McBride Street Cars Limited v District Court (Dunedin Registry)
[2018] NZHC 461
•20 March 2018
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE
CIV-2017-412-64 [2018] NZHC 461
BETWEEN MCBRIDE STREET CARS LIMITED
Applicant
AND
THE DISTRICT COURT (DUNEDIN REGISTRY)
First Respondent
STEPHEN AND DIANE LOACH
Second Respondents
Hearing: 20 March 2018 (On the papers) Counsel:
L A Andersen for Applicant
P J Page and J J Y R Pierce for Second Respondents
Judgment:
20 March 2018
COSTS JUDGMENT OF NICHOLAS DAVIDSON J
[1]Judgment was delivered on 12 February 2018.1
[2] The judgment dismissed an application by McBride Street Cars Limited (“McBride”) for judicial review of a District Court decision which upheld a decision of the Motor Vehicle Disputes Tribunal that McBride breached the Fair Trading Act 1986 when it sold a VW Amarok to the second respondents (Mr and Mrs Loach).
1 McBride Street Cars Limited v District Court (Dunedin Registry) [2018] NZHC 111.
MCBRIDE STREET CARS LIMITED v THE DISTRICT COURT (DUNEDIN REGISTRY) & LOACH [2018] NZHC 461 [20 March 2018]
[3] The District Court (Dunedin Registry) was named as first respondent in the proceedings but counsel advised that the Court simply abided this judgment as to costs.
[4] Mr Pierce for Mr and Mrs Loach first sought costs of $18,923.40 scheduled to a memorandum of 19 February 2018, but then sought adjustment by reply memorandum of 13 March 2018, to $19,875.40. The schedule of costs is attached to this judgment. Additional costs for preparation of written submissions, 1.5 days, was noted as $3,345.00 at scale, but the actual costs were $952.00 and that is all that is sought, hence a total of $19,875.40. An allowance is sought for providing a second bundle as Mr and Mrs Loach had not been consulted about the first.
[5] Mr Pierce says that scale costs would reach $25,359.00 on a 2B basis, allowing for one counsel, which is all this case warranted. He says actual costs are less than scale because of counsel’s efforts to minimise costs, given the amount at stake in the litigation, some $40,057.50.
[6] Mr and Mrs Loach had to go through the Motor Vehicle Disputes Tribunal, then the District Court, then the High Court on review, and were successful throughout. When they tried to enforce the District Court appeal judgment McBride sought to set their statutory demand aside. This was resolved by agreement, but costs were awarded in their favour by the High Court because the demand achieved its objective.2
[7] Mr Pierce says that Mr and Mrs Loach are retired and of limited means, and the approach taken by their legal advisers has been to absorb some of the costs. Because they were put to a disproportionate amount of litigation, compared with the amount in dispute, awarding actual costs is submitted reasonable and justifiable, even if scale costs would come to more.
2 McBride Street Cars Limited v Loach [2017] NZHC 2404.
[8] Mr Pierce refers to the provisions of the High Court Rules 2016 (“HCR”). I do not recite trite law reflected in Supreme Court authority.3 The principles are set out in r 14.2(1):
(a)The party who fails … should pay costs to the party who succeeds;
(b)An award of costs should reflect the complexity and significance of the proceeding;
(c)Costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required …;
(d)An appropriate daily recovery rate should normally be two-thirds of the daily rate considered reasonable …;
(e)What is an appropriate daily recovery rate and what is a reasonable time should not depend on the skill or experience of counsel involved or on the time actually spent by the solicitor or counsel involved or on the costs actually incurred …;
(f)An award of costs should not exceed the costs incurred by the party claiming costs; and
(g)So far as possible the determination of costs should be predictable and expeditious.
Submissions for McBride
[9] Mr Andersen accepts that an award of costs will be made, but opposes the quantum, although he does not challenge the category 2B application. He submits that the appropriate award of costs is $11,373.00 plus disbursements.
[10] He places emphasis on an award of costs reflecting the complexity and significance of the proceeding (HCR 14.2(1)(b)) and that an appropriate daily recovery rate be two thirds of the daily rate considered reasonable for the proceedings.
[11] Of the “actual costs”, Mr Andersen says $5,000.00 relates to the application to set aside the “218” notice making statutory demand, and that is comprehended in the award of costs of $6,019.50 awarded to Mr and Mrs Loach. Mr Andersen therefore deducts $5,000.00 from the costs claimed.
3 Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305.
[12] He then submits that scale costs put before the Court, but not claimed, are for “general civil proceedings” and to illustrate this he takes item 31, a claim for 2½ days preparation, for a one page affidavit.
[13] Mr Andersen says this proceeding is more like an originating application, by its very nature, and he itemises the following:
Item
37
Filing notice of opposition and supporting affidavits
Time period
2 days
39
Case management (as for ordinary proceedings being Items 10 to 13)
1.1 days
40
Preparation of written submissions
1.5 days
42
Appearance at hearing for sole or principal counsel
0.5 days
Total
5.1 days
Award of costs 5.1 days @ $2,230 = $11,373
[14] Mr Andersen’s submissions are therefore based on the proceeding analogous, in its complexity and significance, with an originating application and that the application of the general civil scale for judicial review proceedings is wrong. Treated as an originating application the award he proposes would be 61 per cent of the actual costs incurred by Mr and Mrs Loach and 84 per cent of the costs incurred by McBride.
[15] That submission called for a reply. Mr Pierce says that all the items claimed in the schedule are for steps actually taken by Mr and Mrs Loach and therefore should be claimed under the Rules, and not cut down by treating this as an originating application. Mr Pierce says there is no deduction of $5,000.00 to be made because of replication in the 289 proceedings (as Mr Pierce corrects it). He says the application to set aside the statutory demand was without legal foundation and improper. The proceedings were issued because of the failure to pay the judgment or seek a stay of enforcement. But there is no double recovery of costs, and I am satisfied of that.
[16] Mr Andersen refers to item 31 in the schedule allowing 2½ days for preparation of a list of issues, authorities and a common bundle, but that has not been claimed by Mr and Mrs Loach. If Mr Andersen means item 30 which is the preparation of briefs or affidavits that is submitted of no weight as the time charged to Mr and Mrs Loach was less than that allocated under the Rules.
[17] Mr Pierce says that there is no jurisprudential basis to treat the judicial review as an originating application, and there are no time allocations in the Rules for judicial review, so the only way to address costs is as a general civil proceeding. Mr Pierce characterises McBride’s judicial review application as that of a highly litigious litigant who lost, and lost again and should have been aware of costs implications. The significance of the proceeding was marked in the submissions for McBride, and there was a serious challenge mounted to the judgment in the District Court, that non-disclosure of a vehicle as a statutory right-off was deceptive.
[18] Mr Andersen made a further response to Mr Pierce’s reply. He says the costs discussed in his first memorandum were the plaintiff’s costs of $18,446.22 including GST, excluding disbursements. $5,000.00 of that figure related to what he described as the necessary application to set aside a 218 notice. He said that the assessment of
$5,000.00 was a reasonable assessment as costs of $6,019.50, including “an award of $110” were awarded to Mr and Mrs Loach on that application, so McBride’s costs for this proceeding were in the region of $13,500.00 plus disbursements.
[19] Thus, he says that Mr Pierce’s submissions that $5,000.00 of the costs claimed related to Mr and Mrs Loach’s defence of the application to set aside the statutory demand has no basis. He says that was $5,000.00 charged to McBride.
[20] The same point was repeated in Mr Pierce’s paragraphs 7, 8, 9 and 12 where he assumed that the costs claimed by McBride referred to costs incurred by Mr and Mrs Loach.
[21] It seems clear that the parties were at cross purposes. Mr Pierce characterised Mr Andersen’s submission as that “at least $5,000.00 of the costs claimed relates to the second respondents’ defence of the applicant’s application to set aside a statutory
demand.” That was as Mr Pierce understood Mr Andersen’s submission, but because he was not sure, he addressed this in his paragraph 9 when he said:
All of the costs claimed relate solely to this judicial review proceeding. All of the items identified in the schedule were steps actually taken by the second respondents to defend the judicial review.
[22]Then at paragraph 12 he said:
While the application to set aside the statutory demand was ultimately resolved by agreement, the court awarded costs of $6,019.50 against the applicant.4 In light of that award, the applicant appears to be alleging that the second respondents are now attempting to claim the costs of a separate proceeding for which costs were already awarded. That is not correct. The costs now sought are “clean” of any costs associated with the statutory demand.
[23] Mr Andersen says the new claim for costs is not correct because item 21 relates to defended interlocutory applications and does not apply to these costs submissions. The Court has a broad discretion as to costs and is entitled to bring those additional costs to account.
Further memorandum
[24]Mr Andersen has again raised spirited opposition to the costs application.
[25] I do not see any merit in the argument that costs should not be assessed at scale, as a general civil proceeding. All the steps referred to were taken. An originating application may well have fewer steps than required in this case, but the point is that the steps itemised were taken.
[26] As to quantum, it is relevant that the costs are less than scale. If scale costs had been sought, they would likely have been awarded.
[27] This was a hard-fought appeal where the costs sought, less than scale, are reasonable, and in my view modest. I take the same view of the fees incurred by McBride.
4 McBride Street Cars Limited v Loach [2017] NZHC 2404.
[28]I therefore conclude that the costs as sought are warranted and appropriate.
Disposition
[29]There is nothing to disentitle the second respondents to costs in the sum of
$19,875.40. Each element of the resistance mounted by Mr Andersen has been rejected. The second respondents could have had more costs but chose not to.
[30] I fix the costs of the second respondents in the sum of $19,875.40 against the applicant.
……………………………………….
Nicholas Davidson J
Solicitors:
Craig Paddon Lawyer, Dunedin Gallaway Cook Allan, Dunedin
Copy to counsel:
L A Andersen, Barrister, Dunedin
SCHEDULE OF COSTS
Costs (Category 2: $2,230 daily)
Item Description Time Amount 2 Commencement of defence by second defendants 1 $4,460.00 10 Preparation for first case management conference 0.4 $892.00 11 Filing memorandum for first case management conference 0.4 $892.00 13 Appearance at first case management conference 0.3 $669.00 30 Preparation of affidavit 2.5 $5,575.00 32 Second defendants’ preparation of list of issues, authorities,
and common bundle
2 $4,460.00 33 Preparation for hearing 3 $6,690.00 34 Appearance at hearing for sole or principal counsel 0.5 $1,115.00 29 Sealing order or judgment 0.2 $446.00 Total 11.3 $25,199.00
Actual Costs Total $18,763.40
Disbursements
Ministry of Justice Filing Fee $110.00 Sealing Fee $50.00 Total $160.00
Costs + Disbursements
Costs $18,763.40 Disbursements $160.00 Total $18,923.40
0
2
0