Spackman v Martin

[2022] NZHC 1193

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-000142 [2022] NZHC 1193

BETWEEN

MURRAY SPACKMAN

First Plaintiff

AND

THOMAS MOORE

Second Plaintiff

AND

PATRICK MARTIN

First Defendant

AND

NICOLA MARTIN

Second Defendant

AND

ROBERT SNOEP

Third Defendant

AND

CREATEIP

Fourth Defendant

AND

STEPHEN PETER HAMPSON

Third Party

Hearing:

On the papers

Appearances:

G Slevin for First and Second Plaintiffs

G Davis for the First and Second Defendants

M E Parker and T E Bielby for Third and Fourth Defendants

Judgment:

27 May 2022

COSTS JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 27 May 2022 at 11.00 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

SPACKMAN v MARTIN [2022] NZHC 1193 [27 May 2022]

[1]                  The third and fourth defendants applied for leave to issue a third party notice upon Stephen Peter Hampson pursuant to r 4.4(1) and (2) of the High Court Rules 2016. The application was opposed by the plaintiffs. In a judgment of 24 March 2022 I granted the application to join Mr Hampson as a third party. Counsel have now filed submissions on costs and this judgment is my ruling on costs.

The general principles

[2]                  All matters of costs are discretionary, but the discretion must be exercised on a principled basis.1 The determination of costs, so far as possible, should be both predictable and expeditious.2 The party who has lost should pay the costs of the party that has won unless there are exceptional reasons to the contrary.3 Unless there are special reasons to the contrary, costs on an opposed interlocutory application should be fixed when the application is determined and become payable when they are fixed.4 Generally, costs awards should reflect the complexity and significance of the proceeding and be assessed by applying the appropriate daily rate to the time considered reasonable for each step required in relation to the proceeding.5

The submissions

[3]                  Mr Slevin submits the Court should exercise its discretion to reserve costs pending determination of the third and fourth defendants’ claims against Mr Hampson. He says there are special reasons, for the purposes of r 14.8, why the general rule that costs should be fixed and payable now should not apply. Those reasons are identified as:

(a)Mr Hampson was not in a position to oppose the application himself and the plaintiffs’ opposition was effectively as a contradictor, in circumstances where there would otherwise have been no opposition;

1      High Court Rules 2016, r 14.1(1).

2      Rule 14.2(1)(g).

3      Rule 14.2(1)(a) and Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 2 NZLR 523 at [19].

4      Rule 14.8(1).

5      Rule 14.2(b) and (c).

(b)the opposition was served to ensure the Court was aware of all the circumstances when determining the application;

(c)a determination that Mr Hampson is not liable to the third and fourth defendants is distinctly possible;

(d)such outcome would vindicate the plaintiffs’ opposition to the application and should be taken into account in relation to costs;

(e)a cause of action the third and fourth defendants sought to rely upon was found to be untenable as a matter of law; and

(f)the delay in making the application was not satisfactorily explained.

[4]                  In the alternative, Mr Slevin argues that any costs awarded to the third and fourth defendants should be reduced under r 14.7(d) and (g) of the High Court Rules for the same reasons.

[5]                  The third and fourth defendants’ position is that they are the successful parties and are entitled to costs. They say there are no special reasons why costs should not be fixed and payable now, or why any costs award in relation to the application should be reduced. Their position is that the plaintiffs had no need to oppose the application and there was little benefit in them doing so as the opposition only served to delay the proceeding.

[6]The third and fourth defendants seek costs on a 2B basis amounting to

$7,050.50.

My analysis and view

[7]                  There is no reason to depart from the general principles that the successful party should receive its costs and that costs should be fixed when an interlocutory application is determined and become payable when they are fixed.

[8]                  In response to the matters raised by Mr Slevin, I agree with the defendants that there was no need for the plaintiffs to oppose the application. They did not do so to ensure the Court was aware of the circumstances of the case, but rather to advance their own interests in the proceeding. Accordingly, they took the risk that if they were unsuccessful, costs would follow the event.

[9]                  I am in no position to determine whether or not the claim against Mr Hampson will be successful at trial, but I do not see how that could possibly be a relevant consideration. I am presently only concerned with the outcome of this application.

[10]               In relation to whether the costs should be reduced, r 14.7(d) and (g) allow the Court to refuse to make an order for costs or may reduce costs that would otherwise be payable if:

(d)Although the  party claiming costs has succeeded overall, that party   has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs;

…

(g) Some other reason exists which justifies the Court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.

[11]               The only matter that I can see which is possibly relevant is that the third and fourth defendants had advanced a potential cause of action that I did not consider was tenable. I do not consider that matter could be said to have significantly increased the plaintiffs’ costs to justify a reduced award in the third and fourth defendants’ favour.

Quantum

[12]               It is appropriate that costs be awarded on a 2B basis. I have considered the third and fourth defendants’ calculation of costs and believe it to be correct.

Result

[13]               The third and fourth defendants are awarded costs against the plaintiffs on their application to join the third party in the amount of $7,050.50.

O G Paulsen Associate Judge

Solicitors:

Maciaszek Brown Law (Mark Brown), Christchurch Kevin Smith Law Limited, Wellington

Parker Cowan, Queenstown