Remediation (NZ) Limited v Enviro (NZ) Limited

[2022] NZHC 3224

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1140

[2022] NZHC 3224

BETWEEN

REMEDIATION (NZ) LIMITED

Plaintiff

AND

ENVIRO (NZ) LIMITED

First Defendant

ENVIRO WASTE SERVICES LIMITED

Second Defendant

On the papers:	5 December 2022
Appearances:	Justin D Cameron/Deanne Brabant for the Plaintiff Garry Williams/Tim Lindsay for the Defendants
Judgment:	5 December 2022

COSTS JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 5 December 2022 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:

Nicholsons Lawyers (R Stevens), New Plymouth

Lindsay & Francis (T Lindsay/T Westaway) Auckland Willis Legal (J D Cameron), Napier

Brabant Law (Deanne Brabant), Auckland.

Copy for:

John Maassen, Barrister, Wellington, for the Plaintiff Garry Williams, Barrister, Auckland, for the Defendants

REMEDIATION (NZ) LIMITED v ENVIRO (NZ) LIMITED [2022] NZHC 3224 [5 December 2022]

[1]                 This costs judgment follows a judgment delivered by me in this proceeding on 29 August 20221 (the Judgment).

Background

[2]                 The parties were unable to reach agreement on whether tailored or standard discovery was appropriate. Remediation (NZ) Limited, trading as Revital Fertilisers (Revital), filed and served an application for discovery on 5 April 2022 (the Discovery Application). The primary relief sought by Revital was an order for standard discovery and an associated order requiring Enviro (NZ) Limited and Enviro Waste Services Limited (together Enviro) to file an affidavit addressing proportionality. The application for tailored discovery was advanced as an alternative argument.

[3]                 On 11 April 2022, Enviro filed a notice of opposition to the Discovery Application and the application was heard in the High Court before me on 19 July 2022.

[4]                 On 29 August 2022, I issued the Judgment. Enviro had produced its list of documents it proposed as tailored discovery categories of documents. Revital sought tailored discovery of an additional seven categories of documents to those proposed by Enviro. The result of the Judgment was, in summary:

(a)the categories of documents proposed by Enviro for tailored discovery (and attached as Schedule 2 to the submissions of counsel for Enviro) were to be discovered as a first stage of discovery;

(b)discovery in relation to six of the categories of documents sought by Revital was ordered (the seventh category was being determined as not being needed), with restrictions as to the scope of documents to be discovered in each category.

1      Remediation (NZ) Limited v Enviro (NZ) Limited [2022] NZHC 2155 [29 August 2022].

[5]                 The restrictions were that Enviro was ordered to provide discovery as sought by Revital, except as follows:

(a)no internal communications of Enviro were to be discovered;

(b)discovery of communications between Enviro and third parties was limited in relation to one of the categories to specific causes of action.

[6]As to costs, the preliminary view I expressed in the Judgment was that:

(a)Enviro should be awarded costs on a 2B basis, but not increased costs, against Revital in respect of Revital’s application for standard discovery which was only abandoned in its submissions for the hearing; and

(b)In relation to the outcome of the discovery orders, each party had been partly successful, so costs should lie where they fall.

[7]                 Counsel were directed to endeavour to agree costs. Failing agreement, counsel were directed to file memoranda as to costs. As no agreement was reached, counsel for Revital filed a memorandum dated 12 September 2022 and counsel for Enviro filed a response dated 19 September 2022.

Applicable law

[8]                 Costs on interlocutory applications must, unless there are special reasons to the contrary, be fixed when the application is determined, and become payable immediately.2 Costs follow the event3 and success, in whole or in part such as on limited grounds, still amounts to success.4

2      High Court Rules, r 14.8.

3      High Court Rules, r 14.7(d).

4      Weaver v Auckland Council [2017] NZCA 330 at [26].

[9]                 The Court may order reduced costs payable to the overall successful party if they have failed in relation to a cause of action or there is an issue that significantly increased the costs of the other party.5

[10]              Rule 15.23 of the High Court Rules creates a presumption for the payment of costs in respect of discontinued proceedings. It provides :

Unless the defendant otherwise agrees, or the court otherwise orders, the plaintiff who discontinues the proceeding against the defendant must pay costs to the defendant of and incidental to the proceedings up to and including the discontinuance.

[11]              Mr Williams for Enviro submits that the rule applies equally to abandonment of interlocutory applications,6 and that reference in r 15.23 to “costs of and incidental to the proceeding” encapsulates a variety of costs relating both directly and indirectly to the abandoned proceeding or application. He submits, for example, it includes:

(a)The defendant being entitled to recover costs for the preparation of its written submissions, even if the plaintiff abandons the application before the matter is heard;7

(b)The defendant may recover costs incurred in responding to a position maintained by a party throughout the course of the litigation, but which is subsequently abandoned.

Analysis

[12]The questions to be determined in this costs judgment are:

(a)Is Revital entitled to costs in respect of its success in relation to the Discovery Application and, if so, at what level should such costs be fixed?

5      High Court Rules, r 14.7.

6      Booth v Poplar Road Farms Ltd [2019] NZHC 1889 at [13]; MV Celebre Ltd v Airwork Flight Operations Ltd [2015] NZHC 1400 at [9].

7      Coupe v Learmonth [2020] NZHC 2281 at [20].

(b)Is Enviro entitled to the costs in respect of Revital’s abandoned application for standard discovery and, if so, at what level should such costs be fixed?

(c)Is Enviro entitled to “costs on costs” in relation to the costs application, as sought by Enviro?

[13]I deal with each of these in turn.

Is Revital entitled to costs in respect of its success in relation to the Discovery Application and, if so, at what level should such costs be fixed?

[14]              Mr Cameron for Revital, in his memorandum is seeking costs in respect of the Discovery Application on a 2B basis of $7,648.00 (as set out in Schedule 1 to his memorandum), plus the amount of $500.00 for disbursements, totalling $8,148.00.

[15]              Mr Cameron has submitted that of the seven categories sought by Revital in the Discovery Application, Enviro were ordered to disclose documents in all seven categories. He submits that while Enviro were not required to disclose internal correspondence, that that was a small portion of the documents sought by Revital.

[16]              Mr Williams submits, however, that Revital had limited success in relation to the Discovery Application. He submits that while Revital have sought to minimise the scope of Enviro’s internal correspondence sought, that it was in fact a large part of the Discovery Application. He also points out that Revital had limited success in relation to disclosure of third party communications, where disclosure in respect of category 1 was limited to the second cause of action only.

Conclusion on this issue

[17]              In my view, Revital is entitled to costs on a 2B basis in respect of its success in relation to the Discovery Application, but reduced to allow for areas in which it did not succeed. It is clearly difficult for the Court to judge what proportion of the discovery sought by Revital the internal communications of Enviro (as sought by Revital but not ordered) comprised as a portion of the total Discovery Application. It

is likely that the internal communications would have been quite extensive. In my view, the level of success of Revital in the Discovery Application translates to a discount of 30 per cent from the 2B calculated costs. Accordingly, costs should be awarded to Revital totalling $5,853.60.

Is Enviro entitled top costs in respect of Revital’s abandoned application for standard discovery, and if so, at what level should such costs be fixed?

[18]              In my view, Enviro is entitled to costs on a 2B basis in respect of work carried out by Enviro in relation to Revital’s abandoned application for standard discovery. Bearing in mind the application for standard discovery was only abandoned in Revital’s submissions for the hearing of the Discovery Application, Enviro are entitled to costs up to that point.

[19]              In my view, it is appropriate that a discount be applied to Enviro’s costs in respect of the abandoned application, including incidental costs claimed by Enviro.

[20]              Given that case management conferences would have been required in any event as not all the case management conference time was applicable to standard discovery and while Enviro’s submissions had to be redrafted on abandonment by Revital of the application for standard discovery, this presumably was a straightforward task of deleting the relevant submissions relating to standard discovery, a discount of 30 per cent is appropriate.

[21]This results in a quantification of costs in favour of Enviro of $7,542.50 and

$77.00 in disbursements, totalling $7,619.50.

Is Enviro entitled to “costs on costs” in relation to the costs application as sought by Enviro?

[22]              As Revital have been awarded costs on its Discovery Application, albeit discounted, I do not consider that Enviro’s application for costs of preparing the costs memorandum should be granted. Revital’s application was clearly misconceived, as submitted by Enviro.

Orders

[23]I make the following orders:

(a)Revital are awarded costs totalling $5,853.60.

(b)Enviro are awarded costs and disbursements totalling $7,619.50.

……………………………

Associate Judge Taylor