Smith v Ball

[2018] NZHC 1140

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002268

[2018] NZHC 1140

IN THE MATTER OF

the Estate of Raymond Alexander Smith (Deceased)

BETWEEN

SAHRA LING SMITH

Plaintiff

AND

ROGER NEVILLE BALL

First Defendant

CRYSTAL MINT DEVELOPMENT LIMITED

Second Defendant

CRYSTAL MINT LIMITED

Third Defendant

Hearing:	[On the Papers]
Counsel:	K P McDonald for the Plaintiff R T Glover for the Defendants
Judgment:	23 May 2018

JUDGMENT OF EDWARDS J

[re Costs on the Summary Judgment Application]

This judgment was delivered by Justice Edwards on 23 May 2018 at 10.00 am, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Counsel:     K T Glover, Auckland

Solicitors:    Kevin McDonald and Associates, Auckland Schnauer and Co Ltd, Auckland

SMITH v BALL [2018] NZHC 1140 [23 May 2018]

[1]                 Ms Smith is the daughter of the late Raymond Smith and was appointed executrix of his estate on 15 August 2016. She commenced proceedings against the defendants seeking transfer of documents, shares and interests in real property back to Mr Smith’s estate.

[2]                 The application against the first defendant was for the transfer of shares in Key Consultants Ltd and the return of estate documents. Ms Smith sought summary judgment on those causes of action. The application was initially opposed, but ultimately resolved without the need for a hearing. The plaintiff now seeks leave to withdraw the application for summary judgment.

[3]                 The plaintiff and the first defendant have been unable to reach agreement on costs. The plaintiff seeks costs in the sum of $9,366 and disbursements totalling

$1,589.75. These sums have been calculated on a schedule 2B basis for the commencement of proceedings, the filing of the summary judgment application, two appearances at mentions hearings and the sealing of the costs order.

[4]                 The defendants oppose the plaintiff’s application for costs. They submit that the costs and disbursements in relation to the summary judgment application should lie where they fall, and that the remaining costs and disbursements should be reserved pending determination of the proceeding.

Analysis

[5]                 The Court’s general practice is to reserve costs on an unsuccessful application for summary judgment with costs to be determined once the substantive proceeding is resolved.1 That principle is reflected in the exception to the rule that costs on interlocutory applications should be fixed when the application is determined.2

[6]                 However, in this case, the withdrawal of the summary judgment application resolves the substantive causes of action against the first defendant. It is accordingly appropriate to determine who should bear the costs of the summary judgment application at this stage in the proceeding.

1      NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA) at 405–406.

2      High Court Rules 2016, r 14.8(3).

[7]                 Rule 15.23 of the High Court Rules 2016 states that unless the defendant otherwise agrees or the Court otherwise directs, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance. This rule provides the defendant with the advantage of a presumption that the plaintiff has acted unreasonably in commencing and then discontinuing the proceeding.

[8]                 However, the presumption that a plaintiff pays the costs of a discontinued proceeding is rebuttable. I consider that it should be rebutted in this case. The first defendant should bear the costs directly related to the summary judgment application, but the remaining costs should be reserved pending determination of the substantive proceeding. My reasons for that decision follow.

[9]                 First, although the application was ultimately resolved by consent, the plaintiff essentially obtained what she had sought in the summary judgment application. The shares were transferred after the proceedings were served and a list of documents was also provided by the first defendant. An award of costs to the plaintiff is consistent with the principle that costs follow the event.3

[10]              The fact that the disclosure provided was significantly narrower in scope than what was originally sought, and that other orders initially sought (such as an application for solicitor-client costs) were withdrawn, do not provide a reason to reduce costs or allow costs to lie where they fall.

[11]              Second, although Mr Ball has taken a common sense and reasonable approach to the proceeding following his engagement with the current lawyers, that was not always the case. There is evidence before the Court that suggests that Mr Ball was initially trying to avoid service. Furthermore, there were delays in responding to the claim once he was served with the proceeding which necessitated a grant of leave to file the notice of opposition and affidavits in opposition.4 Such conduct does not warrant leaving costs to lie where they fall, or otherwise reducing the costs payable to the plaintiff.

3      High Court Rules 2016, r 14.2(1)(a).

4      Smith v Ball [2017] NZHC 3231.

[12]              Third, the costs relating to the commencement of the proceeding relate to the filing of the statement of claim. That proceeding has yet to be determined. Those costs and disbursements should be reserved pending the final determination of the substantive proceeding.

Result

[13]I make the following orders:

(a)I award costs on a schedule 2B basis and disbursements relating to the summary judgment application to the plaintiff against the first defendant. The costs awarded are for: the filing of the application for summary judgment; appearances at a mentions hearing; and the sealing of the order.

(b)All other claims for costs and disbursements are reserved.

Edwards J