Trilogy Bar and Eatery v Samson Corporation Limited

[2021] NZHC 848

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-2071

[2021] NZHC 848

BETWEEN

TRILOGY BAR AND EATERY

Applicant

AND

SAMSON CORPORATION LIMITED

Respondent

Hearing:	On the papers
Counsel:	B Norling and C J Lin for Applicant H G Holmes for Respondent
Judgment:	21 April 2021

COSTS JUDGMENT OF WHATA J

This judgment was delivered by me on 21 April 2021 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

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

Solicitors:           Norling Law, Auckland

Keegan Alexander, Auckland

TRILOGY BAR AND EATERY v SAMSON CORPORATION LIMITED [2021] NZHC 848 [21 April 2021]

[1]    In my judgment of 16 February 2021, I resolved to make interim orders, largely by consent.1 I also noted that in terms of costs that the position is complicated and that I was not prepared to argue the merits for costs purposes when those merits were due for full consideration at a later time. On that basis, I simply reserved costs on the interim application. However, as part of the interim orders, I granted leave to the respondent to apply for costs in relation to applications for orders that were discontinued by Trilogy. Submissions have now been filed seeking costs in relation to those matters. This is my related judgment on costs.

Relevant background

[2]    In its application for interim relief, dated 6 November 2020, Trilogy sought the following orders, among others:

(a)that Trilogy pay Samson amounts properly payable under the lease and not the inflated amount that Samson claims is payable (Order 1.3);2

(b)that Samson provides a rent and outgoings reductions pro-rated for the period of its re-entry to the lease premises from 27 October 2020 to  31 October 2020 (Order 1.4); and

(c)that Samson pay damages to Trilogy for all harm suffered by Trilogy as a result of Samson’s cancellation of the lease and for any breach of quiet enjoyment (Order 1.5).

[3]    The parties then engaged in negotiations. In a letter of 20 November 2020, Samson stated it did not intend to oppose the application for relief, subject however to a number of conditions, including that Trilogy pay its rent and operating expenses in full. Samson also said it opposed the balance of the application (ie, the damages claim). It also proposed a settlement which, among other things, capped Trilogy’s liability to specified amounts and costs were to lie where they fall. Samson’s letter also records:

1      Trilogy Bar and Eatery v Samson Corporation Ltd [2021] NZHC 177.

2      The orders sought by Trilogy, relevant to this costs judgment, are contained in paragraphs 1.3, 1.4 and 1.5 of the application. I refer to them here as Order 1.3, Order 1.4 and Order 1.5 respectively for ease of reference.

Samson is due to file its opposition to the application for an interim injunction. For reasons outlined above, Samson opposes the application to the extent that Samson considers certain further conditions should explicitly attach to the order granting relief. To aid settlement, and as suggested by you, Samson will not be filing papers today.

[4]    Trilogy responded in a letter of 21 December 2020. It proposed a counter settlement offer relating to a range of matters, including a reduction in rent and outgoings and a contribution by Samson of $25,000 to damages and legal costs. The letter also recorded:

9For the sake of clarity, should the parties not settle this matter by agreement, we confirm on behalf of Trilogy that it will not seek damages in the course of this proceeding, but reserves its right to seek damages in another forum. For further clarity, we confirm we will not seek the orders sought at 1.5 of the originating application dated      6 November 2020.

10As such, if we cannot settle this matter, we will file documents at the Court to this effect and we caution you against wasting costs as to opposing those orders.

[5]    This was not acceptable to Samson, who filed their opposition, including to orders 1.3, 1.4 and 1.5. The application, to the extent it sought orders 1.3, 1.4 and 1.5, was formally discontinued at the hearing on 12 February 2021.

Submissions

[6]    Samson notes that a respondent/defendant is presumptively entitled to costs following discontinuance, referring to r 15.23 of the High Court Rules 2016. It says the costs now claimed by Samson relate to expenditure properly incurred by Samson, which ought to have been avoided in the first place. It is just that costs be awarded, it says, upon Trilogy’s partial discontinuance of its claims. The amount claimed was as follows:

Item	Step	Time	Amount	Claimed
22	Filing interlocutory application	0.6	$1,434	$1,434
38	Filing notice of opposition and supporting affidavits	2	$4,780	$1,577
TOTALS	2.6	$6,214	$3,011

[7]Trilogy submits that:

(a)Samson’s own conduct authored its own wasted costs – referring to its December 2020 indication that it would not seek damages, and that Order 1.5 would not be sought.

(b)There was no urgency for Samson to file the opposition as the application had not even had case management conference, nor hearing allocated.

(c)It should have been obvious to Samson that the discontinued issues would not be pursued.

(d)Trilogy had not filed its discontinuance only because of the ongoing settlement effort.

(e)Any in any event, the proceedings have not been discontinued completely; rather, only specified issues have been discontinued and therefore the ordinary principles of discontinuance do not apply.

(f)Finally, if Trilogy is ultimately successful on the full application and is required to pay costs in the interim, it would be in the unsatisfactory position of having already paid costs, despite ultimately being the successful party.

Assessment

[8]    Samson deferred taking any formal step in the proceeding until after Trilogy had warned it that Order 1.5 was not in issue and that any damages claim would not be pursued. It cannot have its costs in respect of that discontinuance given that it was on notice that it would not be pursued. But I am, however, satisfied that there should be costs on the other discontinued matters. They do not form part of the remaining substantive proceedings, and Samson was put to the cost of dealing with them. However, I do not consider that the quantum of the costs sought are reasonable, even with the proposed reduction against scale. In reality, the discontinued matters formed only a minor part of the interim proceedings to date. I therefore reduce the amount

claimed by 25 per cent to take into account these matters. I make no order as to costs in relation to preparation of memorandum as to costs.

[9]There shall be orders accordingly.