Waimauri Limited v Powell Junior Limited - [2022] NZHC 1506

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1694

[2022] NZHC 1506

UNDER Part 18 of the High Court Rules

BETWEEN

WAIMAURI LIMITED

Plaintiff

AND

POWELL JUNIOR LIMITED

Defendant

Judgment:

(On the papers)
28 June 2022

JUDGMENT OF HARLAND J

[re costs]

This judgment was delivered by me on 28 June 2022 at 2 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Brown Partners, Auckland Glenie Legal Ltd
M Lenihan Auckland

WAIMAURI LIMITED v POWELL JUNIOR LIMITED [2022] NZHC 1506 [28 June 2022]

Introduction

[1] On 20 June 2022, the Registry forwarded to me the submissions of counsel in relation to costs.1 By my judgment dated 21 March 2022, I dismissed Waimauri Limited’s (Waimauri) application for summary judgment. I expressed the tentative view that costs should be reserved.2

[2] Powell Junior Limited (PJL) submits that Waimauri should be ordered to pay 2B scale costs now. Waimauri disagrees.

Legal principles

[3] Costs on an unsuccessful summary judgment application are often reserved.3 This is because although a defendant can be regarded as successful in resisting a summary judgment application, it is not a final determination of the proceeding itself. As the Court said in NZI Bank v Philpott:4
If, ultimately the plaintiff does succeed it seems to us in the general run of cases that the defendant should pay for both proceedings, the Court paying particular attention to the reasons why the plaintiff was unsuccessful in the first case.

…

where the defendant has raised defences which cannot by their nature be resolved at a summary judgment application but ultimately turn out to have no basis, then costs on both sets of proceedings belong to the plaintiff.

[4] Despite this general principle, there are instances where costs are awarded to defendants following unsuccessful summary judgment applications. Counsel for PJL referred to some of the more recent cases where this has occurred:5

1      Submissions for the Defendant dated 4 April 2022, submissions for the Plaintiff dated 19 April 2022.
2      Waimauri Ltd v Powell Junior Ltd [2022] NZHC 515 at [91].
3      NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA).
4      At 405, line 30 onward.
5      Emmons Developments New Zealand v Mitsui Sumitomo Insurance Co Ltd [2016] NZHC 1244;
Mason v Dodd [2020] NZHC 2005; and Fullarton v AWN Holdings Ltd [2021] NZHC 1873.

[5] Mr Glenie, for PJL, submitted that the following factors arise from the recent cases which weigh in favour of awarding costs to a defendant who has successfully resisted a summary judgment application:

(a)There has been “fault on the part of the plaintiff”6;

(b)The plaintiff knew or ought to have known that there was “a bona fide question of law or fact which can be determined only after a trial”7, or that there was “considerable scope for argument”8, or that there was an “arguable defence”9;

(c)The plaintiff knew or ought to have known that resolution of the claim would…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NZHC 1506
Decision Date: 28 June 2022

CaseChat Overview and Summary

In Waimauri Limited v Powell Junior Limited, the High Court of New Zealand addressed a dispute between Waimauri Limited, the plaintiff, and Powell Junior Limited, the defendant. The plaintiff sought summary judgment against the defendant for an unpaid debt, which the defendant resisted. Following the plaintiff's unsuccessful application for summary judgment, the defendant argued that the plaintiff should be ordered to pay its costs. The plaintiff contested this, arguing that the case involved complex issues that warranted a full hearing.

The central legal issue before the court was whether the defendant should be awarded costs following the plaintiff's unsuccessful application for summary judgment. The court examined the principles governing the award of costs in such circumstances, noting that while unsuccessful summary judgment applications are typically followed by a reservation of costs, there are exceptions where the defendant may be awarded costs. These exceptions include instances where there has been fault on the part of the plaintiff, or where the plaintiff knew or ought to have known that there was a bona fide question of law or fact requiring a trial.

The court considered the defendant's arguments that the plaintiff's application for summary judgment was inappropriate, and that the case involved complex issues that warranted a full hearing. However, the court found that the case had evolved during the application process, and that the potential defences raised by the defendant, while not straightforward, were not compelling enough to warrant an award of costs at that stage. The court concluded that the validity of the defences should be resolved at a substantive hearing before any determination on costs is made. Consequently, the court reserved the issue of costs until the outcome of the substantive proceeding.

Orders