Tracplus Global Limited v Deaker
[2024] NZHC 502
•8 March 2024
IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY
I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE
CIV-2023-442-36
[2024] NZHC 502
BETWEEN TRACPLUS GLOBAL LIMITED
Applicant
AND
SHAWN DEAKER
First Respondent
V2TRACK (2022) LIMITED
Second Respondent
Hearing: On the papers Counsel
P J Napier and P J Shanahan-Pinker for Applicant
T Smith and O C Gascoigne for First and Second Respondents
Judgment:
8 March 2024
JUDGMENT OF RADICH J
(Costs)
[1] TracPlus brought this proceeding against Mr Deaker and V2Track alleging that they had accessed its confidential information. Causes of action for breaches of confidentiality and confidence, and in tort, were advanced. An application for interim relief was made.
[2] Soon before the application for interim relief was to be heard, I issued a minute in which I asked counsel to address a preliminary issue at the hearing on whether the High Court had jurisdiction in the proceeding. The hearing was then dedicated to submissions on that issue and, in my judgment of 7 December 2023, I concluded that the Employment Relations Authority had exclusive jurisdiction to determine the matters that are the subject of the proceeding and that, accordingly, the High Court had no jurisdiction to take any further steps.
TRACPLUS GLOBAL LIMITED v DEAKER [2024] NZHC 502 [8 March 2024]
[3] Following an exchange of memoranda, on 20 December 2023, I made an order under r 10.19 of the High Court Rules 2016 dismissing the proceeding.
[4] Mr Deaker and V2Track now seek costs of $42,840.75 on an increased costs basis and disbursements of $4,443.30. TracPlus says that costs should lie where they fall because, given the dismissal of the proceeding on the jurisdictional grounds raised by the Court itself, neither party could be said to have been successful or to have failed in its claim or in its defence of the proceeding.
The nature of the claim for costs
[5] The position that Mr Deaker and V2Track take is based upon their views on the merits of the interim injunction application and on the case as a whole. They say that the proceedings were misconceived and unnecessary. They say that allegations made at the outset were incorrect and that the plaintiff’s application for interim relief needed to be reconceived as a consequence. It is said that, through a combination of practical (technology-based) means and undertakings, the potential for ongoing access to TracPlus’ confidential information by Mr Deaker and V2Track could have been addressed, rendering the proceeding unnecessary.
[6] In this sense, its position is based upon a premise that it would have succeeded in defending the interim injunction application and the substantive issues.
[7] Moreover, it says that increased costs are appropriate as a result of the way in which TracPlus conducted the proceedings. It alleges that TracPlus failed to act reasonably because the application for interim relief was unnecessary, unreasonable and lacked merit, because undertakings offered were not accepted and because the nature of the allegations was such as to necessitate significant affidavit evidence.
[8] The Court is not in a position to form any view on the merits of the underlying proceeding or the application for interim injunction. It did not hear argument on either. There is, for the same reasons, even less ability for it to go further and to consider the prospect of increased costs on the basis of submissions that the application lacked merit or was unnecessary. Equally, allegations about the conduct of the proceedings
adding unnecessary cost would require the Court to consider the nature and utility of evidence filed on the substantive issues.
[9] While a number of references have been made in the parties’ submissions on costs to evidence in the proceeding and to correspondence between counsel, the Court cannot make substantive findings at this stage when the underlying proceeding has not been heard.
[10] What can be said is that grounds to use band C for certain Schedule 3 time allocations are difficult to discern and, on the face of it, it cannot be said that the TracPlus behaved unreasonably in pursuit of the litigation to such an extent as to warrant any uplift in costs – should costs be available. As Cooke J cautioned in Lepionka & Company Investments Limited v Gibson Sheat, given the schedular approach of the High Court Rules regime, the Court should only be involved in the determination of costs in a limited number of cases yet it has become increasingly apparent that the Court is being asked to grant uplifts, or discounts, almost routinely.1 Those concerns resonate here.
[11] In any event, given that the Court was not called upon to consider the allegations or defences in the proceeding, the set of principles that apply in considering the appropriate approach in setting costs are those that I now come on to discuss.
The principles that are relevant in the circumstances
[12] The overriding principle is that costs are at the discretion of the Court.2 Rule 14.2 of the High Court Rules prescribes a set of general principles to apply to the determination of costs. Included amongst them is the principle that the party who fails in a proceeding or interlocutory application should pay costs to the party who succeeds and that, so far as is possible, the determination of costs should be predictable and expeditious.
[13] Identifying success or otherwise in a proceeding is not always black and white. But it must come down to a matter of common sense. The Court needs to stand back
1 Lepionka & Company Investments Limited v Gibson Sheat [2023] NZHC 2745 at [7].
2 High Court Rules 2016, r 14.1.
and make a realistic appraisal of which party won the principal contest of law and fact and of the extent to which they were unsuccessful on other contests within the case.3
[14] It may be for example that, in cases involving both claims and counterclaims, neither party succeeds fully such that costs should lie where they fall.4 And, moving closer to the circumstances here, there have been cases where it has been most appropriate for costs to lie where they fall where proceedings came to an end before the substantive issues were determined.5
[15]Recent examples can be found in the decision of Mander J in Walker v Angus
– where costs lay where they fell because, for practical reasons, the substantive issue was not determined in either parties’ favour6 – and the decision of Becroft J in Freight Direct (NZ) Ltd v Unity One Ltd – where costs lay where they fell because, ultimately, a substantive hearing was not required and so the issues were not determined on the merits.7
[16] As Harvey J said in Conqra Asbestos Solutions Ltd v Warehouse World Ltd: “A costs proceeding is not intended to provide a platform for ventilation of arguments on the substantive proceedings, had they continued”.8
[17] This proceeding was dismissed for jurisdictional reasons raised by the Court. While Mr Deaker and V2Track supported the view that the Court lacked jurisdiction to hear the case, neither party either succeeded or failed on the issues to which the proceeding related and which had been addressed in their pleadings and evidence. The realistic approach that results is that neither party was successful and costs should lie where they fall.
3 See, for example, Lawrence v Glynbrook 2001 Ltd [2015] NZHC 1005 at [8] and Tower Insurance Limited v Kilduff [2019] NZCA 82 at [27].
4 TTAH Ltd v Koninklijke Ten Cate NV [2012] NZHC 1402 at [54].
5 See, for example, Ministry for Primary Industries v Hawkes Bay Seafoods & Ors [2019] NZDC 12304 at [12] and [13].
6 Walker v Angus [2019] NZHC 2845 at [18].
7 Freight Direct (NZ) Ltd v Unity One Ltd [2024] NZHC 59 at [15].
8 Conqra Asbestos Solutions Ltd v Warehouse World Ltd [2022] NZHC 321 at [21].
Result
[18] No order for costs or for the payment of disbursements is made. Costs will lie where they fall.
Radich J
Solicitors:
K3 Legal, Auckland for Applicant
Mallett Partners, Wellington for First and Second Respondents
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