, I note that it was a joint memorandum, even if the principal drafting duties fell on the defendant. It clearly has been considered and adopted by both counsel. I propose to allow half the normal claim for a memorandum. The result is to reduce the defendant’s claim by 0.2 of a day in respect of this matter;
(c) In respect of the memorandum of 17 February 2015, I note that the plaintiffs question whether the memorandum was required. What is apparent from the caveat file was that the memorandum followed my judgment. The judgment removed the basis upon which any caveat could be sustained. Not surprisingly, Venning J on 24 February 2015 vacated the interim order sustaining the caveat and ordered that the defendant was entitled to costs. In my view, the defendant is entitled to costs for preparation of the memorandum of 17 February 2015;
(d)The claim for costs on the memorandum of 9 March 2014 came about because Venning J was not alerted to an agreed prior position of the
parties that costs were to be determined in the substantive proceeding. The memorandum was required to be filed to correct that position. I do not consider that the plaintiffs should be visited with the costs of this memorandum and therefore do not allow for same; and
(e) The claim for costs for the appearance on 24 February 2015 is overstated by 0.05 of a day and that position is accepted by the defendant. Accordingly, an appropriate adjustment to reflect that position will be made.
[18] The above analysis results in a conclusion that costs, having regard to Category 2 Band B in the caveat proceeding, are 3.2 days x $1,990 or $6,368, plus disbursements of $150.
[19] I now consider whether increased costs in relation to the caveat proceeding should be allowed.
[20] The caveat claimed an interest in the subject property pursuant to an unconditional agreement for sale and purchase dated 2 August 2013 between Casey Bluett Marr and CR Marr, as purchasers, and MJ Guttenbeil, as vendor. MJ Guttenbeil was the purchaser under an unconditional agreement for sale and purchase dated 18 June 2013, under a power of sale exercised by LinkLoan Trustees as mortgagee, under Memorandum of Mortgage 7667128.3.
[21] In my judgment on the substantive proceeding I reached the conclusion for the reasons which are set out that the agreement of 2 August 2013 was not a genuine document. In pursuing the application, the plaintiffs pursued a step that completely lacked merit. Increased costs are therefore justified in terms of r 14.6(3) on any one of several of the grounds set out in that provision. Particularly, however, the pursuit of the caveat based on a fraudulent document is the taking of a proceeding which lacks merit and therefore justifies increased costs and, in many instances would have justified, if it had been sought, indemnity costs. I am satisfied that an uplift of 50 per cent of what I have found as the appropriate 2B costs is justified.
[22] Accordingly, I conclude that the quantum of costs that should be ordered in relation to the caveat application is $9,552 plus disbursements of $150.
[23] For the avoidance of doubt, I record that this judgment does not deal with the alleged breaches of an undertaking given as part of the consent orders that the caveat not lapse and it does not deal with the late payment of rent. They are separate issues which, in my view, are not appropriate to be dealt with in this cost judgment. In the event that a further application or proceeding is made in respect of them, I make it plain that this judgment does not address those issues.
The substantive proceeding
[24] The defendant seeks costs based on Category 2 Band B including a claim for wasted costs and says that the total time is 26.55 days, justifying a claim of
$52,834.50. The defendant says that that should be uplifted by 50 per cent in reliance on r 14.6 (increased costs) plus disbursements of $10,067.47.
[25] The defendant’s calculation includes the order for costs made by Andrews J in a minute of 11 September 2014 in which it confirmed orders made in an earlier minute of 21 August 2014. Her Honour had dealt with costs payable by the plaintiffs in respect of the plaintiffs’ application for leave to amend the statement of claim. Her Honour fixed those costs at $1,990. She expressly reserved the question of wasted costs, which she ruled was a matter to be determined in relation to the substantive proceeding. The result is that the defendant’s calculation must not include her Honour’s order for costs as that is a stand-alone order. The effect is to reduce the defendant’s calculation to 25.55 days at $1,990 per day, namely
$50,844.50. To that, the defendant claims an uplift for increased costs which are on the basis just mentioned are $25,422.25, making a total claim for costs of
$76,266.75.
[26] As with the caveat proceeding, counsel accept that this is a Category 2 proceeding.
[27] The plaintiffs take issue with a number of steps claimed by the defendant. The plaintiffs submit that increased costs are not justified in relation to the substantive proceeding. The plaintiffs dispute some of the disbursements claimed.
The disputed steps
[28] I first consider the disputed steps for which claims are made in the substantive proceeding:
(a) The memorandum of 14 March 2014, for which a claim was made has now been abandoned by the defendant with the result that the defendant’s claim was reduced by 0.4 of a day;
(b)I disallow the claim for the memorandum of 18 June 2014 dealing with security for costs. The order granting costs has been made. In making the order I did not make provision for further claims. The result is that the defendant’s claim must be reduced by a further 0.4 of a day;
(c) I disallow the claim for the 3 July 2014 memorandum for the same reason. The result is to further reduce the defendant’s claim by 0.4 of a day;
(d)In respect of the memorandum of 23 July 2014, I reduce the claim for this to 0.2 of a day. It is, by analogy, an Item 11, Schedule 3 memorandum. When I apply r 14.5(2) of the High Court Rules, it fits within Band A. Accordingly, the result is to reduce the defendant’s claim for costs by a further 0.2 of a day;
(e) The joint memorandum of 18 August 2014, for which a claim of 0.2 of a day is made, is, in my view justified. A party should never be penalised for joining with other parties to advise the court on the hearing time required for a proceeding;
(f) The memoranda of 21 August 2014 and 29 August 2014 both relate to the plaintiffs’ application to amend the statement of claim. I disallow the claims for these memoranda because the costs issue has been finalised by Andrews J in the two minutes earlier referred to. It is not a question of dealing with costs in relation to memoranda but, rather, whether the issue of costs in relation to the matter that was before the Judge has been dealt with by the Judge. The result is that I must reduce the defendant’s claim by a further 0.8 of a day;
(g)Issue is taken by the plaintiffs with the four-day trial hearing time claimed and whether some discount should be allowed because some hearing time was taken up with an unsuccessful application by the defendant to amend its defence. Whilst I have some sympathy for what the plaintiffs say here, I do not overlook the fact, as counsel for the defendant has pointed out, that the court sat late on two of the hearing days. Overall, in my view, a four-day hearing time is the appropriate allowance to be made;
(h)The plaintiffs contest the claim made by the defendant for wasted costs arising from the fact that the trial was adjourned. Counsel’s submissions overlooked the correct approach to this issue. Amendments to pleadings are covered by r 7.77 of the High Court Rules. Rule 7.77(8) provides:
7.77 Filing of amended pleading
…
(8) If an amended pleading has been filed under this rule, the party filing the amended pleading must bear all the costs of and occasioned by the original pleading and any application for amendment, unless the court otherwise orders.
The defendant seeks a claim of two days for additional preparation for trial arising from the delay. That approach might be justified under the alternative which is reserved to the court in r 7.77(8). I propose to
proceed under the alternative provided in r 7.77(8) and to make some allowance for the fact that a delay in the trial commencement will cause some additional preparation and, bearing in mind the circumstances of this case, would seem to be the most practical way of addressing the issue of costs caused by the amendment. In my view, however, the two day allowance claimed is excessive. I would allow one day. The result is that I reduce the defendant’s claim by one day.
[29] The only issue not dealt with, and which is the subject of challenge, is the question of any allowance for costs in relation to the memoranda filed with the court with the costs question. I will deal separately with that question at the conclusion of this judgment and after I have completed the analysis of the increased costs claim and the disputed disbursements claim.
The claim for increased costs
[30] Paragraphs [11] and [12] of this judgment set out the law which must be applied in considering a claim for increased costs.
[31] The first and second part of the exercise referred to in Holdfast has been completed in my analysis of the challenges to the defendant’s claim based on Category 2 Band B.7 That resulted in the defendant’s claim being reduced, based on a Category 2 Band B claim and, where appropriate in one instance, Band A to
$44,476.59.
[32] I now consider the matters advanced by the defendant to support the claim for increased costs.
The caveat proceeding
[33] The defendant refers to the caveat proceedings. I regard those proceedings as stand-alone proceedings. I have made provision in the cost orders made in relation
to those proceedings for increased costs. In my view, the steps taken in that
7 Holdfast NZ Ltd v Selleys Pty Ltd, above n 6.
proceeding themselves do not provide a basis for ordering increased costs in the substantive proceeding.
Non-payment of rent
[34] The next matter raised by the defendant is the non-payment of rent. That arises from the undertaking given in the caveat proceedings. I have already recorded that I do not regard this costs judgment as the appropriate place to deal with alleged breaches of the undertaking and non-payment of the rent. I make it plain again that those matters are not determined by this judgment. Equally, they are not taken into account for the purposes of analysing whether a claim for increased costs in the substantive proceeding is justified.
The late application to amend the statement of claim
[35] The next matter raised deals with the late application to amend the statement of claim. By itself I do not regard that as a matter justifying an order for increased costs. It has been appropriately dealt with in the approach that I have adopted in applying r 7.77(8).
The plaintiffs’ reliance on the 2 August 2013 document
[36] The next matter raised by the defendant is the plaintiffs’ reliance on the
2 August document. That clearly was a central part of the plaintiffs’ claim and was
found by me to be not a genuine document, certainly not signed by Ms Guttenbeil on
2 August 2013.
[37] Advancing a claim based on this document, in my view, was plainly not justified. As I recorded in relation to the caveat proceeding, in my view it justifies an order for increased costs and might well have justified, if they had been sought, indemnity costs.
[38] I do not regard the other matters raised by the defendant, being the abandonment of causes of action and the late amendment to the statement of claim as justifying an award of increased costs.
[39] Reference was also made to a without prejudice save as to cost offer. In the circumstances, I do not regard that, by itself, as justifying a claim for increased costs.
Result of analysis
[40] The result of my analysis is that I conclude that the defendant is entitled to increased costs because of the plaintiffs’ reliance on a document which I found to be not genuine which was her document and which was advanced as a basis for her claim.
[41] When this conclusion is applied, I am satisfied that an uplift of 2B costs by
50 per cent is appropriate. That results in a conclusion that the costs on the substantive proceeding that should be paid by the plaintiffs is $66,714.75.
Disbursements
[42] Counsel are agreed that the disbursements claimed for: (a) the statement of defence filing fee;
(b) statement of defence to the amended statement of claim;
(c) statement of defence to the second amended statement of claim; and
(d) the claim for witness expenses for the New Zealand Police witness are admitted and total $2,696.22.
[43] The parties acknowledge that the claim for the filing fee on the security for costs application has already been paid and should not therefore be included.
[44] The only issue in respect of the disbursements that requires specific analysis is a claim for fees for the witness, Mr Paul Phillips, in the sum of $6,871.25. I propose to reserve this issue. I do not have sufficient information to determine whether Mr Phillips’ fee is an appropriate disbursement. I indicate that the following would be of assistance in determining that question:
(a) Provision of a copy of Mr Phillips’ fee invoice;
(b)If the invoice was paid by someone other than the person to whom it was addressed, the name of the person who paid it;
(c) What part of the bill related to the non-party discovery issue. In respect of that issue, to whom did Mr Phillips give advice.
Orders
[45] In respect of the caveat proceeding, I order that the first and second plaintiffs pay costs of $9,552, plus disbursements of $150.
[46] In respect of the substantive proceeding, I order:
(a) That the first and second plaintiffs pay costs of $66,714.75, plus disbursements of $2,696.22;
(b) I reserve for further consideration the following:
(i) Whether or not Mr Phillips’ fee, or part of it, should be
included as a disbursement; and
(ii)Whether or not allowances should be made for the memoranda which have been filed for the purposes of fixing costs.
[47] In respect of these matters, if counsel are unable to agree, memoranda and any evidence are to be filed in support, opposition and reply at 14-day intervals. On
receipt, I will give judgment in relation to the matters that have been reserved.
JA Faire J
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