Memlink v Haines

[2021] NZHC 2570

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-497

[2021] NZHC 2570

BETWEEN

HARRY MEMELINK

CISCA FORSTER (as trustee of The Link Trust (No. 1)
Plaintiffs

AND

QUENTIN STOBART HAINES

First Defendant

BPE TRUSTEES (NO 1) LIMITED

Second Defendant

QUENTIN HAINES PROPERTIES LIMITED

Third Defendant

Hearing:	24–25 June 2021. Submissions 2 and 8 July 2021
Appearances:	D G Livingston for the Plaintiffs D K Evans for the Defendants
Judgment:	29 September 2021

JUDGMENT OF GRICE J

(costs)

[1]    Following the granting of summary judgment for liability and dismissal of application for strike out in relation to the counterclaim, I noted that counsel had indicated that I should consider costs as part of the judgment.

[2]I said, in relation to costs:1

[191]At the hearing counsel indicated that they agreed:

1      Memelink v Haines [2021] NZHC 1992 at [191]–[197] [“The Substantive Judgment”].

MEMELINK v HAINES [2021] NZHC 2570 [29 September 2021]

(a)That I should give an indication of the costs I would have awarded on the summary judgment application but not award those, rather, reserve them to be dealt with following determination of quantum or as otherwise agreed.

(b)I should fix an award of costs on the strike out application.

[192]    In relation to the summary judgment application I would have awarded costs on the basis of a 2B categorisation. This categorisation was agreed to be appropriate for the proceedings by counsel at the hearing.

[193]    While there was an application for payment of a sum of money included in the summary judgment application which was not successful, I do not consider any discount for that unsuccessful application should be made. That application took up little time at the hearing. I do not consider it justifies any discount from the usual 2B award together with disbursements as reasonable.

[194]    In relation to the strike out application, while orders for strike out were not made, the applicants were, for all intents and purposes, successful on this application. The presently pleaded first and second cause of action are defective. The fact I have given the defendants an opportunity to amend the pleadings should not disentitle the applicants to costs on a 2B basis.

[195]    Accordingly, I award costs on a 2B basis in favour of the plaintiffs on the strike out application, together with reasonable disbursements.

[196]    For the purposes of apportioning time over the two-day hearing I would indicate that 80 per cent of the time at hearing was spent on the application for summary judgment and 20 per cent on the application for strike out.

[197]Orders are made accordingly.

[3]    Counsel have been unable to agree on how to apportion the balance of the claimable steps for costs. The defendants contend the apportionment should be 80/20 (in favour of the summary judgment). The plaintiffs say they should, in general terms, be awarded 2B costs in full for each step and that when costs are finally dealt with following the liability hearing at trial, any steps for which full costs have been allocated in this application will not be double-counted in the final costs orders.

[4]    The plaintiffs argue that there was only one application, which incorporated both the application for summary judgment and the strike out application. They say that while those two applications travelled together and were dealt with together, the same expenditure of time and resource would have been required on each if they were dealt with separately in general terms. On the other hand, the defendants say the

80/20 split reflects the real costs incurred and the intention of the reservation of costs to allow summary judgment to be dealt with at a later date after trial as to quantum.

[5]    Turning to the legal principles, the paramount provision is that costs are at the discretion of the Court.2 The general principles relating to costs are set out at r 14.2 of the High Court Rules 2016 (Rules). The general principle is that the unsuccessful party should pay costs.3 The Rules aim to achieve predictability, consistency, and expediency in the “determination”, or, the fixing and payment of costs.4 The rates and steps contained in the Rules are designed to deliver to the successful party approximately two-thirds of the daily rate considered reasonable by using the appropriate category for the case in terms of complexity or significance,5 and then the appropriate band for the time required.6

[6]    Both parties were of the view these proceedings were appropriately categorised as 2B under the Rules. It is in accordance with that categorisation and time banding that the plaintiffs have calculated their costs.

[7]    In the present  circumstances  the  parties  agreed  the  costs  on  the  summary judgment be reserved. This appears to be a sensible approach given that the trial as to quantum is yet to be dealt with and all matters of costs can be dealt with at that stage. Nevertheless, that is not the universal rule.

[8]    There is no dispute between the parties as to my indication  that  the  summary judgment argument took approximately 80 per cent of the hearing time and the strike out application approximately 20 per cent. I also indicated I did not allow any adjustment for the unsuccessful application by the plaintiffs for an interim payment, which also formed part of the application. I noted little time had been spent on that argument and therefore no adjustments should be made.

2      High Court Rules 2016, r 14.1.

3      Rule 14.2(a).

4      Rule 14.2(g).

5      Rule 14.3.

6      Rule 14.5.

[9]    I have reviewed the file further. In my view, the time and resource applied to the strike out application for the case management and pre-trial time as well as the documentation was probably less than 20 per cent. On a fairness and consistency basis, in view of the hearing time allocation the calculated costs should be split as to 80/20 in favour of the summary judgment costs.

[10]   The application for summary judgment was first raised on 16 November 2020.7 The timetable directions  were made on 1 February 2021 and further detailed on     19 March 2021. They were largely aimed at the summary judgment application. The counterclaim to which the strike out applied was not filed until 23 February 2021. The strike out application argument occupied approximately 10 paragraphs of my judgment, out of some 200 paragraphs.8 The plaintiffs’ first set of submissions devote five of  52 paragraphs  to  the  strike  out  application  and,  in  the  reply,  three  of  26 paragraphs, in general terms.

[11]   Those figures reinforce my view that by a large margin most of the time and resource has been taken up by the summary judgment application. The allocation of 80/20 across all the steps (excluding those which were exclusively related to the strike out application) is generous. However, in my view, it is fair in the circumstances.

[12]   Accordingly, I direct that the 2B costs calculated by the plaintiffs (including the hearing time) be split as to 80 per cent as an indication for the determination of costs in relation to the summary judgment (which costs are reserved) and 20 per cent are awarded in relation to the strike out application.

[13]   Any costs that were incurred exclusively for the strike out application may be claimed in whole for the strike out application. The bundle of documents’ preparation should be similarly allocated 80/20 as the plaintiffs have already conceded.

7      Memelink v Haines HC Wellington CIV-2020-485-497, 16 November 2020. Minute of Ellis J.

8      The Substantive Judgment, above n 1.

[14]   It appears the only disbursement sought was for the preparation of the bundles, which I have already dealt with, and the sealing fee on the strike out application to which the plaintiff is entitled.

Grice J

Solicitors:

Livingston & Livingston, Wellington for the Plaintiffs.