Mortimer v Motorsport Logistics Limited
[2013] NZHC 921
•30 April 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV2011-004-000239 [2013] NZHC 921
BETWEEN WARWICK JOHN MORTIMER and LESLEY ERIN MORTIMER in their personal capacities and as Trustees of THE KARAMAROA FAMILY TRUST and TEKAI INVESTMENTS LIMITED and MORTIMER MOTOR SPORTS LIMITED First Plaintiffs
ANDSEFTON CLINTON GIBB Second Plaintiff
ANDANTHONY EDWARD LE MESSURIER Third Plaintiff
ANDNEIL MCCRUDDEN Fourth Plaintiff
ANDGREGORY THORNTON Fifth Plaintiff
ANDMOTORSPORT LOGISTICS LIMITED Defendant
Hearing: 24 April 2013
Appearances: JEM Lethbridge for the Plaintiffs
M J Dennett for the Defendant
Judgment: 30 April 2013
(RESERVED) JUDGMENT OF ANDREWS J [Application to overturn sealed judgment]
This judgment is delivered by me on 30 April 2013 at 3:30pm pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
Solicitors:
Grove Darlow & Partners : DX CP24049, Auckland – Plaintiffs
Kennedys : DX CP20542, Auckland – Defendant
MORTIMER AND ORS V MOTORSPORT LOGISTICS LTD HC AK CIV 2011-004-000239 [30 April 2013]
Introduction
[1] I delivered judgment in this proceeding on 28 November 2012 (“the judgment”).1 With the exception of a minor aspect of the first plaintiffs’ claim, the plaintiffs succeeded against the defendant. At [81] of the judgment], I said:
Costs should follow the event on a 2B basis, together with disbursements as fixed by the Registrar.
[2] On 12 March 2013 the plaintiffs sealed judgment against the defendant. (“the sealed judgment”). The defendant has applied for an order to “overturn the sealed judgment”. The order is sought on the grounds that:
(a) The sealed judgment includes interest on the amounts each plaintiff was awarded, pursuant to the Judicature Act 1908. The defendant contends that interest was not awarded in the judgment and that, in any event, there was no evidential basis for an award of interest.
(b)The sealed judgment (and the judgment itself) provides for costs to be payable by the defendant on a 2B basis. The defendant contends that the parties intended that submissions were to be filed in relation to costs and that, as a result of “without prejudice except as to costs” offers made before the trial, the plaintiffs are not entitled to any award of costs.
(c) The defendant contends that there are errors in the quantum of the sealed judgment.
Jurisdiction issue
[3] The defendants’ application was brought under rr 11.10 (1) and 11.11 (3) of the High Court Rules. Ms Lethbridge submitted for the plaintiffs that the application could not be brought under either rule. Rule 11.10 (1) is the “slip rule”, under which
a judgment or order may be corrected by the court or registrar who made it, if it
1 Mortimer v Motorsport Logistics Ltd [2012] NZHC 3180.
contains a clerical mistake or an error arising from an accidental slip or omission, or is drawn up so that it does not express what was decided and intended. Rule
11.11 (3) provides that a judgment must not be sealed until an application for recall
(under r 11.9) has been determined.
[4] For the defendant, Mr Dennett submitted that an application for recall had effectively been made by way of a joint memorandum of counsel filed on 17 January
2013. He submitted that the sealed judgment was a nullity, because the (effective) application for recall had not been determined. He submitted that it was open to the defendant to ask for the judgment to be overturned, so that the application for recall could be heard and determined.
[5] Ms Lethbridge submitted for the plaintiffs that no application for recall had been made before the judgment was sealed, either by way of an application under s 11.9, or by way of the memorandum of counsel. She submitted that the judgment having been sealed, r 11.9 has no application. The judgment cannot be recalled and, apart from the application of the slip rule to collect inadvertent errors, the judgment must stand for better or worse, subject only to rights of appeal.
[6] Ms Lethbridge further submitted that it was clear from memoranda filed after the judgment was delivered that the only issue regarding costs was the plaintiffs’ indication that they would seek increased or indemnity costs. In the circumstances, she submitted, the plaintiffs were entitled to, and did, abandon their intention to apply for increased or indemnity costs, and instead claim to 2B costs only. She submitted that there was no mention of any counter-application by the defendant for reduced costs and there was, therefore, no reason why the plaintiffs could not proceed to seal judgment.
[7] In this case, no application for recall was filed before the judgment was sealed. I do not accept the defendant’s contention that the joint memorandum of counsel filed on 17 January 2013 can be regarded as (in effect) an application for recall.
[8] It is necessary to refer first to a memorandum filed by Ms Lethbridge on 30
November 2012. Ms Lethbridge noted in the memorandum that at the end of closing arguments, counsel for the plaintiffs and the defendant had indicated that costs should be reserved so that written submissions could be filed on the issue of costs. Ms Lethbridge further noted that the plaintiffs wished to apply for increased or indemnity costs pursuant to r 14.6. She then said that the plaintiffs could file a formal application to recall the judgment insofar as it related to costs, but the preferable approach was for both parties to get on and file submissions on costs.
[9] In their joint memorandum dated 17 January 2013, counsel for the plaintiffs and the defendant referred to Ms Lethbridge’s earlier memorandum then set out a timetable for costs submissions. The plaintiffs’ submissions were to be filed on 22
January 2013, and the defendant’s submissions on 31 January 2013. The
memorandum then said:
The parties therefore envisage that once submissions are filed Your Honour will recall the judgment as it relates to costs and deliver a decision on the issue of costs.
[10] On 18 January 2013, the plaintiffs’ solicitors wrote to the defendant’s solicitors, noting that “while the issue of costs remains extant by consent of the parties there is no dispute in relation to the outcome of principal and interest.” A schedule of principal and interest for each plaintiff was attached. The plaintiffs sought immediate payment, to stop further interest accruing. Ms Lethbridge advised that the solicitors had not responded to that letter.
[11] No submissions as to costs were filed, by either the plaintiffs or the defendant. Instead, as noted earlier, on 12 March 2013 the plaintiffs’ solicitors presented a formal judgment for sealing. The judgment included interest on the principal sums awarded, and costs calculated on a 2B basis.
[12] I accept Ms Lethbridge’s submission that the two memoranda refer only to the possibility of recalling the judgment for the purpose of an application by the plaintiffs for increased or indemnity costs. I do not accept that the memoranda are to be read as, effectively, an application for the judgment to be recalled for submissions on costs, generally.
[13] Accordingly, I reject the defendant’s submission that the sealed judgment is a nullity by reason of having been obtained before an application for recall had been determined.
[14] I accept Ms Lethbridge’s submission that the judgment must now stand, subject to the parties’ appeal rights, as held by Wild CJ in Horowhenua County v Nash (No 2).2 Further, as Greig held in Thomson v Thomson,3 there is no power to recall a judgment once it has been drawn up and perfected (that is, sealed). My jurisdiction is limited to correcting any errors in the judgment arising out of an accidental slip or omission, or where the judgment does not express what was decided and intended, pursuant to r 11.10.4
[15] I therefore turn to consider the matters raised by the defendant.
Interest
[16] It was submitted for the defendant that, as I did not expressly award interest in the judgment, the sealed judgment is incorrect in including interest.
[17] The sealed judgment accords with my intention. I am quite clear that I intended that each of the plaintiffs was to be paid interest on the awards made in their favour. My not having said so expressly in the judgment was an accidental slip or omission which may be corrected under the slip rule.
[18] My intention to award interest is clear from the wording of the judgment, when viewed against the plaintiffs’ claim. The plaintiffs’ prayer for relief, for each cause of action, claimed interest pursuant to the Judicature Act. In the judgment I held:
(a) The plaintiffs succeeded on the first, second, fourth, and fifth causes of action. It was not necessary to consider the third cause of action.5
2 Horowhenua County v Nash (No 2) [1968] NZLR 632 at 633.
3 Thomson v Thomson (1992) 6 PRNZ 591 (HC) at 594.
4 See Willcocks v Teat HC Rotorua CIV-2008-463-784, 15 March 2011 at [49]–[23].
5 Judgment at [27], [33], [34], [37], and [39].
(b) The defendant is liable to each of the plaintiffs.6
(c) The first plaintiffs succeeded on all aspects of their claim, except for a portion relating to Mr Mortimer’s attendance at the Melbourne Grand Prix.7
(d) The second, third, fourth, and fifth plaintiffs’ claims succeeded in
their entirety.8
[19] By saying that the plaintiffs’ claims “succeeded in their entirety”, or to the extent set out in respect of the first plaintiffs, I intended that their claims succeeded as pleaded. Their claims all included interest and I intended that they succeeded in those claims. My intention in setting out the liability in dollar terms (for example, the second plaintiff’s claim of $35,261.30 (GST incl))9 was to make clear the principal sum of the award to the particular plaintiff, on which interest would accrue. However, the paragraphs I have referred to do not express my intention and decision with regard to interest.
[20] For the defendant, Mr Dennett further submitted that there was no evidence as to when each of the plaintiffs had paid for the repairs to the vehicles and that, therefore, there was no evidential basis for an award of interest.
[21] I accept Ms Lethbridge’s submission that under the Judicature Act the court has a broad discretion to award interest. Section 87 (1) of the Judicature Act provides:
In any proceedings ... for the recovery of any debt or damages, the Court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate, not exceeding the prescribed rate, as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment.
6 At [45].
7 At [63].
8 At [69], [70], [76], and [80].
9 At [69].
[22] As noted in McGechan:10
The Court’s discretion is fourfold in that it can decide:
(a) whether to award interest at all (pleaded or not) and, if so; (b) whether on all or any part of the debt or damages; and
(c) whether for the whole or any part of the period between the date when the cause of action arose and the date of judgment; and
(d) whether at the prescribed rate ... or some lower rate.
[23] Notwithstanding that the plaintiffs’ pleadings included a specific claim for interest, the defendant did not include a specific pleading in its statement of defence; its pleading was a simple denial. Further, the defendant did not at any time during the trial or in closing submissions, raise any of the matters now raised in respect of interest.
[24] I have concluded that the judgment does not express my decision and intention that each of the plaintiffs is entitled to interest. The judgment requires correction.
[25] Paragraph [81] of the judgment is amended by adding the following sentence, after the first sentence: “The first, second, third, fourth, and fifth plaintiffs are entitled to interest pursuant to s 87 of the Judicature Act 1908, from the date of loss until the date payment is made.”11 I accept that it is appropriate to calculate interest, as the plaintiffs have done, from the date of each repair invoice.
Costs
[26] I accept that in closing submissions, counsel indicated that they wished to make written submissions as to costs. My award of costs on a 2B basis arose out of the fact that counsel’s indication slipped my mind when I was preparing that part of the judgment. However, I am clear that when I was preparing that part of the
judgment, my intention was to award 2B costs.
10 McGechan on Procedure (looseleaf ed, Brookers) at [J87.01].
11 Pursuant to r 11.27, interest continues to accrue from the time judgment is given until the judgment is satisfied.
[27] As I noted earlier, despite indicating an intention to seek increased or indemnity costs, the plaintiffs were prepared to forego that, in the interests of certainty and the avoidance of further costs. In the circumstances, are there grounds on which I could entertain an application to “correct” the sealed judgment?
[28] I have concluded that I do not have jurisdiction to do so. I intended to award
2B costs. A judgment to that effect was sealed. If I was wrong to award 2B costs, then my judgment could have been appealed.
[29] I add that, if I did have jurisdiction to reconsider my costs award, I would not have accepted the defendant’s submission that the plaintiffs were not entitled to any award of costs. I set out my reasons, below.
[30] It's apparent that between late March 2012 and 2 July 2012 (the day the trial began) the parties’ counsel exchanged offers and counter-offers. All offers were made “without prejudice except as to costs”. The final position reached was that the defendant was prepared to pay $225,000 in full and final settlement, which included an allowance of $50,000 for “costs, disbursements and interest”, and the plaintiffs were prepared to accept $275,000, inclusive of costs. The plaintiffs sealed judgment for a total of $212,333.13, plus interest.
[31] Mr Dennett accepted that when the defendant’s best offer is compared with the total quantum of the principal awards in favour of the plaintiffs ($212,333.13, exclusive of interest),12 it would appear that the defendant could not succeed in a submission that the plaintiffs had refused to accept an offer which would have given them more than they were in fact awarded. On that basis, the defendant would not be entitled to any costs award.13 However, Mr Dennett submitted that the comparison should not between the offer and the total award. He submitted that the comparison should be between the offer and the awards to the second, third, fourth,
and fifth plaintiffs, only.
12 Mr Dennett submitted that this figure should in fact be $208,984.42, because of errors in the sealed judgment. These are discussed later in this judgment.
13 See rr 14.7, 14.10, and 14.11 High Court Rules.
[32] Mr Dennett submitted that the award to the first plaintiffs should be excluded from the comparison. That was, he submitted, because as at the time the defendant made its last offer, the first plaintiffs could not have succeeded in any claim against the defendant. He submitted that in order for their claim to succeed, the first plaintiffs had to obtain an order to join further first plaintiffs. However, as at the time the defendant’s last offer was made, the further first plaintiffs were not parties to the proceeding. Mr Dennett submitted that if the first plaintiffs’ award is excluded, the balance of the plaintiffs’ claim comes down to $192,945.67, which is less than the defendant’s offer.
[33] I reject the defendant’s submission. First, as Ms Lethbridge submitted, it does not accord with my findings. On 4 July 2012 (the third day of the trial) I ruled that the first plaintiffs could join further first plaintiffs: Mr Warwick Mortimer in his personal capacity, Te Kai Investments Ltd, and Mortimer Motorsports Ltd. The two companies are associated with Mr and Mrs Mortimer. I gave reasons for the ruling on 5 July 2012 (“the ruling”).14
[34] At [4] of the ruling I noted that the first plaintiffs’ claim had been quantified in a schedule annexed to the statement of claim, and the invoices themselves disclosed in the course of discovery. At [5] I noted that the cross-examination of Mr Mortimer was, in part, directed at the fact that he had not, personally, purchased fuel, and that some of the invoices had been directed at the further first plaintiffs. Mr Mortimer’s response was that he had paid the invoices, irrespective of the entity to which they were addressed.
[35] At [6] I noted that the defendant’s pleading to the first plaintiffs’ claims contained a bald denial of the quantum of the claim. No particulars were given. The defendant’s opening did not raise any specific challenge to the quantum of the first plaintiffs’ claim, and no issue had been raised prior to trial, between counsel. Ms Lethbridge’s application for joinder was made out of an abundance of caution. At [15] I concluded that the presence of the further first plaintiffs might be necessary in
order to determine whether the first plaintiffs could succeed against the defendant.
14 Mortimer v Motorsport Logistics Ltd HC Auckland CIV-2011-004-239, 5 July 2012.
[36] In the judgment, I considered the position of the first plaintiffs at [40] to [44]. I concluded that “[a]ny concerns as to the ability of the further first plaintiffs to establish a cause of action against Motorsport do not preclude me from finding that Motorsport is liable to the original first plaintiffs”.15 At [47] to [57] I considered the quantum of the first plaintiff’s claim, in the light of the defendant’s submission that none of the invoices for repair work to cars owned by the first plaintiffs were made out to the first plaintiffs. I concluded that the defence had no merit. I said:16
I accept that Mr Mortimer, in his answers to Mr Hamilton’s questions in cross-examination, gave clear evidence that, irrespective of who paid the invoices, the Karamaroa Family Trust ultimately bore the loss.
[37] The defendant cannot say that, at the time it made its last offer to the plaintiffs, there was no possibility of the defendant being held liable to the first plaintiffs. There was always the possibility of the defendant being held liable to the first plaintiffs. Accordingly, there is no basis on which the award to the first plaintiffs should be excluded, when comparing the plaintiffs’ award against the defendant’s offer.
[38] I would also accept Ms Lethbridge’s second submission, which was that as the defendants’ offer was inclusive of interest, costs and disbursements, it must be compared against the plaintiffs’ award on the same basis. The sealed judgment of
$212,333.13 is exclusive of interest, costs, and disbursements. When those sums are
included, the award to the plaintiffs well exceeds the defendant’s offer.
Errors in the sealed judgment
[39] Mr Dennett submitted that the sealed judgment contained errors in two respects.
15 Judgment at [44].
16 At [54] (The first plaintiffs were Mr and Mrs Mortimer in their capacity as trustees of the
Karamaroa Family Trust.)
The first plaintiffs’ claim
[40] Mr Dennett submitted that the sealed judgment wrongly included the cost of Mr Mortimer’s accommodation when attending the Melbourne Grand Prix. The first plaintiffs had claimed the costs for Mr Mortimer and his race crew attending this event as “wasted costs”. As a result of the damage caused to Mr Mortimer’s vehicles, he was not able to compete in the event, but claimed for non-refundable airfares and accommodation costs. In the judgment, I directed that Mr Mortimer’s own costs relating to the Melbourne event were to be excluded.
[41] There was some uncertainty at the hearing as to whether Mr Mortimer’s accommodation had been included in the sealed judgment. I am not, therefore, able to rule on whether the sealed judgment should be corrected. It appears that the parties will be able to reach agreement on this point. If the sealed judgment is required to be corrected in this respect, then I direct that the correction may be made in accordance with a joint memorandum of counsel. If the parties cannot agree, then memoranda are to be filed, and I will decide the issue on the papers.
Currency conversion
[42] Mr Dennett submitted that the default position is that a claim in an overseas currency is converted to New Zealand currency at the date the liable party pays the judgment. He submitted that the sealed judgment was wrong in that the award to the fourth plaintiff, Mr McCrudden, had been converted to New Zealand currency as at the date the proceeding was filed.
[43] Mr McCrudden’s claim was in Australian dollars. The date at which the judgment was to be converted to New Zealand currency (if at all) was not argued at the hearing and was not, therefore, canvassed in the judgment. In the circumstances, conversion of Mr McCrudden’s award is not a matter in respect of which it could be said that there is an accidental slip or omission in the sealed judgment which must be corrected, or that the sealed judgment does not reflect what was intended and decided. Accordingly, I conclude that I have no jurisdiction to consider the defendant’s application in this regard.
Australian dollars, would suggest that Mr McCrudden wished to receive payment of the judgment sum, with interest, in Australian dollars. If it is necessary to enforce the judgment in New Zealand, then the authorities referred to by Mr Dennett indicate that the judgment should be converted at that time.17 I do not consider that the fact that those cases concerned “commercial contracts” counts against their application in this case.
Scale costs claimed
[45] Mr Dennett submitted that the sealed judgment was incorrect in respect of individual claims for steps taken. I rule on these as follows:
(a) “Preparing notice of claim in District Court” ($2,325): I accept the plaintiffs’ submission that the plaintiffs are entitled to claim these costs. The plaintiffs had elected to limit their claim so as to come within the District Court jurisdiction, and filed a notice of claim in that Court. The defendant elected to transfer the proceeding to this Court. That required the plaintiffs to file a fresh statement of claim. The effect of the defendant’s transfer was to increase the plaintiffs’ costs. There is no illegitimate duplication of the plaintiffs’ claim. The plaintiffs are also entitled to claim the filing fee for the amended statement of claim filed in this Court on 10 April 2012 ($108.80).
(b) “Preparation for case management conference on 5 July 2011” ($376):
The plaintiffs conceded that this cannot be claimed.
(c) “Memoranda dated 15 November 2011, 15 December 2011, 1 June
2012, 21 June 2012, and 27 June 2012 (total $3,848): I accept the
plaintiffs’ submission that these memoranda related to issues raised in
17 See Miliangos v George Frank (Textiles) Ltd [1976] AC 443 (HL) at 465; American Express Europe Ltd v Bishop HC Wellington CP61/87 at 3; and Marinkovich v The proceeds of sale of the ship “Gold Coast” HC Whangarei M4/92 and M122/94 at 8.
the proceeding. The plaintiffs having succeeded, they are entitled to costs in respect of the memoranda. The claims are allowed.
(d)“Application for order that evidence be given by video conference” ($1,194) and filing fee ($725): This application was reasonable, given that the witness (the fifth plaintiff) is resident in the United Kingdom. The claim for costs is reasonable and appropriate, and is allowed.
(e) “Preparation of briefs and affidavits” ($24,875): I reject the defendant’s submission that the plaintiff should be allowed to claim for preparing briefs of evidence and affidavits as if there were one plaintiff, only. Each plaintiff was a separate party, and raised different issues which had to be addressed in the evidence. The plaintiffs’ claim is reasonable and appropriate, and is allowed.
(f) “Appearance of second counsel on 2 July 2012” ($995): The plaintiffs’ claim is for second counsel on the first morning of the trial, only. It is reasonable and appropriate, and is allowed.
(g)“Preparation for teleconference on 13 September 2012” ($995) and “appearance at teleconference on 13 September 2012” ($597): I reject the defendant’s submission that the plaintiffs are not entitled to costs in relation to this conference, which concerned an application by the defendant for further discovery, which the defendant later abandoned. The fact that no costs order was sought or made at the time does not preclude the plaintiffs from seeking costs. The claim is reasonable and appropriate, and is allowed.
(h)“Payment to Kennedys pursuant to costs order” ($200): Ms Lethbridge conceded that the plaintiffs are not entitled to reimbursement of this sum.
(i) “Plaintiffs’ accommodation costs (second plaintiff $855; third plaintiff
$884.34; fourth plaintiff $1,314.39; Mr Ozanne (witness for the fourth
receive reimbursement for their accommodation only in respect of the period when they gave evidence. As parties to the proceeding they were entitled to be present at the trial for its duration. They are, therefore, entitled to reimbursement for their accommodation, as claimed. Mr Ozanne was a witness, not a party, but is resident in Australia. Given the uncertainty as to when he would be required to give evidence, it is not unreasonable that he was in Auckland for the duration of the trial. The plaintiffs are entitled to be reimbursed for the cost of his accommodation.
(j)“Photocopying – bundles and submissions for trial” ($719.80) and “photocopying” ($974.60): The amount claimed for the bundles and submissions does not appear to be out of line, given the number of plaintiffs and the bundles produced. The claim is allowed. I am concerned, however, that the general claim for $974.60 may be a duplicate. No further indication was given as to what this claim relates to, and no submissions were made. In the circumstances, I do not allow the claim for $974.60.
(k) “Taxis – court attendances” ($128.60): This claim is allowed.
(l)“Hearing fees not yet invoiced for” ($3,141.80): The plaintiffs submitted that this claim related to hearing fees which have now been invoiced, and paid. An invoice can be provided to the defendant. In the circumstances, the claim is allowed.
Costs on this application
[46] Ms Lethbridge sought increased or indemnity costs in respect of this application and hearing. She submitted that the same hopelessness that characterised the defendant’s defence at trial was echoed in the present application. She submitted
that none of the matters raised by the defendant had any merit, but the plaintiffs had been put to unnecessary costs and delay.
[47] Mr Dennett submitted that the application had been reasonable in the circumstances. He submitted that it had been reasonable for the defendant to take the points it had taken, as the defendant had been under the impression that it would in due course receive submissions as to costs, to which it would respond. Instead, it received a sealed judgment. He further submitted that it was clear that the defendant would have at least some success in the application, given the plaintiffs’ concessions on some points.
[48] In the circumstances of this case, I do not accept that it is appropriate for the plaintiffs to be awarded increased or indemnity costs on the present application. On the other hand, I do not accept that the defendant has succeeded to the extent that no order for costs should be made against it.
[49] I order the defendant to pay costs to the plaintiffs on this application, as for a standard interlocutory application, on a 2B basis, together with disbursements as
fixed by the Registrar.
Andrews J
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