Southland Indoor Leisure Centre Charitable Trust v Invercargill City Council
[2014] NZHC 3176
•11 December 2014
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
CIV-2010-425-000588 [2014] NZHC 3176
BETWEEN SOUTHLAND INDOOR LEISURE
CENTRE CHARITABLE TRUST Plaintiff
AND
INVERCARGILL CITY COUNCIL First Defendant
A S MAJOR Second Defendant
OMAHA INVESTMENTS NO. 1
LIMITED
First Third PartyMAURICE JOHN HARRIS Second Third Party
Hearing: 11 December 2014 (Costs determined on the papers) Appearances:
C J Jamieson and D R Weatherley for Plaintiff
K B Dillon for First Defendant
M R Cowan and S E Leyser for Second DefendantJudgment:
11 December 2014
COSTS JUDGMENT OF ASSOCIATE JUDGE MATTHEWS
[1] In a judgment released by the Court on 4 September 2013, an application by the first defendant to join third parties was granted. It had been opposed by the plaintiff; costs were awarded to the first defendant against the plaintiff.
[2] Costs were not awarded to the second defendant on that application, as it had taken a neutral stance.
SOUTHLAND INDOOR LEISURE CENTRE CHARITABLE TRUST v INVERCARGILL CITY COUNCIL [2014] NZHC 3176 [11 December 2014]
[3] In the same judgment the Court determined an application by the second defendant for further and better discovery by the first defendant. Costs were awarded to the second defendant on its successful application.
[4] Two issues have arisen in relation to these costs orders:
(a) The plaintiff applies to have the costs order in favour of the first defendant reversed.
(b)The second defendant has filed a memorandum advising that the plaintiff has indicated that it does not accept the draft costs order submitted for sealing, and asks for a timetable to be put in place for the filing of memoranda in relation to that issue.
[5] I deal with these in turn.
(a) Should the costs order made in favour of the first defendant on 4 September be reversed?
[6] The order arose from a successful application by the first defendant to join Omaha Investments No. 1 Limited and Mr M J Harris as first and second third parties respectively. After their joinder, they applied for the causes of action against them to be struck out. This application was partly successful. I am told it was based on the limitation provisions contained in the Building Act. Counsel for the plaintiff now says that the effect of the strike-out decision was exactly as the plaintiff had foretold, in its opposition to the application to join these parties. The plaintiff maintains it was “entirely vindicated”.
[7] Nonetheless counsel for the plaintiff accepts that the third parties remain parties to the proceeding, though in respect of causes of action which were not before the Court at the time the joint application was made.
[8] Rule 14.8 of the High Court Rules provides that costs on an opposed interlocutory application, unless there are special reasons to the contrary, must be fixed in accordance with the rules when the application is determined, and become
payable when they are fixed. Notwithstanding that provision, the Court may reverse, discharge or vary an order for costs on an interlocutory application if satisfied subsequently that the original order should not have been made.
[9] Counsel for the plaintiff says, in effect, that the original joinder order should not have been made, and therefore that the original costs order should not have been made. Counsel for the first defendant says that the decision striking out causes of action against the first and second third parties struck out two of the five causes of action, but three remain. Counsel accepts that these three causes of action were not in the draft statement of claim before the Court at the time of the joinder application. Counsel for the first defendant now says that it was not necessary for the plaintiff to oppose the joinder of the third parties. They could have been joined, and if the claim was untenable then the third parties could have applied to have the claim against them struck out (as they did).
[10] Counsel also points out that the costs concerned are minor in the context of a claim for some $23,000,000 by the plaintiff. Counsel points out that the opposition to the joinder of additional parties was unnecessary, in the context of the High Court Rules which operate on the principles of natural justice. One of those principles is that a defendant is entitled to have all the appropriate parties to the proceedings before the court.
[11] I am not prepared to vary the order, for the following reasons.
[12] First, if the order were reversed in the circumstances of this case, there would be grounds to conclude that a costs order should always be reversed whenever the basis for an interlocutory order on which it was based is subsequently found not to be justified. The test in r 14.8(2) is whether the Court is satisfied, subsequently, that the original order should not have been made. I am not satisfied that the original order should not have been made. It was made on the basis of the documents and argument presented at the time. A subsequent application by the third parties themselves, who were not party to the original application, and who therefore argued the position on their own behalf, has been successful to the extent that the causes of action intended at the time of joinder cannot proceed. A decision made on a
subsequent argument presented by a different party does not automatically imply that an earlier decision should not have been made.
[13] Secondly, and closely related to this, counsel for the first defendant is quite correct in his submission that the plaintiff could have consented to the joinder, and left it to the third parties to exercise such rights as they wished to exercise – as in the event, they did. Seen that way responsibility for any additional expenditure caused by the opposed joinder lies at the door of the plaintiff.
[14] The application is dismissed.
(b) Award of costs in favour of the second defendant
[15] In paragraph [15] of the judgment dated 4 September 2013 I awarded costs to the second defendant against the first defendant for a total time allocation of 1.9 days.
[16] Counsel for the second defendant has prepared a schedule claiming costs for
1.9 days on a 2B basis, for a total of $3,781.
[17] I direct the Registry to seal an order for costs in that sum, together with disbursements, if any. The schedule showing the costs sought in respect of the second defendant’s application for further and better discovery, in respect of which I have awarded costs, does not show a filing fee. The only reference to a filing fee is on the other schedule produced by the first defendant, which relates to its successful application to join Omaha Investments No. 1 Limited and Mr Harris as first and second third parties.
[18] I resolve this point by directing that if a filing fee was incurred by the second defendant on its application for further and better discovery, which was successful, the order is to be sealed for that filing fee as well.
[19] The travel expenses of counsel are in the schedule relating to the claim to join the third parties, as is the filing fee on that application. It does not seem, therefore,
that any part of the travel expenses of counsel should be the subject of the sealed order on the application for further and better discovery.
[20] Next, in her memorandum in support counsel for the second defendant says that there is no issue between the first defendant and the second defendant on these costs orders, it is the plaintiff which has advised that it is “unhappy with the draft costs orders”. The plaintiff is not entitled to input in relation to the costs order in favour of the second defendant against the first defendant. Unsurprisingly, the plaintiff makes no mention of this in its memorandum. For this reason it has not
been necessary for me to direct that this issue be referred to the plaintiff.
J G Matthews
Associate Judge
Solicitors:
Young Hunter, Christchurch.
Heaney & Partners, Auckland.
Parker Cowan Lawyers, Queenstown.
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