Sharp v Pillay

[2017] NZHC 1207

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2015-404-2924

[2017] NZHC 1207

BETWEEN

NICOLA JUNE SHARP

Plaintiff

AND

PAVITHRA PILLAY

First Defendant

CR MARKETING NORTH SHORE LIMITED t/a CENTRAL REALTY
Second Defendant

LESLEY WHEATLEY
Third Defendant

BODY CORPORATE SPECIALISTS LIMITED
Fourth Defendant

DAVID IRVING LLEWELLIN

Fifth Defendant (Discontinued) ARMSTRONG MURRAY

Sixth Defendant

DAVID IRVING LLEWELLIN

First Third Party

Hearing:

On the papers

Appearances:

K W Kemp and H L Quinlan for Plaintiff

D S McGill and A B Weal for First and Second Defendants L Wheatley for Third Defendant

T Bates for Fourth Defendant S Ryland for Sixth Defendant J P Wood for Third Party

Judgment:

6 June 2017

JUDGMENT OF LANG J

[on costs]

SHARP v PILLAY [2017] NZHC 1207 [6 June 2017]

This judgment was delivered by me on 6 June 2017 at 11 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

[1]                  On 10 May 2017, the plaintiff filed a notice of discontinuance against all defendants. On 18 May 2017, the first and second defendants filed a notice of discontinuance of their claim against the first third party. The filing of the discontinuances gives rise to consequences in terms of costs.

[2]                  There are no issues as to costs in respect of the plaintiff and the first, second and sixth defendants. I am required, however, to determine claims for costs against the plaintiff by all the other defendants. In addition, I am required to determine a claim for costs by the third party against the first and second defendants. I make that determination on the basis of memoranda filed by those parties in accordance with directions given by Muir J on 18 May 2017.

The claim for costs by the third defendant

[3]                  The third defendant, Ms Wheatley, is currently unrepresented, but seeks costs in respect of the steps taken in the proceeding whilst she was represented by counsel.

[4]                  Ms Wheatley also explains that she mistakenly advised Muir J during the telephone conference on 18 May 2017 that she did not intend to pursue a claim for costs against the plaintiff. She explains that she became confused during the conference and made her concession based on her understanding that she had formally agreed to that course of action with the plaintiff. She acknowledges that  she signed an agreement containing a provision to the effect that she would not seek costs if the plaintiff discontinued the claim against her. She contends that  the plaintiff never signed the agreement in question, and says that the plaintiff proceeded thereafter on the basis that costs as between the plaintiffs and the third defendant had not been settled.

[5]                  Having regard to the material provided to me by counsel for the plaintiffs, however, I am satisfied that the plaintiff did sign the agreement. It  is now too late  for Ms Wheatley to contend that there was no agreement in relation to the issue of costs.

[6]There will be no order as to costs in respect of the third defendant.

The claim for costs by the fourth defendant

[7]                  The fourth defendant seeks increased costs on the basis that the plaintiff acted unreasonably in bringing a claim that was untenable. Furthermore, the solicitors acting for the fourth defendant met with the solicitors acting for the plaintiff shortly after the proceeding was issued and explained why the plaintiff’s claims against it could not succeed. They also advised that the fourth defendant would not seek costs if the plaintiff discontinued the claim at that point. The plaintiff rejected the fourth defendant’s offer. The fourth defendant’s solicitors repeated the offer in an open letter sent to the plaintiff’s solicitors on 31 May 2016. The offer was again rejected.

[8]                  The fourth defendant has now incurred legal costs that are $1157.36 in excess of costs calculated on a Category 2 Band B basis. It seeks increased costs in that sum.

[9]                  The plaintiff accepts that costs are payable on a Category 2B basis together with disbursements. She does not, however, accept that she should pay increased costs because she disputes the fourth defendant’s assertion that she acted unreasonably.

[10]              I uphold the submissions for the fourth defendant. I commenced hearing an application by the fourth defendant for an order striking out the claim against it on the basis that it was legally untenable. During the hearing I reached a clear view that the claim as pleaded could not be maintained. Counsel for the plaintiff then asserted that the plaintiff had a materially different claim against the fourth defendant and sought leave to file an amended pleading based on that claim. Rather than strike the claim out, I gave the plaintiff further time within which to attempt to re-formulate her claim.

[11]              I consider that the plaintiff acted unreasonably in continuing with her claim to the point where the fourth defendant was required to argue the strike out application. The plaintiff ought to have appreciated well before the hearing of that application that her claim as pleaded could not be maintained.

[12]              For that reason I am satisfied an award of increased costs in the sum sought by the fourth defendant is appropriate. I make an order accordingly. The fourth defendant is also entitled to disbursements as claimed in the memorandum of  counsel dated 19 May 2017.

Claim by third party against first and second defendants

[13]              The third party, Mr Llewellen, was originally the fifth defendant. He became a third party when the plaintiff discontinued her claim against him. At that point the first and second defendants joined him as a third party.

[14]              I am satisfied that Mr Llewellen is entitled to costs on a category 2B basis together with disbursements in respect of all steps that he has taken in the proceeding after he was joined as a third party. Steps that Mr Llewellen took to that point in his capacity as a defendant obviously cannot form part of any award against the first and second defendants.

[15]              On my understanding of the situation this would entitle Mr Llewellen to costs in respect of preparing the statement of defence to the third party claim and any costs associated with conferences attended by Mr Llewellen’s counsel after he was joined as a third party.

[16]              In the event that there is any dispute as to quantum, it is to be referred for determination in the first instance to Mr Tony Mortimer, the Registrar of the High Court at Auckland. Should either party not accept Mr Mortimer’s determination, the matter can be referred back to me for final resolution.

Lang J

Solicitors:

Anthony Harper, Auckland Duncan Cotterill, Auckland Rainey Law, Auckland Legal Vision, Auckland