T & S Construction 2015 Limited v Armstrongs Auckland Limited

[2024] NZHC 3733

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-454-83

[2024] NZHC 3733

BETWEEN

T & S CONSTRUCTION 2015 LIMITED

First Plaintiff

HARMAN IMPEX (NZ) LIMITED
Second Plaintiff

AND

TOYOTA NEW ZEALAND LIMITED

Defendant

CIV-2024-404-467

BETWEEN

T & S CONSTRUCTION 2015 LIMITED
First Plaintiff

AND

HARMAN IMPEX (NZ) LIMITED

Second Plaintiff

YU CAO

Third Plaintiff

Cont’d …

Hearing:

On the papers

Appearances:

J S Cooper KC, H Davies, B McKinlay for Plaintiffs T C Weston KC, L C Sizer for Defendant

J Goodall KC, B White and S Coupe for the Defendants in CIV-2024-404-467

Judgment:

9 December 2024

COSTS JUDGMENT OF MUIR J

This judgment was delivered by me on 9 December 2024 at 4 pm, Pursuant to Rule 11.5 of the High Court rules.

Registrar/Deputy Registrar Date: ……………………………

T & S CONSTRUCTION 2015 LIMITED v TOYOTA NEW ZEALAND LIMITED [2024] NZHC 3733

[9 December 2024]

ROSS DAVID BENNETT

Fourth Plaintiff

SHAUN GARTH COUGHLAN

Fifth Plaintiff

ADAM GERALD D’OYLEY STODART

Sixth Plaintiff

ALISON ELIZABETH STODART

Seventh Plaintiff

ASTRID MARY SIMS

Eighth Plaintiff

ALLAN GERALD SIMS

Ninth Plaintiff

KIERAN THOMAS WELSBY

Tenth Plaintiff

DALTON ROBERT REED

Eleventh Plaintiff

NICHOLAS ALEXANDER EYRE

Twelfth Plaintiff

STEVEN MARK HEARD

Thirteenth Plaintiff

DUNSTAN UTHUM FERNANDO

Fourteenth Plaintiff

REHANA FERNANDO

Fifteenth Plaintiff

DUNBLANE FARMS LIMITED

Sixteenth Plaintiff

RICHARD FREDERICK PEET HOWELL

Seventeenth Plaintiff

ROBOTECH CONTRACTORS LIMITED

Eighteenth Plaintiff

JAMES RICHARD WILLIAMS

Nineteenth Plaintiff

ALICIA MAY STYLES

Twentieth Plaintiff

LESLIE DAVID THORN

Twenty First Plaintiff

AND  ARMSTRONGS AUCKLAND LIMITED

Second Defendant

ASHBURTON AUTOMOTIVE LIMITED

Third Defendant

BOWATER MOTORS LIMITED

Fourth Defendant

CENTREPOINT MOTORS LIMITED

Fifth Defendant

COAST CARS AND COMMERCIAL LIMITED

Sixth Defendant

COOKE HOWLISON LIMITED

Seventh Defendant

CROWOOD LIMITED

Eighth Defendant

G W D RUSSELLS LIMITED

Ninth Defendant

HOWARD TRADING LIMITED

Tenth Defendant

MARLBOROUGH AUTOMOTIVE LIMITED

Eleventh Defendant

MILES LIMITED

Twelfth Defendant

MUIR & RICHARDS LIMITED

Thirteenth Defendant

NORTH ALBANY MOTORS LIMITED

Fourteenth Defendant

NORTH OTAGO MOTOR GROUP LIMITED

Fifteenth Defendant

NORTHERN BAYS MOTORS LIMITED

Sixteenth Defendant

PAT PRESCOTT LIMITED

Seventeenth Defendant

RANGIORA AUTOMOTIVE LIMITED

Eighteenth Defendant

RUTHERFORD & BOND LIMITED

Nineteenth Defendant

SCOTT ADAMS LIMITED

Twentieth Defendant

SINCLAIR PRYOR MOTORS LIMITED

Twenty First Defendant

SOUTH CANTERBURY AUTOMOTIVE LIMITED

Twenty Second Defendant

TASMAN AUTOS LIMITED

Twenty Third Defendant

DEBREN ENTERPRISES LIMITED
Twenty Fourth Defendant

WAIKATO MOTORS LIMITED

Twenty Fifth Defendant

Introduction

[1]    On 8 August 2024, I heard applications by the plaintiffs in CIV-2024-404-467 (the dealer proceedings) and CIV-2023-454-83 (the TNZ proceedings) for orders:

(a)adding additional plaintiffs;

(b)substituting the company Debren Enterprises Ltd (DEL) for the existing twenty third defendant, TRC Enterprises Ltd (TRC) in the dealer proceedings; and

(c)consolidating the two sets of proceedings on such terms as the court thought fit.

[2]    Application (a) was resolved on the basis that Toyota New Zealand Ltd (TNZ), and the defendants in the dealer proceedings (together the dealers) did not oppose and therefore abided (with certain reservations acknowledged by the parties and recorded in my judgment).

[3]    Likewise, in respect of application (b), the dealers did not oppose and therefore abided on the basis of a reservation in relation to limitation acknowledged by the plaintiffs.

[4]    The substantive argument occurred in relation to application (c). The principal issue was whether the proceedings should be consolidated on terms which struck out or removed what the parties referred to as the “no claims dealers” — those dealers in respect of whom no individual plaintiff with a potential cause of action against the dealer had been identified. This issue was resolved in favour of the defendants,1 who now seek costs.

[5]    The parties are unable to agree on the quantum of costs and invite my judgment in that respect.

1      T & S Construction 2015 Ltd v Toyota New Zealand Ltd [2024] NZHC 2483.

TNZ’s application

[6]    TNZ says that costs should be fixed on a 3C basis in the amount of $30,005 plus disbursements. They further submit that if I was minded to make an allowance in respect of those matters resolved in the plaintiffs’ favour on an unopposed basis, it should be limited to the sum of $4,706 which it calculates by reference to the costs the plaintiffs would have received for filing an interlocutory application under step 22, sch 3 of the High Court Rules 2016 (the Rules).

The dealers’ application

[7]    The dealers agree that costs should be fixed on a 3C basis. They say that no deduction should be made for those matters resolved by agreement because the agreements reached in respect of applications (a) and (b) resulted in deferral and not disposition of one of the key issues — the effective date of addition/substitution for limitation purposes. They say that deferral of issues by agreement does not justify a reduction in costs. They seek an award in the amount of $23,040.65 including disbursements.

The plaintiffs’ position

[8]    The plaintiffs say that a 2B categorisation is appropriate for interlocutory applications such as those I was required to consider and that the ultimate award should be reduced by 50 per cent because:

(a)applications (a) and (b) were resolved immediately prior to or shortly after the commencement of the hearing; and

(b)TNZ and the dealers had the ability to, and did take, a coordinated approach between them to the plaintiffs’ applications.

[9]    They do not take issue with either of the defendants’ claims for an allowance for second counsel.

Discussion

Categorisation and banding

[10]   The proceeding has not yet been categorised for costs purposes. I consider it inappropriate to do so on a general basis at this stage, albeit that all the portents are that category 3 is appropriate. I intend therefore to make a provisional categorisation governing the applications in question only, with the rest of the proceeding to be readdressed at the next mention.

[11]   My provisional categorisation is category 3. In my view, the complexity and significance the proceedings require counsel to have special skill and experience in the High Court. I agree with both TNZ and the dealers that the proceedings are large scale, high value and raise a number of complex and novel issues as to representative action procedures, liability and loss. All parties are represented by King’s Counsel, whose experience and skills were of assistance to the Court in determining the applications.

[12]   I note that many of the class actions heard by this Court have shared my provisional categorisation, including Paine v Carter Holt Harvey Ltd.2

[13]   In terms of banding, I likewise agree with TNZ and the dealers that band C is appropriate. The consolidation application raised complex, novel and significant issues. I note that the plaintiffs are appealing my decision, which is an obvious reflection of the importance they place on the outcome. I consider it reasonable for TNZ and the dealers to have spent a comparatively large amount of time on preparation of the notices of opposition and submissions, as evidenced by the leave granted to all parties to file submissions exceeding usual interlocutory limits,3 the number of affidavits filed (51 with 192 exhibits) and the number of authorities cited (67).

[14]   I note that in the case of the dealers, single representation of a large number of defendants is an accepted basis for band C allocation and likewise an accepted basis

2      Paine v Carter Holt Harvey Ltd [2019] NZHC 478 at [72].

3      Each filed submissions of 30 pages or more, including attached schedules.

on which to claim increased costs under r 14.6(3) of the Rules.4 The dealers do not seek increased costs in this case.

Should the plaintiffs’ costs liability be mitigated on account of the result in relation to applications (a) and (b)?

[15]   The plaintiffs’ applications were  filed on 23 February  2024, amended  on  22 March 2024 and further amended on 10 May 2024. On the afternoon before the hearing, additional affidavits were filed from further proposed plaintiffs (the result being to reduce the number of “no claims dealers”). The plaintiffs also unsuccessfully opposed the dealers’ position that the joinder/consolidation application needed to be determined prior to the hearing of the application for representative orders.

[16]   While neither the dealers nor TNZ opposed the plaintiffs’ application for joinder/consolidation, this was subject to the following conditions:

(a)the “no claims dealers” be struck out as parties;

(b)any orders would take effect from the date on which they were made for limitation purposes; and

(c)either joinder or consolidation was to be granted, but not both.

[17]   The third of these conditions was uncontentious to the extent that the plaintiffs always envisaged joinder and consolidation as alternatives. They initially advocated for joinder but, shortly before the hearing, agreed to consolidation. I agree with the plaintiffs, however, that the first two conditions were not minor and, given the position adopted by them in respect particularly of the “no claims dealers”, it was reasonable of the plaintiffs not to have accepted them.

[18]   The upshot is that at least part of what the plaintiffs achieved immediately before and at the beginning of the hearing was only achieved as a result of bringing and prosecuting the applications.

4      Body Corporate 169791 v Auckland City Council HC Auckland CIV-2004-404-5225, 17 August 2010 at [8]–[12].

[19]But I must take into account both that:

(a)the nature of the resolution did not finally establish effective dates for addition of the plaintiffs and substitution of DEL. Both these issues have effectively been held over. As the dealers point out, there does not appear to be any authority in support of the proposition that deferral of issues by agreement justifies a reduction in costs; and

(b)the most significant issue which arose across the various applications was that which I determined in my judgment, namely whether the no claims dealers should be struck-out or removed from the dealer proceeding.

[20]   I also acknowledge the point raised by the plaintiffs that TNZ and the dealers were able to take a coordinated approach which will, at least to some extent, be reflected in actual costs.

[21]   The resultant exercise has a highly discretionary component. I must necessarily be reasonably robust. In my view, some reduction is appropriate but not at the level (50%) proposed by the plaintiffs nor in respect of all steps.

[22]   TNZ submits that if I were minded to make an adjustment to the “headline” figure, the proper course would be to discount TNZ’s costs by “the claimable amount for the steps taken by the plaintiffs in which they achieved success”. It says that because the plaintiffs only succeeded on unopposed orders, the reduction should only apply to the cost for filing the application for joinder, given that the other steps claimed for related only to opposed matters.

[23]   However, that approach would not see any deduction in respect of step 24 — the preparation of written submissions — when these related to all three applications.

[24]   However, by the same token, it would be inappropriate to apply a discount to step 26 — appearance at hearing — or step 27 — second counsel — when the hearing was almost exclusively devoted to the issue I have identified.

[25]   I accordingly fix costs in favour of both defendants on a 3C basis with a discount of 25 per cent on steps 23 and 24. My calculations appear as Schedules A and B.

Result

[26]I award costs and disbursements as follows:

(a)In favour of TNZ in the amount of $24,020.60.

(b)In favour of the dealers in the amount of $18,628.15.

Muir J

Solicitors:

Shine Lawyers, Auckland Buddle Findlay, Auckland Gilbert Walker, Auckland

Schedule A

Costs on a 3C basis Daily Recovery Rate $3,530

TNZ

Step in the proceeding	Allocated time (days)	Total cost
23	Filing opposition to interlocutory application x2	4	$14,120
24	Preparation of written submissions	3	$10,590
26	Appearance at hearing	1	$3,530
27	Second counsel	0.5	$1,765
Sub-total	$30,005
Deduct 25% of award on steps 23 and 24.	$6,177.50
Disbursements
14	Filing notice of opposition (x2)	$193.105
TOTAL	$24,020.60

5      Exclusive of GST.

Schedule B

Costs on a 3C basis Daily Recovery Rate $3,530

Dealers

Step	Days (Band C)	Total (category 3)
23	Filing opposition to interlocutory application	2	$7,060
24	Preparation of written submissions	3	$10,590
26	Appearance at hearing of defended application for sole or principal counsel	1	$3,530
27	Second counsel	0.5	$1,765
Sub-total	$22,945
Deduct 25% of award on steps 23 and 24.	$4,412.50
Disbursements	$95.65
TOTAL	$18,628.15