NZ Natural Therapy Limited (in liquidation) v Little

[2015] NZHC 156

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-4866 [2015] NZHC 156

BETWEEN

NZ NATURAL THERAPY LIMITED (IN

LIQUIDATION) First Plaintiff

VIVIEN JUDITH MADSEN-RIES and HENRY DAVID LEVIN as liquidators of NZ NATURAL THERAPY LIMITED (IN LIQUIDATION), both of Deloitte having its offices in Auckland

Second Plaintiffs

AND

JOHN LAWSON LITTLE, of Auckland

Defendant

Hearing:

5 December 2014

(on papers)

Appearances:

K Kuang for plaintiffs
A D Marsh for defendant

Judgment:

12 February 2015

COSTS JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on

12.02.15 at 4 pm, pursuant to

Rule 11.5  of the High Court Rules.

Registrar/Deputy Registrar

Date……………

NZ NATURAL THERAPY LIMITED (IN LIQUIDATION) & Anor v LITTLE, of Auckland [2015] NZHC 156 [12 February 2015]

[1]      One of the principles which govern the award of costs is the need for the determination of costs to be resolved in a way that is predictable and efficient.  That objective is being undermined by applications and counter-applications being made almost routinely in cases where no hearing ever took place before the Court. Essentially, in these cases, the Court is being invited to review the merits of the case, which is to ask the Court to embark upon an exercise that cannot be satisfactorily carried out.

[2]      Parties routinely ask the Court to effectively conduct an enquiry into the merits of the case where the pursuing party, the applicant in this case, has discontinued  its  application.  They  have  routinely  taken  this  approach notwithstanding that settled authority provides that it will only be an exceptional case of this kind that the Court will be in a position to review the merits of the case.

[3]      The respondent to the application (the plaintiff) invoked r 15.23 of the High Court Rules to the effect that a party who discontinues its application must pay the costs thereon. The applicant (the defendant) while acknowledging that that is the presumption contained in the rules, suggests that the merits of the case justify it making an application for costs.  The merits of the case is such as to, in effect, the defendant says, displace the presumption that would otherwise apply.

[4]      I intend to follow the approach that Faire J (then Associate Judge) adopted in Scaffold Shore Load Ltd v Gill and Gundry Concrete Construction Ltd.1   In that case, his Honour determined that the rule governing the ordering of costs on a discontinuance, r 15.23, could be applied by analogy to interlocutory applications. The judgment contains the following passages:

[4]       The defendant, by counsel, has reviewed the history of the dispute. For reasons, which I will shortly explain, it is not appropriate that I make any determination of the merits of this case.

[5]       Because  the  plaintiff  has  effectively  elected  not  to  proceed,  the position is analogous to that which applies where a plaintiff discontinues. When that occurs r 476C of the High Court Rules applies.

1      Scaffold Shore Load Ltd v Gill and Gundry Concrete Construction Ltd HC Auckland CIV-2006-

404-1207, 30 June 2006.

[6]      The Rule raises a presumption that a discontinuing party will be liable for costs: North Shore City Council v Local Government Commission

9 PRNZ 182.  Generally, the Court will not inquire into the merits of the case unless the answer is clear and obvious.

[7]      Once the above considerations are taken into account, the matter is to be considered pursuant to the cost regime which was introduced on 1

January 2000 and is found in rr 46 to 53 of the High Court Rules

[5]      The defendant claims that while the plaintiff resisted the making of an order, it  nonetheless  voluntarily  provided  additional  discovery.    It  was,  the  defendant argues, the making of the application for a further discovery that led to the consequence of the plaintiff making additional discovery over and above what it had provided previously.

[6]      In  answer  to  these  contentions,  the  plaintiff  says  that  the  admittedly additional discovery had came about because it only later emerged that the defendant was opposing the plaintiffs’ claim on grounds that had not previously been apparent to the plaintiffs.   In those circumstances, the plaintiffs were obliged  to provide additional discovery.  Up until it became apparent, the discovery they had provided was what reasonably appeared necessary having regard to the issues which were raised by the defendant in his pleadings.

[7]      The Court is not in a position to resolve all of these competing contentions. There is no “clear and obvious” view open to the Court concerning the merits.2    In my view the presumption enacted by r 15.23 (which I agree applies analogously to the present case) was designed to guide the Court in exactly this type of situation. That being so, the presumption is that the defendant ought to pay the costs of the application which he brought but discontinued.   As such, costs are to be on a 2B

basis.

J.P. Doogue

Associate Judge

2   Scaffold Shore Load Ltd v Gill and Gundry Concrete Construction Ltd, above n 1, at [6].