McKinnon v Skelton

[2020] NZHC 2066

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2015-419-429

[2020] NZHC 2066

BETWEEN

NORRIS WARD McKINNON

Plaintiff

AND

DONALD ALFRED SKELTON

Defendant

Hearing:

On the papers

Appearances:

JD Savage for the Plaintiff

VA Whitfield & KJ Pennell for the Defendant

Judgment:

14 August 2020

JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on 14 August 2020 at 3pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Norris Ward McKinnon, Hamilton V Whitfield, Hamilton

Norris Ward McKinnon v Skelton [2020] NZHC 2066 [14 August 2020]

[1]    In my judgment on the plaintiff’s summary judgment application given on 24 June 2020 (the judgment), I invited the parties to file memoranda on the issues of costs and interest if they could not agree.1 Leave was also reserved to file memoranda relating to the New Zealand dollar/Australian dollar exchange rate, for the purpose of quantifying a claimed set-off that I considered was arguable for Mr Skelton.

[2]    Mr Savage filed a memorandum for the plaintiff (Norris Ward) on 15 July 2020, but no submissions have been made for Mr Skelton. In a memorandum dated 27 July 2020, Ms Whitfield advised that Mr Skelton presently intends to take no further steps in the proceeding.

The Australian dollar exchange rate

[3]    At paragraph [214] of the judgment, I held that Mr Skelton had a reasonably arguable set-off in the sum of AUD$115,616.97. At paragraph 258(1) of the judgment, I gave summary judgment for Norris Ward in the sum of $277,900.40, minus two set- off amounts that I considered were reasonably arguable for Mr Skelton. One of them (referred to at paragraph [258](1)(b) of the judgment) was the set-off for the AUD$115,616.97. I directed that that sum was to be converted to New Zealand dollars as at 20 November 2015 for the purposes of calculating the New Zealand dollar figure for which Norris Ward would be entitled to summary judgment. If the parties could not agree on the New Zealand dollar amount, leave was reserved to apply further.

[4]    Mr Savage produced with his memorandum Reserve Bank exchange rate figures for the Australian dollar exchange rate as at 20 November 2015. The rate stated was 0.9121. On that basis, the AUD$115,616.97 converted to NZ$126,759.09.

[5]    I order, for the purposes of paragraph [258](1)(b) of the judgment, that the amount to be deducted under that subparagraph from the sum of NZ$277,900.40 is the sum of NZ$126,759.09. The amount for which summary judgment will be entered for Norris Ward under paragraph [258](1) and (2) of the judgment will accordingly be

$110,082.16.

1      Norris Ward McKinnon v Skelton [2020] NZHC 1445.

Costs

[6]    Norris Ward represented itself in the summary judgment application, but the rule that solicitors acting for themselves are entitled to costs if they are successful in a High Court proceeding applies.2 Norris Ward asks for costs on a 2B basis, in the sum of $18,881. It also seeks disbursements in the sum of $1,760. The claims for costs and disbursements are made up as follows:

Costs

Item	Description	Time	Amount
2	Commencement of defence by defendant	2	$4,780
11	Filing joint memorandum dated 11 September 2019 for case management conference.	0.4	$956
11	Filing memorandum dated 25 October 2019	0.4	$956
11	Filing memorandum dated 4 November 2019	0.4	$956
11	Filing joint memorandum dated 25 November 2019	0.4	$956
22	Filing interlocutory application	0.6	$1,434
24	Preparation of written submissions	1.5	$3,585
25	Preparation by applicant of bundle for hearing	0.6	$1,434
26	Appearance at hearing of sole counsel	1	$2,390
29	Sealing order	0.2	$478
Total	7.5	$17,925

Disbursements

Item	Description	Amount
10	Filing a statement of defence to counterclaim	$110
20	Hearing half-day fee after first half-day	$1,600
51	Sealing the original copy of judgment	$50
Total	$1,760

[7]    In addition to those sums, Norris Ward claims a further $956 for preparing and filing its costs memorandum.

[8]    Under Schedule 2 to the High Court Rules, the daily rate (applicable from 1 August 2019) for a Category 2 proceeding, is $2,390. The figures set out in the first of the two tables in paragraph [6] above represent that sum multiplied by the “Band B”

2      Maguire v Secretary for Justice [2018] NZSC 116; {2019] NZLR 335; (2018) PRNZ 350, at [55] and [83]-[88].

time allocations for particular steps in a proceeding, as set out in Schedule 3 to the High Court Rules.

[9]    I accept that costs are properly claimed on a 2B basis, and that Norris Ward should have its full scale costs on Mr Skelton’s counterclaims, which have now been finally dismissed. But I do not accept that full costs should be awarded on Norris Ward’s application for summary judgment on its own claims.

[10]   In the judgment, I held that parts of the amounts claimed by Mr Skelton by way of counterclaim were in fact amounts that he could reasonably have pleaded as defences (amounts to be set off against Norris Ward’s claims). In advancing its own summary judgment claims, Norris Ward was primarily engaged in countering Mr Skelton’s set-offs, so there is a fairly substantial overlap between the issues in the claim and the counterclaims.

[11]   The claims made in Norris Ward’s costs table for the various memoranda, and for the interlocutory application, written submissions, bundle, and appearance at a one day hearing, all appear to be properly made, and I accept that the additional claims of

$956 for costs on the costs memorandum and $1,760 for disbursements have also been properly made. The issue is the extent to which those claims should be discounted to reflect (1) the overlap of the issues between claim and counterclaims, and (ii) the fact that Mr Skelton had some success in challenging the quantum of the claim.

[12]   Looking at the matter in the round, I think the justice of the case will be met by an award of costs of $$4,780 on filing the defence to Mr Skelton’s counterclaims (as sought), together with the further sum of $9,400 (approximately two-thirds of the amount claimed) on Norris Ward’s application for summary judgment on its own claims. That total sum is intended to broadly reflect my view that, although Norris Ward only obtained summary judgment for approximately 40 per cent of the amount claimed by it, it succeeded in having Mr Skelton’s substantial counterclaims dismissed, and it succeeded on the majority of the matters that were in issue at the hearing. Essentially, Mr Skelton’s defence and counterclaims forced Norris Ward to do the work it did to obtain any judgment at all, and that needs to be appropriately

reflected in the costs award. The fact that Mr Skelton had some success on matters of quantum is sufficiently reflected in the one-third discount I have applied.

[13]   In the result, I award costs of $14,180 to Norris Ward, together with disbursements of $1,760 as sought.

Interest

[14]   Norris Ward seeks interest on the sum of $110,082.16 (the figure at which the summary judgment has now been quantified), at the rate of 14.95 per cent per annum. That rate is the Visa rate for the Bank of New Zealand, which is the relevant rate specified in Norris Ward’s terms and conditions. Calculated to 15 July 2020 (the date of Mr Savage’s memorandum), the total amount sought for interest came to

$76,109.30. That sum covered 1,688 days running from 1 December 2015 to 15 July 2020.

[15]   Mr Skelton has not opposed the application of the interest rate of 14.95 per cent in accordance with Norris Ward’s terms of engagement, and I accept that Norris Ward is entitled to claim interest at that rate. I also accept that the interest has been properly claimed from 1 December 2015. By my calculation, the daily interest rate on that basis is $45.09, and Norris Ward is entitled to a further 30 days’ interest on the summary judgment amount from 15 July 2020 to the date of this judgment. The additional interest comes to $1,352.70, and that sum is to be added to the $76,109.30 claimed in Mr Savage’s memorandum.

[16]   On that basis, I award interest under paragraph [258] (5) of the judgment in the total sum of $77,462, calculated to the date of this judgment.

Result

(1)For the purposes of paragraph [258](1)(b) of the judgment, the sum of AUD$115,616.97 referred to in that paragraph is to be treated as equivalent to NZ$126,759.09. The amount for which summary judgment is to be entered for Norris Ward is according $110,082.16.

(2)Mr Skelton is to pay costs to Norris Ward on his counterclaims and on Norris Ward’s summary judgment application, in the total sum of

$14,180, plus disbursements of $1,760.

(3)Mr Skelton is to pay interest to Norris Ward, calculated to the date of this judgment, in the sum of $77,462.

Associate Judge Smith