New Zealand Bloodstock Finance & Leasing Ltd v Jones

[2022] NZHC 1477

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1822

CIV-2020-404-1357 [2022] NZHC 1477

BETWEEN

NEW ZEALAND BLOODSTOCK FINANCE & LEASING LIMITED

Plaintiff

AND

GREGORY JOHN JONES

Defendant

Hearing:	On the papers
Counsel:	F A King and A Osama for the plaintiff G J Jones in person
Date of judgment:	23 June 2022

JUDGMENT OF JAGOSE J

[Quantification of solicitor-client costs]

This judgment was delivered by me on 23 June 2022 at 10.00am.

Pursuant to Rule 11.5 of the High Court Rules.

…………………………

Registrar/Deputy Registrar

Solicitors/Party: McKenna King, Hamilton G J Jones, Auckland

NEW ZEALAND BLOODSTOCK FINANCE & LEASING LTD v JONES [2022] NZHC 1477 [23 June 2022]

[1]                 By judgment of 28 May 2021,1 Harland J set aside the Registrar’s sealing of my 5 June 2020 judgment in favour of the plaintiff (“NZ Bloodstock”).2 (I also had dismissed Mr Jones’ applications for leave to appeal and stay my original judgment, with scale costs payable by Mr Jones.3)

[2]                 Undetermined is the sum of solicitor-client costs on which my original judgment in part  gave  NZ  Bloodstock  summary  judgment  against  Mr  Jones.  My 10 August 2021 minute had directed Mr Jones file and serve any and all response he had to the balance of NZ Bloodstock’s 1 July 2020 memorandum quantifying its claim for solicitor-client costs, the timetable for which response was suspended by my and Harland J’s  20  August  2021  joint  minute  while  Her  Honour  determined  NZ Bloodstock’s application for recall of her judgment.4 Mr Jones filed his response on 6 April 2022. The file remained with the Judge for her determination of interlocutory costs,5 concluding 6 May 2022, and now is returned to me.

[3]                 NZ Bloodstock seeks I quantify the sum of my original judgment’s solicitor-client costs at $108,021.95 (including GST) plus interest at 10 per cent per annum. Mr Jones responds I am to recuse myself from any litigation in which he is involved, on grounds of my alleged “judicial misfeasance and lack of good faith” in delivering my judgments, and otherwise I am without jurisdiction to re-enter my original determination. He adds I gave NZ Bloodstock summary judgment in terms of its contractual claim, and it cannot now pursue “Judicature [Act]” interest in the alternative or seek to adduce further evidence to quantify those contractual solicitor-client costs.

1      Jones v New Zealand Bloodstock Finance & Leasing Ltd [2021] NZHC 1228.

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

3      New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1633 and New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1962.

4      New Zealand Bloodstock Finance & Leasing Ltd v Jones [2022] NZHC 231.

5      New Zealand Bloodstock Finance & Leasing Ltd v Jones [2022] NZHC 948.

[4]                 I previously refused to recuse myself on grounds of my original judgment’s contended error.6 Nothing in Mr Jones’ renewed claim — which adds, with reference also to other adverse judgments from this Court:7

[M]embers of the judiciary are plainly acting in concert against me to both prevent criticism of fellow members of the judiciary and to inflict damage to my reputation both personally and in terms of the legal profession.

— justifies me revisiting that decision. I will not recuse myself.

[5]                 My  original  judgment  gave  summary  judgment  against  Mr  Jones  on  NZ Bloodstock’s contractual claim.8 That claim expressly included “[t]he plaintiff’s solicitor-client costs”. Such arose by reason of “the advances contract’s and lease’s indemnities”.9 But that is not to render Mr Jones’ liability for such costs exclusively contractual.

[6]                 Instead, “[a]ll matters [relating to costs] are at the discretion of the court”,10 usually for determination in accordance with general principle.11 “Despite” that latter generality, the court may make an order “the costs payable are the actual costs, disbursements, and witness expenses reasonably incurred by a party (indemnity costs)”.12 Relevantly here, the power to make such order includes when “the party claiming costs is entitled to indemnity costs under a contract or deed”.13 In those contractual circumstances, if the actual costs, disbursements and expenses are “reasonably incurred” does not engage the court’s usual discretion on costs.14 Rather, there is to be an objective assessment — from the perspective of “the contractual protection the indemnity was intended to provide” — of the contractual indemnity’s

6      New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1633 at [5].

7      New Zealand Bloodstock Finance & Leasing Ltd v Jones [2021] NZHC 3220; New Zealand Bloodstock Finance & Leasing Ltd v Jones [2021] NZHC 3371; and Jones v Stace Hammond Lawyers [2022] NZHC 47.

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

9      New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1633 at [26]; and New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1962 at [3] (and see also [5]– [6]).

10     High Court Rules 2016, r 14.1(1).

11     Rule 14.2

12     Rule 14.6(1)(b) (original emphasis).

13     Rule 14.6(4)(e).

14     Black v ASB Bank Ltd [2012] NZCA 384 at [78].

scope, and the reasonableness of the work and charges in that context.15 I am not therefore without jurisdiction.

[7]                 The advances contract’s and lease’s indemnities are in uncompromising terms, respectively:

and

All costs and charges and expenses incurred by the Creditor arising from default in payment of any monies owing pursuant to this Agreement or the breach of any covenant on the part of the Borrower or the Guarantor will be paid by the Borrower and will from the date on which such costs charges and expenses are incurred be deemed to be part of this Facility and shall bear penalty interest computed by applying the penalty interest rate to the amount of costs charges and expenses outstanding daily from the date of payment by the Creditor until the date of payment by the Borrower.

Should any such event of default occur or be committed at any time, then the Lessor may, at its option … [o]btain judgment against the Lessee and enforce such judgment against the lessee and/or Guarantor/s for the monies owing hereunder or of any deficiency in such monies including but not limited to recovering from the Lessee any shortfall from the proceeds of the sale of the Collateral, damages, interest and costs on a solicitor to client basis … which the Lessor may suffer … by reason of the Lessee’s breach or default and any action by the Lessor hereunder in consequence thereof and the Lessee hereby agrees to indemnify and keep indemnified the Lessor against all such damages costs and liabilities as aforesaid[.]

… The Lessee will in addition to paying [its] own costs in relation to his lease pay the Lessor’s reasonable costs of this Lease and without limiting the generality of the foregoing shall include the cost of credit checks, of investigations in relation to the Animal, of the costs [of] preparing and executing this Lease, and of complying with the registration and formalities relating thereto, of variation or waiver or change demand, of consents and requests in relation hereto, and of protecting its security interest herein.

[8]                 My original judgment specified the qualifying defaults.16 In my anticipated “robust [judgement]” now,17 NZ Bloodstock’s claimed solicitor-client costs reasonably fall within the scope of those indemnities, particularly as “arising from default”, ‘suffering’ solicitor and client costs and “protecting [the plaintiff’s] security interest”. They are supported by appropriately particularised client invoices as well as

15     At [80], citing ANZ Banking Group (NZ) Ltd v Gibson [1986] 1 NZLR 556 (CA) and Beecher v Mills [1993] MCLR 19 (CA).

16     New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1233 at [24]–[27].

17     Black v ASB Bank Ltd, above n 14, at [81], citing Frater Williams & Co Ltd v Australian Guarantee Corp (NZ) Ltd (1994) 2 NZ ConvC 191,873 (CA) at 191,887.

detailed solicitors’ time records calculated at what appear to be market rates. I have nothing to impugn their incurrence as beyond the indemnities’ scope or them unreasonably incurred within it. (The exception is a half-day hearing fee of $1600, which appears claimed twice, first on  its  own  account  and  then  as  charged  to NZ Bloodstock on 30 April 2020. Excluding it reduces NZ Bloodstock’s claim to

$106,421.95.) In any event, it was for Mr Jones to do so,18 and he has not. The 10 per cent interest rate sought is less than the 16 per cent penalty interest rate specified in the advances contract. I cannot identify anything of work exclusively under the lease if not there incurring the same default interest charge.

[9]                 Last, as I previously held,19 assuming NZ Bloodstock to be GST-registered, GST is not recoverable in costs. I am not able to calculate the net figure from the information before me, as the invoices include travel disbursements without identifying if they include or exclude GST.

[10]              I therefore quantify the sum of solicitor-client costs payable by Mr Jones under my original judgment at $106,421.95 (less GST, if NZ Bloodstock is GST-registered) plus interest at 10 per cent per annum and direct the Registrar to seal the judgment accordingly.

—Jagose J

18 At [81].

19 New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1962 at [9], citing New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282, (2016) 27 NZTC 22-058 at [17].