TSB Bank Ltd v Dollimore (No 2)

[2016] NZHC 253

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1779 [2016] NZHC 253

IN THE MATTER

of Section 348 of the Property Law Act

2007

BETWEEN

TSB BANK LIMITED Applicant

AND

DARRYLE DENISE DOLLIMORE First Respondent

DARRYLE DENISE DOLLIMORE and TRISHUL TRUSTEES LIMITED Second Respondents

On the papers
Counsel:	J Carnie for applicant M J Utting for first respondent T Juneja for second respondents
Judgment:	24 February 2016

JUDGMENT No 2 (COSTS) OF PALMER J

This judgment was delivered by me on 24 February 2016 at 3 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Clendons, Auckland (J Carnie) Utting Law, Auckland

Singhs Lawyers, Auckland

TSB Bank Limited v Dollimore [2016] NZHC 253 [24 February 2016]

Summary

[1]      In a judgment of 11 December 2015 I declined an application by TSB Bank Ltd (TSB) for an order, against Ms Dollimore and Trishul Trustees Ltd (the trustees), setting aside a disposition of property.  Ms Dollimore and the trustees want costs on a 2B basis.  TSB only wants to pay on a 2A basis to Ms Dollimore and nothing to the trustees.  I outline the law relating to time bands for costs and apply it.  I order costs on a 2A basis to Ms Dollimore and half of a 2A basis to the trustees.

The Law Relating to Banding Decisions

[2]      A fundamental principle is that costs follow the event1  – meaning that a losing party pays to the winning party a contribution towards their legal costs.  Rule

14.1 of the High Court Rules is the overriding rule in relation to costs and, subject to qualification by more specific rules, provides that all matters are at the discretion of the Court.

[3]      An award of costs “should reflect the complexity and significance of the proceeding” (r 14.2(b)) assessed using the categories of complexity and time bands provided in the High Court Rules. There are three categories and three bands.

[4]      Here, the parties agree that these are category 2 proceedings under Rule 14.3: of average complexity requiring counsel of skill and experience considered average in the High Court.  The parties disagree about whether band A or B applies in terms of r 14.5 and Schedule 3 of the Rules.  TSB and the trustees disagree about whether costs should be payable at all.

Time Bands

[5]      Rule 14.5(2) provides:

(2)      A determination  of  what  is  a  reasonable  time  for  a  step  under subclause (1) must be made by reference—

(a)      to  band  A,  if  a  comparatively  small  amount  of  time  is considered reasonable; or

1      Rule 14.2(a) of the High Court Rules and Manukau Golf Club Inc v Shoye Venture Ltd [2012]

(b)      to  band  B,  if  a  normal  amount  of  time  is  considered reasonable; or

(c)      to band C, if a comparatively large amount of time for the particular step is considered reasonable.

[6]      The assessment is of each step – so a different band may apply to different steps of a proceeding.2    The assessment is an objective one; involving what time would be “considered reasonable” rather than what time was actually spent.

[7]      The  distinctions  between  the  three  bands  are  relative  to  each.    Band  B involves a “normal” amount of time and bands A and C and “comparatively” small and large amounts of time respectively – rather like Goldilocks’ choices.  Contrary to (one interpretation of) Ms Dollimore’s submission, the B band is not a default except in the sense that a step in a case could often be expected to be “normal”.

[8]      The assessment of a “normal” vis a vis a comparatively small or large amount of time in a step may, depending on the step, relate to such factors as:

(a)       the scope of the facts that are material to the issue;

(b)      the degree of difficulty in identifying the law relevant to the issue; and

(c)       the number and complexity of the arguments by both sides applying the law to the facts.

Refusal or Reduction of Costs

[9]      Rule 14.7 governs the court’s discretion to reduce, or refuse to make, a costs order if, relevantly, “the nature of the proceeding or the step in the proceeding is such that the time required by the party claiming costs would be substantially less

than the time allocated under band A”.

2      Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) 24

Application to this Case

[10]      I  agree  with  TSB’s  submission  that  the  legal  and  factual  issues  in  the application were very confined, as reflected in the straightforward pleadings, one page notice of opposition, the focused nature of the evidence, the lack of dispute over the applicable law, the lack of any need for oral evidence, the quarter day hearing time and, indeed, the twenty paragraph judgment.  This is a baby bear case. I consider that a “comparatively small” amount of time would be reasonable in relation to all the steps involved in this proceeding by counsel for Ms Dollimore.

[11]     Even less was required of counsel for the trustees.  TSB submits that it should pay no costs, or costs reduced by two thirds, to the trustees.  It notes that each of the notice of opposition, the submissions, and the evidence was one page long and no oral submissions were made.   Counsel for the trustees objects that he attended the hearing, had to peruse the application, took instructions on opposition, extracted documents as annexures for the affidavit, perused submissions, conducted research and incurred further costs.  It was TSB’s choice to pursue the trustees.  But I consider the time reasonably required of counsel for the trustees was substantially less than under Band A and that it would be fair for their costs award to be reduced to half of the relevant steps under Band A.  I order accordingly.

…………………………

Palmer J