Robinson v IAG New Zealand Limited

[2013] NZHC 1293

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2012-404-001629 [2013] NZHC 1293

BETWEEN  CHRISTOPHER JOHN ROBINSON AND ALISON CHRISTINA ROBINSON Plaintiffs

ANDIAG NEW ZEALAND LIMITED Defendant

Hearing:                   By memoranda

Cousenl:                  C J Robinson, plaintiff in person (on behalf of plaintiffs) C J Hlavac for defendant

Judgment:                4 June 2013

COSTS JUDGMENT OF ASSOCIATE JUDGE ABBOTT

This judgment was delivered by me on 4 June 2013 at 12.30pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:

C Hlavac, Young Hunter, Christchurch

Also to:

C J Robinson, Wellsford

C J ROBINSON AND A C ROBINSON v IAG NEW ZEALAND LIMITED [2013] NZHC 1293 [4 June 2013]

[1]      The defendant, IAG New Zealand Limited, has applied for costs on a scale

2B basis, after the plaintiffs, Mr and Mrs Robinson, discontinued this proceeding and reissued a new proceeding.

[2]      The Robinsons have issued their new proceeding in respect of the same dispute.  They say that costs should not be awarded as the new proceeding replaces the earlier one.  They ask that the costs of this proceeding be transferred to the new one, and be determined at the end of that case.  They also say that the amount sought by IAG is excessive.

Background

[3]      The Robinsons at all material times were the owners of a house and contents at 125A Ness Road, Kerikeri.  The house and contents were insured under a policy taken out with IAG.

[4]      The house and contents were destroyed by a fire in September 2011.   The Robinsons made a claim under the policy.  It was declined by IAG on the ground that the fire had been caused deliberately by Mr Robinson, and therefore came under an exclusion in the policy for intentional damage.

[5]      The Robinsons issued this proceeding contending that the rejection of their claim for indemnity was a breach of the contract of insurance and a breach of a duty owed by IAG to conduct their investigation into the cause of the fire in good faith. IAG denied any breach of contract or of any duty of good faith.   It pleaded as affirmative defences a clause in the policy that excluded intentional damage, and that the Robinsons had breach a duty to act in good faith by deliberately lighting the fire (allegedly using a remote control device) to obtain a benefit under the policies.

[6]      In  May 2012,  the  parties  agreed  to  stay the  proceeding  until  a  criminal prosecution of Mr Robinson, for arson, had been determined.  That prosecution has not yet been determined.

[7]      The Robinsons are acting for themselves in the new proceeding (they say that they do not have the financial resources to continue to employ their former counsel).

They commenced the new proceeding earlier this year.   It duplicates the claims against IAG in this proceeding (with some additional contentions), and adds claims against other parties.  The Robinsons have now sought a stay of the new proceeding also, pending determination of the prosecution of Mr Robinson.

[8]      The Robinsons were represented by counsel in this proceeding, but gave notice that they were acting for themselves before discontinuing it (after they had issued the new proceeding).

Discussion

[9]      There is a presumption[1] that a party who discontinues a claim pays the costs of the other party.   The Court has a discretion, however, to make any order that appears just, having regard to the circumstances of the case.

[1] High Court Rules, r 15.23.

[10]     Mr Robinson says that he is suffering from a terminal illness.  I suspect that fact has driven a decision by the Robinsons to keep some momentum going in their civil claim by joining the extra defendants, and they thought that because of the stay in the earlier proceeding they had to do so by issuing the new proceeding (and were unaware of possible cost consequences of their decision).

[11]   Counsel for IAG has submitted that there is no reason to displace the presumption.   He acknowledges that the plaintiffs have discontinued to avoid duplication with their new proceeding, but says that they should not escape liability for the costs as the new proceeding has been brought improperly:

(a)      The new claim against IAG seeks essentially the same relief as this proceeding, and should not have been brought given the stay order made (by consent) in the earlier proceeding; and

(b)The new proceeding has joined as defendants persons involved in the investigation of the fire, who will be witnesses in the prosecution. The  claims  against  them  include  an  allegation  of  conspiracy  to

fabricate and dispose of evidence, which is an allegation of criminal

conduct which should not have been made until the prosecution is concluded.

[12]     There is merit to the points made by counsel for IAG.   However, they are matters more appropriately raised in the new proceeding.

[13]     The   unusual   combination   of   circumstances   justifies   displacing   the presumption.  However, although I put the presumption to one side, I consider that I should exercise my general discretion to award IAG costs it has incurred in this proceeding that can truly be said to have been wasted.  Although the Robinsons may not appreciate this, costs are fixed by reference to the scale in the High Court Rules.

[14]     IAG has sought scale costs for commencement of its defence.   Although much of the work undertaken in responding to this proceeding will not be wasted, there will inevitably be some wastage as a consequence of the duplication of proceedings.   I assess the wasted costs at a quarter of the two days that would ordinarily be allowed on a 2B basis (thus allowing 0.5 of a day).  I also consider that the other costs sought (preparing for the first case management conference, and a joint memorandum for that conference) are wasted as they will be (or have been) duplicated in the new proceeding.  I allow those costs although I do not accept that they have been correctly sought in IAG’s memorandum.   I allow scale costs for preparation (0.4 day) and a half of the claim for the joint memorandum (0.2 day): a total of 0.6 of a day.  This gives a total allowance of 1.1 days at the daily rate of

$1990.

[15]     IAG is also entitled to the wasted filing fee on its statement of defence in this proceeding (it will have to pay another fee when it files its defence in the new proceeding).

[16]     I  award  costs  to  IAG,  following  the  discontinuance,  of  $2189  plus disbursements of $108.80.

Associate Judge Abbott