McGuire v Wellington Standards Committee (No 1)

[2015] NZHC 448

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2014-485-3007 [2015] NZHC 448

UNDER

the Judicature Amendment Act 1972

AND

Part 30 of the High Court Rules

BETWEEN

JEREMY JAMES McGUIRE Applicant

AND

WELLINGTON STANDARDS COMMITTEE (No 1)

First Respondent

THE LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL

Second Respondent

On the papers
Judgment:	12 March 2015

JUDGMENT OF MALLON J (Costs)

[1]      I refer to my judgment on Mr McGuire’s application for judicial review of disciplinary proceedings that were brought against him.1    That application was brought on a number of grounds.  Mr McGuire succeeded in having the decision to censure him quashed on only one of them.  He failed in his claim for damages and in having the costs order of the Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal) set aside.

[2]      As to costs in respect of his judicial review application, I said:

1      McGuire v Wellington Standards Committee (No 1) [2014] NZHC 3042.

McGUIRE v WELLINGTON STANDARDS COMMITTEE (No 1) [2015] NZHC 448 [12 March 2015]

[93]      My preliminary view is that Mr McGuire should be entitled to costs because he has succeeded in having the censure quashed.  Any such costs order should be reduced to some extent (perhaps by around 25 per cent) to reflect the significant number of other issues that Mr McGuire raised, on which he did not succeed.   It would be preferable if the parties reach an agreement on costs in light of this indication.  If that is not possible, they may file brief submissions (no more than five pages each) confined solely to the particular aspects of costs that are in dispute.  Such submissions are to be filed by 30 January 2015.

[3]      The parties have been unable to agree.  Mr McGuire seeks indemnity costs in respect of both the disciplinary proceedings ($141,033.60 GST inclusive) and his subsequent application for judicial review ($89,527.50 GST inclusive).2    The first respondent seeks that no order be made in Mr McGuire’s favour.  In the alternative it seeks that costs be reduced by an amount greater than that indicated in my preliminary view set out above.

[4]      Mr McGuire’s claim for any costs in respect of the disciplinary proceedings in misconceived.  I have already upheld the Tribunal’s order for costs against him.3

That also answers Mr McGuire’s alternative submission that he should have costs against the Tribunal in respect of what he says was an “unnecessary hearing” on “penalty and costs”.

[5]      Mr McGuire’s claim for indemnity costs in respect of the application for judicial review is an unrealistic one.   I had indicated a preliminary view that any costs  order  in  his  favour  should  be  reduced.      Mr  McGuire  submits  that  such reduction would be “unprecedented”.   However a reduction where a party has succeeded overall but has “failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs” is provided for in the

High Court Rules4 and is an orthodox approach to the costs discretion.5   All but one

of the grounds set out under the “procedural matters” heading in my judgment were completely without merit.6     They nevertheless required a detailed review of the

2      These figures were not calculated on the basis of Mr McGuire’s usual hourly rate, but on the basis that he had referred the judgment to a Wellington Queen’s Counsel who is said to have described the outcome as a “good win” from which Mr McGuire considers the work involved can be “priced” at a minimum of $500 plus GST per hour, regardless of who conducted the case.

3      McGuire v Wellington Standards Committee (No 1), above n 1, at [90].

4      High Court rules, r 14.7(d).

5      Rule 14.1.

6      Although Mr McGuire did not succeed on the delay issue, the delay was unsatisfactory as discussed in my judgment at [68] to [71].

evidence relating to those procedural matters and accordingly increased the first

respondent’s costs.7

[6]      Mr McGuire submits that his claim against the second respondent was wholly successful  and  that  the  first  respondent  “vigorously  defended  the  claims  made against both respondents”.  First, it is not correct that his claim against the second respondent was wholly successful.  Mr McGuire failed in his challenge to the second respondent’s decision in ordering costs in the first respondent’s favour.  Secondly, as was proper in a claim of this kind, the Tribunal abided the Court’s decision and the first respondent took the substantive role in responding to Mr McGuire’s claim.

[7]      Mr McGuire submits that indemnity costs should be ordered because he attempted on two occasions to settle the judicial review claim.8    However, as the New Zealand Law Society (to whom Mr McGuire made his settlement approach) correctly pointed out, decision-makers usually abide the decision of the Court.  As the first respondent submits, it was proper for it to take a reasonable stance in defending the claim albeit that in one respect, that defence was unsuccessful.

[8]      There  is,  therefore,  nothing  in  Mr  McGuire’s  submissions  to  support  a different view from the preliminary one I previously indicated.   The only issue is whether costs should be further reduced beyond the 25 per cent reduction, indicated on a preliminary basis above, as the first respondent submits.

[9]      As to that, the first respondent calculates on a category 2B basis that costs for one statement of claim, one case management conference and normal trial steps would be $20,895.   It submits that from that sum there should be a 25 per cent reduction for Mr McGuire’s lack of success, a further 25 per cent reduction to recognise the increased costs Mr McGuire caused through filing unnecessary pleadings and evidence, and a further reduction for the costs of an interlocutory application that Mr McGuire ultimately conceded.  It submits that there should be a

further small discount because Mr McGuire did not accept the first respondent’s

7      The first respondent’s submissions set out why costs would have been “much reduced” if Mr

McGuire had not pursued these meritless grounds.

8      He refers to settlement offers made at the time of the disciplinary proceedings.   These have already been considered when I upheld the Tribunal’s decision to award the first respondent costs.

proposal, offered in a Calderbank letter, that Mr McGuire not seek costs on this proceeding in return for the first respondent not pursuing the costs ordered in its favour by the Tribunal.

[10]     I consider it is appropriate to take the starting point of 2B costs for usual steps, that is $20,895.  That already incorporates a discount in the sense that other steps that were taken by Mr McGuire are not allowed for.   I therefore consider it inappropriate to discount that figure by applying 25 per cent twice.   I accept that there could be a discount in respect of the interlocutory application.9    However Mr McGuire was invited by the Judge who heard that application to replead.  He took that opportunity. The Judge determined that costs should be reserved for the trial

judge in that eventuality.   In the circumstances I consider that the appropriate approach is to allow for this as part of a global reduction for Mr McGuire’s lack of success which increased costs to the first respondent.   The 25 per cent discount I indicated should therefore be increased slightly to allow for this.

[11]     Looked  at  overall  I  consider  that  the  first  respondent’s  proposal  in  its Calderbank letter reflects the appropriate outcome on costs.  Mr McGuire is indebted to the first respondent in the sum of $14,700.  A costs order in his favour of that amount in this proceeding would represent a discount of approximately 31 per cent from  $21,350.52  (that  figure  being  the  sum  of  $20,895  plus  the  accepted

disbursements of $455.52).10   I consider that to be an appropriate award of costs.

[12]     I therefore order costs of $14,700 against the first respondent and in Mr

McGuire’s favour.

Mallon J

9      High Court Rules, r 14.2 provides the general principle that the party who fails with respect to an interlocutory application should pay costs to the party who succeeds.

10     Effectively this represents the 25 per cent discount I indicated for Mr McGuire’s lack of success at the substantive hearing on matters that increased costs to the first respondent, and a reduction of  around  $1,300  in  respect  of  the  interlocutory application in  respect  of  which  the  first respondent might have had a costs award of $5,273.50. Mr McGuire has also caused further cost to the first respondent in not accepting its offer in relation to costs.  If anything, therefore, this approach is generous to Mr McGuire.