Premier Events Group Limited v Beattie HC Auckland CIV 2010-404-003178
[2011] NZHC 1215
•13 October 2011
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2010-404-003178
BETWEEN PREMIER EVENTS GROUP LIMITED Plaintiff
ANDMALCOLM JAMES BEATTIE First Defendant
ANDANTHONY JOSEPH REGAN Second Defendant
ANDCT NZ LIMITED (PREVIOUSLY KNOWN AS CARTAN GLOBAL LIMITED)
Third Defendant
ANDPARNELL PARTNERS GROUP LIMITED Fourth Defendant
ANDSPORTS HOSPITALITY MANAGEMENT LIMITED Fifth Defendant
ANDPARNELL PARTNERS GROUP (NZ) LIMITED
Sixth Defendant
ANDCARTAN GLOBAL LLP Seventh Defendant
ANDCARTAN TOURS INC Eighth Defendant
ANDSPORTSMARK MANAGEMENT GROUP LIMITED
Ninth Defendant
CIV 2011-404-000474
AND BETWEEN ANTHONY JOSEPH REGAN First Plaintiff
ANDANTHONY JOSEPH REGAN JENNIFER ANNE REGAN AS
PREMIER EVENTS GROUP LIMITED V MJ BEATTIE & ORS HC AK CIV 2010-404-003178 13 October
2011
TRUSTEES OF THE PICCADILLY TRUST
Second Plaintiffs
ANDROBERT GILL First Defendant
ANDPREMIER EVENTS GROUP LIMITED Second Defendant
ANDBA PARTNERS LIMITED (IN RECEIVERSHIP AND LIQUIDATION) Third Defendant
ANDDIGITAL PARTNERS LIMITED (IN RECEIVERSHIP AND LIQUIDATION) Fourth Defendant
ANDCPG YORK LIMITED Fifth Defendant
ANDBRAND ADVANTAGE MEASUREMENT AND CONSULTING LIMITED
Sixth Defendant
ANDDIGITAL PARTNERS (NZ) LIMITED Seventh Defendant
Hearing: (On the papers)
Counsel: Z Kennedy and M Pascariu for the Plaintiff in the First Proceeding J Eichelbaum for the First to Seventh Defendants in the First Proceeding
J Eichelbaum for the Plaintiffs in the Second Proceeding
Z Kennedy and M Pascariu for the Defendants in the Second
Proceeding
Judgment: 13 October 2011 at 5:00 PM
[COSTS] JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie
On 13 October 2011 at 5.00 pm
Pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
[1] I refer to my reserved judgment in these proceedings which was issued on
16 August 2011.
[2] In that judgment, I dealt with
(a) an application by the plaintiff (“PEG”) in proceedings CIV 2010-404-
003178 to use discovered documents for collateral purposes;
(b)an application by PEG in the same proceedings for particular discovery against the defendants;
(c) an application for interim orders by Mr Regan and the fourth defendant, Parnell Partners Group Limited, in proceedings CIV 2010-
404-003178. (This application was also in the name of Mr Regan personally and by Mr and Mrs Regan as trustees of the Piccadilly Trust in proceedings CIV 2011-404-000474); and
(d)a separate application for interim orders by Mr and Mrs Regan as trustees of the Piccadilly Trust in proceedings CIV 2011-404-000474.
[3] In [77] of the judgment, I held that PEG is entitled to costs and disbursements in respect of the applications dealt with under headings (a) (b) and (d) above. I held that Mr Regan and Parnell Partners Group Limited are entitled to costs in relation to the application noted in [c] above. (The application by Mr Regan personally and Mr and Mrs Regan as trustees of the Piccadilly Trust failed but I did not order costs against them, first because no separate application was filed, and secondly because no additional time was taken in deciding this matter.)
[4] I also noted in the judgment that Mr Kennedy, on behalf of PEG, was seeking indemnity costs in relation to subpoenas which were issued and then withdrawn by Mr Eichelbaum for the hearing held on 30/31 May 2011.
[5] I have now received memoranda from counsel.
[6] The memorandum from Mr Eichelbaum is filed only in proceedings CIV 2010-404-003178. It purports however to deal with costs in both sets of proceedings.
[7] I have held that the two sets of proceedings should not be consolidated. Mr Eichelbaum’s clients have appealed against that ruling. It stands until such time as the appeal is allowed. I have pointed out to counsel on numerous occasions that they should ensure that the appropriate intitulement is used on all documents which are filed in Court. PEG’s solicitors have complied with the request. The solicitors for Messrs Beattie and Regan and their respective entities have not done so. Counsel and their instructing solicitors should be aware that any failure to properly intitule papers filed causes very real difficulty for the Registry and for me. The documents get placed on the appropriate file in accordance with their intitulement. When documents are not properly intituled, it is all but impossible to keep track of the proceedings. I repeat my direction that documents filed must be properly intituled. If this does not happen in the future, then the offending party runs the risk that I will look at documents only in relation to the proceedings in which they are intituled and filed.
[8] In the present circumstances, I am, albeit reluctantly, prepared to treat
Mr Eichelbaum’s memorandum as relating to costs in both sets of proceedings.
a) Use of Documents for Collateral Purposes – CIV 2010-404-003178
[9] PEG seeks costs on a 2B basis in the sum of $11,128 in respect of this application. Mr Kennedy annexed to his memorandum a schedule showing how that sum had been calculated.
[10] The defendants oppose the application. They say that leave was not obtained in respect of 92 per cent of the documents initially the subject of PEG’s application, and that PEG persistently refused to confine the scope of its application and identify the particular documents it sought to use. They argue that the list of documents was progressively reduced from 176 pages down to 14 pages. They argue that PEG
ought to pay costs in respect of the 162 pages of documents which it did not ultimately obtain leave to use, and they seek costs of $7,783 in this regard.
[11] First, I record that, in my view, it is appropriate that costs in this matter should be determined on a 2B basis. The application was of average complexity, requiring counsel of skill and experience considered average in this Court. I note that this view coincides with that expressed by Stevens J when he was dealing with another interlocutory application in these proceedings.[1]
[1] Premier Events Group Ltd v M J Beattie & Ors CIV-2010-404-003178 HC Auckland, 21 June 2010 at [41].
[12] Secondly, I note that there has been no express challenge by Mr Eichelbaum to the various categories under which costs are claimed by PEG in the schedule dealing with costs in this application attached to Mr Kennedy’s memorandum.
[13] In my view, some of the costs claimed are not properly recoverable. I deal with each item in the memorandum in turn. There can be no dispute with the claim made for $1,128 under the heading “item 4.12”. I am not, however, convinced that the claim for $4,700 under item 7.2 has any application to this interlocutory application. Item 7.2 comes under heading “7”, which relates to preparation for hearing following setting down or directions if the trial does not eventuate. As Mr Eichelbaum points out in another context, the item does not apply to interlocutory applications. Accordingly, I disallow the claim made for costs under the heading “item 7.2”. Nor am I persuaded that the allowance of one day for the hearing, which reflects in the amounts claimed under items 4.14, 4.15 and 4.16, is appropriate. A number of interlocutory applications were heard over the three days in question. An allowance of half a day in respect of the use of documents application seems to me to be more reasonable, given the time actually occupied by this particular application.
[14] It follows that a claim properly made on a 2B basis should in my judgment be as follows:
Item 4.12 - $1,128 Item 4.14 - $ 940 Item 4.15 - $ 940 Item 4.16 - $ 470 $3,478
[15] I certify that second counsel was necessary, given the very large number of documents filed in this proceeding, and the difficulties in collating all of the relevant materials.
[16] I am receptive in part to the submissions made by Mr Eichelbaum. As he points out, initially PEG sought to use a very large number of documents for collateral purposes. These documents were not itemised. PEG also sought to use future documents which might be discovered by the defendants. In my view, the award of costs should be reduced to acknowledge that the defendants properly objected to the width of the initial application made by PEG.[2]
[2] Rule 14.7; and see Packing In Limited (in liquidation) formerly known as Bond Cargo Limited v Chilcott (2003) 16 PRNZ 869 (CA) at [5].
[17] The defendants, however, persisted in opposing PEG’s application, even when the number of documents sought was substantially reduced. Indeed, at the hearing, Mr Eichelbaum belatedly withdrew objection in respect of six of the documents, but proceeded to resist PEG’s application in regard to the balance of the documents. Ultimately, the defendants were unsuccessful in their opposition. There is no warrant for Mr Eichelbaum’s suggestion that the defendants should be awarded costs in relation to the documents in respect of which orders were not made. The application was not pursued in respect of those documents and there was no argument over them. Moreover, I held in my judgment that PEG is entitled to costs in regard to this matter. I cannot reopen that finding.
[18] The normal rule is, of course, that the party who fails with respect to an interlocutory application, should pay costs to the party who succeeds.[3] Here, PEG ultimately succeeded in the face of opposition from the defendants, albeit in respect of fewer documents than were the subject of its initial application. It should be
entitled to costs in respect of its successful application. The Court is, however,
entitled to reduce an award of costs in circumstances where the party claiming costs has only been partially successful. In my view, the costs award otherwise payable to PEG should be reduced by 25 per cent to recognise that its application over-stated matters in the first instance.
[3] Rule 14.2(9).
[19] In my judgment, PEG should receive costs in the sum of $2,608.50 – being
75 per cent of the costs calculated above. In addition, it is entitled to receive reimbursement of the filing fee paid by it – $600. Accordingly, I award costs and disbursements to PEG of $3,208.50 in respect of the application to use documents for a collateral purpose. The award is joint and several as between each of the defendants in proceedings CIV 2010-404-003178.
b) Application for Particular Discovery – CIV 2010-404-003178
[20] Again, PEG seeks costs in regard to this application on a 2B basis. It has prepared a schedule in this regard, which calculates the total costs payable on a 2B basis at $6,441.33. That calculation was made on the basis that appearances at the hearing took one day. Costs are sought for second counsel. PEG seeks increased costs because it alleges that the defendants failed to comply with discovery orders. It refers to r 4.6, and submits that its application for particular discovery resulted because of the defendants’ persistent refusal to comply with orders for discovery, including continuing discovery, made by me by consent on 23 November 2010. It also points out that the further discovery that was eventually provided by Mr Regan in his affidavit of 24 June 2011 failed to comply with r 8.21. It argues that its solicitors had to review some 4,300 documents, many of which were irrelevant, in order to determine whether or not the defendants had addressed the particular discovery issues earlier identified by it. It seeks an uplift of 50 per cent on the scale costs to compensate it for its additional costs due to what it alleges are shortcomings by the defendants in attending to their discovery obligations. Accordingly, the total costs award sought is $9,661.
[21] Mr Eichelbaum resists the application. First, he asserts that the allocated hearing time ought to be considered to be a quarter of a day. Secondly, he submits that matters were complicated by the “loss” of an affidavit filed by Mr Regan, and
thirdly, that many of the further and better discovery requests were mischievous, or designed to impose additional costs upon the defendants. Finally, he argues the costs ought to lie where they fall in respect of discovery, and that the obligations imposed on the defendants by the continuing discovery order are exceptionally onerous.
[22] I have already dealt with most of the matters raised by Mr Eichelbaum in my judgment. The discovery issues took approximately a day, and not the quarter of a day asserted by Mr Eichelbaum. Moreover, there is no substance to his assertion that matters were complicated because Mr Regan’s affidavit was “lost”. Mr Regan’s affidavit was handed up to the Court and made available to PEG’s counsel on
31 May 2011. A later affidavit was filed from Mr Gill. It was dated 23 June 2011. He continued to maintain that discovery by the defendants was inadequate. Mr Regan did not respond to this further affidavit. I noted this point in [19] and [20] of my judgment. I concluded on the basis of Mr Gill’s affidavit of 23 June 2011 that there were ongoing deficiencies in the defendants’ discovery. Indeed, Mr Regan did file an affidavit giving further discovery on 24 June 2011. The defendants were ordered to give further and better discovery. Obviously, I did not consider that the application was mischievous. The plaintiff succeeded in its application and I have already held that it is entitled to costs. I dealt with an application to vary the terms
of the discovery orders on 30 September 2011.[4]
[4] Premier Events Group Limited v Beattie & Ors HC Auckland CIV 2010-404-003178, 30 September 2011.
[23] Extensive discovery obligations were placed on both parties pursuant to consent orders made by me on 23 November 2010. I concluded at [22] that the defendants breached those consent orders. Their initial affidavit of documents was provided late. The defendants have not provided ongoing discovery. Further, I concluded that there were ongoing deficiencies in the discovery which had been provided. Mr Regan’s affidavit of 24 June 2011 did not comply with the High Court Rules. It was manifestly deficient and I directed him to file a complying affidavit.
[24] I am satisfied that an order for increased costs is appropriate. In my view, the defendants have contributed unnecessarily to the time and expense of the
proceedings by failing to comply with the relevant rules and with directions of the
Court.[5]
[5] Rule 14.6(3)(b)(i).
[25] The level of costs sought on a 2B basis by PEG is in my view, appropriate. Further, in my judgment, it is appropriate that those costs should be uplifted by
50 per cent to recognise the time and expense unnecessarily incurred by PEG in dealing with this matter.
[26] Accordingly, I award costs to PEG of $9,661 in relation to its application for further and better discovery. Liability is to be joint and several as between the defendants.
Application for interim orders made by the Trustees of the Piccadilly Trust –
proceedings CIV 2011-404-000474
[27] PEG claims costs against the trustees of the Piccadilly Trust of $9,588 in regard to this application. Again, it has calculated costs on a 2B basis, and annexed to it submissions a schedule indicating how the costs have been calculated.
[28] I agree with Mr Eichelbaum that the schedule over-states the costs which can properly be awarded on a 2B basis. Costs are claimed of $3,760 under the heading “item 7.4”. For the reasons I have given above, it does not seem to me that that item has any relevance in the present context.
[29] In the schedule, costs are claimed on the basis of a one-day defended interlocutory application. In my view, an allowance of one day is excessive. An allowance of half a day would more appropriately reflect the time taken in regard to that particular application.
[30] It follows, that costs should, in my view, be calculated as follows:
Item 4.13 - $1,128 Item 4.14 - $ 940 Item 4.15 - $ 940 Item 4.16 - $ 470 $3,478
I accept that the appointment of second counsel was necessary, inter alia, to assist in managing the documents.
[31] Mr Eichelbaum, on behalf of the trustees, submits that in the round they were successful, because the monies the subject of the application have been frozen. While he accepts that both the applications for interim orders in proceedings CIV 2011-404-000474, and in CIV 2010-404-003178, occupied a day in total, he did not deal with the application under proceedings CIV 2011-404-000474 individually.
[32] In my judgment at [35] and [38], I dealt with the application by the trustees separately, because they filed a separate application. The trustees in their own right were applying for a number of other orders. They sought orders that:
(a) the commission payable by The Langham, Auckland be paid direct to the Bank of New Zealand care of Buddle Findlay, or
(b) alternatively the commission payment be frozen, or
(c) that it remain in Simpson Grierson’s Trust Account, or
(d) that it be paid into Court.
Those applications were opposed by the defendants in proceedings CIV 2011-404-
000474. I held that the applications must fail, inter alia, because I could not see that the trustees had a good arguable case to require the interim orders sought. I declined the application by the trust for a freezing order at [54], and their application for an injunction at [58], [60], [62], [63], [64] and [65].
[33] The trustees were unsuccessful and it follows that the defendants are entitled to a costs award. The fact that Mr Regan and Parnell Partners Group (NZ) Limited
obtained a freezing order in proceedings CIV 2010-404-003178 does not affect that entitlement.
[34] In my view, costs properly calculated under on a 2B basis require an award in the sum of $3,478. There was no application for increased costs by the defendants in proceedings CIV 2011-404-000474 and, in the absence of an application, I am not prepared to consider the same.
[35] Accordingly, I award costs of $3,478 against Mr and Mrs Regan as trustees of the Piccadilly Trust. That liability is joint and several.
Interim orders – proceedings CIV 2010-404-003178
[36] As noted in my judgment, an application was made under r 7.55 by Mr Regan and Parnell Partners Group Limited in proceedings CIV 2010-404-003178, and by Mr Regan personally and by Mr and Mrs Regan as trustees of the Piccadilly Trust in proceedings CIV 2011-404-000474. I allowed the application in proceedings CIV 2010-404-003178, but declined it in proceedings CIV 2011-404-000474. I did not consider that a further costs award was necessary against the trustees, or against Mr Regan personally, for the reasons set out in [33] above.
[37] Mr Regan and Parnell Partners Group Limited are entitled to costs in regard to their successful application in proceedings CIV 2010-404-003178. Mr Eichelbaum submits that costs should be calculated on a 2B basis. Mr Kennedy does not oppose that submission and I agree. It seems to me appropriate to allow a half a day for the hearing of the application in proceedings CIV 2010-404-003178. This application and the application by the trustees which I have dealt with above took, in broad terms, a day to hear. It follows that costs can be calculated as follows:
Item 412 - $1,128 Item 414 - $ 940 Item 415 - $ 940 Item 416 - $ 470 $3,478
Again, I certify that second counsel was appropriate to assist in managing the documents.
[38] Mr Kennedy does not take issue with an award of costs on this basis. He does object to costs in regard to proceedings CIV 2010-404-003178 being “lumped together” with costs in proceedings CIV 2011-404-000474. I agree that that is inappropriate, and I have dealt with both separately.
[39] Accordingly, costs are awarded to Mr Regan personally, and to Parnell
Partners Group Limited in the total sum of $3,478 in proceedings CIV 2010-404-
003178.
Subpoenas
[40] On 23 May 2011, Mr Eichelbaum wrote direct to the Registrar requesting the issue of subpoenas against Mr Gill, a Mr Smith (who is a director of a company known as Times House Digital Limited), and a Ms Raylene Castle. The subpoenas were issued pursuant to r 9.52. They sought to compel the attendance of Messrs Gill and Smith and Ms Castle at the interlocutory hearing scheduled for 30/31 May 2011.
[41] It seems from Mr Eichelbaum’s letter to the Registrar that the subpoenas were sought by the defendants in proceedings CIV 2010-404-003178, and by the plaintiffs in proceedings CIV 2011-404-000474.
[42] Mr Kennedy promptly objected on the basis that there was no jurisdiction under r 9.52 for the issue of the subpoenas. They were then quickly withdrawn.
[43] Mr Kennedy now seeks indemnity costs, on the basis that costs were unnecessarily incurred by Mr Gill. He argues that an award of indemnity costs is justified on two distinct grounds:
(a) first, that the plaintiffs’ conduct in preparing and questioning the High Court Registry to issue the subpoenas was an abuse of process and hopeless from its inception; and
(b)secondly, because the plaintiffs knew, or ought to have known, that evidence in interlocutory applications is given by way of affidavit, and that only in special circumstances will a Judge accept oral evidence, and even then, only on application by the party seeking to introduce the oral evidence, and only where there is a proper basis for the application.
He submits that subpoenas were issued by the Registrar because the plaintiff incorrectly advised the Registrar that there was a forthcoming trial to be heard. He submits that, in pursuing the subpoenas, the plaintiffs’ conduct was improper.
[44] Indemnity costs of $1,553.33 are claimed.
[45] Mr Eichelbaum points out that the subpoenas were withdrawn three hours following the protest by the defendants. He argues that interlocutory hearings may be regarded as a trial, and points to a Canadian authority which apparently supports the issue of subpoenas in such circumstances. He also points out that there is no evidence to support the claim to indemnity costs made by the defendants.
[46] The Court has power to order indemnity costs under r 14.6(4). Inter alia, the Court can order indemnity costs if a party has acted improperly or unnecessarily in commencing a step in a proceeding.
[47] Here, I am satisfied that the request for the subpoenas was improper and an abuse of process. Under r 7.27, evidence relating to interlocutory applications is to be given by affidavit. A Judge in special circumstances can accept oral evidence but this requires an application by the party seeking to introduce the oral evidence. Here, no such application was made. Mr Kennedy asserts that the Registrar was told that there was a “trial” scheduled for 30/31 May 2011. That was not the case. I do not, however, take this factor into account because there is no independent evidence of it. I am nevertheless satisfied that the subpoenas ought not to have been issued at all. Nor should they have been sought unilaterally.
[48] One difficulty I have in the present case is that the indemnity costs claimed by Mr Gill have not been proved. I do not have a copy of any invoice rendered to Mr Gill. Nor do I have timesheets. I do not know the hourly rate charged by his solicitors. I simply have a bald assertion that his costs were $1,553.32. In the circumstances, I cannot award indemnity costs. There is no basis on which I can be satisfied as to the quantum of those costs.
[49] There is no scale item applicable in this situation. By analogy to other scale items, costs can be estimated at $752,[6] and I accept that costs in this sum is the appropriate starting point. In the circumstances, it seems to me that an award of increased costs is also appropriate, to recognise that subpoenas should not have been sought. I award increased costs in the sum of 50 per cent.
[6] Rule 4.10.
[50] Accordingly, costs are awarded in respect of the issue of subpoenas against the defendants in proceedings CIV 2010-404-003178 and the plaintiffs in proceedings CIV 2011-404-000474 in the sum of $1,128. The award is joint and
several as between those parties.
Wylie J
Z Kennedy: [email protected]
M Pascariu: miha[email protected]
J Eichelbaum: [email protected]
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