Partners Finance and Lease Limited v Richmond

[2019] NZHC 628

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-653

[2019] NZHC 628

BETWEEN

PARTNERS FINANCE AND LEASE LIMITED

Plaintiff

AND

RENE JOHN RICHMOND and JADE

KYLIE RICHMOND as trustees of the RICHMOND BUSINESS TRUST

First Defendants

AND

ASB BANK LIMITED

Second Defendant

Hearing:

(Determined on the Papers)

Counsel:

D G Dewar for Plaintiff

L G Cox for First Defendant
C R Vinnell for Second Defendant

Judgment:

28 March 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

[1]                 On 29 January 2019, Osborne J gave judgment for the second defendant on the plaintiff’s  claim  against  the  second  defendant,  and  consequential  orders.1     In    a practical sense, that marked an end to the proceeding subject to the issue of costs.

1      Partners Finance and Lease Ltd v Richmond [2019] NZHC 34.

PARTNERS FINANCE AND LEASE LTD v RICHMOND & ORS [2019] NZHC 628 [28 March 2019].

[2]                 It is not in issue that costs in regard to the second defendant should follow the event. The issue is quantification. Both defendants seek costs. The plaintiff’s memorandum filed on 21 February 2019 accepts the second defendant’s costs calculation presented on a 2B basis.

[3]                 The plaintiff’s memorandum records: “There has been no award of costs in favour of the Second Defendant and they are not to be considered”.  In context, this is a reference to the first defendants. On that point, the plaintiff is correct. The orders made by Osborne J record:2

The costs of the proceeding and the interlocutory applications as between plaintiff and second defendant are reserved.

First defendants

[4]                 Costs issues in relation to the first defendants were overtaken by the plaintiff discontinuing its proceeding on 1 March 2019. With the filing of the discontinuance, the first defendants filed a further memorandum seeking costs in respect of the proceeding apart from the summary judgment application. Given the discontinuance, the starting position is that the plaintiff is obliged to pay the defendants’ costs. I agree there is no basis for that principle not to apply in this case and the plaintiff does not suggest otherwise.

[5]                 The schedule for non-summary judgment steps only contains two items. The first is in relation to the filing of a memorandum for the first case management conference, which is not disputed.

[6]                 The second item is a claim for two days for the filing of a statement of defence. While a statement of defence was not filed, the first defendant says an allowance for the costs incurred by the first defendant analysing the statement of claim and identifying available defences is appropriate.

2      At [70](d).

[7]                 There is significant duplication in the two notices of opposition. Clearly (and understandably) as the first and second defendants had a common interest in defending the plaintiff’s claim, they co-operated in the preparation of the papers in opposition, as they did in the conduct of the hearing.

[8] In the costs schedule filed in relation to the summary judgment application, the first defendants sought an allowance for their input into the second defendant’s submissions which they adopted for the hearing. I consider that claim reasonable but also consider that allowance encompasses the issue of analysis of the statement of claim and availability of defences referred to at [6] above. In a practical sense, the burden of the proceeding fell on the second defendant and accordingly I do not allow the claim referred to in [6].

[9]                 There is a costs order in favour of the first defendants relating to the summary judgment application in terms of the 2B costs schedule set out at para [4] of the first defendants’ memorandum dated 13 February 2019, and for item 11 of the schedule at para [7] of the first defendants’ memorandum of 13 March 2019 in relation to the balance of the proceedings.

Second defendant

[10]              The plaintiff realistically accepts that if costs are to be awarded they should be on a 2B basis and the scale calculation presented in the second defendant’s memorandum is accepted.

[11]              I am not persuaded that the  matter warrants  being classified as  band C.  In  a sense, the claimed complexity is inconsistent with both parties considering that their respective cases were sufficiently clear cut to warrant summary judgment. That is not to say that because a matter results in summary judgment that it cannot involve complex matters, but at the end of the day the legal authorities and arguments traversed by Osborne J in his decision were not of themselves overly complex.

[12]              Accordingly, I do not accept that an increase from band B to band C is warranted.

Costs uplift

[13]              The first defendants adopt the second defendant’s arguments in respect of an increase in costs over scale. I consider an increase in costs appropriate and I give the reasons for that below.

[14]              The point that I have made in relation to the arguments being relatively straightforward and therefore not justifying a departure from the usual 2B category counts against the plaintiff in respect of the application for an uplift of costs under r 14.6(3). The second defendant submits that the position taken by the plaintiff lacked merit and in particular that the plaintiff failed to accept legal argument or admit facts. The second defendant relies on the plaintiff having been put on notice as to the very argument which ultimately succeeded.

[15]              The plaintiff’s memorandum in response does not really engage with this issue. The argument in the plaintiff’s memorandum, that the late production of the identifying plate on the bulldozer in the second affidavits filed by the defendants was the first time that evidence had been provided supporting the contention that brought the machine within the definition of “motor vehicle”, does not assist the plaintiff as notwithstanding that it had that evidence, it proceeded with the hearing.

[16]              I do not consider there is a public interest element in the case given Osborne J applied existing authorities. At the end of the day, it was the description of the collateral type as “goods – other” that created the dispute. The hearing was only required because the plaintiff did not accept the arguments put to it based on the existing law.

[17]              That the plaintiff’s application for summary judgment was itself met with the defendants’ successful application for summary judgment shows the miscalculation by the plaintiff in respect of the legal position.

[18]              In my view, an increase in costs is warranted for the reasons given by the second defendant. There is an award of costs to the second defendant against the plaintiff on a 2B basis with a 50 per cent uplift together with disbursements as set out in the second defendant’s memorandum of 13 January 2019. The 50 per cent uplift also applies to the costs award in favour of the first defendants.

Associate Judge Lester

Solicitors:

Thomas Dewar Sziranyi Letts, Lower Hutt Morgan Coakle, Auckland

Anthony Harper, Christchurch