Mike Greer Homes Limited v Douglas [2013] NZHC 2774 (22 October 2013)

Last Updated: 6 December 2013

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-001067 [2013] NZHC 2774

BETWEEN MIKE GREER HOMES LIMITED Applicant

AND PAUL THOMAS DOUGLAS and WINIFRED HELEN DOUGLAS Respondents

Hearing : On Submissions filed - Respondents: 16 September 2013

Applicant 26 September 2013

Appearances: A N Riches for the Applicant

R McCrea for the Respondents

Judgment: 22 October 2013

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

_{as to costs}

Introduction

[1] This proceeding was an interlocutory application (under r 5.69 High Court

Rules) for transfer of a proceeding from the District Court to this Court under s 45

District Courts Act 1947.

[2] The application was opposed by the respondents. Evidence was filed on both sides. On 18 June 2013 the Court allocated a hearing date (6 September 2013) and made directions for the filing of submissions commencing 23 August 2013.

[3] On 22 August 2013 the applicant filed a notice of discontinuance.

_{[4] The Court is called upon to determine costs as the parties are unable to agree.}

MIKE GREER HOMES LIMITED v DOUGLAS [2013] NZHC 2774 [22 October 2013]

The approach to costs

[5] Both counsel have approached the matter upon the basis that it is to be treated as if a proceeding has been discontinued. I say “as if” because the filing of a notice of discontinuance was not strictly the correct procedure (discontinuance operating in relation to a “proceeding” which is defined under r 1.3 as not including an interlocutory application, which this proceeding involved).

[6] However, it is clear that the applicant would have been entitled to withdraw its application. More importantly for present purposes, both counsel accept that the fallback position under r 15.23 – that the “discontinuing” party pays costs (unless there is an order otherwise) for the steps up to and including the point of discontinuance – should apply in this case.

Two areas of dispute

[7] There are two areas of dispute between the parties as to the appropriate award of costs:

1. Whether two or three items under Schedule 3 High Court Rules should be allowed.

2. Whether there should be an uplift on an award based on a 2B calculation.

Items under Schedule 3

[8] The respondents are clearly entitled to two items under Schedule 3, namely: Item 12 (appearance at mentions hearing)

Item 23 (filing opposition to interlocutory application)

[9] It is also clear that the respondents are entitled to recovery of the disbursement incurred when meeting the filing fee on their opposition ($110).

[10] The single Schedule 3 item which is in dispute is Item 24 (preparation of written submissions). Mr McCrea, for the respondents, explains this item thus:

... the respondents’ submissions were substantially complete at this date [of discontinuance]. Counsel for the respondents had prepared submissions for the first mentions hearing on 28 June 2013 on the basis that the matter have been heard there. These submissions were subsequently fine-tuned and substantially finalised in preparation for the half-day hearing set down for 6

September 2013. A copy of these submissions can be provided if the Court wishes.

[11] Responsibly, Mr Riches in his submissions in response, did not submit that the Court should call for a copy of the submissions. Mr McCrea’s word as an officer of the court suffices.

[12] The thrust of Mr Riches’ submission against allowing Item 24 was that the applicant (through counsel) was unaware of the state of the respondents’ preparation for hearing until recently.

[13] It is just to allow Item 24. The discontinuance was filed almost two months after the mentions hearing. Preparation and fine-tuning of submissions for the respondents in the meantime was entirely appropriate and to be expected. It is not appropriate to consider some adjustment on the normal allocation (of 1.5 days) under Item 24 on account of the fact that some further fine-tuning of the submissions may have occurred had the respondents received submissions from the applicant. That may or may not have proved to be the case. It should not cut across the respondents’ entitlement when Mr McCrea confirms that the submissions were “substantially finalised”.

Respondents’ claim for increased costs

[14] Mr McCrea submits that increased costs are appropriate in this case because the applicant acted unreasonably in the proceeding (invoking r 14.6(3) High Court Rules). He submits that there should be a 50 per cent uplift on each item allowed.

[15] Having reviewed the evidence filed and counsels’ submissions, I am satisfied that the just award in this case is one based solely on scale costs and not one based on increased costs (involving an uplift above scale). I view this as a straight-forward case for observing the principle that the determination of costs should be predictable and expeditious.

[16] The central focus of the application for an order of transfer to this Court lay in the fact that the applicant had commenced a defamation claim against the respondents for defamation. The defamation claim exceeds the District Court jurisdiction. The applicant asserted that the counterclaim arose out of substantially the same circumstances as the respondents’ claim in the District Court.

[17] Mr McCrea makes a number of criticisms of the basis of the transfer application. These include assertions that only one of the respondents could arguably have been involved in the allegedly defamatory comments; that there is in fact no nexus between the subject matter of the claim and counterclaim; and that the quantum of the defamation claim ($725,000) is “utterly unfounded”.

[18] I cannot view the first point (identity of parties) as decisive. As to the remaining two points, there is upon the basis of counsels’ competing submissions clearly room for argument. For instance, the statements made by the second respondent which are alleged to be defamatory were specifically about the applicant’s performance of its building contract. It is that building contract which is the subject of the District Court claim. Similarly, while Mr McCrea suggests there is no evidential foundation for the level of damages claimed pursuant to the alleged defamation, Mr Riches has pointed to matters relating to the commercial standing of the applicant which, if ultimately supported by evidence at trial, would justify the selection of the High Court as the appropriate venue.

[19] Against this background I cannot find that the interlocutory application was brought unreasonably or improperly.

Fixing of costs

[20] The appropriate award of costs, on the 2B basis which I consider appropriate, is:

Item 12 - $398

Item 23 - $1,194

Item 24 - $2,985

Total costs award $4,577

[21] In addition the respondents are entitled to its disbursement of $110.

Order

[22] I order that the applicant pay the respondents’ costs and disbursements of the application in a total sum of $4,687.

Associate Judge Osborne

Solicitors:

Saunders & Co, Christchurch

Lane Neave, Christchurch