Nellies v Mark - [2023] NZHC 1526

IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE

CIV-2018-406-010

[2023] NZHC 1526

BETWEEN IAIN ANDREW NELLIES as liquidator of PMT 2010 Limited (in liquidation)
Plaintiff

AND

PETER MARK and

JEANETTE PATRICIA MARK

Defendants

CIV-2021-406-13

BETWEEN

PMT 2010 LIMITED (in liquidation) First Plaintiff

IAIN ANDREW NELLIES as liquidator of PMT 2010 Limited (in liquidation)

Second Plaintiff

AND

PETER MARK and

JEANETTE PATRICIA MARK
First Defendants

WISHEART MACNAB & PARTNERS TRUSTEE COMPANY LIMITED and

DAVID JOHN PAUL as trustees of the Mark Family Trust

Second Defendants

Hearing: On the papers

Appearances:

D P MacKenzie for Plaintiffs P Morten for Defendants

Judgment:

19 June 2023

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[Costs]

NELLIES v MARK [2023] NZHC 1526 [19 June 2023]

Introduction

[1] In a judgment dated 22 March 2023,1 Associate Judge Johnston dealt with two interlocutory applications relating to leave to amend pleadings and further discovery and made timetabling directions. The issue of costs was reserved. Counsel, having been unable to agree on costs, have now filed memoranda.

Legal principles

[2] The principles governing the award of costs are well established.2 Questions of costs are ultimately a matter of discretion, the overall objective being to achieve an outcome that best meets the interest of justice. However, the discretion is not unfettered; it is qualified by the applicable costs rules, rr 14.2–14.10 of the High Court Rules 2016, and must be consistent with established principles.

[3] The general principles in relation to determination of costs include that the party who fails should pay costs to the party who succeeds, and costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application.3

[4] Rule 14.8 of the High Court Rules governs costs on interlocutory applications. It provides as follows:

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.

1      Nellies v Mark [2023] NZHC 584.
2      High Court Rules 2016, r 14.1; Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7] and [16]; Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [21]–[24] and [28]; and Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd (2002) 16 PRNZ 662 (CA) at [27].
3      High Court Rules, r 14.2(1).

(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.

[5]Rule 7.77(8) covers costs in relation to an amended pleading:

(8) If an amended pleading has been filed, the party filing the amended pleading must bear all the costs of and occasioned by the…

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.

Continue reading Nellies v Mark

Details

AGLC: Nellies v Mark [2023] NZHC 1526
Case: [2023] NZHC 1526
Decision Date: 19 June 2023

CaseChat Overview and Summary

The matter before the court involved an application for costs following interlocutory applications and further discovery in a case concerning the liquidation of PMT 2010 Limited. The plaintiffs, represented by Iain Andrew Nellies as liquidator, sought to amend their pleadings and obtain further discovery from the defendants, Peter and Jeanette Mark. The defendants, in turn, opposed the application for leave to amend and sought further discovery. Associate Judge Johnston previously ruled on the interlocutory applications, granting leave to amend and ordering further discovery, while reserving the issue of costs. The court was required to determine the costs of the interlocutory applications, guided by established principles and rules governing costs in the High Court.

The primary legal issue before the court was whether the plaintiffs should bear the costs of their application for leave to file an amended statement of claim. The plaintiffs argued for scale costs based on their success in obtaining leave, while the defendants contended that the plaintiffs should bear the costs under rule 7.77(8) of the High Court Rules. The defendants also sought 2B scale costs for their success on the discovery application. The court had to balance the principles of cost allocation with the procedural context of the case, including whether the defendants' opposition was genuine and whether the plaintiffs' success warranted a different cost outcome.

The court determined that the plaintiffs should bear most of the costs of their application for leave to file the amended statement of claim, in accordance with rule 7.77(8). However, the defendants were required to bear the plaintiffs' costs of preparing the application for leave, as the defendants had proposed on 16 February 2023 that the plaintiffs provide an application for leave even if the defendants consented to leave, necessitating the plaintiffs' incurring the cost. Regarding the defendants' costs, the court allowed 2B scale costs of $6,684 and disbursements of $734.66. The court disallowed certain disbursements claimed by the defendants, such as the filing fee, as the plaintiffs had an exemption for filing fees under rule 6 of the High Court Fees Regulations 2013.

The court ordered that the plaintiffs bear the costs of their application for leave to file the further amended statement of claim, except for the cost of filing the interlocutory application, which the defendants were to pay. The first defendants were entitled to 2B costs in the sum of $6,684 and disbursements in the sum of $734.66.

Orders