New Zealand Bloodstock Finance & Leasing Limited v Jones

[2020] NZHC 1962

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1822

[2020] NZHC 1962

BETWEEN

NEW ZEALAND BLOODSTOCK FINANCE & LEASING LIMITED

Plaintiff

AND

GREGORY JOHN JONES

Defendant

Hearing:	On the papers
Appearances:	F A King for the plaintiff G J Jones in person
Judgment:	6 August 2020

JUDGMENT OF JAGOSE J

[Costs]

This judgment was delivered by me on 6 August 2020 at 2.30pm.

Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Solicitors/Party:

McKenna King Limited, Hamilton G J Jones, Auckland

NEW ZEALAND BLOODSTOCK FINANCE & LEASING LTD v JONES (COSTS) [2020] NZHC 1962 [6

August 2020]

[1]                On 20 and 25 May 2020, I deferred determination of Mr Jones’ interlocutory applications dated 19 and 25 May 2020 for at or after the substantive hearing.1 My judgment of 5 June 2020 also dismissed the applications.2

[2]                Mr Jones has appealed my judgment to the Court of Appeal. Mr Jones then sought leave to appeal against my decisions on his interlocutory applications, and also to stay execution of my judgment.3

[3]                My  judgment  of  9  July  2020  dismissed  those  latter  applications  also.4    I expressed my preliminary view costs incurred in opposing those applications did not fall within the advances contract’s and lease’s indemnities. Instead, as the successful party, NZ Bloodstock may be entitled to 1B costs and disbursements for steps taken on the appeal, as the appeal was of a straightforward nature occupying a normal amount of time. If that was not accepted by the parties, or they could not otherwise agree, I reserved costs for determination.5

[4]                NZ Bloodstock now seeks indemnity costs in the amount of $20,337.40, including on its costs application (alternatively calculating 1B scale costs at

$7,791.00) plus disbursements of $372.00 (including GST). Mr Jones says the threshold for indemnity costs is not met.

[5]                For NZ Bloodstock, Fraser King argues the contractual indemnities’ inclusion of expenses incurred on a judgment’s ‘enforcement’ extends to opposing steps taken to stay the judgment as, if successful, such steps would prevent the judgment’s enforcement. (Presumably the same logic applies in opposing steps taken to obtain leave to appeal, and in opposing appeal, although Mr King does not expressly say so.) He says I am to be taken to have accepted that logic, by accepting NZ Bloodstock would be detrimentally affected by stay of execution “in not being able to obtain the fruits of its judgment (at least to the extent ‘immediately payable by Mr Jones’)”.6

1      New Zealand Bloodstock Finance & Leasing Ltd v Jones CIV 2019-404-1822, 20 and 25 May 2020 (minutes).

2      New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1233 at [42].

3      Mr Jones’ application was amended on 3 July 2020 to include specific reference to s 56(3) of the Senior Courts Act 2016 and related caselaw. No objection is taken to the belated amendment.

4      New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1633.

5 At [25].

6 At [21].

[6]                I disagree. Deferred enforcement, as may follow stay or unsuccessful appeal, is not prevented enforcement. ‘Enforcement’ means exactly that: steps taken to obtain the judgment’s performance, “to compel [its] observance”.7 And preparatory steps may be excluded.8 NZ Bloodstock’s contractual indemnities do not extend to expenses incurred in opposing Mr Jones’ applications for leave to appeal and stay.

[7]                Mr  King  alternatively  contends  indemnity  costs  are  payable   under   HCR 14.6(4)(a) on grounds Mr Jones has acted frivolously and unnecessarily on his applications. I disregard Mr King’s recitation of Mr Jones’ contended misconduct in the course of the substantive proceeding as irrelevant to my decision on costs arising from the anterior applications.

[8]                The statutory threshold is such actions be taken in “commencing [or] continuing”, here, a step in a proceeding. Mr Jones was entitled to seek leave to appeal against my decisions on his interlocutory applications, and also to seek to stay execution  of  my  judgment.  That  neither  was  successful,  even  on  the  grounds  I expressed (including the former seemed superfluous given Mr Jones’ substantive appeal as of right), is not to elevate his actions in bringing the applications to the requisite threshold. In particular, “unnecessarily” in connection with indemnity costs carries with it the meaning of “distinctly bad behaviour”,9 not merely superfluity.

[9]                NZ Bloodstock is not entitled to indemnity costs on Mr Jones’ applications for leave to appeal and stay. Its application for such is unsuccessful. It therefore also is not entitled to claim costs on preparation of its written submissions on costs – which in any event may be exceptional in following the event,10 and on which coordinate authority  is  conflicting11  –  reducing  1B  costs   to   $5,406.00.  And,   assuming NZ Bloodstock to be GST-registered, neither is GST recoverable on disbursements.12

7      R v Bates [1982] 2 NSWLR 894 (CCA) at 895.

8      McGuffick v Royal Bank of Scotland plc [2009] EWHC 2386 (Comm), [2010] 1 All ER 634 at [80], citing Rankine v American Express Services Europe Ltd [2009] CCLR 3.

9      Bradbury v Westpac Banking Corporation [2009] 3 NZLR 400 (CA) at [26].

10 Strata Title Administration Ltd v Body Corporate Administration Ltd [2014] NZCA 96 at [10]– [14]; Hojsgaard v Chief Executive of Land Information New Zealand [2019] NZCA 84, [2019] 2 NZLR 864 at [130].

11 David Bullock and Julian Long “Costs of costs applications” [2014] NZLJ 348.

12   New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282, (2016) 27 NZTC 22-058 at [17].

[10]I therefore order Mr Jones to pay NZ Bloodstock costs in the amount of

$5,406.00, plus disbursements of $349.24 (plus any GST paid, if NZ Bloodstock is not GST-registered).

—Jagose J