Singapore Airlines Limited v Mistry

[2014] NZHC 2048

ORDER PROHIBITING PUBLICATION OF ANY PART OF THE JUDGMENT (INCLUDING THE NAMES OF THE PARTIES AND OF EVA ENTERPRISES LTD) IN NEWS MEDIA OR ON THE INTERNET OR OTHER PUBLICLY AVAILABLE DATABASE UNTIL FINAL DISPOSITION OF TRIAL NUMBER CRI-2013-085-4178. PUBLICATION IN LAW REPORT OR LAW DIGEST PERMITTED

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2013-485-3911 [2014] NZHC 2048

BETWEEN

SINGAPORE AIRLINES LIMITED

Airline

AND

JITESH MOHAN MISTRY Defendant

On thepapers:	26 August 2014
Counsel:	C Matsis for Airline J D Haig for Defendant
Judgment:	27 August 2014

COSTS JUDGMENT OF ASSOCIATE JUDGE SMITH

[1]      On 17 July 2014 I entered summary judgment for the Singapore Airlines (the Airline).  Counsel were invited to file memoranda on costs, and those memoranda have now been filed.  I now give judgment on the parties’ respective applications for costs.

[2]      The  Airline   initially   obtained   summary   judgment   in   default   of   any appearance by Mr Mistry.   Judgment was entered for $340,427.67 by Associate Judge Bell on 25 November 2013.

[3]      The Airline issued a bankruptcy notice to enforce its judgment.  It was when he was served with the bankruptcy notice that Mr Mistry says he became aware of

the  summary  judgment  application,  on  which  judgment  had  been  made  in  his

SINGAPORE AIRLINES LIMITED v JITESH MOHAN MISTRY [2014] NZHC 2048 [27 August 2014]

absence.  He promptly moved to set aside the summary judgment and the bankruptcy notice.

[4]      Mr Mistry’s application to set aside the summary judgment was heard on 13

May 2014.  In a reserved decision given on 20 May 2014, I set aside the summary judgment on the basis that deficiencies in service of the summary judgment proceedings were of sufficient magnitude that the summary judgment could not be allowed to stand, regardless of the merits of the Airline’s claim.  I directed that the Airline’s summary judgment application be heard afresh, and gave directions for the filing of a formal notice of opposition and further affidavits.

[5]      The Airline’s bankruptcy notice was then withdrawn by consent, on the basis that costs would be dealt with following the re-hearing of the summary judgment application.

[6]      I heard the summary judgment application on 11 June 2014, and in a reserved judgment given on 17 July 2014 entered judgment for the Airline.   I also made directions for the non-publication of the judgment, pending completion of a separate criminal proceeding.

[7]      Counsel agree that costs should be awarded on a 2B basis.   They differ, however, on the following four matters:

(1)The particular steps set out in schedule 3 to the High Court Rules for which costs should be awarded to the Airline; and

(2)The Airline’s claim for a 25 per cent costs uplift (claimed on the basis that Mr Mistry allegedly pursued an unnecessary step, or an argument that lacked merit)1; and

(3) Costson the setting aside application.   The Airline says that costs should lie where they fall; Mr Mistry says that he should be awarded

costs; and

1      Rule 14.6(3)(b)(ii) of the High Court Rules.

(4) Costs on the setting aside of the bankruptcy notice.    The Airline

disputes Mr Mistry’s claim for costs.

Issue 1: The Airline’s costs claim based on time allocations in schedule 3 to the
High Court Rules

[8]      The Airline claims scale 2B costs as follows:

Step	Description	2B allowance (in days)	Amount claimed by Airline (in days)
Commencement
1	Commencement of proceeding by Airline	3	3
Case Management
12	Appearance at mentions hearing or call-over on 7 October 2013	0.2	0.2
Interlocutory applications (including applications for summary judgment and for review of interlocutory decisions)
22	Filing interlocutory application	0.6	0.6
24	Preparation of written submissions	1.5	1.5
26	Appearance at hearing of defended application for sole or principal counsel	The time occupied by the hearing measured in quarter days	0.5
28	Obtaining judgment without appearance	0.3	0.3
29	Sealing order or judgment	0.2	0.2

Trial preparation and appearance
36	Other steps in proceeding not specifically mentioned	As allowed by the court	0.3 (for costs submissions and memoranda regarding suppression)

[9]      It also claims the $1,350 fee for filing the proceeding, and two fees ($50 each) for sealing judgments.

[10]     In  addition,  the  Airline  seeks  costs  for  half  of  the  hearing  time  on

13 May 2014 (which was half a day).  The basis for that claim is that the detailed arguments at the setting aside hearing, including arguments on the merits, reduced the hearing time which would otherwise have been required when the summary judgment was later heard on a defended basis.   Mr Matsis sought an additional allocation of one quarter of a day on that account.

[11]     The Airline’s total costs claim on a 2B basis is $13,631.50.

[12]     I am satisfied that the Airline is entitled to costs on each of the first six steps set out in the table at paragraph [8] above.

[13]     I am not satisfied that the Airline should have costs for “obtaining judgment without appearance”, or the $50 sealing fee on the first judgment entered in its favour  (i.e.  the  judgment  entered  by  default  by  Associate  Judge  Bell  on  25

November 2013).  That judgment was entered only because the court was provided with  an  affidavit  of  service  on  Mr Mistry which  later  proved  to  be  completely unreliable.

[14]     I accept that the Airline is entitled to costs in respect of the memoranda filed after the 17 July 2014 judgment on the issues of costs and non-publication.  The time claimed of 0.3 days is appropriate for those attendances.

[15]     I  find  that  the  total  2B  calculation  to  which  the  Airline  is  entitled  is

$12,537.00, being 6.3 days at $1,990 per day.

[16]     I decline to award the Airline a one quarter day time allowance for the hearing  on  13  May  2014.    I  accept  Mr  Mistry’s  submission  that  the  service deficiency was such that the summary judgment had to be set aside on that account alone, regardless of the merits.  And I am not satisfied that the fact that there had been some discussion of the substantive issues at the hearing on 13  May 2013 resulted in any significant amount of time being saved at the later hearing of the defended summary judgment application.

Issue 2: The Airline’s claim for a 25 per cent uplift

[17]     The Airline says that Mr Mistry needlessly prolonged the argument at the defended hearing of the summary judgment application by running two hopeless arguments, namely that the monies received by Eva were not subject to a trust in favour of the Airline, and that Eva had not acted in breach of that trust by failing to account to the Airline.  It says that Mr Mistry’s arguments on these two points are inconsistent with contemporaneous documents and with his own affidavit evidence.

[18]     In my view this is not a case for increased costs.   While Mr Mistry was unsuccessful in his defence of the summary judgment application on the merits, I accept that there were elements of the Airline’s case that were bolstered by affidavit evidence filed in reply after the summary judgment had been set aside, and the questions of whether Eva owed trust obligations to the Airline, and breached those obligations, did not in my view add to the length of the hearing on 11 June 2014 to such an extent that an award of increased costs is appropriate.  It was necessary to spend some time on the issues relating to Eva in order to form a clear view on Mr Mistry’s liability for dishonest assistance.

[19]     I decline to award the Airline a 25 per cent uplift for costs.

Issue 3: Costs on the setting aside application

[20]     The Airline says that Mr Mistry only gained a temporary reprieve – while the judgment was set aside on account of the defective service, judgment was entered against him within a fairly short period afterwards.

[21]     It is true that the application to set aside the summary judgment was only successful because of the deficiencies in the service of the original proceedings.  I later held that Mr Mistry had no defence on the merits of the application.  In those circumstances, there may seem to be some merit in the Airline’s submission that costs should lie where they fall.  However I do not think that would meet the justice of the case.   The process server said in his original affidavit, on which the court relied on entering summary judgment, that he had handed copies of the proceedings to Mr Mistry personally.   In his affidavit sworn in opposition to the setting aside application, he gave a quite different version of the events.  The differences between the two affidavits were never satisfactorily explained.  Mr Mistry should not have been put to the cost of filing and arguing the set aside application, and in my view he is entitled to some costs on it.

[22]     Mr Mistry claims a total of 3.2 days under schedule 3 for the successful application to set aside the judgment.   He also claims a filing fee of $500 on the application.

[23]     Some time was spent at the setting aside application dealing with matters on which Mr Mistry was eventually unsuccessful.   In the circumstances, I think the justice of the case will be met if Mr Mistry is awarded costs of one half of what he has claimed, together with the filing fee of $500.  I accordingly allow costs to Mr Mistry on the setting aside application in the sum of $3,184 (1.6 days at $1,990 per day), together with disbursements of $500.

Issue 4: setting aside the bankruptcy notice

[24]     The Airline submits that costs should lie where they fall.   It says that Mr Mistry was required to do little more than file a pro forma application, the supporting affidavits being essentially the same as those filed in support of his application to set aside the summary judgment.

[25]     It seems to me that the result must be the same as for the application to set aside the summary judgment, although I accept the Airline’s submission that there were savings for Mr Mistry arising from the overlap between the two setting aside

applications.  I assess costs on the application to set aside the bankruptcy notice at

$300, plus the filing fee of $200.

Summary

[26]     I make the following awards in respect of costs:

(1)The Airline is entitled to costs on the substantive proceeding in the sum of $12,537, plus $1,400 for disbursements.

(2) MrMistry is entitled to costs on his applications to set aside the summary judgment and the bankruptcy notice, in the sum of $3,484, plus $700 for disbursements.

[27]     The net result is that Mr Mistry is to pay the Airline $9,753, covering both costs and disbursements.  I make an order accordingly.

Solicitors:

Gault Mitchell Law, Wellington for Airline

Greenwood Roche Chisnall, Wellington for defendant

Associate Judge Smith