Whimp v Dugdale

[2023] NZHC 3308

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV 2022-488-63

[2023] NZHC 3308

BETWEEN

GARRY CECIL WHIMP

First Plaintiff

FOREX TECHNICAL ANALYST SYSTEMS LIMITED (IN LIQUIDATION)
Second Plaintiff

AND

KENNETH RODNEY PEEL DUGDALE, LINDA YVONNE DUGDALE and JOHN MURU WALTERS

First Defendants

KENNETH RODNEY PEEL DUGDALE

Second Defendant

On the papers

Counsel:

S O McAnally and A Ho for the plaintiffs

B Molloy and O Rose for Mrs and Mr Dugdale H Waalkens KC and M Francis for Mr Walters

Judgment:

21 November 2023

COSTS JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 21 November 2023 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

WHIMP AND ANOTHER v DUGDALE AND OTHERS [2023] NZHC 3308 [21 November 2023]

[1]    The parties have been unable to agree costs following my judgment dated    31 July 2023. Memoranda on costs were filed by the parties in late August and early September 2023.  Regrettably, those memoranda have only recently been referred   to me.

[2]    In my judgment, I expressed the provisional view that the defendants should pay costs to the plaintiffs on at least a 2B basis, with allowance for second counsel.

[3]    The plaintiffs claim indemnity costs, being $23,745. That includes costs for dealing with costs.

[4]The defendants accept that the plaintiffs are entitled to costs, but say:

(a)Costs to the plaintiffs should be on a 2B basis, up to 26 May 2023, when the underlying breach of the court’s order was remedied and the plaintiffs were invited to discontinue their contempt of court application.

(b)The defendants should have costs on a 2B basis for steps after 26 May 2023 (the hearing on 31 May 2023 and memoranda on costs), which should be set off against the plaintiffs’ costs entitlement.

[5]    The first question is what costs the plaintiffs are entitled to, leaving aside the defendants’ invitation on 26 May 2023 to the plaintiffs to discontinue the contempt application. In seeking indemnity costs, the plaintiffs rely on r 14.6(4)(b) of the High Court Rules 2016. This empowers the court to order a party to pay indemnity costs  if the party has “ignored or disobeyed” an order of the court. I consider that this rule is engaged only where a party has intentionally ignored or disobeyed a court order.1 In accordance with my findings in the substantive judgment, r 14.6(4)(b) is engaged in respect of Mr Dugdale. Given my conclusion that Mr Dugdale knowingly failed  to comply with the court order,  I am satisfied I should exercise my discretion in       r 14.6(4)(b) to order him to pay indemnity costs (including for preparation of the costs memorandum).

1      Chesterfield Preschools Ltd v Commissioner of Inland Revenue (2009) 24 NZTC 23,504.

[6]    The other defendants are in a different position, given my findings in the substantive judgment. I do not accept the plaintiffs’ submission that the usual practice of the court is to allow an applicant indemnity costs whenever a breach of a court order is established, even if it is not shown that the respondent knowingly breached the order. In such circumstances the applicant will ordinarily be the unsuccessful party (as was the case here). The usual practice is that, notwithstanding the applicant’s failure, the respondent will be ordered to pay costs. This takes sufficient account of the respondent’s underlying breach of a court order. It is not necessary – except where the breach was intentional – to additionally order that the costs award be on an indemnity basis.

[7]    Accordingly, I consider that Mrs Dugdale and Mr Walters should pay costs  to the plaintiffs on a 2B basis.

[8]    The next question is whether the position is affected by the defendants having invited the plaintiffs to discontinue their contempt of court application on 26 May 2023. This invitation was sent in the form of a Calderbank letter.

[9]    If the Calderbank letter made an offer that was more beneficial to the plaintiffs than the judgment ultimately obtained, the court can order the plaintiffs to pay costs to the defendants for steps after the offer was made.2 Here the defendants’ offer was not more beneficial to the plaintiffs than the ultimate result, because the defendants did not offer to pay the plaintiffs’ costs for steps up to the date of the offer.3 The offer therefore does not affect the conclusions I had otherwise reached on costs.

[10]   Returning to the costs payable by Mrs Dugdale and Mr Walters, the plaintiffs did not provide a calculation of costs on a 2B basis. There are costs schedules attached to the costs memorandum of Mr Walters, but I consider them to be incomplete. The plaintiffs should have 2B costs for the steps set out in those schedules (steps 22, 24– 27 and 11) and also for the following steps:

(a)Preparation of the joint memorandum dated 13 March 2023.

2      High Court Rules 2016, r 14.11(3).

3      Health Waikato Ltd v van der Sluis (1997) 10 PRNZ 514 (CA).

(b)Preparation of the memorandum dated 17 April 2023.

(c)Attendance at the teleconference on 10 May 2023.

[11]I therefore order that:

(a)Mr Dugdale pay costs to the plaintiffs on the contempt application in the sum of $23,745.

(b)Mrs Dugdale and Mr Walters pay costs to the plaintiffs on a 2B basis for the steps identified in [10] above.

[12]   The defendants’ liability to pay costs is joint and several to the extent of the amount of 2B costs ordered against Mrs Dugdale and Mr Walters.

Campbell J