Todd v Hillary HC Auckland CIV 2005-412-294

[2007] NZHC 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2005-412-000294

BETWEEN  G M TODD & OTHERS (MACALISTER TODD)

Plaintiffs and First Counterclaim

Defendants

AND  G J HILLARY

Defendant and Counterclaim Plaintiff

ANDA P DUNCAN & OTHERS (CORBAN REVELL)

Second Counterclaim Defendants/First

Third Party

Judgment:      20 August 2007 at 3.00 p.m.

COSTS JUDGMENT OF VENNING J

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Solicitors:           Gilbert Walker, Auckland

M E Parker, Queenstown

Copy to:            M Phillips, Auckland

G Hillary, Christchurch

G M TODD & OTHERS (MACALISTER TODD) V G J HILLARY AND ANOR HC AK CIV 2005-412-

000294  20 August 2007

[1]      In a judgment delivered on 15 June 2007 this Court dismissed Mr Hillary’s claims against Macalister Todd and Corban Revell.   It also entered judgment for Macalister Todd against Mr Hillary for fees.   It was unnecessary to deal with the third party claim brought by Macalister Todd against Corban Revell.

[2]      Leave was reserved in relation to the issue of costs.   I have now received memoranda from all parties in relation to costs.

[3]      Both Macalister Todd and Corban Revell seek costs against Mr Hillary.  In addition, Corban Revell seeks costs against Macalister Todd in relation to a third party claim.

[4]      Macalister Todd seek costs calculated on a 2B basis against Mr Hillary. Macalister Todd seek an uplift in the costs incurred after Mr Hillary’s refusal to accept a settlement offer prior to trial.

[5]      Corban Revell also seek costs calculated on a 2B basis.   They seek costs against both Mr Hillary and Macalister Todd.  They also seek an uplift on the trial costs against Mr Hillary following his refusal to accept their settlement offer prior to trial.

Mr Hillary’s position

[6]      Mr Hillary’s position is that both Macalister Todd and Corban Revell were fortunate to obtain a judgment against him and should not be awarded costs.  He has appealed the substantive judgment.

[7]      Mr  Hillary’s  submissions  also  addressed  his  view  of  Corban  Revell’s obligations towards his former wife, Ms Itagaki.  That is irrelevant.  It is a separate issue, and is the subject of separate proceedings.

[8]      Mr Hillary also sought to revisit the earlier offers made by Corban Revell and

Macalister Todd.  But those offers are no longer relevant save as to the issue of costs.

[9]      Finally  Mr  Hillary  sought  to  revisit  the  merits  of  the  judgment.    The appropriate venue for that is the appeal hearing.

Decision

[10]     As successful parties both Macalister Todd and Corban Revell are entitled to costs against Mr Hillary:  r 47(a).  There has been no disentitling conduct by either party in these proceedings.

[11]     The  proceedings  were  properly  classed  as  category  2.    Time  scale  B

appropriately applies to the steps taken in the course of the proceedings. [12]           The only real issues that arise are:

•   the effect of Macalister Todd’s third party claim against Corban Revell;  and

•   whether there should be an uplift in favour of both Macalister Todd and Corban Revell in relation to Mr Hillary’s refusal to accept the settlement offers made by those firms.

The third party claim

[13]     Corban Revell was first joined to the proceedings by Macalister Todd when it issued a third party claim in August 2005.   Mr Hillary subsequently also made a claim against Corban Revell.  Corban Revell has calculated the costs that are directly attributable to the claims brought against it by Macalister Todd and Mr Hillary.  In addition, Corban Revell has incurred costs in defending Mr Hillary’s claim and Macalister Todd’s third party claim which cannot be separated out, as they relate to the defence of both.

[14]     Corban Revell submit Macalister Todd and Mr Hillary should be jointly and severally liable for the balance of those costs.

[15]     I accept that Corban Revell is entitled to look to Macalister Todd for costs on the basis it was joined by Macalister Todd as a third party but I am not able to accept that Macalister Todd should be jointly and severally liable with Mr Hillary for the entire amount of Corban Revell’s costs.  Although Macalister Todd maintained the third party claim against Corban Revell to trial (in that it was not formally withdrawn), the claim ultimately did not feature at trial.  The focus of the trial was on Mr Hillary’s claim.   In the circumstances an apportionment of costs between Macalister Todd and Mr Hillary is appropriate.

[16]     Nor do I accept that costs for the second counsel at trial was appropriate. Corban Revell did undertake additional work in preparation of the bundle, pleading and chronology that are not normally taken, but they are steps prior to trial.  It was unnecessary for two counsel to appear at trial.  As the case progressed counsel for Corban Revell did not cross-examine at all.  I disallow the claim for second counsel.

Are either Corban Revell or Macalister Todd entitled to an uplift?

[17]     I am not prepared to accept there should be an uplift to Corban Revell for costs against Mr Hillary on the basis he declined to accept a settlement offer made to him by that firm.   The offer made to him was also directed at a resolution of the proceedings involving Corban Revell and Ms Itagaki to the extent that Mr Hillary would have had to pay his judgment debt to Ms Itagaki as a condition of settlement. Corban Revell had a direct interest in the resolution of the proceedings between Mr Hillary and Ms Itagaki given that Ms Itagaki has extant proceedings against Corban Revell.  In the circumstances I am not prepared to say that it was unreasonable for Mr Hillary to decline to have accepted Corban Revell’s offer:   r 48C(3)(b)(v).   I decline to make any order for uplift in Corban Revell’s favour against Mr Hillary.

[18]     In my judgment however the position is different in relation to Macalister Todd’s submission for an uplift.  Mr Hillary should have accepted their offer.  By failing to do so he has required Macalister Todd to incur the additional unnecessary expense of defending this proceeding.  Rule 48C(3)(b)(v) applies.  Mr Hillary has, without reasonable justification, declined to accept an offer of settlement and has thus contributed unnecessarily to the time and expense of the hearing.  I accept that

an uplift of 50 percent is appropriate:   Holdfast NZ Limited v Selleys Pty Limited

(2005) 17 PRNZ 897.

Result/Orders

[19]     Corban  Revell  is  to  have  costs  against  Macalister  Todd  in  the  sum  of

$2,990.00.

[20]     Corban Revell is to have costs against Mr Hillary in the sum of $4,040.00. [21]       Corban  Revell  is  to  have  additional  costs  against  both  Mr  Hillary  and

Macalister Todd in the sum of $27,878.47 (that order for costs is joint and several).

[22]     Macalister Todd is to have costs against Mr Hillary in the sum of $49,005.00 being the costs sought of $39,965.00 together with a 50 percent uplift of $9,040.00.

Addendum – Stay

[23]     Mr Hillary has suggested that the stay should continue until the appeal is heard and dealt with.  That is a matter for the parties to either resolve or for the Court to rule on following application.  The current order is that the stay was to be lifted on

expiry of the appeal period.

Venning J