Tyre Collection Services Ltd v Le Roy
[2016] NZHC 898
•5 May 2016
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2016-409-000060 [2016] NZHC 898
BETWEEN TYRE COLLECTION SERVICES
LIMITED Plaintiff
AND
MICHAEL BENNY LE ROY First Defendant
AND
JAMISON INVESTMENTS LIMITED Second Defendant
AND
TYRE RECYCLING SERVICES NEW ZEALAND LIMITED
Third Defendant
Hearing: On the papers Appearances:
G A Biggs for Plaintiff
D J Ballantyne for the First, Second and Third DefendantsJudgment:
5 May 2016
JUDGMENT OF DUNNINGHAM J RE: COSTS DECISION
[1] On 10 March 2016, I granted the plaintiff’s application for interim injunction orders. At the conclusion of the judgment I indicated that the plaintiff was entitled to costs and, on a preliminary view, indicated that costs on a 2B basis were justified. The parties have been unable to agree on costs and the plaintiff now seeks costs on a
2B basis.
The plaintiff ’s submissions
[2] In support of the plaintiff ’s application for costs, it notes that:
TYRE COLLECTION SERVICES LIMITED v LE ROY [2016] NZHC 898 [5 May 2016]
(a) costs on a 2B basis are substantially less than two-thirds of the
plaintiff’s actual costs (which are supported by attached invoices);
(b)the proceedings were of at least average complexity, noting the defendants’ acknowledgement in a memorandum dated 1 March 2016 that this was a “complex interlocutory application for interim injunction[s]”.
[3] Costs are sought for steps 12, 22, 24, 25, 26, 29 and, by analogy, step 30, under Schedule 3 of the High Court Rules as set out in the following table:
Step Attendance
Allocated
Days
Daily Rate
Cost
12
Appearance at mentions hearing or call-over
0.2
$2,230
$446.00
22
Filing interlocutory application
0.6
$2,230
$1,338.00
24
Preparation of written submissions
1.5
$2,230
$3,345.00
25
Preparation by applicant of bundle for hearing
0.6
$2,230
$1,338.00
26
Appearance at hearing of defended application
0.25
$2,230
$557.50
29
Sealing order
0.2
$2,230
$446.00
30
Plaintiff ’s preparation of affidavits (by analogy)
1.5
$2,230
$3,345.00
Sub Total
4.85
$10,815.50
[4] Counsel for the plaintiff explains that, in claiming for the preparation of the plaintiff’s affidavits, he has determined that by analogy with a time allocation for preparation of briefs and affidavits under step 30 for trial preparation. On a Category B basis, 2.5 days are allocated for step 30. While step 30 deals with full affidavits, the plaintiff says that the type of application in this case needed the factual background to the proceeding fully set out and the allowance sought of 1.5 days on a
2B basis for the preparation of the plaintiff’s affidavits is appropriate.
[5] In addition, the plaintiff seeks the filing fee on an interlocutory application of
$500, plus the process server’s fees of $183.00.
[6] The plaintiff also seeks costs of $500 for preparing the costs memorandum, saying costs are warranted because it was unreasonable for the defendants not to agree to resolve costs on a 2B basis.
[7] Total costs and disbursements sought are therefore $11,498.50.
The defendants’ submissions
[8] The defendants did not file a memorandum contesting the costs calculation of the plaintiff within the timeframe ordered by the Court.1 Shortly before this judgment was to be finalised, a costs memorandum was received from the defendants. As an indulgence to the defendants, I have considered those submissions and taken them into account in this judgment.
[9] The defendants’ memorandum says that “the approach the Court adopts in its summary judgment jurisdiction should be adopted in the present circumstances, namely that costs should abide the final determination of the substantive proceedings including any appeals”. The defendant argues that if the plaintiff does not recover from the defendants at trial, or if the second defendant is successful in its counterclaim, then success in the interlocutory application “would have been in a
vacuum”.
1 Which required any memorandum from the defendants to be filed by 18 April 2016, being a
further 5 working days from receipt of the plaintiff ’s costs memoranda on 11 April 2016.
[10] Alternatively, the defendant argues that if costs are fixed now, that enforcement should be stayed, saying “this will provide sufficient balance between the interests of the parties to the interim injunction and, should the plaintiff fail in its claim, there would be no principled reason to award costs at this stage because, taking an overall view, the plaintiff would not have been successful”.
[11] Finally, the defendants argue that if costs are fixed, then they accept that costs should be awarded on a 2B basis, but they object to two items claimed in the plaintiff’s costs submission. First, they oppose a full award in respect of item 25, being the preparation by the applicant of bundle for hearing, saying that “what was provided was of limited assistance to the parties and the Court and not in accordance with the Court’s standard directions for a common bundle”. Accordingly, a lesser award of 0.4 of a day at the 2B rate should be awarded.
[12] Secondly, an in respect of item 30, the defendants say that steps related to “trial preparation and appearances” are not ordinarily claimable at an interlocutory stage and accordingly they oppose that aspect of the costs claim. In any event, they say that item 30 is already covered by an award of costs for item 22, for filing an interlocutory application.
Discussion
Principles applying to the determination of costs
[13] The principles applying to the determination of costs are well understood. Costs are at the discretion of the Court but, in normal circumstances, they are to be determined having regard to the principles set out in High Court r 14.2. These include that the party who fails with respect to an interlocutory application should
pay costs to the party who succeeds,2 costs should be assessed by applying the
appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the interlocutory application,3 and so far as
possible, the determination of costs should be predictable and expeditious.4
2 High Court Rules, r 14.2(a).
3 High Court Rules, r 14.2(c).
4 High Court Rules, r 14.2(g).
Should the determination of costs be deferred?
[14] High Court r 14.8 provides that:
(1) Costs on an opposed interlocutory application, unless there are special reasons to the contrary,—
(a) must be fixed in accordance with these rules when the application is determined; and
(b) become payable when they are fixed.
[15] The commentary in McGechan on Procedure notes that the rule recognises that the costs of an interlocutory application are best fixed contemporaneously by the Judge or Associate Judge who decides it. Where, for special reasons, costs are reserved, it may be wise to fix their quantum, or at least record the hearing time involved and perhaps stipulate the appropriate time band.5 Applications for summary judgment are excluded from the presumption in r 14.8, and the defendant submits that, by analogy, to take the same approach here, because the plaintiff may not be successful in the final outcome.
[16] I accept that the presumption in r 14.8 is not immutable, but I do not consider that in this case there are “special reasons” for departing from the rule. Unlike a summary judgment application, the application for an interim injunction is not considering the merits of the substantive claims beyond there being “a serious question to be tried”. The issues which determined the outcome related to where the balance of convenience lay and the plaintiff was successful on that issue. For this reason, I do not consider there is a special reason for departing from the presumption in r 14.8 and costs on the application for interim injunction should be fixed and become payable when they are fixed.
Fixing the costs
[17] In fixing costs, I am satisfied that, subject to the claim for step 30 discussed below, each step claimed by the plaintiff is warranted having regard to the principles set out in r 14.2. The costs sought are reasonable having regard to the complexity
and significance of the proceedings and have been assessed using the default
5 McGechan on Procedure (looseleaf ed, Brookers) at [HR 14.8.02].
categories in the High Court schedules for a category 2B proceeding. This includes the claim for step 25, being preparation of the common bundle.
[18] I accept having considered the extent of the affidavit evidence filed by the plaintiff (there were three affidavits filed in support of the application and a further three affidavits filed in reply), that a claim which exceeds the 0.6 day allocation for filing an interlocutory application is warranted. In my view, the preparation of the interlocutory application, including the six affidavits, justifies a time allocation for this step being awarded on a Category C basis, which is two days. The reasonableness of this is confirmed in my view, by analogy with the Category B time allocation for filing an originating application with supporting affidavits, which is also two days. Accordingly, rather than awarding the plaintiff’s claim for step 30 in addition to step 22, I award 2C costs for step 22.
[19] The defendants do not challenge the disbursements sought by the plaintiff and I confirm those, too, are properly claimed.
[20] In respect of the claim for costs on preparation of the costs memorandum I acknowledge that there is no jurisdictional barrier to the award of costs on a costs application,6 but that costs on costs applications are not consistently awarded.7
[21] Here costs are sought on the basis that it was unreasonable not to have agreed costs where they were sought on a 2B basis and where the presumption in r 14.8 applies so that costs on an opposed interlocutory application should be fixed and become payable when the application is determined, unless special reasons apply.
[22] However, the memorandum for the defendant, albeit filed late, did raise issues which have influenced my costs decision. In those circumstances I consider it
more appropriate for costs on the costs application to lie where they fall.
6 As acknowledged by Associate Judge Doogue in Bonney v Cottle [2012] NZHC 2195.
7 See David Bulloch and Julian Long “Costs of Costs Application” [2014] NZLJ 348.
Summary of costs orders made
[23] In summary, the plaintiff is awarded 2B costs on all steps in the proceedings except step 22, where 2C costs are awarded and this negates the need to claim under step 30. This equates to an award of $10,592.50 in costs. In addition, disbursements of $683 are awarded in the plaintiff’s favour, making a total amount of $11,575.50.
Solicitors:
Corcoran French, Christchurch
Canterbury Legal, Christchurch
5