Sunshine Coast Grammar School v Meads

[2012] NZHC 3357

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-6794 [2012] NZHC 3357

IN THE MATTER OF     an application under the Reciprocal

Enforcements of Judgments Act 1934

AND

IN THE MATTER OF      a judgment obtained in the Magistrates

Court of Queensland, Australia

BETWEEN  SUNSHINE COAST GRAMMAR SCHOOL

Judgment Creditor

ANDCODY MEADS Judgment Debtor

Hearing:         (On the papers)

Counsel:         AM Hutton for Judgment Creditor

Judgment:      12 December 2012

JUDGMENT OF BREWER J (Costs)

SOLICITORS

RA Fraser & Associates (Christchurch) for Judgment Creditor

SUNSHINE COAST GRAMMAR SCHOOL V MEADS HC AK CIV-2011-404-6794 [12 December 2012]

Introduction

[1]      The judgment creditor seeks an order for costs.

[2]      The application relates to the registration of a foreign judgment under the Reciprocal Enforcements of Judgments Act 1934.   The amount of the judgment, obtained in the Magistrates Court of Queensland, Australia, was AUD$7,824.04.  To this sum was added interest of AUD$1,605.53.

[3]      The judgment creditor elected to proceed on notice.  Substituted service was applied for and granted.  At no time was the registration of the judgment opposed, and indeed the judgment debtor took no steps at all.

[4]      The quantum of costs sought is $8,987.70.  This has been calculated on a 2B

basis in respect of all steps taken.

Issue

[5]      The issue is whether the costs claimed in the circumstances are excessive.  I invited a memorandum from counsel for the judgment creditor on this issue, and it was provided on 13 March 2012 by email.  The Rules make provision for the “e- filing” of documents,[1] but that does not apply to the attempted filing of the judgment creditor’s memorandum.  In other words, the judgment creditor adopted an informal method of filing and did not supplement it by filing a paper copy in the usual way.  I

mention this because no-one in the registry seems to have received the memorandum and it was not until October 2012, following inquiry by counsel, that it was appreciated that the memorandum had gone astray.

Submissions for the judgment creditor

[1] Subparts 15 and 16 of Part 5 of the High Court Rules 2008.

[6]      Counsel appreciates that r 23.4(2) provides that an application for registration of a foreign judgment may be made without notice to the judgment debtor.  In this case, the judgment creditor decided that a tactical advantage might be obtained by

proceeding on notice.  Counsel’s experience was that service of an application results

in settlement negotiations and a more cost effective outcome.  Sadly, that proved not to be the case here.   On the judgment creditor’s submission, the judgment debtor became aware of the application, actively avoided service, and so the judgment creditor was put to the additional cost of obtaining an order for substituted service.

[7]      Counsel for the judgment creditor submits that the proceeding falls within the definition of category 2B.   That is to say, it is of average complexity requiring average skill and experience applied over a normal amount of time.

Decision

[8]      It is correct that the rules allow a judgment creditor to proceed either on notice or without notice.   However, the costs claimed by a successful judgment creditor who has proceeded on notice will be allowed only to the extent they are reasonable in the circumstances.

[9]      The basic principle is that costs are ordered at the discretion of the Court.[2]

Their assessment, at the appropriate daily rate, should focus on the time considered reasonable for each step reasonably required to be taken.[3]   The taking of unnecessary steps is a ground for reducing an order for costs otherwise payable.[4]

[2] Rule 14.1.

[3] Rule 14.2(c).

[4] Rule 14.7(f)(ii).

[10]     In this case, the amount of the judgment sought to be registered was modest. There is no assertion that the judgment debtor was known to be determined to resist registration such that the on notice procedure was justified.  Instead, the judgment creditor used the more expensive procedure to motivate the judgment debtor to negotiate.  Substantial extra cost was incurred by the decision to obtain an order for substituted service.

[11]     The judgment debtor took no steps whatsoever.

[12]     Under these circumstances, it would be excessive to order as costs a sum approaching the amount of the judgment registered.

[13]     I  am  prepared  to  allow  the  judgment  creditor  costs  on  a  2B  basis  to  a maximum of the sum that would have been permitted if the application had been on a without notice basis.  The judgment creditor may calculate those costs and submit

them to the Registrar for approval.

Brewer J