Wiki v Watene

[2015] NZHC 1790

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2015-485-245 [2015] NZHC 1790

BETWEEN

PAMELA CHARLOTTE WIKI

Appellant

AND

SHARYN HEENI WATENE First Respondent

AND

ZAPA TRUST LIMITED Second Respondent

Hearing:	30 July 2015
Counsel:	D D Vincent and P A McKenzie-Bridle for Appellant J R Grace for Respondents
Judgment:	31 July 2015

JUDGMENT OF SIMON FRANCE J

[1]      The  appellant  appeals  a  costs  award  made  against  her  following  an unsuccessful application for summary judgment.1      The summary judgment application foundered for the rather common reason that there were issues arising that required the hearing of evidence.   Only then could the merit of the claim be properly determined.

[2]      The Judge awarded costs on a 2B basis.   No reasons were given, a not unexpected situation on an interlocutory application where the costs order follows the event.  The appellant, however, submits that summary judgment applications are to be treated differently and that the normal course is to reserve costs pending resolution of the substantive proceedings.   It is submitted no basis existed here to

depart from the standard approach.

1      Wiki v Watene DC Wellington CIV-2014-085-000633, 26 February 2015.

WIKI v WATENE [2015] NZHC 1790 [31 July 2015]

[3]      Support for the appellant’s case is found in the relevant District Court Rule, r 4.8.3, which itself mirrors the equivalent High Court Rule.  The starting point is that costs on interlocutory matters shall be fixed at the time, and become payable once fixed.  However, r 4.8.3 provides:

This rule does not apply to an application for summary judgment.

[4]      Of this provision McGechan observes:2

This  preserves  the  Court’s  general  practice  of  reserving  costs  on  an

unsuccessful summary judgment application.

[5]      The  special  position  accorded  applications  for  summary  judgment  is generally taken to reflect the observations in NZI Bank Ltd v Philpott.3    There the Court of Appeal explained that if ultimately the defence is unsuccessful, the plaintiff should normally be entitled to costs on both sets of proceedings:4

As with most questions of costs, they should be approached on broad principles.  Whilst a defendant may be regarded as successful in one sense in resisting an application for summary judgment, it is of course not a final determination  in  the  proceeding  itself.    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.  If those reasons include some question of fault on the part of the plaintiff then it may be appropriate to  reduce  or  even  eliminate  an  entitlement  to  costs  for that  part  of  the proceedings so far as the plaintiff is concerned.   Where, however, 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.

It can be seen that the Court considered that generally a better costs assessment in relation to the summary judgment application can be made after the substantive hearing.

[6]      Turning to the appeal, Mr Grace emphasised it is an appeal from an exercise of discretion, and accordingly the appellant must point to an error of principle or that

the Judge was plainly wrong.  That this is so is beyond dispute,5  but here the order

2      Andrew Beck and  Others McGechan on Procedure (loose leafed, Brookers, 2009) at [HR

14.8.03].

3      NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA).

4      At 405.

5      Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523.

represents a departure from the norm and no reasons for that have been given.  In Manukau Golf Club Inc v Shoye Venture Ltd the Supreme Court noted that while reasons are not expected where costs follow the event, when there is a departure from the standard approach a brief explanation should be provided.6

[7]      In the present case, following receipt of the judgment, the appellant filed a memorandum with the Court.  The memorandum referred to Philpott and invited the Court to reserve costs.   The memorandum did not identify what jurisdiction was being invoked.  Costs had not been discussed at the hearing, but the memorandum did not raise that in aid.

[8]      In response the Judge issued a Minute which states:7

I have made an order for costs on this unsuccessful application for Summary Judgment.  There is no basis for me to recall that part of the judgment which I infer is what the Plaintiff is seeking.

[9]      Mr Grace  relied  on  this  as  representing  consideration  of  the  Philpott approach, and as affirmation of the decision to depart from it.  I do not consider it can be read that way.  Unassisted by a memorandum which does not make clear the nature of the application, the Judge has fairly treated it as a recall.   His Honour appears to have concluded the grounds for recall were not made out, and that is all that can be inferred from the Minute.   In that regard it can be observed the memorandum did not address any submissions to the law concerning recall. Communications with a court following judgment about the judgment need to be clearer and more focused, and always identify what is being sought and what jurisdiction is invoked.

[10]     In Manukau Golf Club the Supreme Court, not having any reasons from the

Court below, appeared to proceed to form its own view.  That is the approach I adopt here.

6      Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [16].

7      Wiki v Watene [Minute] DC Wellington CIV 2014-085-000663, 17 March 2015.

[11]     Many unsuccessful summary judgment applications fail for the same reason as exists here, namely the merits cannot be properly established without evidence being tested.   In the present case I consider the appellant has confused what she considers to be a strong case – which may be right or wrong – with a case that is susceptible  to  resolution  by summary judgment.    For  the  reasons  given  by the District Court, it is not such a case, and plainly so.

[12]     Mr Grace suggested this was a particularly strong example of a case being unsuited to summary judgment and that this merited a costs award.  He noted that there had been proceedings in 2012 which had lapsed but not before the competing positions were articulated.  The contest identified is the same as that identified by the Judge in the present case, the existence of which saw summary judgment declined. Some weight can be allocated to this, but ultimately at the start of the hearing the parties were in no different a position from any other summary judgment case.  The contest has by then usually been articulated, yet the hearing proceeds.  It is just that it was articulated earlier here.

[13]     Mr Grace  raised  orally  a  deficit  in  the  form  of  the  summary  judgment application.   It is not a matter referred to by the District Court, nor raised in the written submissions.   I am not prepared to have regard to it.   Next, both parties addressed the strength of their respective positions but this was not something that assisted, essentially for the reasons summary judgment was declined.   Strength depends on how the evidence emerges.

[14]     Mr Vincent placed weight on a development at the start of the District Court hearing which unexpectedly weakened the applicant’s case.  He submitted this aspect supported the proposition that costs should be reserved until the true merits emerge. To briefly explain, there are in fact two defendants in the substantive proceedings. The second (a company in which the first defendant is involved) was added later, with leave, but due to a procedural oversight, the second defendant was not brought into the summary judgment application.  Accordingly, the application could proceed only against the respondent.  The applicant only became aware of this at the start of the hearing.  I do not accept this assists the appellant, and prefer Mr Grace’s point

that whether one or both defendants were there, the same legal questions exist, and these could only be determined once the factual disputes are resolved.

[15]     That said, in the absence of reasons from the District Court as to why costs should be awarded in this case, I am not willing to make the same order.  It is not obvious to me that the case stands out from many other unsuccessful summary judgment applicants, and reserving the position as regards costs allows the issue to still be aired following the substantive proceeding.

[16]     The appeal is allowed.  The award of costs in the District Court is quashed, and in its place I order that costs on the summary judgment application be reserved. It may assist the Court hearing the substantive proceeding if I record that I was advised costs on the summary judgment application were assessed by the parties at being $2,620.

[17]     The respondent is now legally aided, so no costs award is made  on the appeal.

Simon France J

Solicitors:

Thomas Dewar Sziranyi Letts, Solicitors, Lower Hutt
J R Grace, Porirua