Gerritsen v Gerritsen [2018] NZHC 1324 (7 June 2018)

Last Updated: 15 June 2018

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2016-419-294 [2018] NZHC 1324

BETWEEN	JOHN DOUGLAS GERRITSEN Plaintiff
AND	ERIC MITCHELL GERRITSEN Defendant

Hearing:	On the papers
Appearances:	Mr Gerritsen in person S Gloyn for the Defendant and the intended Second and Third Defendants
Judgment:	7 June 2018

COSTS JUDGMENT OF ASOCIATE JUDGE SMITH

This judgment was delivered by Associate Judge Smith on 7 June 2018 at 9.30am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:

J Gerritsen, self-representing Bytalus Legal

J D GERRITSEN v E M GERRITSEN [2018] NZHC 1324 [7 June 2018]

[1] The defendant and the intended second and third defendants seek costs following the abandonment by the plaintiff of three separate interlocutory applications.

[2] The first abandoned application was an application to join Nicola Simpson as second defendant in the proceeding. The second application was for an order joining Michael Gerritsen as third defendant. The third application was an application by the plaintiff, filed on 12 April 2018, “for urgent relief for debt collection demands”.

The procedural background and the costs submissions

[3] The three applications came before me in the course of a telephone conference on 16 April 2018. I directed that the applications for orders joining the additional parties be set down for a defended hearing, with an application the defendant had filed for an order striking out the plaintiff’s statement of claim (or in the alternative, security for his costs).

[4] I noted that all three applications appeared to have been filed after the close of pleadings date, and that no leave had been sought by the plaintiff to file the applications. I granted leave in respect of the applications to join the additional parties, but directed that if the plaintiff wished to pursue the application for “urgent relief” he would need to amend his application to seek leave to do so. I directed that any such amended application was to be filed by 1 May 2018 (that date was later extended to 8 May 2018).

[5] By memorandum filed on 8 May 2018, the plaintiff withdrew the application for urgent relief. On the same day, he filed a memorandum withdrawing his application to join Michael Gerritsen and Nicola Simpson as defendants.

[6] Mr Gloyn filed a memorandum seeking costs on 9 May 2018. He advised in that memorandum that he had received instruction from the Mr Michael Gerritsen and Ms Simpson, as well as the defendant, and had spent time preparing for the conference held on 16 April. Notices of opposition and affidavits in response to two of the three applications had been drafted, but not filed. Mr Gloyn referred to the plaintiff having for some months put the registry and the Court to wasted time and expense, “whilst
all the time hiding behind the umbrella of a lay litigant”. Mr Gloyn asked for costs on the usual 2B basis.

[7] By minute dated 9 May 2018 I directed that any memorandum in response to the defendant’s and intended defendants’ costs application, was to be filed and served by 23 May 2018. I indicated that I would then deal with the costs application on the papers.

[8] The plaintiff filed a memorandum on 23 May 2018, advising that, after considering my “advice” during the conference of 16 April, he had come to the belief that, while the issues raised in his interlocutory applications were genuine and would be dealt with at the hearing of the case, the applications should be withdrawn to get “this long drawn case” moving towards a hearing.

[9] The plaintiff pointed out that leave had not been granted to make the applications, and he submitted that, as the applications had not been accepted by the Court, and no leave to file them had been granted, no action was required on the part of the defendant (or the intended defendants) other than mention at the telephone conference. He opposed any order for costs, but submitted that if any costs were to be awarded, an order should be made staying the costs until the substantive hearing has been completed. Alternatively, costs should be reserved.

[10] Mr Gloyn then filed a more detailed memorandum, in which he sought indemnity costs under clause 14.6 of the High Court Rules. He submitted that the Court has had to deal with the plaintiff’s attempts to bring the applications for joinder, under the guise of an application for “inclusion”, since well before 8 February 2018, when Katz J directed the registry not to receive the application for filing. He said that the plaintiff applied, initially without notice, to join the proposed second and third defendants some 15 months after he issued the proceeding, and no application was made for leave to file the application. Nor did the affidavit contain the information, including reasons for delay, that are essential in a leave application.

[11] Mr Gloyn described the plaintiff’s application for urgent relief as completely ill-conceived.
[12] Mr Gloyn referred to the complexity of each application, and the prolix and poor drafting. The significance of a possible judgment against the defendant and the intended defendants was large, and they were entitled to view the matter with concern and take steps.

[13] On the issue of costs possibly being reserved, or a stay of execution of any costs judgment being granted, Mr Gloyn pointed out that the intended second and third defendants have not been made parties to the proceeding, and if they are entitled to costs they should not have to await the outcome of the proceeding.

[14] Mr Gloyn advised that the costs of the defendant and the intended defendants averaged $2,200 over the three proceedings. He submitted that a costs award of $1,100 on each application would be appropriate, as being not more than actual costs incurred to prepare a notice of opposition and affidavit in support, and to prepare and appear at the conference and receive notice of withdrawal at the last minute. He submitted that
$1,100 represents one half of a daily rate on a 2B basis¹.

[15] The last memorandum filed was the plaintiff’s memorandum dated 31 May 2018. In it, the plaintiff submitted that any reasonably competent solicitor would have known that, as the applications required leave, there was no need to prepare affidavits or the like.

[16] In response to Mr Gloyn’s submission that there are no special circumstances that would justify delaying a decision on costs, the plaintiff submitted that he has been made a pauper by the defendant and his friends, and it would not be fair to punish him further by adding to his financial woes. He submitted that costs should be reserved “until the truth comes out”.

Discussion and conclusions

[17] Rule 14.8 of the High Court Rules materially provides:

14.8 Costs on interlocutory applications

¹ Under the Third Schedule to the High Court Rules, an allowance of 0.6 of a day would have been allowed if the notices of opposition had been filed.

(1) Costs on an opposed interlocutory application, unless there are special reasons to the contrary,—

(a) must be fixed in accordance with these rules when the application is determined; and

(b) become payable when they are fixed.

(2) Despite subclause (1), the court may reverse, discharge, or vary an order for costs on an interlocutory application if satisfied subsequently that the original order should not have been made.

...

[18] In this case the applications withdrawn by the plaintiff have not been determined by judgment, but by the plaintiff withdrawing them. However I think the same principle must apply, and costs should be determined now unless there are special reasons to the contrary.

[19] The plaintiff has not made out any special reasons for deferring the making of an order for costs. First, the Court cannot decide the issue of costs on the three withdrawn applications on the basis of what the plaintiff says are the ultimate merits of this claim, or on the basis of his (untested) contention that the defendant (or the intended defendants) are or have been responsible for his “financial woes”. Any consideration of the ultimate merits must await the trial, when both parties will have the opportunity to call evidence and make their submissions. I also accept Mr Gloyn’s submission that, if costs are to be awarded to the intended second and third defendants, they should not have to wait what is likely to be many months for the eventual trial of this proceeding, before they receive their costs.

[20] In my view both the defendant and the intended second and third defendants are entitled to some costs, although not at the level sought by Mr Gloyn.

[21] As far as the joinder applications are concerned, the plaintiff was directed to serve Mr Michael Gerritsen and Ms Simpson, and once they were served it was entirely foreseeable by the plaintiff that they would incur legal costs.

[22] And they did incur legal costs. Although they did not file notices of opposition to the applications for joinder, Mr Gloyn did address the joinder applications at some
length in his memorandum dated 13 April 2018 prepared for the conference convened on 16 April 2018. He also made brief submissions on the plaintiff’s application for urgent relief, which had been served the previous evening, concluding that the application was “contrived and without legal precedent, and is not dissimilar to the situation that Justice Katz dealt with in her minute of 8 February 2018”. In respect of all three applications, he submitted that the Court should direct the registry not to accept them for filing.

[23] In those circumstances, I am satisfied that the defendant and the intended defendants are entitled to some contribution to their costs, notwithstanding that they did not file notices of opposition. However I do not think there is any basis for an award of increased or indemnity costs, under Rule 14.6. Whether or not the applications were ill-conceived, at least they have been withdrawn fairly promptly after the 16 April 2018 conference, and I do not consider that there are aggravating circumstances that would justify an award of increased or indemnity costs.

[24] Turning to the question of quantum, costs for filing one notice of opposition to an interlocutory application on a 2B basis would have been $1,338. In fact, no notices of opposition were filed. And there would have been some double-up in preparing the notices of opposition for each of the intended defendants. Further, time spent at the 16 April conference was not just devoted to these three applications; a range of other case management matters were also addresses.

[25] The plaintiff appears to submit that, because leave to file the applications had not been granted, the defendant and the intended defendants should have done nothing, and simply relied on the plaintiff’s failure to obtain leave. That might have been a reasonable position in respect of the application for “urgent relief”, which was clearly defective on its face, and was only served on the evening before Mr Gloyn filed his conference memorandum. However, I do not consider that simply doing nothing was a course reasonably open to the defendant and the intended defendants on the applications for joinder. While the plaintiff’s previous attempt to join the intended defendants was rejected by Katz J in her minute of 8 February 2018, Her Honour did refer to the correct procedure to be followed by a plaintiff who wishes to join additional defendants, and she concluded her minute with a statement that the plaintiff
would need to proceed in accordance with the requirements of the High Court Rules if he wished to pursue the issue of joinder. And in a minute issued on 8 March 2018, Jagose J directed that the joinder applications were to be served on the intended defendants - His Honour did not mention any need for the plaintiff to obtain leave to make the applications.

[26] In those circumstances, I do not think it was unreasonable for the defendant and the intended defendants to prepare draft papers in opposition to the joinder applications, in the expectation that the Court would wish to consider any application for leave to file after the close of pleadings date in the context of a wider consideration of the merits of the proposed joinder applications.

[27] In all of the foregoing circumstances, I think the justice of the case will be met if the sum of $750 is awarded on each of the two joinder applications, and $250 on the application filed on 12 April 2018 for “urgent relief”. As the defendant and the intended defendants have used the same firm of solicitors, I make no direction as to how the costs on the two joinder applications are to be apportioned as between the defendant and the intended defendants. However, if a determination is necessary on that point, leave is reserved to the defendant and the intended defendants to apply by memorandum for further directions, within 10 working days of the date of this judgment.

[28] In the result, costs are awarded against the plaintiff on the withdrawal of the three applications in the total sum of $1,750, being $250 on the “urgent relief” application, and $750 on each of the two joinder applications.

[29] At this stage, I see no basis for staying execution on the costs awards, and I decline to make any stay order. If the plaintiff considers that there are some grounds for a stay, he will need to file a formal interlocutory application, in the proper form,
and accompanied by an affidavit setting out the claimed grounds for a stay, and any required filing fee.




Associate Judge Smith