MARLBOROUGH DISTRICT COUNCIL V WADSWORTH AND BOTHAM HC BLE CIV 2009-406-000140 [2009] NZHC 1384 (7 October 2009)

IN THE HIGH COURT OF NEW ZEALAND
BLENHEIM REGISTRY
                                                              CIV 2009-406-000140



               BETWEEN                   MARLBOROUGH DISTRICT COUNCIL
                                         Plaintiff

   
           AND                       GINA MARIE WADSWORTH AND
                                         NIGEL WILLIAM BOTHAM
    
                                    Defendants


Hearing:       (Determined on the Papers)

Judgment:      7 October 2009


    
          JUDGMENT OF ASSOCIATE JUDGE OSBORNE
                           AS TO COSTS



[1]    The Court has dismissed a plaintiff's
summary judgment application after the
plaintiff made a decision not to proceed with the application. In the meantime, the
defendants
had within the required time filed a notice of opposition and extensive
affidavit evidence.


The application


[2]    The defendant
seeks an order that the plaintiff pay costs on a 2B basis, plus
disbursements, to be paid in any event. The plaintiff opposes the
application.


[3]    For the defendant, Mr Clark submits that this is one of those "exceptional
cases" (NZI Bank Ltd      v Philpott
[1990] 2 NZLR 403) when costs should be
awarded. Mr Clark submits that the plaintiff had embarked on a summary judgment
application
in the clear knowledge that there was a bona fide dispute. He further
submits that the affidavit in support of the application for
summary judgment could


MARLBOROUGH DISTRICT COUNCIL V WADSWORTH AND BOTHAM HC BLE CIV 2009-406-
000140 7 October 2009

be described
as misleading in that it does not set out the position at all.
Correspondence from the defendants' solicitors to the plaintiff and
its solicitors
between 1 April 2009 and 9 June 2009 was not provided in evidence by the deponent
who gave evidence for the plaintiff
(a solicitor in the plaintiff's solicitor's firm). She
(a Ms Campbell) exhibited one letter being a letter from the plaintiff's solicitor
to the
defendants' solicitor dated 8 April 2009 setting out the plaintiff's position. As
Ms Campbell's affidavit indicates, the reason
she attached that letter to her affidavit
is because it is referred to in the statement of claim (the statement of claim asserting
that the plaintiff's solicitor wrote to the purchasers' new solicitor and confirmed that
the plaintiff's new solicitor was holding
an executed authority and instruction for an
electronic transaction for the transfer of the property to the purchasers). Nothing
in
Ms Campbell's affidavit disclosed the extent of correspondence which had taken
place between solicitors dealing with arguments
between the parties (save to the
extent that the 8 April 2009 letter incidentally did that).


[4]    The full correspondence (1
April 2009 to 9 June 2009) discloses the very
arguments which the defendants have taken in their notice of opposition to summary
judgment and which have led the plaintiff, on advice, to withdraw its summary
judgment application. For the plaintiff, it is emphasised
that the parties had had
ongoing correspondence in relation to proposed proceedings. It is not suggested that
the subject matter
of the dispute was not fully aired before the proceeding was
commenced. Rather, emphasis is placed on the process that was under
discussion.
Mr Fowler for the plaintiff puts it upon the basis that the plaintiff was seeking to
enforce its rights under a sale
and purchase agreement on the basis the defendants
were in default of their obligations under the agreement while the defendants
were
seeking to cancel the agreement under the requisitioning process.            Mr Fowler
correctly points to passages in the correspondence
where the solicitors were
discussing how best to deal with disputes concerning the requisition clause.
Mr Fowler stated in his submissions
that the plaintiff had assumed on the basis of the
correspondence that the defendants would be filing an originating application
to deal
with the requisition issue. He submits that since the proceeding would not deal with
enforcing the sale and purchase agreement if the defendants were unsuccessful
in
their application, it was necessary for the plaintiff to file the present proceeding. He

submits that in the absence of the
requisitioning issue, summary judgment was
entirely appropriate.


[5]    Mr Fowler notes that what has happened is that the defendants
have elected
not to bring an originating application relating to requisition issues but instead raise
the requisitioning process
as a defence to the application for summary judgment.


[6]    I view this case as being one which comes very close to satisfying
the
"exceptional cases" category of Philpott. The plaintiff did know what the issues in
dispute were and chose to pursue summary
judgment, which application has now
been withdrawn. However, by the agreement of both counsel the matter is to be
referred to the
standard track but with the first step to be the determination of a
preliminary question relating to the requisition issue. That
is the procedure the
parties now embark on. It may prove to be a very similar step to a summary
judgment hearing. The situation that
arises is not the same as that referred to by the
Court of Appeal in Air Nelson Ltd v Airways Corporation of New Zealand Ltd
 (1992) 6 PRNZ 1 when discussing Philpott. This may not prove to be a case where
there was a bona fide question of fact or law which could be determined
only after
trial. This case may be essentially determined by the requisition issue which is to be
determined as a preliminary issue.


[7]    In these circumstances, and upon a fine margin, I fix the costs of the
interlocutory proceeding for summary judgment upon
a 2B basis, together with
disbursements, and order that they be costs in the cause.


Affidavit by a member of the law firm


[8]
   It is appropriate that this judgment contain also an observation as to the
nature of the affidavit evidence relied upon by the
plaintiff in this case. The only
affidavit filed in support of the plaintiff's case came from a solicitor employed by the
plaintiff's
solicitor's firm. She deposes to having read the statement of claim and
she verifies that to the best of her knowledge and belief
all statements and allegations
set out in the statement of claim are true and correct. It is not uncommon for
employees of law firms
to provide affidavits where the principal purpose of the

affidavit is to produce relevant correspondence or documents with which
the
solicitor's firm has been involved.        It is a different matter when a plaintiff in
summary judgment proceedings is suing
a defendant in relation to contractual
obligations which the parties entered into and in respect of which the defendants
have been
raising issues of substance relating to the property in question. It is not
clear from the affidavit of Ms Campbell as to how she
has personal knowledge of the
facts in issue, as is required:      Hempseed v Durham Developments Ltd  [1998]
3 NZLR 265.


[9]     Furthermore, when a solicitor chooses to provide the affidavit in a case of
this kind it also will raise issues referred
to under "Independence in Litigation"
Chapter 13, Rules of Conduct and Client Care rules for lawyers.


[10]    Once the defendants
raise contentions of the nature raised in the April to June
2009 correspondence r 13.5.2 may stand in the way of such a solicitor
(or his/her
firm) acting for one of the parties if the solicitor intends to provide an affidavit.


[11]    I express no concluded
view on whether r 13.5.2. was breached in this case.



__________________________



Solicitors:
DLA Phillips Fox, P O Box 2791,
Wellington, for Applicant
Wisheart MacNab & partnders, P O Box 138, Blenheim, for Defendant