McCracken v Massey University HC Palmerston North CIV 2006-454-878

[2007] NZHC 1599

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2006-454-878

IN THE MATTER OF     the Judicature Act 1908

AND IN THE MATTER OF  of an Intending Proceedings

BETWEEN  LEANNE RACHEL MCCRACKEN Intended Plaintiff

ANDMASSEY UNIVERSITY First Intended Defendant

Judgment:      9 February 2007

In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 2.30pm on the 9th day of February 2007.

JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL

[1]      In a Minute I issued in this matter on 28 November 2006 I noted at paragraph

[1]:

[1]       Mr Clews for the Intended Plaintiff advises that after discussion with Ms Craven for the Intended Defendant, he accepts now that the application before the Court for pre-commencement discovery was misconceived, given that counsel for the Intended Plaintiff understood the grievance process had been completed when this was not the case.

[2]      This Minute went on to note that the Intended Plaintiff was to withdraw her application for pre-commencement discovery.

[3]      That application had been filed in this Court on 8 November 2006 and was set down for a call/hearing at 10.00am on 27 November 2006.

[4]      Counsel for the Intended Plaintiff was not prepared for the matter to be heard when it was called on 27 November 2006 and consequently it was adjourned to a

MCCRACKEN V MASSEY UNIVERSITY HC PMN CIV-2006-454-878  9 February 2007

directions telephone conference on 28 November 2006, at which my Minute noted in paragraph [1] above was issued.

[5]    The Intended Plaintiff has now withdrawn her application for pre- commencement discovery.

[6]      In accordance with my 28 November 2006 Minute, counsel for the Intended Plaintiff and counsel for the Intended Defendant have filed memoranda regarding the question of costs on the application which are sought by the Intended Defendant.

[7]      The Intended Defendant is seeking costs against the Intended Plaintiff of

$18,554.07, including GST.  As I understand it, these are calculated on an indemnity basis.

[8]      Counsel   for   the   Intended   Plaintiff   accepts   (at   paragraph   37   of   his memorandum of 1 February 2007) that costs should be awarded in favour of the Intended Defendant, but argues that these should be calculated only on a scale costs basis.  He says that costs should be calculated on a category 1 band B basis.

[9]      The general principle relating to costs stated in r47(a) High Court Rules is that the party who fails with respect to an interlocutory application should pay the costs of the party who succeeds.

[10]     And, withdrawal of  an application such as happened here  is  akin  to  the discontinuance of a proceeding – see Hibbitt v Granville & Lawlor (HC AK, CIV-

2005-404-5560, 9 March 2006, Associate Judge Faire).

[11]     On discontinuance of a proceeding r476C provides:

476C.   Costs

Unless the defendant otherwise agrees or the Court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[12]     As   I   have   noted   above,   here,   counsel   for   the   Intended   Defendant acknowledges that costs (calculated on a scale basis) should be awarded to the Intended Defendant.  The issue before me, however, is whether this is an appropriate case for the indemnity costs (or even increased costs) sought by the Intended Defendant to be awarded.

[13]     Rule 48C provides for increased costs and indemnity costs.

[14]     The Intended Defendant maintains that this is an exceptional case in which increased/indemnity costs are appropriate under r48C.  It claims that the following parts of r48C apply here and permit the Court to make an order for increased/indemnity costs:

48C(3) The Court may order a party to pay increased costs if –

…

(b)      The party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in the proceeding by –

(ii)      taking  or  pursuing  an  unnecessary  step  or   an argument that lacks merit, 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.

48C(4) 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.

[15]     Here,   the   Intended   Defendant   maintains   that   the   Intended   Plaintiff’s application was misconceived and that she had acted unnecessarily in making the application.

[16]     In  particular,  the  Intended  Defendant  suggests  that  the  Intended  Plaintiff could have obtained the documents she said were required to formulate her claim

against the Intended Defendant by requesting them under the Official Information

Act 1982 and/or the Privacy Act 1993.

[17]   Further, the Intended Defendant states first, that the Intended Plaintiff’s proceedings were premature, as no decision had been made whether to admit her into the Year 3 Bachelor of Veterinary Science course in 2007, and secondly, that she had not exhausted the internal grievance procedures open to her over her Bachelor of Veterinary Science course issues in either 2006 or 2007.

[18]     The Intended Defendant submits that the Intended Plaintiff’s application was completely unjustified and misconceived and that it put the Intended Defendant to unnecessary and unjustified expense.

[19]     There can be little doubt here that the Intended Plaintiff’s application was misconceived.  In effect this was conceded by her counsel.  To his credit, however, Mr Clews for the Intended Plaintiff did give notice that this proceeding would be withdrawn immediately he obtained advice from counsel for the Intended Defendant that the Intended Plaintiff had not in fact completed the “internal student grievance procedure”, although the Intended Plaintiff believed earlier that she had done so.

[20]   Counsel for the Intended Plaintiff suggests in his submissions that the application for pre-trial discovery was conscientiously commenced, given what the Intended Plaintiff saw as a need for urgency with regard to her admission into the

2007 Bachelor of Veterinary Science course, and that the application was promptly withdrawn immediately the full facts were known to her and her counsel.

[21]     There is also some conjecture over whether the appearance by instructed counsel at the Palmerston North High Court on 27 November 2006 prepared to argue the application was necessary, given that this was effectively the first call of the matter.

[22]     That said, and under all the circumstances here, by a fine margin I find that this is not one of those cases “where truly exceptional circumstances exist” (per

Goddard J in Hedley v Kiwi Co-op Dairies Limited (2002) 16 PRNZ 694 at para 8)

which justifies an award of indemnity costs.

[23]     Nevertheless, the issue of these proceedings by the Intended Plaintiff was misconceived to an extent, and she has thus contributed to the Intended Defendant’s costs in opposing this proceeding in terms of r48C(3)(b).

[24]     I am satisfied, therefore, that an award of increased costs calculated on a category 2B basis, plus an uplift of 50% on such 2B costs, is appropriate here.

[25]     An order is now made that the Intended Plaintiff is to pay to the Intended Defendant costs with respect to her withdrawn application for pre-commencement discovery calculated on the basis of category 2B, plus an uplift of 50%, together with disbursements (if any) as approved by the Registrar.

[26]     If counsel are unable to resolve the quantum of such costs and disbursements, leave is reserved for either party on three days notice to return to the Court for final

determination of this issue.

Associate Judge D.I. Gendall

Solicitors:

Kit Clews, Solicitor, Hamilton for Intended Plaintiff

Andrea Craven, Solicitor, Palmerston North for Intended Defendant