Telfer Electrical Nelson Limited v Trotter
[2018] NZHC 480
•20 March 2018
IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY
I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE
CIV-2017-442-33
[2018] NZHC 480
BETWEEN TELFER ELECTRICAL NELSON LIMITED
PlaintiffAND
KENNETH JOHN TROTTER
First Defendant
GAIL ELIZABETH TROTTER AND KENNETH JOHN TROTTER AS
TRUSTEES OF THE K & G TRUSTSecond Defendants
Judgment: 20 March 2018
JUDGMENT OF DOBSON J
[Costs]
[1] In October 2017, I delivered a judgment largely dismissing the defendants’ protest to the jurisdiction of the High Court to hear the causes of action pursued by the plaintiff.1 My judgment did, however, stay one of four causes of action that I found was within the jurisdiction of the Employment Relations Authority.
[2] Subsequently, on 7 November 2017,2 I dismissed an application by the defendants to stay the effect of my October judgment pending an appeal to the Court of Appeal.
[3] Subsequent to those steps in the proceeding, Churchman J dismissed the plaintiff’s application for an interim injunction to restrain relevant activities by the
1 Telfer Electrical Nelson Ltd v Trotter [2017] NZHC 2528.
2 Telfer Electrical Nelson Ltd v Trotter [2017] NZHC 2718.
TELFER ELECTRICAL NELSON LTD v TROTTER [2018] NZHC 480 [20 March 2018]
defendants,3 and separately dealt with costs arising on the interim injunction application.4
[4] The proceeding has now been referred back to me to settle costs on the steps dealt with by me.
[5] The defendants’ initial response to the plaintiff’s request for costs to be settled is that the decision ought to be deferred until resolution of their appeal. Alternatively, liability to pay any costs ordered against them ought to be stayed pending the outcome of the appeal. In addition, the defendants raise numerous grounds challenging the bases for the plaintiff’s claim for costs.
[6] In my October 2017 judgment, I indicated a provisional view in relation to costs in the following terms:
[62] The defendants have succeeded to a modest extent in obtaining a stay of one of the company’s causes of action. The company has made out jurisdiction for what appears to be the larger part of its claims. In those circumstances, my provisional view is that the company should be entitled to costs. To the extent that the defendants’ partial success might otherwise warrant a reduction from 2B scale costs, my provisional view is that the defendants’ conduct in disregarding the directions on presentation of evidence, and their insistence on citing the content of the [Record of Settlement] but refusing the Court’s request to view its content would justify a full award of costs in accordance with the 2B scale.
[7] On the protest to jurisdiction judgment, the plaintiff has sought costs on a 2B basis, amounting to $9,143, together with a 50 per cent uplift on account of the defendants’ conduct, which would total $13,714. Disbursements are also sought, including a sum of $498 for return airfares for counsel from Christchurch to Nelson. The plaintiff also seeks costs on a 2B basis of $1,784 for the preparation of two memoranda, first opposing the application for stay and, secondly, in respect of costs relating to that step in the proceeding.
3 Telfer Electrical Nelson Ltd v Trotter [2017] NZHC 3155.
4 Telfer Electrical Nelson Ltd v Trotter [2018] NZHC 171.
[8] The defendants reject the concerns I had expressed about the manner in which they argued the protest to jurisdiction from [62] of that judgment on a number of grounds.
[9] First, Mr Ironside criticised my expectation that the defendants would file affidavit evidence in support of their protest to the High Court’s jurisdiction. He said that course was inconsistent with directions for the preparation for the protest hearing made by Williams J following a telephone conference on 3 July 2017. Those directions did not provide for the filing of affidavits, and confirmed “no further evidence will be required or is timetabled”. Also, the defendants disputed that affidavits ought to have been filed because in doing so they would be deemed to act inconsistently with the protest to jurisdiction.
[10] The way the issues raised for the defendants in their protest to jurisdiction developed, the appropriate scope of the hearing could not be dictated by the understanding Williams J was given in early July 2017. The defendants’ belated attempt to place before the Court unverified documents, and the extent of the argument I heard, amply demonstrated that there were issues of fact that ought appropriately to have been put to the Court, verified in affidavit form.
[11] Nor was there any valid concern that affidavits addressing the factual matters relevant to the protest to jurisdiction could have been held against the defendants as some form of submission to the jurisdiction. The commentary in McGechan on Procedure at [HR5.49.11], which Mr Ironside cites as supporting his concern that affidavits might compromise the defendants’ protest, is misconstrued. That commentary reflects the caution that a defendant protesting the jurisdiction ought not to participate in the proceedings by taking steps inconsistent with that protest. That risk cannot arise where the affidavits address factual matters that are relevant to the protest to jurisdiction, and which could readily be explicitly confined to that purpose. Accordingly, no issue would arise that they compromise the parties’ entitlement to maintain the protest.
[12] Therefore I am not dissuaded from the view I expressed in my judgment that the manner in which the defendants’ protest was argued frustrated a proper
determination of the point. I also remain of the view that the modest extent of the defendants’ success on the protest to jurisdiction (notionally succeeding with one out of four causes of action) is sufficient to materially alter the appropriate costs entitlement. The relative levels of success for the parties on the present application is very different to that which the Court of Appeal was dealing with in Packing In Ltd (in liq) v Chilcott, which was cited by Mr Ironside as justifying a reduction in the level of costs to which the plaintiff would otherwise be entitled.5
[13] As to the quantum of the items comprising the plaintiff’s claim, they sought one day for the hearing. This was challenged by Mr Ironside who submitted that the hearing only occupied three quarters of a day. The Court record confirms that I adjourned at 3.00 pm. Accordingly, that component of the plaintiff’s claim should be reduced from $2,230 to $1,672.50.
[14] The issue then is whether an award of more than scale is warranted. I consider that it is. The plaintiff reasonably considered it appropriate to respond to the defendants’ proposed manner of presenting unverified documents to the Court very shortly before the hearing, which would have added materially to the task for those acting for the plaintiff. I consider an uplift of 15 per cent is appropriate.
[15] The defendants opposed the disbursement claimed for airfares on the basis that it was a Nelson case and, implicitly, that the plaintiff could have obtained adequate representation in Nelson. That overlooks the fact that the plaintiff’s representatives providing instructions to lawyers were in Christchurch and were reasonably entitled to use those lawyers who act for them. I accordingly approve the disbursement for airfares.
[16] On the plaintiff’s application for costs in opposing the defendants’ application for a stay of the effect of the protest to jurisdiction judgment, the plaintiff claims 0.4 of a day for preparing each of the memorandum opposing the application for stay and the memorandum in respect of costs. I agree that a separate allowance is not justified, given the two aspects of the costs application were connected and relatively confined. Costs on opposing the application for stay is accordingly limited to $892.
5 Packing In Ltd (in liq) v Chilcott (2003) 16 PRNZ 869 at [5].
Defendants’ application for costs on admissibility of mediation documents on injunction hearing
[17] The defendants seek a costs order in their favour for a preliminary step in preparation for the interim injunction hearing, namely contesting the plaintiff’s signalled intention to adduce evidence of steps in a mediation process. This matter was addressed in various memoranda filed in early June 2017 and was the subject of directions made by Faire J on 8 June 2017. The defendants claim a time allocation of
2.2 days, amounting on a 2B scale to $4,906.
[18] It is not clear why that step in preparation for the interim injunction hearing was not dealt with in the matters put to Churchman J which resulted in his judgment on costs on the interim injunction issue of 16 February 2018. However, from an analysis of that judgment, it appears that this discrete step was not explicitly addressed.
[19] The plaintiff has not filed any memorandum in response to the defendants’ application for costs on these steps.
[20] The steps claimed include 0.8 of a day for filing two further memoranda, when the issues were relatively confined. I do not consider that reasonable and would reduce that to 0.4 of a day, reducing the total to 1.8 days. In other respects, the application appears reasonable and I accordingly order costs in favour of the defendants for those steps in the proceedings at a daily rate of $2,230, totalling $4,014.
[21]Accordingly, the costs entitlements of each party are:
Plaintiff – protest to jurisdiction HCR
Sch 3 item
Description Time (days) Costs ($2,230
per day)
23 Filing opposition to interlocutory application 0.6 1,338.00 24 Preparation of written submissions 1.5 3,345.00 25 Preparation of bundle for hearing 0.6 1,338.00 26 Appearance at hearing of defended application for sole or principal counsel 0.75
1,672.50
36 Filing memorandum in respect of costs 0.4 892.00 Plaintiff – stay application 36 Filing memoranda opposing defendants’ application for stay and in respect of costs 0.4
892.00
$9,477.00
Plus 15% uplift 1,421.55 $10,898.55 Plaintiff – disbursements Courier fees 12.50 Return airfares – Christchurch to Nelson 498.00 Total $11,409.05
Defendants – preliminary step prior to interim injunction hearing HCR
Sch 3 item
Description Time (days) Costs ($2,230
per day)
10 Preparing for case management conference (CMC) 0.4 892.00 11 Filing memorandum for first CMC 0.4 892.00 11 Filing two further memoranda for second CMC 0.4 892.00 10 Preparation for second CMC 0.4 892.00 36 Preparing and file memorandum in respect of costs 0.2 446.00 Total $4,014.00
[22] For the avoidance of doubt, I confirm that the respective costs entitlements can be offset against each other. If, after taking account of other costs liabilities, the net position is that the defendants are required to pay costs, then I agree that their obligation ought to be stayed pending a determination of their appeal from my October 2017 judgment. Such deferral is conditional on their prosecuting that appeal promptly.
Dobson J
Solicitors:
Cavell Leitch, Christchurch for plaintiff Ironside Law Limited, Nelson for defendants
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