Staples v Freeman

[2018] NZHC 2406

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2016-409-000309 [2018] NZHC 2406

BETWEEN

BRYAN DOUGLAS STAPLES

First Plaintiff

AND

CLAIMS RESOLUTION SERVICE LIMITED

Second Plaintiff

AND

RICHARD LOGAN FREEMAN First Defendant

AND

MEDIAWORKS TV LIMITED Second Defendant

AND

KATE McCALLUM Third Defendant

AND

TRISTRAM CLAYTON Fourth Defendant

Hearing:	12 September 2018 (Determined on the papers)
Counsel:	P A Morten for Plaintiffs J W J Graham and T F Cleary for Second to Fourth Defendants
Judgment:	13 September 2018

COSTS JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      On 2 July 2018 the Court issued a judgment on an interlocutory application brought by the plaintiffs for orders directing the giving of further particulars in relation to the defence pleaded by the second, third and fourth defendants of honest opinion, and for orders that each of these parties file a further affidavit of documents giving

further identification of certain documents disclosed in affidavits already filed.  Both

STAPLES v CLAIMS RESOLUTION SERVICE LTD [2018] NZHC 2406 [13 September 2018]

applications were successful. The Court directed that the plaintiffs would be awarded costs, but the quantum of costs was reserved.

[2]      Counsel have been unable to agree on costs. Five memoranda have been filed.

[3]      In summary, the position of the plaintiffs is:

(a)Although there was a single application, costs should be awarded on the basis of two applications because the orders sought were separate and distinct.

(b)Costs should be assessed on band B save for preparation of a bundle of documents which should be assessed on the basis of band C.   There should be a 30 per cent increase on band B costs for filing the application for further discovery, preparation of submissions on honest opinion, and preparation of submissions on the further discovery application.

[4]      The position of the defendants is:

(a)There  should  be  costs  on  one  application  only,  and  one  set  of submissions.

(b)There should be no increase for costs in relation to preparation of the bundle of authorities.

(c)There is no principled basis for an increase of costs under r 14.7 for any steps in the proceeding.

(d)Costs should not be awarded for a full day because part of the day was taken up with dealing with an application for discovery by the second to fourth defendants.

(e)     They should be awarded costs in relation to the present application.

[5]      The plaintiffs claim disbursements of $1,109.44 and the defendants accept that an award in that sum is appropriate.

[6]      Five issues are raised.

First issue : costs on two applications?

[7]      The accepted authority on this issue is Kite v May in which Master Faire found that if one application is made that embodies a range of orders it still should be considered as one application.1

[8]      The plaintiffs relied on the decision in Commissioner of Police v Gong, a decision of Downs J on an originating application in which five separate orders were sought.2  His Honour found that each application was distinct both in its nature and in relation to the relief sought, each was significant, and each should be treated as a separate application with costs awarded accordingly.

[9]      I do not think that the decision in Commissioner of Police v Gong should be taken as altering the established position recorded in Kite v May.   A variety of interlocutory orders is frequently sought in one application during the interlocutory phase of civil litigation, with costs then awarded on one application. Rule 7.19, which relates to the filing of an interlocutory application, envisages this will be the case, as it refers to an interlocutory application in the singular whilst envisaging multiple orders being sought, as can be seen from forms G31 and G32. Rule 14.8, which deals with costs in interlocutory applications, also refers to the interlocutory application in the singular.  Further, an application for a range of orders is almost invariably dealt with at one hearing, with one book of key documents and one book of authorities being prepared, filed and served.   Even if separate applications were filed they would commonly be dealt with at one hearing, also with one set of documents.  The learned Judge in Commissioner of Police v Gong, made a decision on the substantive case then before him, but I do not think it is of universal application to interlocutory applications given the circumstances I have described.  In any event, costs are at the discretion of the Court, and if appropriate there can be an increase of costs for certain steps where

a disparate range of orders is sought and the Court considers it appropriate.

1      Kite v May (2001) 14 PRNZ at [11].

2      Commissioner of Police v Gong [2018] NZHC 1686.

[10]     It  follows  that  there  will  be  an  award  of  costs  to  the  plaintiffs  for  one application only.

Second issue : increased costs for certain steps?

[11]     I deal with the steps for which the plaintiffs sought increased costs in turn.

[12]     First, the application for further discovery. There are two aspects to this:

(i)As  recorded  in  the  substantive  judgment,  the  first  aspects  of  the application for discovery related to claims of confidentiality in Part 3 of the schedule to the defendants’ affidavit of documents.

It is clear from the extensive discussion of the application relating to certain documents in Part 3, contained in paragraphs [35]-[72] of the judgment that this was a complex issue requiring extensive analysis, with room for judgment to be exercised on key issues in a careful and considered way.   It was not a black and white issue.   Although the decision of the Court favoured the plaintiffs on analysis, there is no sound reason  to  increase  costs  awarded  against  the defendants  for  having formed their view in relation to this issue differently.  The plaintiffs say that the defendants failed without reasonable justification to comply with the order for discovery. I do not agree.  In the end they were required to provide further information as sought, but their conduct was not such that an increased award of costs is justified under r 14.6.

(ii)    The second aspect of the application for discovery related to particulars of the disposal of documents said to be no longer in the possession of the defendants, in Part 4 of their affidavits.  This is dealt with at paragraph [73]-[82] of the judgment.  It is not a matter of the same complexity as the issue raised in relation to Schedule 3.   The defendants’ failure to complete Schedule 4 adequately was a more straight-forward failure to comply with their discovery obligations to the extent required. However, it was not a failure that comes within r 14.6(3)(b) in my view. It resulted in an award of costs, but an uplift from scale must be assessed by reference to the extent of the unreasonableness of that failure.  In one

sense, every failure to comply with a discovery obligation might be thought to be unreasonable, but the rule is not directed to every failure. To construe it that way would lead to uplifts in costs in every case, which is not the purpose of r 14.6. The failure here was not unreasonable to an extent sufficiently material to engage r 14.6.

[13]     Secondly, the plaintiffs sought a 30 per cent increase on Band B costs for preparation of submissions. The plaintiffs presented their claim for costs on the basis of Schedule 2 allocations of time (1.5 days) for their submissions on their discovery application and on their application for further particulars of honest opinion, making a total claim of three days, on which they then sought a 30 per cent increase. Applying the principle in Kite v May, as I consider correct, the plaintiffs would be limited to an award of 1.5 days, on which an uplift of costs under r 14.6 could then be considered.

[14]     The plaintiffs did not seek an award of costs for preparation of submissions under Band C, which is the category which may be applied if “a comparatively large amount of time for the particular step” in a proceeding is considered reasonable.  As their request for increased costs was based on the time taken for preparation, this was the way in which the plaintiffs should have approached their request.

[15]    As observed earlier the plaintiffs submit that the orders sought in their application were separate and distinct.  I agree with that submission, and also think that the submissions were required to deal with complex areas of the law.  Had the Court been requested to do so I would have awarded costs in Band C for the preparation of submissions, a total of three days. Approaching the matter the way the plaintiffs did, they sought three days (two allocations of 1.5 days) with a 30 per cent increase, 3.9 days. I do not think that is justified, but I do consider an uplift is justified in the discretion of the Court under r 14.6(3)(d), as in my opinion the complexity of the issues argued justifies the Court in departing from the time allocation in Schedule B.  Costs to the plaintiffs for preparation of submissions will be awarded on the basis of three days.

Third issue : should costs for preparation of the bundle of documents be under

Band C?

[16]     The plaintiffs say that they prepared and filed the bundle of documents in two volumes, together with an original bundle and a supplementary bundle of authorities. They note that under band B 0.6 of a day is allowed for preparation of a bundle for an interlocutory hearing but under band C it is one day. They say the latter should apply.

[17]     I have reviewed the bundle.  It is substantial.  It comprises two volumes and contains over 400 pages. The exercise of preparing a bundle requires identification of the documents to be included, not of itself either time consuming or complicated, followed by photocopying or printing, then binding, in this case a task of some magnitude.  In my view fair recompense for this will be made by an allowance of 0.6 of a day.  The majority of the job does not involve the skills or input of counsel; after the documents for inclusion have been identified only support staff need be involved. Costs for preparation of the bundle will therefore be in band B.

Fourth issue : should costs be awarded for a full day of hearing or a part day?

[18]     Argument on the plaintiffs’ applications extended into the fourth quarter of the day but ended just short of a full day.  The balance of the day was taken with the defendants’ applications.

[19]     On that basis the defendants say that the plaintiffs should not be awarded a full day by way of a hearing fee.

[20]     Item 26 in Schedule 3 of the High Court Rules which relates to appearance at the hearing of a defended application, refers to the time occupied by the hearing measured in quarter days.  As the hearing extended into the fourth quarter of the day the plaintiffs are entitled to a full day of costs.

Fifth  issue  :  should  an  award  of  costs  be  made  to  the  defendants  on  this application for costs?

[21]     Each side has enjoyed a measure of success on this application.  Whilst the sum awarded to the plaintiffs falls well short of the sum claimed and they have not succeeded on material parts of their analysis of their entitlement, the defendants have not succeeded on all aspects of their argument either. Broadly I assess the measure of success of each side as equal. There will be no award of costs on this application.

Outcome

[22]     The defendants will pay to the plaintiffs costs for six days on a Category 2 basis, a total of $13,380 plus disbursements in the sum of $1,109.44.

Solicitors:

Canterbury Legal Services Ltd, Christchurch

Chapman Tripp, Auckland