Street and Cook Construction Company Ltd v Cambridge Terraces Ltd
[2023] NZHC 2802
•6 October 2023
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2022-409-613
[2023] NZHC 2802
BETWEEN STREET AND COOK CONSTRUCTION COMPANY LTD
CreditorAND
CAMBRIDGE TERRACES LTD
Debtor
CIV-2023-409-18 BETWEEN
CAMBRIDGE TERRACES LTD
PlaintiffAND
STREET AND COOK CONSTRUCTION COMPANY LTD
Defendant
Judgment:
(On the papers)
6 October 2023
JUDGMENT OF BREWER J
(Costs)
This judgment was delivered by me on 6 October 2023 at 2.30 pm pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
Solicitors:
B M Saegers (Christchurch) for Street and Cook Construction Company Ltd Kearneys (Christchurch) for Cambridge Terraces Ltd
STREET AND COOK CONSTRUCTION COMPANY LTD v CAMBRIDGE TERRACES LTD [2023] NZHC
2802 [6 October 2023]
Introduction
[1]This is a costs judgment.
[2] Following my 30 June 2023 judgment, the applicant, Street and Cook Construction Company Ltd, is seeking costs against the respondent, Cambridge Terraces Ltd.1 In my judgment, I indicated that the applicant, as the successful party, is entitled to costs.
[3] The parties have filed costs memoranda. The applicant seeks 2B costs in respect of all steps, including District Court steps, necessary for the final outcome. The respondent does not oppose 2B costs but objects to some of the steps claimed.
Applicant’s submissions
[4] The applicant accepts that the Construction Contracts Act 2002 does not permit it to recover actual costs and instead seeks standard scale costs.2
[5]The specific steps claimed are:
Step Description Daily Allowance 62 Application under s 73 to register judgment in District Court 0.5 62 Application for freezing order in High Court 0.5 62 Application to extend freezing order 0.5 62 Application to extend freezing order 0.5 62 Application to remove District Court judgment to High Court 0.5 60 Application for interim charging order 0.5 37 Preparation and filing interlocutory application for absolute charging order and payment out and supporting affidavits 2.0 38 Filing notice of opposition to application for summary judgment and supporting affidavit 2.0 11 Filing memorandum for mentions hearing 0.4 12 Appearance at mentions hearing 0.2 40 Preparation of written submissions 1.5 41 Preparation by applicant of bundle for hearing 0.6
1 Street and Cook Construction Company Ltd v Cambridge Terraces Ltd [2023] NZHC 1673.
2 Sections 23(2)(a)(ii) and 59(2)(a)(ii); and Body Corporate 20012 v Naylor Love Construction Ltd
[2018] NZHC 569.
42 Appearance at hearing for principal counsel 0.75 43 Appearance at hearing for second counsel 0.375 29 Sealing judgment 0.2 Total hours 11.25 Amount claimed $26,349.75
[6]In addition, disbursements of $1,220 are claimed.
Respondent’s submissions
[7]The respondent opposes a number of the steps claimed. In summary:
(a)the District Court steps should not be considered by this Court as the appropriate forum to decide those costs is in that Court (step 62);
(b)the freezing order because it lapsed by consent (step 62);
(c)the extensions of the freezing order were dealt with by consent memoranda (step 62);
(d)the application to remove the judgment to the High Court should not be considered by this Court as the appropriate forum to hear those costs is the District Court (step 62);
(e)the interlocutory application for absolute charging order and payment out should fall under step 22 and not step 37;
(f)notice of opposition should fall under step 23 and not 38;
(g)the filing of a memorandum for case management, step 11, does not attract costs as this was only a mentions hearing;
(h)appearance at mentions hearing, step 12, should be reduced to 0.1 allowance;
(i)preparation of written submission should fall under step 24;3
(j)preparation of common bundle is not claimable as the respondent prepared it; and
(k)second counsel appearance unnecessary and should not be awarded.
[8] The costs on the accepted costs steps have a sum of $9,560. The respondent does not object to the disbursements.
Discussion
[9] The starting point is that costs follow the event. The party who fails should pay costs to the party who succeeds.4 As the successful party, the applicant is presumptively entitled to costs.
[10] I will first decide whether I have jurisdiction to award costs for the steps determined in the District Court. Then I will decide the specific objections.
Jurisdiction of the High Court
[11]Section 96 of the District Court Act 2016 provides:
96 Costs in cases transferred
(1)This section applies to a proceeding or counterclaim or set-off and counterclaim (a transferred proceeding) that is transferred—
(a)from the District Court to the High Court; or
(b)from the High Court to the District Court.
(2)Any order for costs in a transferred proceeding must be made by the court to which the proceeding is transferred.
(3)Subsection (2) is subject to an order of the court that made the order to transfer the proceeding.
(4)An order for costs in relation to part of a proceeding transferred to the District Court that takes place in the High Court—
3 This would not affect the time allocation.
4 High Court Rules 2016, r 14.2(1)(a).
(a)must be made in accordance with the High Court Rules 2016; and
(b)subject to any order by a High Court Judge, may be made by a District Court Judge.
(5)Subsection (6) applies to—
(a)a summary judgment application or a matter arising on a summary judgment application that has, after having been transferred to the High Court under section 92, been referred back to the District Court:
(b)a proceeding continued in the District Court after a question of law in the proceeding has, under section 93, been determined in the High Court.
(6)An order for costs in the proceeding or matter in relation to the proceeding in the District Court both before and after transfer to the High Court must be made by a District Court Judge.
(7)Despite subsection (6), an order for costs incurred in the High Court may be made only by a High Court Judge in accordance with the High Court Rules 2016, but may be included in a judgment or an order made by the District Court.
[12] If s 96 applies to the present costs application, subs (2) is clear that this Court must determine the costs.5
[13] Section 96 is silent as to whether the costs provisions of the District Court Rules 2014 or the High Court Rules apply to steps taken in the District Court when a proceeding is transferred to the High Court.6 However, the legislative context indicates that the rules of the respective Court should apply to the parts of proceedings that took place in that Court; that is, the High Court Rules apply to the parts of proceedings that took place in the High Court and similarly for the District Court. For example, this is consistent with r 14.18 of the District Court Rules, which provides:
14.18 Proceeding transferred from High Court
(1)This rule applies if a proceeding has been transferred from the High Court to the District Court and the amount remaining in dispute at the
5 Subsection (2) is subject to subs (3), however, there is no order by the District Court affecting costs on this proceeding.
6 Subsection (4) directs the District Court to apply the High Court Rules in respect of the parts of the proceeding that took place in the High Court. There is no provision for or direction to High Court Judges on which Rules they should apply in respect of the proceedings or parts of proceedings which took place in the District Court.
date on which the Registrar receives the documents referred to in section 47 of the Act is less than the amount originally claimed.
(2)The costs incurred after that date must be allowed on the scale and subject to the rules applicable to the costs of a proceeding started in the District Court to recover the amount remaining in dispute.
Ultimately, the discretion will always lie with the Court,7 particularly where the Rules are silent.8
[14] However, the application of s 96 is less than clear. Justice Peters, in New World (New Zealand) Ltd v Zhang, held that:9
[31] Removal of a judgment and of a charging order do not constitute the removal of a proceeding from one Court to another in the sense of s 96 of the Act. In this case, the proceeding in the District Court, which was between New World and Ms Zhang, remained in the District Court. It follows that I accept New World’s submission that I do not have jurisdiction to make any order as to costs in the District Court.
[15] Implicit in Peters J’s reasoning is that removal of a judgment and charging order from the District Court to this Court would not constitute a “proceeding” but are, rather, interlocutory applications. It is therefore necessary to turn to the relevant statutory definitions.
[16]Section 4 of District Court Act defines proceeding as:10
proceeding means any application to the court for the exercise of the civil jurisdiction of the court other than an interlocutory application
The District Court Act does not define interlocutory application. The District Court Rules adopt the same definition of proceeding and also provide a definition of interlocutory applications:11
interlocutory application means application made in accordance with rule 1.15, 7.12, or 7.34
7 High Court Rules, r 14.1.
8 Rule 1.6.
9 New World (New Zealand) Ltd v Zhang [2023] NZHC 854.
10 High Court Rules, r 1.3 adopts the identical definition.
11 Rule 1.4.
[17] As s 96 is found within the District Court Act and the District Court Rules are an instrument stemming from the District Court Act, these definitions are immediately relevant to s 96’s interpretation. The relevant steps taken at the District Court — to register the adjudication as a judgment12 and to apply to remove the judgment to the High Court13 — were not applications made under rr 1.15, 7.12 or 7.34. Therefore, under the District Court Act and Rules registration of an adjudication as a judgment and, more relevantly, the application to remove the judgment to the High Court, are not interlocutory applications. By default, they can be “proceedings” for the purposes of the Act and, more specifically, s 96.
[18] Other statutory provisions are relevant to the present circumstances. Sections 120 and 121 of the District Court Act provide:14
120Removal of judgment of District Court into High Court
(1)A judgment creditor or a person on the judgment creditor’s behalf may apply to the court to remove into the High Court a final judgment or an order of the District Court (the judgment) for the payment of an amount of money.
(2)The Registrar must issue a certificate of removal in the prescribed form, which may be filed by the judgment creditor in the High Court.
(3)The Registrar must not issue a certificate of removal—
(a)before the expiry of the time for giving notice of an appeal against the judgment:
(b)if an enforcement proceeding has been issued in relation to the judgment, until the enforcement proceeding has been withdrawn or completed.
(4)No further steps may be taken in relation to the proceeding in which the judgment was given after the Registrar’s certificate has been filed in the High Court.
(5)On the removal of the judgment,—
12 Construction Contracts Act, s 73; and District Court Rules, r 20.86 and form 104.
13 District Court Act, s 120 and 189; and Stephen Harrop (ed) District Courts Practice (Civil) (online ed, LexisNexis) at [120.1]:
The ability to remove a judgment to the High Court has been available for decades, yet no procedure is provided for in the Rules. An application must be made to the court to trigger removal: there is no reason why this ought not to be made without notice. Section 120(2) refers to a Registrar issuing a certificate in the prescribed form, but there is no relevant prescription. That said, Form 35 is plainly the relevant document, in that it says it is issued for the purposes of s 66 of the 1947 Act (the predecessor of s 120), which reflects the failure to update the Rules in light of the District Court Act 2016.
14 (Emphasis added).
(a)the judgment may be enforced as a judgment of the High Court, with such fees and costs as may be paid or allowed in connection with the removal and entry of judgment:
(b)no appeal may be brought against the judgment.
(6)A Judge of the High Court may, on the application of the judgment creditor or judgment debtor, set the removal aside on such terms as to costs or otherwise that the Judge thinks fit.
121Proceeding in High Court on judgment or order of District Court
(1)A proceeding may be brought in the High Court on a judgment or an order of the District Court.
(2)Costs may be awarded to the plaintiff in the proceeding only if a Judge of the High Court is satisfied that the proceeding was necessary and proper to enforce the judgment or order against the person or property of the defendant.
[19] Section 120(5) allows costs to be “paid or allowed in connection with the removal and entry of judgment”. This allows for costs in respect of the removal application in the District Court to be awarded in the High Court. Further, the broad wording of “in connection” and “removal and entry” suggests that costs are claimable for all steps necessary for removal and entry of judgment, which would include entry of the judgment in the District Court. Finally, s 121 directs High Court Judges to only award costs where proceedings are necessary and proper for enforcement. I am satisfied that these proceedings were necessary and proper and that steps undertaken in the District Court are encompassed by s 120(5)(a) and therefore can be properly awarded in this Court. In any event, I consider that s 96 applies.
[20] If my analysis is incorrect, I would have relied on the inherent jurisdiction of this Court to allow costs. If the statute was silent as to jurisdiction to award costs it would, at most, create a lacuna for costs of this type and not oust the jurisdiction of this Court. It is just and practicable to award costs in this Court rather than send the matter to District Court for determination of the steps undertaken there.
[21]I will allow costs at the applicable District Court Rules daily recovery rate.
Specific objections
[22] The first objection is to the freezing order, which the respondent says cannot be claimed as it lapsed by consent. I do not regard this as a reason not to award costs. While the freezing order did lapse by consent, the applicant is plainly the successful party for this interlocutory application. The order was granted and, when it did ultimately lapse, it was because the respondent had agreed to set aside funds for the purpose of satisfying the judgment debt, which eventually led to the charging order and my judgment. The respondent submits that Eaton J’s judgment on 15 September 2022 indicated that it would be entitled to costs for this step. I disagree. Justice Eaton did not discharge the freezing order and instead granted a consented variation to the terms of the order which largely preserved the terms of the order and continued to protect the applicant’s interests. Accordingly, I will allow costs for this step.
[23] The second objection is to the extensions of the freezing orders, which were granted by consent. I will not allow costs for these steps, costs to lie where they fall.
[24] The third objection is to a number of steps claimed as originating applications rather than interlocutory applications, specifically steps 37 (originating application for absolute charging order) and 38 (notice of opposition to summary judgment). It is submitted these should be steps 22 and 23 respectively. I have concluded that these applications should be treated as interlocutory applications, so I will allow the applicable time allocations for steps 22 and 23.
[25] The fourth objection is to the claims for filing of memoranda and appearance at the mentions hearing, steps 11 and 12. The respondent submits that these steps are inapplicable as it was only a mentions hearing. However, steps 11 and 12 specifically provide for mentions hearings so I will allow costs for these steps.
[26] The fifth objection is to the preparation of the common bundle. This was prepared by the respondent so I will not allow costs for this step.
[27] The sixth objection is to the appearance at the hearing, which Eaton J set down for a half-day hearing. I will allow a half-day to be claimed.
[28] The seventh objection is to the claim for second counsel during the hearing. I will allow the claim. This was a novel claim for a garnishee-type order, there was the complication of the respondent’s application for summary judgment, and the factual background had become complex.
Conclusion
[29] I will allow the following steps at the High Court Rules Category 2 recovery rate:
Step Description Daily Allowance 62 Application for freezing order in High Court 0.5 60 Application for interim charging order 0.5 22 Preparation and filing interlocutory application for absolute charging order and payment out and supporting affidavits 0.6 23 Filing notice of opposition to application for
summary judgment and supporting affidavit
0.6 11 Filing memorandum for mentions hearing 0.4 12 Appearance at mentions hearing 0.2 24 Preparation of written submissions 1.5 41 Preparation by applicant of hearing bundle 0.6 42 Appearance at hearing for principal counsel 0.5 43 Appearance at hearing for second counsel 0.25 29 Sealing judgment 0.2 Total hours 5.25 Amount claimed $12,547.50
[30] I will allow the following steps at the District Court Rules Category 2 recovery rate:
Step Description Daily Allowance 19 Application under s 73 to register judgment in District Court 0.4 19.18 Application to remove District Court judgment to
High Court
0.4 Total hours 0.8 Amount claimed $1,528
Result
[31] The respondent is to pay the applicant costs of $14,075.50 and disbursements of $1,220.
Brewer J
0
2
1