Turvey v Reeves

[2022] NZHC 1184

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-000129 [2022] NZHC 1184

BETWEEN

DARYN TURVEY

Plaintiff

AND

GRAEME REEVES

Defendant

AND

CORNWALLIS TRUSTEES LIMITED

Second Defendant

AND

PATRICIA TURVEY

Third Defendant

Hearing:	On the papers
Counsel:	T Mijatov and O L Wilkinson for Plaintiff D P MacKenzie for Third Defendant
Judgment:	26 May 2022

COSTS JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 26 May 2022 at 11.00 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

TURVEY v REEVES [2022] NZHC 1184 [26 May 2022]

[1]    In a judgment of 12 April 2022, I determined an application by the third defendant to strike out the plaintiff’s amended statement of claim and/or for summary judgment.1 The application for summary judgment was dismissed, but due to serious deficiencies in the amended statement of claim, the plaintiff (Mr Turvey) was ordered to file a further amended statement of claim within 42 days.2 The plaintiff’s application for strike out was adjourned with leave reserved to bring it back before the Court if it was considered Mr Turvey’s further amended statement of claim remained deficient. I reserved costs on the basis that either party may apply for costs by memorandum.

[2]The third defendant (Mrs Turvey) has applied for costs.

[3]    While to this point in time Mr Turvey has been self-represented, he has now instructed counsel. He opposes the making of an award of costs.

Submissions of the parties

[4]    Mrs Turvey argues that she was the successful party as whilst Mr Turvey’s amended statement of claim was not expressly struck out, he was required to file a further pleading with the benefit of counsel, and his former pleading cannot be pursued.

[5]    Counsel referred me to several findings throughout my judgment, noting deficiencies in the amended statement of claim and, it is said, due to the extent of those deficiencies, Mrs Turvey had no option but to apply for strike out.

[6]    Mrs Turvey also argues that consistent with r 14.8 of the High Court Rules 2016, costs on an opposed interlocutory application must be fixed when the application is determined, and become payable when fixed, unless there are special reasons to the contrary. It is submitted that there are no special reasons here. Costs are sought on a 2B basis.

1      Turvey v Reeves [2022] NZHC 760.

2      The date for filing the amended statement of claim has since been extended.

[7]    For completeness, I do not consider it necessary for present purposes to express any view on counsel’s submissions as to the course the proceeding may take following the amendment of Mr Turvey’s pleadings.

[8]    Mr Turvey, who as I note is only latterly represented by counsel, opposes costs and says they should continue to be reserved. Three reasons are advanced.

[9]    First, it is said that in my judgment I reserved costs in light of the possibility that Mrs Turvey may renew her application for strike out. It is argued that in doing so I recognised it was too early for costs to be determined.

[10]   Second, it is said Mrs Turvey’s costs claim does not recognise Mr Turvey’s large measure of success in opposing the applications. It is said Mrs Turvey substantially failed in relation to the grounds advanced for strike out and failed for summary judgment in its entirety.

[11]   Third, it is argued that if the Court nevertheless wishes to determine costs, the appropriate course is for them to lie where they fall. Mr Turvey argues that had he been represented, he would have been entitled to claim costs due to his large measure of success. For this reason, it is said, an order that costs are to lie where they fall represents an accommodation in favour of Mrs Turvey.

General principles

[12]   The general principles governing the Court’s approach to costs are well established and do not appear to be contested. All matters of costs are discretionary, but the discretion must be exercised on a principled basis.3 The determination of costs, so far as possible, should be both predictable and expeditious.4 The party that has lost should pay the costs of the party that has won unless there are exceptional reasons to the contrary.5 Costs on an opposed interlocutory application should generally be fixed when the application is determined and become payable when they are fixed.6 Costs

3      High Court Rules 2016, r 14.1(1).

4      Rule 14.2(1)(g).

5      Rule 14.2(1)(a) and Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 2 NZLR 523 at [19].

6      Rule 14.8(1).

awards should reflect the complexity and significance of the proceeding and be assessed by applying the appropriate daily rate to the time considered reasonable for each step required in the proceeding.7 The Court may, in its discretion, refuse an order of costs or reduce the costs otherwise payable by the losing party to the successful party in any of the circumstances set out in r 14.7. Similarly, the Court may award the successful party indemnity or greater costs relative to scale in circumstances set out in r 14.6.

My analysis

[13]   The first issue I must decide is which party was successful. Mrs Turvey was plainly not successful on the summary judgment application and is not entitled to costs in respect to that application. As Mr Turvey was not represented, he has not claimed costs in relation to that application.

[14]   However, in relation to the strike out application, the matter is not so straightforward. The Court must take a realistic and holistic approach to the question of success. It must have regard to all of the circumstances, including what was sought to be achieved by the application and the positions taken by the parties.8 In Karaka v Ngai Tai Ki Tamaki Tribal Trust, Katz J said:9

[22] Where both sides have had some success in the proceedings, the proper approach was set out by the Court of Appeal in Packing In Ltd (in liq) v Chilcott. The Court said at [5]-[6]:

In a case ... where in broad terms each party has had similar success, we do not consider it helpful to focus too closely on the question which party has failed and which has succeeded. Costs in a case such as this should rather be based on the premise that approximately equal success and failure attended the efforts of both sides. To that starting point should be added issues such as how much time was spent on each transaction or group of transactions in issue, and any other matters which can reasonably be said to bear on the Court’s ultimate discretion on the subject of costs. In the end, as in all costs matters, the Court must endeavour to do justice to both sides, bearing in mind all material features of the case.

…

7      Rule 14.2(b) and (c).

8      See the discussion in David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2002) at [2.2]-[2.5]; Karaka v Ngai Tai Ki Tamaki Tribal Trust [2014] NZHC 603; Young v Tower Insurance Ltd [2017] NZHC 482; Lawrence v Glynbrook 2001 Ltd [2015] NZHC 1005; Emmons Developments New Zealand Ltd v Mitsui Sumitomo Insurance Company Ltd [2020] NZHC 932.

9      Karaka v Ngai Tai Ki Tamaki Tribal Trust, above n 8.

Success or failure ... is better assessed by a realistic appraisal of the end result rather than by focusing on who initiated what step, and the extent to which that step succeeded or failed.

[15]   Notwithstanding  Mr  Tuvey’s  submissions  to  the  contrary,  I   consider Mrs Turvey was the successful party on the strike out application. While it is true that Mrs Turvey sought to strike out the claim on several bases that I did not accept, it is also the case that one of the grounds advanced, and the one that I effectively upheld, was that the amended statement of claim was so deficient it did not disclose discernable  causes  of  action.  The  case  could  not  have  proceeded  to  trial  on Mr Turvey’s pleadings and an application to strike them out was appropriate.

[16]   Mr Turvey has submitted that my decision to reserve costs was recognition that it is too early for costs to be determined. That was not my view. I reserved costs because I considered the parties might regard it more convenient to deal with costs once Mr Turvey filed any amended pleading, but I expressly reserved leave for costs to be sought earlier.

[17]   The next issue is what is the appropriate costs category for the proceeding. I do not understand it to be in doubt that this is a category 2 proceeding.

[18]   In relation to the next issue of the steps taken in the proceeding and the appropriate time allocation for each of those steps, I do not accept Mrs Turvey’s position that all steps should be assessed on a band B basis. Some allowance must be made for the fact that several of the arguments advanced for Mrs Turvey were not successful and, Mr Turvey would argue, should never have been pursued. Mrs Turvey succeeded on an argument that was straightforward. It did not require, nor justify, lengthy submissions or an extended hearing. This should be recognised when assessing what time allocations for each step in the application are objectively reasonable. I consider that time allowances should be assessed on a band A basis. Further, part of the hearing concerned applications by other parties. Insofar as it related to Mrs Turvey’s application, it was extended because of arguments that were not successful. I shall allow 0.25 of a day for the appearance of counsel at the hearing.

[19]   The next issue is whether there are circumstances requiring a departure from scale costs. One of the grounds upon which the Court might refuse an order of costs,

or reduce the costs otherwise payable by the losing party to the successful party, includes where, although a party has succeeded overall, that party has failed in relation to a cause of action or issue that “significantly” increased the costs of the party opposing costs. Here, while Mrs Turvey was unsuccessful in relation to several of the grounds advanced to strike out the claim, as Mr Turvey was self-represented, it cannot be said that Mrs Turvey significantly increased his costs. It appears to me also that appropriate recognition for the losing points advanced by Mrs Turvey is factored in by my assessment of the time allowances considered reasonable for steps taken in the application.

[20]   The final matter is whether Mrs Turvey is entitled to recover disbursements. The only disbursement sought is the filing fee on the application, which is appropriate.

[21]   It follows that Mrs Turvey is entitled to the following costs and disbursements on the strike out application:

Step	Description	Time Allocation (2A)	Amount (2A)
22	Filing interlocutory application	0.3	$717
24	Preparation of written submissions	0.5	$1,195
25	Preparation of bundle for hearing	0.4	$956
26	Appearance    at     hearing     (sole counsel)	0.25	$597.50
Filing fee	$500
Total	1.45	$3,965.50

Result

[22]There shall orders that:

(a)In relation to Mrs Turvey’s application for summary judgment, there is no order for costs.

(b)In relation to Mrs Turvey’s application for strike out, she is awarded costs and disbursements totalling $3,965.50.

O G Paulsen Associate Judge

Solicitors:

Smyth & Co (Pearse Smyth), Christchurch Darroch Forrest Lawyers, Wellington

Dewhirst Law (M Dewhirst and G Woollaston), Palmerston North