Trustees Executors Limited v QBE Insurance (International) Limited HC Auckland CIV 2009-404-1165

[2011] NZHC 448

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2009-404-1165

UNDER  THE DECLARATORY JUDGMENTS ACT 1908

BETWEEN  TRUSTEES EXECUTORS LIMITED Plaintiff

ANDQBE INSURANCE (INTERNATIONAL) LIMITED

Defendant

Hearing:         On Papers

Counsel:         M McIntosh and C Labard for Plaintiff

M G Ring QC and A Chaliss for Defendant

Judgment:      3 May 2011

COSTS JUDGMENT OF RONALD YOUNG J

[1]      In these proceedings Trustees Executors sought a declaratory judgment that an insurance policy held by the defendant in the plaintiff’s favour covered particular losses on loans.  In my judgment I refused to make the declaration sought.

[2]      The defendant now seeks costs.  The plaintiff does not oppose costs in favour of the defendant but there are disagreements as to; the appropriate categorisation of the proceedings; whether any award of costs should be reduced by an unsuccessful challenge to the appropriateness of the declaratory judgment procedure; and whether the defendant’s  costs  award should  be reduced  by virtue of a  pre-trial  decision

relating to exclusion of evidence.

TRUSTEES EXECUTORS LIMITED V QBE INSURANCE (INTERNATIONAL) LIMITED HC AK CIV

2009-404-1165 3 May 2011

[3]      The defendant says this is a category 3 case, the plaintiff’s a category 2 case. A category 3 case is one that is out of the ordinary run of High Court litigation.  I am satisfied that this case is properly a category 3 case.  It was, in my view, of above average complexity and involved difficult legal issues regarding the interpretation of an insurance policy and causation.  While I accept, as the plaintiff points out, there were no material facts in dispute the legal issues were, as I have noted, of some complexity.    I  note  that  the  Court  of  Appeal  in  its  judgment  on  this  matter categorised the case as a complex appeal.

[4]      As to the determination of a reasonable time and, therefore, a consideration of what band this case comes within it does not matter whether band B or C is adopted. The time allocation is the same for either band.

[5]      As to the defendant’s unsuccessful challenge to the declaratory judgment procedure r 14.7 provides for a reduction in any costs awarded to a successful party if that party fails in relation to an issue which significantly increases the costs of the other party.

[6]      The plaintiff’s claim is that costs to the defendant should be reduced either on the  basis  that  the  defendant  failed  in  relation  to  an  issue  which  significantly increased the costs of the other party or the defendant pursued an unnecessary step or an argument that lacked merit (r 14.7).  In my view neither case applies here.

[7]      The argument regarding the appropriateness of the declaratory judgment procedure occupied a very short part of the hearing.  In my view, therefore, it could not be said that either that argument significantly increased the costs of the other party.  While I rejected the argument I do not consider that the defendant pursued an unnecessary step or argument that lacked merit.

[8]      I, therefore, reject the plaintiff’s claim that there should be a reduction in

costs for the appropriateness argument.

[9]      The plaintiff applied to exclude the evidence of Mr Craig Anderson.   The application sought orders that Mr Anderson’s affidavit not be read or alternatively parts not be read.   The matter came before Keane J who ruled approximately five paragraphs plus two sentences from a sixth paragraph should not be read from an affidavit of over 30 paragraphs.

[10]     The plaintiff says that either it should have costs in relation to that application or costs of that application should lie where they fall.  The defendant should not be entitled to costs on that application.

[11]     The plaintiff’s application was partly successful and partly unsuccessful.  In my view in those circumstances the proper course is for costs of that application to lie where they fall.   Accordingly, neither the plaintiff nor defendant should have costs or disbursements arising from that application.   The defendant’s claim will, therefore, need to be reduced accordingly.

[12]     In  summary,  therefore,  costs  should  be  awarded  on  a  3B  basis  to  the defendant  reduced  by  no  costs  order  with  respect  the  plaintiff ’s  application  to exclude Mr Anderson’s evidence (including disbursements).

[13]     The defendant, therefore, should file a schedule of costs to the Registrar which reflects this judgment for approval.

Ronald Young J

Solicitors:

H N McIntosh, Russell McVeagh, PO Box 10212, Wellington, email:

[email protected]
M G Ring QC, Auckland, email:  [email protected]