Haldon Range Vineyards Limited v Tonkin & Taylor Limited [2014] NZHC 1230 (4 June 2014)

Last Updated: 16 June 2014

IN THE HIGH COURT OF NEW ZEALAND (AUCKLAND) NELSON REGISTRY

CIV-2010-404-008564 [2014] NZHC 1230

BETWEEN	HALDON RANGE VINEYARDS LIMITED First Plaintiff HALDON RANGE FIBRES LIMITED Second Plaintiff HALDON RANGE EXPORTS LIMITED Third Plaintiff RICHARD STANLEY JOHN BELL and HALDONS TRUSTEE LIMITED as Trustees of the HALDONS TRUST Fourth Plaintiff CAMERON GLADSTONE PARTNERS LIMITED Fifth Plaintiff
AND	TONKIN & TAYLOR LIMITED First Defendant MARLBOROUGH MANAGEMENT SERVICES LIMITED Second Defendant TIMON HENRIC SMIT Third Defendant

Hearing:	30 May 2014 (Determined on the Papers)
Counsel:	C Withnall QC and D J Ballantyne for Plaintiffs L Taylor QC for First Defendant A Darroch for Second and Third Defendants
Judgment:	4 June 2014

_{COSTS JUDGMENT OF ASSOCIATE JUDGE MATTHEWS}

HALDON RANGE VINEYARDS LIMITED v TONKIN & TAYLOR LIMITED [2014] NZHC 1230 [4 June

2014]

[1] As noted in the Minute issued on 28 May there are three applications before the Court for costs on interlocutory issues. I deal with these in turn.

Costs re determination of a separate question

[2] The first, second and third defendants applied for determination of a separate question before trial. These applications have been withdrawn. The plaintiffs seek costs.

[3] Rule 14.8 provides that costs on an opposed interlocutory application must be fixed when the application is determined, unless there are special reasons to the contrary. Therefore, in the absence of special reasons, the plaintiffs would be entitled to costs.

[4] The first defendant notes the history of the pleading of their claims by the plaintiffs, which have altered significantly as time has gone on, and says that at the time the application was filed there were sound grounds for doing so, and only the filing and service of the fourth amended statement of claim led to a position where the requirements of r 10.15, on which the first defendant relied, would not be met. The application was then withdrawn. They say this is a special reason for costs not to be awarded pursuant to r 14.8.

[5] The second and third defendants say that their application, too, was justified at the time it was filed in relation to the first amended statement of claim, they note the ongoing deficiencies in the plaintiffs’ pleadings (as they see them) and they say that the application was only withdrawn after the fourth amended statement of claim made it clear that it should be withdrawn.

[6] So far as the first defendant’s position is concerned, the plaintiffs say that its application for a trial on a separate question was re-filed on 1 August 2013, after the plaintiffs’ third amended statement of claim was filed and served on 28 May 2013, which contains the same causes of action against the first defendant as are currently pleaded. They say, therefore, that the application was not appropriately filed at the

time, as the first defendant maintains. They say the application was most unlikely to succeed in any event.

[7] In relation to the second and third defendants’ withdrawn application for trial of a separate question, the plaintiffs say that no special reasons have been advanced, in terms of r 14.8. They say that the criticisms of their pleadings are unjustified as they have not altered in substance, apart from responding to the impact of the Seddon earthquakes, since counsel for the second and third defendants reaffirmed their position on these applications in November 2013, a point well after the current causes of action were pleaded. The plaintiffs also say that the applications by the second and third defendants were, as they put it, always destined to fail, though they do not give any reason to support that contention.

[8] I do not find it necessary to go into the merits of the application. I find that special reasons are not made out in terms of r 14.8. In my view there was ample opportunity to review the position long before the hearing. There will be costs to the plaintiffs on the withdrawn application, subject to the following point.

[9] Part of the claim for costs includes costs on case management conferences. This is a complicated and detailed case, and it has had a number of procedural issues aired before the courts over time. In my opinion all costs in relation to case management conferences should await the outcome of the trial and not be included in interim awards of costs along the way.

[10] As a result the plaintiffs will have costs on a 2B basis (and disbursements) on the withdrawn application, exclusive of costs on any case management conferences. On those costs are reserved.

Costs on the withdrawn applications by the second and third defendants for security for costs

[11] The plaintiffs say that costs should be awarded to them on this withdrawn application. They say that, in terms of r 14.8, there are no special reasons why costs should not follow the event.

[12] It is difficult to discern from the memorandum filed for the second and third defendants what they rely on as a special reason for this not occurring. They seem to say that the application was justified, based on what they see as a sustained inadequacy in the plaintiffs’ pleadings, a failure they say on the plaintiffs’ part to buy necessary equipment for the dam, a failure to pay a costs order, and a lack of any significant documents to support the plaintiffs’ claim for an increasing level of loss of profits.

[13] I am unable to discern from this any special reason for costs not to be awarded. Indeed it is difficult to discern from this information why the application was brought in the first place.

[14] The plaintiffs will have costs on this application on a 2B basis together with disbursements, but for the reasons already given excluding any claim in relation to telephone conferences.

Costs on the discovery application by the first defendant

[15] This application was dealt with by consent as recorded in the Minute issued on 28 May. Under r 14.8 costs would be awarded to the first defendant unless there are special reasons to the contrary. I have considered the reasons put forward by the first defendant and, in my opinion, they support the proposition that the application was justified.

[16] The plaintiffs say that throughout the pleading phase to date they have maintained that all issues of discovery could be dealt with by consent, as eventually occurred. They say that after discovery was given the first defendant did not make any attempt to outline its concerns, but instead filed written submissions in support of the application which was moving towards a fixture, without further reference to the plaintiffs. The written submissions, the plaintiffs say, were not required, nor was the case bundle for the fixture. In effect they say the first defendant pressed on without taking proper account of the fact that the plaintiffs had always said that they would deal with any discovery concerns on a consent basis.

[17] Early discovery of relevant documents and prompt attention to requests for further discovery significantly aid the clarification of issues in litigation. Although I think the plaintiffs’ approach is pragmatic and can often be appropriate, it is apparent that further discovery was still required as recently as last week when consent orders were ultimately made. Full attention to discovery obligations may have been hampered by the necessary evolution of the proceedings, the intervening effects on the dam (which is at the heart of this case) of the Seddon earthquakes, and the fact that the plaintiffs have been represented by different firms of solicitors as time has gone on. Notwithstanding this, an application was made and ultimately resulted in a consent order. I find that special reasons to depart from the presumption in r 14.8 have not been made out.

[18] The plaintiffs also say that the costs claimed are excessive. They include the costs for filing the application, appearing at the initial chambers List call, preparing written submissions and a bundle for the hearing, and the filing fee paid to the court. The plaintiffs say that if costs are awarded they should be awarded only for the costs of filing the application and the chambers List call, together with the filing fee. Costs for preparation of submissions and the bundle for the hearing should be deleted. They say it was not until they received the submissions in support of the application on 16 May that they became aware of the concerns of the first defendant about the sufficiency of the affidavit by way of discovery sworn by Mr Bell. When they reviewed the position they were advised by senior counsel that confidential financial statements for the plaintiffs’ entities should be provided if these were available. That led to the plaintiffs consenting to the orders which were made on

28 May. They say that had the first defendant responded to the plaintiffs’ sustained position that it would consent to give whatever discovery was reasonably required, these steps would not have been necessary.

[19] It is difficult to recreate the reality of the situation which prevailed. In the end I am persuaded that costs should be paid as sought. The fixture was allocated for determination of this application weeks in advance. It was open to the plaintiffs at that point to contact the first defendant and grapple fully with the first defendant’s concerns about discovery well in advance of the first defendant filing its submissions and casebook in mid-May.

[20] I therefore order costs in favour of the first defendant on this application in

_{the sum of $6,521 including disbursements.}

J G Matthews

Associate Judge

Solicitors:

C & F Legal Limited (D J Ballantyne), Nelson.

DLA Phillips Fox, Auckland.

Darroch Forrest Lawyers, Wellington.