Poplawski v Pryde

[2013] NZHC 457

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV2011-425-000117 [2013] NZHC 457

BETWEEN  ZBIGNIEW JAN POPLAWSKI AND STEFAN DAVID POPLAWSKI Plaintiffs

ANDTHOMAS MCNEIL PRYDE First Defendant

ANDCRUICKSHANK PRYDE Second Defendant

AND  TE ANAU INVESTMENT NO. 1

LIMITED

Third Defendant

Hearing:         (On Papers)

Counsel:         P W Michalik for Plaintiffs

M E Parker and A J Nash for First and Second Defendants

Judgment:      11 March 2013

COSTS JUDGMENT OF WHATA J

[1]      The plaintiffs in this case failed to establish that an e-mail sent by Mr Pryde was misleading conduct for the purposes of s 9 of the Fair Trading Act 1986.  In my judgment[1]  I found that the e-mail sent by Mr Pryde was factually misleading, but that a reasonable person in the position of the plaintiffs was not likely to have been misled by the e-mail.

[1] Poplawski v Pryde [2012] NZHC 2011.

[2]      The first and second defendants now seek costs against the plaintiffs.  They rely on the orthodox principle that costs should follow the event, and in accordance with the regime specified in the High Court Rules especially r 14.2.  I will return to

this claim but I want to first address their claim to an uplift on costs.

POPLAWSKI V PRYDE HC INV CIV 2011-425-000117 [11 March 2013]

[3]      The first and second defendants submit that there should be an uplift of 50% because the plaintiffs failed to objectively analyse their claim.  They specifically rely on r 14.6(3)(b)(ii) (lacks merit), (iii) (without reasonable justification), (iv) (failing to comply), (v) (failing to accept offer of settlement).

[4]      Apart from the claim under (v), dealing with settlement offers, I cannot see how the claimed actions warrant an uplift:

(a)       The plaintiffs’ case did not lack merit;

(b)The proceedings were not without reasonable justification, frivolous, vexatious or improper in any respect that would warrant an uplift;[2] and

(c)     Non-compliance with an order for discovery or particulars or interrogatories is hardly a compelling basis for an uplift.

[2] Counsel referred to r 14.6(3)(b)(iii) in the following terms:

“(iii)      has acted vexatiously, frivolously, improperly, or failing without reasonable justification to admit facts, evidence, documents, or accept a legal argument; or”

I have assumed that this was a typographical error.

[5]      Dealing then with r 14.6(3)(b)(v), Mr Parker sent a letter to Mr Michalik stating the flaws in the plaintiffs’ case and offering not to seek costs if the claim was withdrawn. Assuming that this fits within the ambit of r 14.6(3)(b)(v) as an ‘offer of settlement’, it does not provide a basis for uplift.  The Poplawskis had a legitimate grievance.   My findings at [49]-[50] of my earlier judgment detail the misleading aspects of Mr Pryde’s e-mail.   Rejecting his offer was understandable in the circumstances.

[6]      Accordingly the claim for uplift is rejected.

Ordinary costs?

In my judgment I observed:

[68]      I reserve leave to the parties to seek costs.  But the first and second defendants may wish to reflect on their (albeit unintentional) role in the Poplawskis’ misfortune before seeking costs.

[7]      This  observation  derived  from  my  finding  that  Mr  Pryde’s  e-mail  was misleading and, in a purely causative sense, linked to Mr Poplawski’s loss.  I was therefore inviting the first and/or second defendants to consider whether in those circumstances, and in light of Mr Pryde’s professional status, costs might lie where they fall.

[8]      I accept however that the orthodox principle of costs following the event should be applied save in exceptional circumstances, for example in light of the manner in which the proceedings were conducted and/or when a genuine issue of public interest was resolved.  This case does not fall into that category.  Therefore costs should be awarded according to scale.

[9]      I am unimpressed by the inability for counsel to agree the basic matter of quantum and/or the relevant attendances.   Subject to the directions I am about to make, I order that counsel are to confer and to agree the relevant steps and quantum.

[10]     My specific directions are as follows:

(a)      I reject the claim of third party costs.  The first and second defendants elected to sue the third party, Mr Thow – a bankrupt.  The defendants must have known that recovery of costs could never have been achieved from him.  Why he was joined is not entirely clear to me. In any event the claim against Mr Thow was not actively pursued to a hearing. Any costs in this regard should lie where they fall.

(b)I reject the plaintiffs’ claims in respect of the conduct of the settlement conference.   The conduct of settlement conferences is privileged.   I am not prepared to factor that conduct into a costs award.

(c)      The applicable rates[3] are:

(a)     For all steps prior to 14 June 2012, $1,880; (b)   For all steps after 14 June 2012, $1,990.

[3] As per Schedule 2 of the High Court Rules.

[11]     It should not otherwise be the task of this Court to endeavour to quantify the steps taken by counsel, or to identify them, at least not without evidence and if necessary a hearing.  That is why counsel are expected to agree on these matters for cost purposes.  Accordingly as I have said, I direct that counsel are to confer and agree the relevant attendances and report to the Court with a combined schedule. Disagreement on minor matters should be resolved without further recourse to the Court.  Indeed, further judicial resource should not be wasted on matters that counsel are obliged to their clients and to this Court to resolve without undue acrimony.

Solicitors:

Morrison Kent, Wellington, for Plaintiffs

M E Parker, Queenstown, for Defendants