Powell v K 2 Investment Group Limited
[2021] NZHC 2862
•27 October 2021
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2018-409-191
[2021] NZHC 2862
BETWEEN RICHARD OWEN POWELL
Plaintiff/Counterclaim Defendant
AND
K 2 INVESTMENT GROUP LIMITED
First Defendant/First Counterclaim Plaintiff
AND
K2 INVESTMENT GROUP AUSTRALIA PTY LIMITED
Second Defendant/Second Counterclaim Plaintiff
AND
GABOR KEMENY
Third Defendant/Third Counterclaim Plaintiff
Hearing: 5-7 July 2021 (with supplementary submissions on costs 24
September 2021, 12 October 2021 and 12 October 2021)
Appearances:
S D Campbell and J J Anson-Holland for Plaintiff P J Woods and T E Hutchinson for Defendants
Judgment:
27 October 2021
SUPPLEMENTARY JUDGMENT OF OSBORNE J
[costs]
This judgment was delivered by me on 27 October 2021 at 9.30 am pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
POWELL v K 2 INVESTMENT GROUP LIMITED [2021] NZHC 2862 [27 October 2021]
Introduction
[1] Following a trial of this civil proceeding, I gave judgment largely for the plaintiff.1
[2]As part of the orders, I ordered:2
K2 Australia and Kemeny shall pay to Powell the costs and disbursements of the proceeding fixed on a 2B basis.
The issues as to the fixing of costs
[3] Following an exchange of memorandum between counsel, there are no issues as to the total disbursements to be fixed ($14,200) but there remained two issues in relation to costs.
Costs on counterclaim
[4] The plaintiff sought recognition for the unsuccessful counterclaim of K 2 Investment Group Ltd. By the judgment that counterclaim had been struck out.3
[5] Initially counsel for the plaintiff sought (in relation to counterclaim) a time allocation based on Item 4, Schedule 3 High Court Rules. That, however, was plainly incorrect as Item 4 covers the filing of a counterclaim, not its defence.
[6] Given that the plaintiff was the counterclaim defendant, the appropriate item to cover the plaintiff’s response to the counterclaim was Item 2 (commencement of defence by defendant).
[7] This allowance of Item 2 does not cut across the plaintiff’s entitlement to an allowance for Item 3 (Reply). Notwithstanding the defendants’ submission that the plaintiff is not entitled to both Items 3 and 4, in this case the plaintiff filed a Reply pursuant to his duty under r 5.62 High Court Rules in relation to affirmative defences and positive allegations.
1 Powell v K 2 Investment Group Ltd [2021] NZHC 2253.
2 At [277(i)].
3 At [277(a)].
Single set of costs
[8]For convenience, I repeat that the costs order made was that:
K2 Australia and Kemeny shall pay to Powell the costs and disbursements of the proceeding fixed on a 2B basis.
[9] The plaintiff’s counsel have interpreted that order to mean that each of the defendants is to pay the total amount of the proceeding’s costs as fixed on a 2B basis. In other words, there are to be two sets of scale costs for the one proceeding.
[10] The second and third defendants submit that the costs order means that there is to be a single set of costs.
[11] The issue may first be resolved simply as a matter of interpretation. The clearly intended meaning of the order made was that there is a single set of costs and disbursements to be fixed under paragraph [277(i)] of the judgment, for which both K2 Australia and Kemeny are to be liable. In terms of r 14.14 High Court Rules the liability of each of those two defendants is joint and several (the Court not having ordered otherwise). That is what the costs order means.
[12] Had I left open whether there might have been more than one set of costs, I would not have been satisfied on the basis of the submissions filed that the Court should contemplate an order for two sets of costs in a case such as this, where several defendants were jointly represented throughout the proceeding.
[13] The purpose of a costs award is to provide to a successful party a recovery in relation to the costs of the proceeding. Under r 14.2(1)(f) High Court Rules an award of costs should not exceed the costs incurred by the party claiming costs. Were this Court to have awarded two separate sets of costs (on a 2B basis) payable by K2 Australia and Mr Kemeny, the likely effect would have been to breach r 14.2(1)(f). That is neither permissible nor desirable. In this case, the plaintiff appropriately joined all defendants in the same proceeding. The defendants were all represented by the same solicitor and counsel. There was a single trial of the issues.
[14] A single award of costs calculated by reference to all steps taken in the proceeding will meet the principles set out in r 14.2 High Court Rules. Two separate awards, covering precisely the same steps, would not.
[15]The sealed order is to identify the fact that there is a single award of costs.
Costs award against K 2 Investment Group Ltd
[16] A separate order for costs and disbursements was made against K 2 Investment Group Ltd (K2 New Zealand).4
[17] While counsel for the parties have filed memoranda dealing with the costs and disbursements payable by the other defendants, no memoranda appear to have been filed in relation to the amount to be paid by K2 New Zealand.
[18] While it is appropriate for the formal order flowing from the judgment to be finalised now and sealed, any outstanding issues in relation to the costs payable by K2 New Zealand should be determined without unreasonable delay.
[19] In the circumstances I direct that counsel for the plaintiff, in relation to the costs payable by K2 New Zealand, shall file and serve the directed memorandum within 15 working days (and K2 New Zealand within 10 working days thereafter).
Costs submissions
[20] The central issue with this judgment flowed from the plaintiff’s continuing assertion that there should be two sets of costs payable by the second and third defendants.
[21]The plaintiff has failed on that argument.
[22] The second and third defendants, through counsel, were called upon to file two memoranda in support of the outcome which this judgment provides. It is just that the plaintiff pay to the second and third defendants the costs of those memoranda. They
4 At [277(h)].
will be fixed by reference to Item 11, Schedule 3, High Court Rules, in a total sum of
$1,912.
[23] I make no allowance for a disbursement in relation to the sealing of this separate costs judgment. Sealing of this particular order is unlikely to be necessary given the direction I make below as to setting off. I reserve leave to the second and third defendants to seek an additional order in relation to any costs of sealing should sealing prove to be necessary.
Order
[24]I order:
(a)the plaintiff is to pay to the second and third defendants costs of the interlocutory issues as to costs, which I fix in the sum of $1,912 (“the costs”); and
(b)the costs are to be met as an off-set against the costs and disbursements payable by the said defendants to the plaintiff pursuant to the Court’s costs and disbursements order made in this proceeding.
Osborne J
Solicitors:
Wynn Williams & Co, Christchurch
Anthony Harper, Christchurch
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