Railway Street Trustees Limited v Railway Investments Limited HC Auckland Civ-2010-404-2545

[2011] NZHC 88

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-2545

BETWEEN  RAILWAY STREET TRUSTEES LIMITED

Plaintiff

ANDRAILWAY INVESTMENTS LIMITED First Defendant

ANDDAVID RAYMOND GRANT CAMPBELL

Second Defendant

Hearing:         14 February 2011

On the papers

Counsel:         AHJ Commons for plaintiff

DA Wood for defendants

Judgment:      15 February 2011

JUDGMENT OF ASSOCIATE JUDGE FAIRE [on costs]

Solicitors:           Hornabrook Macdonald Lawyers, PO Box 91 845, Auckland 1142

Therese Slade, PO Box 75 504, Auckland 2243

RAILWAY STREET TRUSTEES LTD V RAILWAY INVESTMENTS LTD HC AUCKLAND CIV-2010-404-

2545 15 February 2011

[1]      In  my  judgment  of  17 December  2010  on  the  plaintiff’s  application  for further  and  better  discovery  I  made  orders  in  the  plaintiff’s  favour  which  are recorded  in  [29]  of  that  judgment.    I reserved  costs  and  directed  the  filing  of memoranda on costs.

[2]      Memoranda in support, opposition and reply have been filed.

[3]      The plaintiff seeks indemnity costs which, when GST is excluded, amount to

$4,235.  The plaintiff also seeks disbursements, being the filing fee of $600 that was paid.

[4]      In  response  to  a  question  which  I  raised,  counsel  for  the  plaintiff  has confirmed the plaintiff’s position in relation to GST.   That is that the plaintiff is registered for GST and would be entitled to a GST input credit in respect of the GST portion of counsel’s fee.  On that basis, the actual costs incurred are $4,235 and not the GST inclusive figure.

The principles applicable in awarding costs

[5]      Rule 14.1 gives the Court a discretion to order costs in relation to a step taken in a proceeding.  That discretion is generally to be exercised in accordance with the specific Rules contained in rr 14.2-14.10:  Glaister v Amalgamated Dairies Ltd.[1]   In Mansfield Drycleaners  Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd[2] it was said of the costs regime contained in what is now rr 14.2-14.10 that:

[1] Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 [19].

[2] Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd (2002) 16 PRNZ 662 at 668 (CA).

there is a strong implication that a Court is to apply the regime in the absence of some reason to the contrary

The test to be applied is entirely an objective and not a subjective one.   The only reference which  it is necessary to make towards actual costs is to be found in r 14.2(f), namely that an award of costs should not exceed the costs incurred by the

party claiming the costs: Glaister v Amalgamated Dairies Ltd.[3]

[3] Glaister v Amalgamated Dairies Ltd, above n 1, at 610[14].

[6]      Rule 14.2 lists the principles applying to determination of costs. Subrule (a) affirms the principle that the losing party should pay the costs to the successful party. Subrule (b) requires that the costs reflect the complexity and significance of the proceedings and refers specifically, therefore, to the categorisation of a proceeding which is provided for in r 14.3.

[7]      Rule 14.8 requires that costs on an opposed interlocutory application, unless there are special reasons to contrary, must be fixed in accordance with the rule when the application is determined and become payable when they are fixed.

[8]      The circumstances involved in this case, in my view, justify no departure from the primary position provided for in r 14.8.  In short, the costs should be fixed now and should be payable now.

[9]      Mr Commons seeks indemnity costs.  If they were to be granted the figure would by $4,235.   He also completed a calculation based on Category 2 Band B which provides a figure of $3,984.

[10]     Rule 14.6 deals with increased costs and indemnity costs.  I have considered this rule. Although I found against the defendants and concluded that the defendants’ position was really without merit I am not satisfied that in the full scheme of things an order for increased or indemnity costs is justified in this case.  There is not a great sum involved.  The difference is simply $251.  Accordingly, I conclude that costs on a 2B basis, which I shall fix in this judgment, are appropriate.

[11]     Accordingly, I order that the defendants pay the plaintiff’s costs in respect of

the application for further and better discovery by the defendants in the sum of

$3,984 plus disbursements of $600.

JA Faire

Associate Judge