Waterhouse v Contractors Bonding Limited HC Auckland CIV-2010-404-3074

[2011] NZHC 2050

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-3074

BETWEEN  GODFREY WATERHOUSE First Plaintiff

ANDROBERT JOHN WATERHOUSE Second Plaintiff

ANDCONTRACTORS BONDING LIMITED Defendant

Hearing:         On the papers

Counsel:         S A Grant and E A James for Plaintiffs

R E Harrison QC and G J Turner for Defendant

Judgment:      7 June 2011 at 11:00 AM

COSTS JUDGMENT OF ALLAN J

This judgment was delivered by

The Hon. Justice Allan on

7 June 2011 at 11:00am

pursuant to Rule 11.5 of the High Court Rules

……………………………………………..

Registrar/Deputy Registrar

Solicitors:

S A Grant, P O Box 4338 Auckland 1140

Email:   [email protected] / [email protected]

Fortune Manning, P O Box 4139Auckland 1140

Email:   [email protected]

Copy for:

Dr R E Harrison QC, P O Box 1153 Auckland 1140

Email:   [email protected]

Case officer:       [email protected]

WATERHOUSE V CONTRACTORS BONDING LIMITED HC AK CIV-2010-404-3074 7 June 2011

[1]      This judgment is concerned with costs issues arising from my judgments of

13 December 2010 and 15 March 2011 respectively.

[2]      In the first judgment,  I dealt with the defendant’s claim that a  litigation funding agreement between the plaintiffs and a third party professional litigation funder ought to be produced to the defendant, that the plaintiffs be required to apply to the Court for leave to commence the proceeding and that there should be a stay in the meantime.   I also considered the defendant’s application for removal of the proceeding from the Commercial List.  The first of these applications was partially successful, the second failed.

[3]      In the second judgment, I granted leave to the defendant to appeal to the Court of Appeal from my decision on the litigation funding point, but refused leave to appeal from my decision to retain the case in the Commercial List.  I also declined the defendant’s application for a stay of the proceeding pending the outcome of the appeal to the Court of Appeal.

[4]      The parties have been unable to resolve questions of costs arising from these interlocutory applications, and now seek a ruling from the Court.

[5]      It will be noted that, in respect of each of my judgments, each party enjoyed a measure of success.  In such circumstances, the approach mandated by the Court of Appeal in United Homes (1988) Ltd v Workman[1]  and in Packing-In Ltd (in liq) v Chilcott[2] will apply.

[1] United Homes (1988) Ltd v Workman [2001] 3 NZLR 447 (CA).

[2] Packing In Ltd (in liq) v Chilcott (2003) 16 PRNZ 869 (CA).

[6]      In fixing costs, the Court must take cognisance of the degree of success is achieved by each party and take into account also, in a broad fashion, the time occupied in preparing for and dealing with each issue.  In the end, the Court must endeavour to do justice to both sides bearing in mind the material features of the

case.

[7]      I accept the submission for the defendant that the two applications ought to be considered separately.  They were heard six months apart and dealt with different, although partially overlapping, issues.

[8]      In  its first  application,  the defendant  sought  orders for disclosure of  the litigation funding agreement to the defendant and for a stay of the proceeding until the plaintiffs had obtained the leave of the Court to prosecute the proceedings in the context of the litigation funding agreement and had fully complied with any conditions imposed by the Court if leave were granted.  The case for the plaintiffs was that the litigation funding agreement had nothing to do with the defendant and that the Court ought to dismiss the defendant’s application out of hand.

[9]      Each party enjoyed partial success.  I directed that the plaintiffs produce the litigation funding agreement to the Court for perusal but that it need not be provided to the defendant in the first instance.   The agreement was produced to the Court. Having  considered  its  terms,  I  concluded  that  there  was  no  proper  basis  for permitting the defendant to see it and ruled accordingly.  I consider that costs on that aspect of the first application ought to lie where they fall.

[10]     The second argument was concerned with the defendant’s desire to have the proceeding removed from the Commercial List.  On that application the defendant failed.   I consider that the plaintiffs are entitled to costs on that application.   The plaintiffs seek costs on the Category 2B basis of $5828 in respect of all aspects of the application dealt with in my first judgment.  Given that the removal application was the subject of significant argument, I consider the plaintiffs are entitled to costs equivalent  to  50  per cent  of that  sum,  namely $2914.   There will  be an  order accordingly.

[11]     In respect of my second judgment, I consider that costs ought to lie entirely where they fall.  The defendant succeeded on its application for leave in respect of the litigation funding agreement issue, but it failed to obtain leave in respect of the retention of the case in the Commercial List.

[12]     The defendant also failed in its bid for a stay of the proceeding in its entirety pending the outcome of the appeal to the Court of Appeal. A significant factor in the refusal of the application was the plaintiffs’ offer of interim security for costs in the sum of $50,000, which provided to the defendant a significant degree of comfort in respect of costs in relation to such interlocutory matters as might require attention while an appeal hearing is awaited.    In my opinion, the parties enjoyed roughly equal success on the application for leave and the stay application failed largely by reason of the plaintiffs’ offer of security for costs.

[13]     Costs on matters arising out of my second judgment will accordingly lie where they fall.

.............................................. C J Allan J