Monnery v Parsons

[2023] NZHC 2332

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2018-485-482

[2023] NZHC 2332

BETWEEN

PAUL MARK MONNERY

First Plaintiff

PAUL MARK MONNERY and JULIE ANN MONNERY

Second Plaintiffs

AND

ANDREW GRAHAM PARSONS
First Defendant

JOHN MURRAY CREIGHTON

Second Defendant                Cont Over

Hearing:

On the papers

Appearances:

C Carruthers KC for Plaintiffs

P Chisnall and J Haig for First and Sixth Defendants

D Chisholm KC and J Ryan for Second, Third, Seventh and Eighth Defendants

G Bogiatto for Fourth, Fifth and Ninth Defendants

Date of Judgment:

24 August 2023

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

[costs]

This judgment was delivered by me on 24 August at 3.30 pm.

Pursuant to Rule 11.5 of the High Court Rules.

Solicitors/Counsel:

…………………..

Registrar/Deputy Registrar

Woods Fletcher Associates, Wellington Macalister Mazengarb, Wellington

K3 Legal Ltd, Auckland

Claymore Partners, Auckland George Bogiatto, Auckland Port Nicholson Chambers

Colin Carruthers KC, Wellington

MONNERY v PARSONS [2023] NZHC 2332 [24 August 2023]

AND  BRUCE GORDON COPELAND

Third Defendant

KURT BREDENBECH
Fourth Defendant

MURRAY CHARLES PARSONS
Fifth Defendant

PUSH DEVELOPMENTS LIMITED

Sixth Defendant

SANDFIELD ASSOCIATES LIMITED

Seventh Defendant

SANDFIELD VENTURES LIMITED
Eighth Defendant

P K B INVESTMENTS LIMITED
Ninth Defendant

Introduction

[1]        On 19 December 2018, Associate Judge Johnston granted applications by the defendants for orders requiring the plaintiffs to give security for costs.

[2]Four separate applications for additional security were subsequently made by:

(a)the first and sixth defendants;

(b)the second defendant;

(c)the third, seventh and eight defendants; and

(d)the fourth, fifth and ninth defendants.

For ease of reference, I refer to the applicants as four groups.

[3]        In addition, the first and sixth defendants sought an order for further discovery from the plaintiffs.

[4]On 26 June 2023, Associate Judge Skelton granted:

(a)the applications by the defendants for orders requiring the plaintiffs to give additional security for costs; and

(b)the application by the first and sixth defendants for further discovery from the plaintiffs.

[5]        Associate Judge Skelton reserved costs, and leave was granted to the parties to file memoranda on costs if counsel were unable to agree costs. Counsel have been unable to agree.

[6]        Each group of defendants now seeks a separate award of costs. The plaintiffs accept that costs should follow the event, but argue that only one set of costs should be allowed to be shared by all of the defendants, with a reduction in the amount of the costs to recognise that the global security ordered was less than the security sought.

[7]        The defendants accept that there should be a discount in the costs awarded to reflect that there was some duplication in the steps taken by each group of defendants, with two qualifications:

(a)The second defendant’s position is discrete. The second defendant arranged for counsel for the third, seventh and eighth defendants to advance the second defendant’s position at the hearing of the application for security. That is reflected in the 2B costs that are sought by the second defendant. It is argued that no further discount for the second defendant is appropriate.

(b)The first and sixth defendants also prosecuted the application for further discovery.

[8]        This litigation is hard fought. This is not the first interlocutory skirmish. The Court has faced similar competing submissions on costs following success by the defendants on other interlocutory applications.1

The issue

[9]Rule 14.15 of the High Court Rules 2016 provides:

The court must not allow more than 1 set of costs, unless it appears to the court that there is good reason to do so, if—

(a)several defendants defended a proceeding separately; and

(b)it appears to the court that all or some of them could have joined in their defence.

[10]      McGechan  on  Procedure  summarises  the  legal  principles  applicable  to   r 14.15:2

(a)The court will look in a realistic way at whether parties have common or overlapping interests and, if so, to what extent. A consideration is the extent to which separate cases were run against, and separate relief sought from, each defendant, and whether the impact on the defendants of granting that relief would have been identical or different.

1      See Monnery v Parsons [2022] NZHC 167; and Monnery v Parsons [2022] NZHC 2793.

2      Robert Osborne and others McGechan on Procedure (online ed, Thomson Reuters) at [HR14.15.02].

(b)Whether a conflict of interest was likely in terms of the way the plaintiffs ran their case, and/or whether the defendants’ relationship was such that they were justified in remaining at arm’s length from each other.

(c)If defendants’ reputations are at stake (for example, where they are alleged to have acted fraudulently or to have colluded in trading unfairly), the court will be more ready to accept, as reasonable, separate representations.

(d)Whether the parties took legal advice as to the appropriateness of separate/joint representations and, if so, what it was and whether it was followed.

(e)The extent to which one party did or could have relied upon the evidence or submissions of another.

[11]      I accept counsel for the plaintiffs’ submission that these principles ordinarily apply when costs are under consideration following substantive judgment on a proceeding.

[12]      Counsel for the first and sixth defendants submitted that when the principles are applied to this case, the grouping of the defendants and separate representation for each group in the litigation is justified because of their separate interests.

[13]      I accept the defendants’ contention that the different causes of action against the groups of defendants justify each of the groups advancing their own interests in the litigation.

[14]      The issue raised by the current applications for costs is whether the groups of defendants could have cooperated to avoid unnecessary duplication of the steps taken by them in successfully seeking additional security.

Analysis

[15]      Counsel for the plaintiffs submits that the similarity of the defendants’ arguments in support of their applications for additional security illustrate that they could have joined together and had one party present the argument.

[16]      When Associate Judge Johnston first ordered security for costs, he did so on a global basis rather than requiring separate security for each group of defendants.

When the latest round of applications for security were filed, all defendants should have appreciated that this might remain the Court’s approach if additional security was ordered.

[17]      One of the factors to be considered on an application for security is the merits of the plaintiffs’ claims. Here, the claims against each group of defendants differed. In my view it was reasonable for each group to make their own application for additional security. Each group of defendants is entitled to an award of costs.

[18]      However, there was potential for co-operation between the defendants, as occurred between the second defendant and the third, seventh and eighth defendants in respect of representation at the hearing of the applications.

[19]      There also needs to be some recognition of the different positions of the second defendant, and the first and sixth defendants, as discussed in [7] above.

[20]      The issue of duplication can be dealt with by a reduction of 30 per cent in the award of costs for two groups, the third, seventh and eight defendants, and the fourth, fifth and ninth defendants. The reduction for the first and sixth defendants should be 20 per cent, to reflect their prosecution of the discovery application.

[21]      The reduction for the second defendant should be 15 per cent, to reflect that the second defendant was not separately represented at the hearing, avoiding a 2B claim for costs of $1,195.

[22]      I do not accept that any further discount is required because the additional security ordered was less than the defendants’ sought.

[23]In fixing costs:

(a)I assume that the first and sixth defendants will take responsibility for sealing the order; and

(b)I do not certify for second counsel.

[24]Therefore, each group of defendants is entitled to costs as follows:

(a)The first and sixth defendants are entitled to costs for items 22, 24, 26 and 29. With a 20 per cent reduction this totals $5,353.60 plus disbursements of filing fees of $550.

(b)The second defendant is entitled to costs for items 22 and 24. With a 15 per cent reduction this totals $4266.15 plus disbursements of $500.

(c)The third, seventh and eight defendants are entitled to costs for items 22, 24, and 26. With a 30 per cent reduction this totals $4,349.80 plus disbursements on the basis of flights and accommodation for senior counsel only and taxis, to be confirmed by provision of the invoices, and the filing fee of $500.

(d)The fourth, fifth and ninth defendants are entitled to costs for items 22, 24, and 26. With a 30 per cent reduction this totals $4349.80 plus disbursements of $1,137.

Associate Judge Brittain