Mulholland v Mulholland - [2023] NZHC 3853

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2022-470-000111

[2023] NZHC 3853

BETWEEN
VICKY-LEE MULHOLLAND

Plaintiff

AND

BRENT EDWARD MULHOLLAND

First Defendant

ELE HOLDINGS LIMITED

Second Defendant

Hearing: On the papers

Appearances:

W Hofer for the Plaintiff

R J Gordon and S C Howard-Brown for the First Defendant

Judgment:

21 December 2023

COSTS JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 21 December 2023 at 2.30 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Tompkins Wake, Hamilton
MinterEllisonRuddWatts, Wellington

MULHOLLAND v MULHOLLAND [2023] NZHC 3853 [21 December 2023]

Introduction

[1] The first defendant has filed a memorandum seeking costs following the plaintiff’s unsuccessful interlocutory application for leave to bring a summary judgment application.1 In the judgment I held that the respondent had succeeded and so was entitled to costs and that my preliminary view was that costs ought to be awarded on a 2B basis. I asked the parties to confer and only if agreement could not be reached to file memoranda.

[2]The parties have not been able to agree and have filed memoranda.

[3]The first defendant, Brent Mulholland (“Brent”) seeks costs on a 2B basis of

$11,830.50 plus disbursements of $444.43 although noting that 2C costs could properly be fixed. The plaintiff, Vicky Mulholland (“Vicky”) accepts 2B costs are appropriate but considers that costs should be reserved until the determination of her substantive claim.

[4] I set out the relevant costs principles before applying them to the circumstances of this case.

Relevant costs principles

[5] The starting point in any costs decision is r 14.1 of the High Court Rules 2016 which confirms that all matters relating to costs are at the court’s discretion. The discretion vested by r 14.1 is wide but must be exercised subject to the general principles in r 14.2 and the remaining costs provisions.

[6] Rules 14.3 to 14.5 provide for: the calculation of scale costs through the categorisation of proceedings; appropriate daily recovery rates; and the determination of a reasonable time for each step for the purposes of r 14.2(1)(c) by reference to the time specified in sch 3 of the High Court Rules.

1 Mulholland v Mulholland [2023] NZHC 1692.

[7]Rule 14.8 provides:

14.8 Costs on interlocutory applications

(1)Costs on an opposed interlocutory application, unless there are special reasons to the contrary,—

(a)must be fixed in accordance with these rules when the application is determined; and

(b)become payable when they are fixed.

(2)Despite subclause (1), the court may reverse, discharge, or vary an order for costs on an interlocutory application if satisfied subsequently that the original order should not have been made.

(3)This rule does not apply to an application for summary judgment.

[8] On the basis of this rule, absent special reasons to the contrary, costs on interlocutory applications other than summary judgment ought to be fixed at the time the application is determined.

[9] In NZI Bank Ltd v Philpott

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 3853
Decision Date: 21 December 2023

CaseChat Overview and Summary

The case of Mulholland v Mulholland involves the plaintiff, Vicky-Lee Mulholland, and the first defendant, Brent Edward Mulholland, with Ele Holdings Limited acting as the second defendant. The plaintiff sought leave to bring a summary judgment application, which was ultimately unsuccessful. Following the unsuccessful application, the first defendant sought costs, which led to the High Court addressing the matter of costs on interlocutory applications.

The primary legal issue before the court was whether costs should be fixed immediately upon the determination of the interlocutory application for leave to bring a summary judgment application, or whether they should be reserved until the determination of the substantive claim. The court had to consider the principles governing costs on interlocutory applications, particularly in light of Rule 14.8 of the High Court Rules, which generally mandates that costs on opposed interlocutory applications be fixed at the time of determination unless special reasons exist to the contrary.

The court found that, while Rule 14.8(3) does not apply to the interlocutory application in question, the principles underlying the reservation of costs in summary judgment applications could be analogously applied. This analogy was particularly apt because the interlocutory application for leave was closely related to the substantive proceedings, and the court could not definitively determine the merits of the case at the interlocutory stage. The court emphasised that reserving costs allows the factual matters and defences raised to be fully determined, which would enable a more informed decision on the allocation of costs based on the ultimate outcome of the substantive claim. As such, the court decided that there were special reasons to reserve costs, aligning with the principles applied in summary judgment applications.

The outcome of the court's reasoning was that costs on the interlocutory application for leave were reserved, pending the determination of the substantive claim. The court noted that while costs on a 2B basis seemed appropriate, the exact amount would be better assessed once the substantive issues were resolved. The court thus refrained from making a definitive costs order at that stage, ensuring that the final costs order would reflect the actual outcome of the litigation.

Orders