Nisbet v Blakey

[2020] NZHC 1731

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-156

[2020] NZHC 1731

BETWEEN

CRAIG GRANT SCOTT NISBET

Applicant

AND

PHILLIPA GAY BLAKEY and PENELOPE ANNE PERE

First Respondents

JOHN ROBERT HANDS and WAYNE STUART KIRK

Second Respondents

On the papers:

Counsel:

S Iorns for Applicant

D M Kerr for Respondents

Judgment:

16 July 2020

JUDGMENT OF CHURCHMAN J (COSTS)

Introduction

[1]                 On 2 June 2020 this Court considered an application filed by Mr Nisbet (the applicant) for what was effectively a freezing order over assets of the Nisbet Family Trust and Nisbet Family Trust No 2 (the trustees of those two trusts being the respondents in this case), requiring “that the full proceeds, without deduction for real estate fees or commission, or any other disbursements, from the sale of the property at 16 Ferguson Avenue, Westshore, Napier be paid into the Trust account of an independent solicitor”.

NISBET v BLAKEY & ORS [2020] NZHC 1731 [16 July 2020]

[2]                 Mr Nisbet’s application was dismissed.1 Counsel for the respondents have now filed memoranda seeking a costs award totalling $21,868.50. In a memorandum in response, counsel for Mr Nisbet, Mr Iorns, submitted that while he did not dispute that the respondents are entitled to some quantum of costs, he took issue with particular aspects of the respondents’ costs memorandum:

(a)firstly, that certain steps were calculated on a 2C, rather than a 2B basis;

(b)secondly, that the respondents’ claim for an uplift to the costs award was unjustified in the circumstances; and

(c)thirdly, that the respondents’ quantification of costs included an element of double-counting.

The position of the parties

[3]                 Mr Kerr, counsel for the respondents, submitted that costs on a 2C scale were justified for two separate steps in the proceedings:

(a)Step 14: Preparation for and attendance at issues conference, totalling

$2,390.00; and

(b)Step  23 times three:    Filing opposition to interlocutory application, totalling $14,340.00.

[4]                 It was submitted that costs on a 2C basis were reasonable for step 14 given that the proceeding was commenced through a without notice application supported by nearly 150 pages of evidence, meaning that the time required to prepare for the first conference was “comparatively large”. It was further submitted that costs on a 2C basis were also reasonable for the filing of the respondents’ opposition to the applications (Mr Nisbet filed three separate applications). This was because, according to counsel, the factual matters put in issue by Mr Nisbet were wide-ranging; requiring retrieval of extensive historical information and records and preparation of

1      Nisbet v Blakey & Ors [2020] NZHC 1196.

detailed and substantial affidavits. Therefore again, a comparatively large amount of time was consumed for this interlocutory matter.

[5]                 Counsel for the respondents also more broadly justified the uplift of costs to a 2C scale under r 14.6 because Mr Nisbet “pursued unnecessary steps and arguments that lacked merit, and have acted vexatiously and improperly”.

[6]                 Counsel for Mr Nisbet submitted that the uplift for both steps was inappropriate. In relation to step 14, Mr Iorns argued that it was not unusual to have to review significant material at short notice, and that the matter was not so complex as to warrant an uplift. With regard to step 23, counsel submitted that the three applications were substantially similar, and did not need to be counted three times. Furthermore, if the applications were to be counted three times, then an uplift to category C was difficult to accept.

[7]                 More generally, counsel for Mr Nisbet stated that Mr Nisbet had been self- represented throughout the proceedings, and that he was not aware that his application was filed ex parte (and the obligations and cost implications this may give rise to). It was submitted that had his counsel been instructed sooner, the matter may have been handled differently, and given that he was a self-litigant, the manner in which the proceedings were conducted ought to be read in a different light to a party represented.

Increased costs on a 2C scale

[8]                 Under r 14.6(3)(b)(iii) of the High Court Rules 2016, a Court may order a party to pay increased costs if that party has contributed unnecessarily to the time or expense of the proceeding or step in it by taking or pursuing an unnecessary step or an argument that lacks merit.

[9]                 In relation to time bands in interlocutory applications, the Court focuses on the complexity of the issues and the time involved in formulating arguments, as opposed to the length of written submissions.2 As noted by Fitzgerald J in Minister of Education v James Hardie New Zealand:3

2      McGechan on Procedure (online ed, Thomson Reuters) at HR14.5.01.

3      Minister of Education v James Hardie New Zealand [2018] NZHC 2960 at [16].

For completeness, I do not accept the length of the written submissions will ordinarily be an appropriate guide or relevant factor to banding for costs purposes on interlocutory applications. In theory at least, all written submissions on interlocutory applications will be no more than 10 pages in length. And, it is not the length of the written submissions per se which is determinative, but the complexity of the issues to be determined and the time involved in preparing and formulating the arguments reflected in those submissions.

[10]              Where a party seeks a band C categorisation for particular steps, it must demonstrate why a normal time allocation for that particular step is insufficient.4 While the complexity of the proceeding is often addressed through categorisation under r 14.3, it may still be relevant to the assessment of reasonable time under r 14.5.5

Analysis

[11]              I am not convinced that the costs for step 14 should be calculated on a category C basis. The fact that the applicant filed a without notice application with nearly 150 pages of supporting evidence does lend some support to counsel for the respondent’s submission that the time required to respond may have been relatively significant. However, I do not consider these proceedings to be of such significant complexity or difficulty so as to justify an uplift. The finding of this Court in the substantive proceeding that Mr Nisbet did not have a good arguable case supports an argument that the proceedings lacked  merit.  Against  that  must  be  weighed  the  fact  that Mr Nisbet was a litigant in person who says that he had difficulty engaging legal advice as a result of COVID-19 restrictions. I also accept counsel for the applicant’s submission that it is not unusual to have to review significant material at short notice, and that the complexity of the material itself does not warrant an uplift. Therefore, 2B costs for step 14 are appropriate here.

[12]              In relation to step 23, counsel for the respondents stated in their submissions that the three interlocutory applications filed were in fact, separate applications:

The first was dated 14 April and was a without notice application for a freezing order. The second was dated 22 April and sought leave to lodge a caveat. The third was an application for freezing orders in broader terms than the first. The

4      Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400 at [161]. See also Paper Reclaim Ltd v Aotearoa International Ltd [2007] NZCA 544 at [35].

5      Mary Moodie Family Trust Board v Attorney-General [2016] NZHC 755 at [6].

Applicant advised the Registrar in correspondence on 19 May that the third application was not in substitution for the first.

[13]              I accept this submission and consider that calculating the costs award with step 23 included three times as being justified here. However, for the reasons discussed above (namely the lack of complexity and evidence as to time spent preparing) it appropriate for step 23 to be applied three times on a 2B basis.

[14]This ultimately leads to a costs award of:

Step Number	Description	Band	Value
14	Preparation for and attendance at issues conference	2B	$1195.00
11	Filing memorandum for first or subsequent case management conference or mentions hearing	2B	$956.00
23	Filing opposition to interlocutory application	2B	$1434.00
23	Filing opposition to interlocutory application	2B	$1434.00
23	Filing opposition to interlocutory application	2B	$1434.00
24	Preparation of written submissions	2B	$3585.00
26	Appearance at hearing of defended application for sole or principal counsel	2B	$597.50
Total	$10,635.50

[15]There was no dispute as to the claimed disbursement of filing fees of $330.

Outcome

[16]              The applicant is ordered to pay the respondents a payment in respect of costs and disbursements in the sum of $10,965.50.

Churchman J

Solicitors:

DAC Legal, Waipukurau for Respondents cc:  C G S Nisbet