Roskill Nominees Limited v Cunningham

[2022] NZHC 539

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1072

[2022] NZHC 539

BETWEEN

ROSKILL NOMINEES LIMITED

Plaintiff

AND

BRUCE STEWART CUNNINGHAM

Defendant

Hearing:	On the papers
Appearances:	G Bogiatto for the Plaintiff PM Hoskins for the Defendant
Judgment:	22 March 2022

JUDGMENT OF FITZGERALD J

[As to costs of withdrawn application for leave to file summary judgment application]

This judgment was delivered by me on 22 March 2022 at 3.00pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Corban Revell, Auckland To:           G Bogiatto, Auckland

P Hoskins, Auckland

ROSKILL NOMINEES LTD v CUNNINGHAM [2022] NZHC 539 [22 March 2022]

Introduction

[1]    Mr Cunningham seeks costs on his application for leave to file a summary judgment application, which was filed by him on 29 June 2021 but later withdrawn on 9 August 2021 (the Application).

[2]    Moore J thereafter made directions for the filing of costs memoranda in relation to the Application, there then being a significant delay in Roskill Nominees Limited (RNL) filing its costs memorandum (which was not filed until 8 February 2022).1

[3]    I make a preliminary point before proceeding any further. The Application filed by Mr Cunningham arises in this proceeding, CIV-2019-404-1072. There are also related proceedings in which Mr Cunningham is the plaintiff, RNL is the second defendant and Mr Johnson (the shareholder/director of RNL) is the first defendant (proceeding CIV-2019-404-2553). As Robinson J noted in his minute of 1 February 2022, these two proceedings are being case managed together, but they are no consolidated.

[4]    Mr Cunningham’s memorandum seeking costs is filed in this proceeding, but in the intituling, lists Mr Johnson as “second respondent”.  That is inappropriate.   Mr Johnson is not a party to this proceeding. It is not possible for a party to an existing proceeding to change or add parties to that proceeding simply by adding names to the intituling. Rule 4.56 requires a Court order in order for parties to a pre-existing proceeding to be changed or added. Counsel should take care going forward, to ensure that the appropriate parties are listed as parties on any applications or memoranda in these proceedings.

Factual background

[5]    The factual background to the current application for costs can be briefly stated.

1      Pursuant to a minute of Robinson J dated 1 February 2022, which provided a further extension of time for RNL to file its costs memorandum.

[6]    RNL’s original statement of claim was filed in June 2019. On its face, while the pleading was brief, it was sufficient in my view to plead a cause of action in contract, for alleged breach of an agreement entered into in 2010. The amounts sought by way of damages were also particularised.

[7]    No doubt considering the pleading sufficiently clear and particularised to enable a statement of defence to be filed, Mr Cunningham duly filed a statement of defence on 8 August 2019.

[8]RNL served a reply dated 22 August 2019.

[9]    As noted earlier, Mr Cunningham then filed the Application. He did so  on  29 June 2021. This was accordingly some two years following the commencement of the proceedings. Because the proposed application for summary judgment was filed after Mr Cunningham had filed a statement of defence, leave was required.

[10] The basis for the proposed application for summary judgment was Mr Cunningham’s submission that RNL’s proceeding comprises an abuse of the High Court’s process, in that it was filed by RNL to gain a collateral advantage in proceedings brought by Mr Cunningham in 2018 (not those referred to at [4] above). It was further alleged that the claim for breach of contract was statute barred. Notably, other than the limitation point, the Application did not suggest that the proposed application for summary judgment was being brought on the basis that RNL’s proceeding did not disclose any available cause of action at law.

[11]   RNL subsequently filed an amended statement of claim dated 2 August 2021. This largely repeated, in very much the same form, the contractual cause of action from the original statement of claim, but added two further causes of action: a cause of action pursuant to s 35 of the Contract and Commercial Law Act 2017 (RNL alleging that it was induced to enter into the 2010 agreement by misrepresentations made by Mr Cunningham), and a claim in equitable estoppel.

[12]   Mr Cunningham now seeks costs on the Application, despite having withdrawn it. He says that he is effectively the successful party, the Application highlighting

significant deficiencies in RNL’s original statement of claim and effectively “forcing” RNL to file an amended pleading. As part of his submissions as to why he should be awarded costs, Mr Cunningham refers to High Court Rule 7.77(8), which provides that:

If an amended pleading has been filed under this rule, the party filing the amended pleading must bear all the costs of and associated by the original pleading and any application for amendment, unless the Court otherwise orders.

Decision

[13]   I consider an appropriate outcome is for costs of the Application to lie where they fall. My reasoning follows.

[14]   First, the Application was made some two years after RNL filed its original statement of claim. That is a very lengthy period of time, for which there is no clear explanation in the materials before me on the costs application. Leave being required, Mr Cunningham sought an indulgence from the Court. While there is no general rule as to costs on an application, where the application is successful yet the applicant has been granted an indulgence, the fact the applicant is granted an indulgence can be relevant to costs.

[15]   Second, while RNL’s original statement of claim was relatively brief, it was not as deficient as Mr Cunningham now suggests, and on its face disclosed a cause of action in breach of contract. The fact that the original statement of claim was adequately (albeit briefly) pleaded is evidenced by the fact that Mr Cunningham was satisfied he was able to appropriately plead in response, by filing his statement of defence. Further, to the extent a limitation defence was relied on, or an abuse of process, there is no reason why an application to strike out, or for a defendant’s summary judgment, could not have been filed instead of or at the same time as      Mr Cunningham’s statement of defence.

[16]   Further, the Application was ultimately abandoned by Mr Cunningham. Whether RNL’s amended statement of claim was “driven” by the Application is in my view somewhat of a red herring. The point remains that a cause of action in contract

was  adequately  pleaded  in   the   original   statement   of   claim   and   enabled   Mr Cunningham to plead in response to it. Ultimately RNL was put to expense in responding to the Application, which was not then pursued. I also note that Associate Judge Lester has more recently expressed his view that RNL’s claims have merit, and that Mr Cunningham’s limitation defence (insofar as it relates to RNL’s claim for unpaid rent) does not have “clear merit”.2

[17]   RNL does not seek its own costs on the Application. It does say, however, that the Court should dismiss Mr Cunningham’s application for costs and that “the Court is requested to reserve any costs which the plaintiff may be entitled to bring against Mr Cunningham notwithstanding that he is legally aided”.

[18]   I decline to reserve RNL’s costs on the Application. Costs, to the extent they were to be sought against Mr Cunningham, ought to have been sought now, on the Application, and in accordance with Moore J’s directions of 10 August 2021 (namely that any memorandum seeking costs on the Application were to be filed and served in accordance with the timetable orders his Honour made). Having not sought costs on the Application, it is not appropriate to simply reserve RNL’s costs on this particular application into the substantive proceeding.

[19]   Finally, and for the avoidance of doubt, even if I had awarded Mr Cunningham costs on the Application, I would not have awarded costs in the amount sought (totalling $9,560.00). Any costs awarded would have been limited to costs arising on the Application itself, rather than broader costs incurred in these proceedings, such as the filing of the original statement of defence dated 8 August 2019, and the defendant’s preparation and provision of particulars to that statement of defence. Those costs relate to the proceeding more generally, and are appropriately dealt with in the substantive proceeding. Presumably Mr Cunningham will still seek recovery of those costs even if he is unsuccessful in the proceeding overall, pursuant to High Court Rule 7.77(8). This judgment expresses no view on that matter.

Result

2      Roskill Nominees Ltd v Cunningham [2022] NZHC 160 at [28].

[20]   Mr Cunningham’s application for costs on his withdrawn application for leave to file an application for summary judgment is dismissed. Costs on that application are to lie where they fall.

Fitzgerald J