Frimley Estate Ltd v Fog [2016] NZHC 153 (12 February 2016)

Last Updated: 10 March 2016

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-003364 [2016] NZHC 153

BETWEEN	FRIMLEY ESTATE LTD Applicant
AND	MARIANNE FOG Respondent

Hearing:	On the papers
Counsel:	PM Fee and AR Durrant for Applicant RB Hucker for Respondent PJ Davey for interested party
Judgment:	12 February 2016

JUDGMENT OF ASHER J (Costs)

This judgment was delivered by me on Friday, 12 February 2016 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Fee Langstone, Auckland.

Hucker & Associates, Auckland. Steindle Williams Legal Ltd, Auckland.

PJ Davey, Auckland.

FRIMLEY ESTATE LTD v FOG [2016] NZHC 153 [12 February 2016]

Introduction

[1] In a judgment of 13 May 2015 I denied relief sought by Frimley Estate Ltd (Frimley) in respect of Marianne Fog, under s 37AH of the Securities Act 1978 (the Act).¹

[2] In a judgment of 6 November 2015 I dismissed an application for stay. It had been actively opposed by the defendant Ms Fog and by two other subscribers, Giles and Katrina Rinckes (although the Rinckes had not opposed the original relief application).²

[3] When I issued my decision of 6 November 2015 I observed that it could be expected that costs would follow the event, but allowed the parties to file submissions in respect of costs. Submissions have now been filed.

[4] On behalf of Ms Fog, costs are sought on a category 2 band B basis for all attendances, apart from the filing of a notice of opposition and affidavits in opposition for which extended time is sought on a band C basis. In addition, increased costs of 50 per cent over the scale costs are sought, as was certification for second counsel. The total costs sought accordingly come to $17,708.75.

[5] The Rinckes have also sought costs on a 2B basis with a 50 per cent uplift, totalling $10,704.

[6] Counsel for Frimley has filed a memorandum which does not oppose the ordering of standard 2B costs in respect of Ms Fog (although some attendances are challenged), opposing any 50 per cent uplift and opposing any costs in respect of the Rinckes. Counsel submitted that it was not necessary for the Rinckes to file

_{submissions in addition to Ms Fog.}

¹ _{Frimley Estate Ltd v Fog [2015] NZHC 1010, [2015] NZAR 1019.}

² Frimley Estate Ltd v Fog [2015] NZHC 2757.

Analysis

[7] In my decision I found that the stay application was misconceived and that a stay of the effect of my decision would not assist Frimley and not go to the heart of the relief that Frimley was seeking. Nevertheless, I also considered the merits of the application and had doubts as to whether an appeal would be rendered nugatory by lack of a stay. I also had concerns about the fact that Frimley had not taken all steps to obtain a quick hearing of the appeal, and that Ms Fog would be injuriously affected by a stay.

[8] Despite these features of my decision, and the fact that issues arose which do not normally arise on stay applications, I do not consider that there was any particular feature in the conduct of Frimley unsuccessfully pursuing the application which would warrant increased costs. There was no procedural unreasonableness on Frimley’s part, and no particular or extreme lack of merit which might warrant a departure from the normal costs regime where parties who fail pay costs on the established scale. I bear in mind that, although the background issues in the original substantive proceedings were not straightforward, the issues that arose on the stay were not complex.

[9] Equally I do not consider that there was any particular attendance for Ms Fog, including the filing of the opposition and affidavits in support, which would warrant an increase from the norm. Some attendances may have involved less work than the norm, and some more. There are elements of accepting “swings and roundabouts” in any costs assessment of this type. For the same reason, I do not accept Frimley’s resistance to some disbursements where there was only a brief attendance or small amount of work.

[10] I do, however, accept that the claim for filing a memorandum prior to the application for stay cannot be sustained, and for that reason the attendances claimed by both Ms Fog and the Rinckes for filing memoranda dated 28 July 2015 must be excluded.

[11] Ms Fog is accordingly entitled to costs on a 2B basis against Frimley, but not for the attendance of 28 July 2015. There are no increased costs or costs of a different category awarded.

[12] Ms Fog seeks costs for second counsel. The approach in determining whether second counsel should be granted is always objective, and “is focused on the nature of the proceeding, not the actual counsel involved and how he or she or they choose to conduct the litigation”.³ It was emphasised both in Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd and in subsequent cases, that there will usually need to be some unusual feature to the litigation to warrant allowances for second counsel.⁴ However, in Wholesale Distributors Ltd v Songle Ltd it was noted that the applicant did not need to show that the case was beyond the capabilities of the principal counsel, so long as it was sufficiently complex to justify certification for second counsel.⁵ In these circumstances, given the relative simplicity of the issues, I do not consider that the presence of second counsel justifies a costs award.

[13] As to the Rinckes costs claim, I can understand why the Rinckes as a new party would have wished to file a separate submission and present a different perspective. However, there was a considerable extent of overlap between the points that were made on behalf of the Rinckes and those made on behalf of Ms Fog. With the benefit of hindsight, the Rinckes’ submissions could have been considerably more concise and drafted so as to dovetail more with Ms Fog’s submissions.

[14] In those circumstances I award the Rinckes costs on the basis of two-thirds of the 2B scale, with the same refusal to order increased costs, and excluding the memorandum of 28 July 2015.

Result

[15] I order costs on a 2B basis for Ms Fog excluding the attendance of 28 July

_2015.

³ _{Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155 (HC) at [21].}

4. See Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd, above n 3, at [19], and ZYXCBA Developments Ltd v Auckland Council [2015] NZHC 2224 at [16].

⁵ Wholesale Distributors Ltd v Songle Supermarket Ltd [2015] NZHC 809 at [8].

[16] I order costs on a 2B basis in favour of the Rinckes, reduced by one-third, excluding that attendance of 28 July 2015.

...................................

Asher J