Eckhoff v Orbell [2021] NZHC 1118 (19 May 2021)

Last Updated: 25 May 2021

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-000133 [2021] NZHC 1118

BETWEEN	PHILIPPA JANE ECKHOFF Plaintiff
AND	RUTH ALICE ORBELL First Defendant
AND	NICOLA ALICE HYSLOP Second Defendant
AND	WILLIAM HAMISH ORBELL Third Defendant
AND	RUTH ALICE ORBELL and WILLIAM HAMISH ORBELL as trustees of the Hamish Orbell Family Trust Fourth Defendants
AND	NICOLA ALICE HYSLOP, JONATHAN ANGUS HYSLOP and QA TRUSTEES 2012 LIMITED as trustees of the Hyslop Family Trust Fifth Defendants
AND	JOHN DUNCAN MCFARLANE Sixth Defendant
AND	JONATHAN ANGUS HYSLOP Seventh Defendant

Hearing:	On the papers
Counsel:	D R Tobin for Plaintiff M K Prendergast for First Defendant M J Wallace for Second, Fifth and Seventh Defendants S J Jamieson and J A Higby for Third and Fourth Defendants
Judgment:	19 May 2021

ECKHOFF v ORBELL [2021] NZHC 1118 [19 May 2021]

JUDGMENT OF ASSOCIATE JUDGE PAULSEN ON COSTS

This judgment was delivered by me on 19 May 2021 at 11.30 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

• [1] In a judgment of 13 April 2021 I determined applications:¹

(a) by the second, fifth and seventh defendants for further particulars of the statement of claim; and

(b) by the plaintiff for particular discovery from the first and second defendants.

• [2] I directed counsel to confer on costs and reserved leave to file memoranda on costs if necessary.

• [3] Memoranda have now been filed for the plaintiff, the first defendant and second, fifth and seventh defendants.

• [4] Although Ms Jamieson and Mr Higby appeared at the hearing for the third and fourth defendants no memorandum has been filed on their behalf and it is to be inferred they do not seek costs.

The application for further particulars of statement of claim

• [5] The second, fifth and seventh defendants were successful on their application for further particulars of the statement of claim. They are entitled to an award of scale 2B costs and disbursements amounting to $6,314.

The application by the plaintiff for particular discovery

The parties’ positions

• [6] Both the first and second defendants claim success on this application and seek costs. The plaintiff also claims some success on the application but in recognition that her success was limited she argues costs should lie where they fall.

¹ Eckhoff v Orbell [2021] NZHC 757.

Relevant principles

• [7] All matters of costs are discretionary. The discretion must be exercised on a principled basis. The determination of costs, so far as possible, should be both predictable and expeditious.²

• [8] The party who has lost should pay the costs of the party that has won.³ The loser pays costs unless there are exceptional reasons to the contrary.⁴ It is not unusual for a party bringing an application or proceeding to achieve only partial success. It has been held that the starting point in such cases is that success on more limited terms is still success.⁵

• [9] In Emmons Developments New Zealand Ltd v Mitsui Sumitomo Insurance Co Ltd, Dunningham J observed it is not always easy to determine which party won overall and what is required is a realistic appraisal of the end result.⁶ There, this appraisal involved consideration of which party won in circumstances where the parties had put five discrete issues before the Court for determination and each had had mixed success. Dunningham J had regard to several other factors in determining the question of which party won overall including the terms of a partial settlement agreement resolving issues which would otherwise have been determined in the proceeding and the downstream financial implications of the findings on the five issues determined in the proceeding. Ultimately she decided that balancing all matters neither party had won nor lost and costs were to lie where they fell.⁷

• [10] Costs on an opposed interlocutory application should, unless there are special reasons to the contrary, be fixed when the application is determined.⁸

² Rule r 14.2(1)(g).

³ Rule 14.2(1)(a).

4. Rule 14.2(1)(a); Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].

⁵ Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].

6. Emmons Developments New Zealand Ltd v Mitsui Sumitomo Insurance Co Ltd [2020] NZHC 932 at [28].

⁷ At [41].

⁸ High Court Rules 2016, r 14.8(1)(a).

• [11] In the present context some reference is necessary to r 14.7 of the High Court Rules which relevantly provides:

14.7 Refusal of, or reduction in, costs

Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—

...

(d) although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs; or

...

(f) the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

...

(ii) taking or pursuing an unnecessary step or an argument that lacks merit; or

...

(g) some other reason exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.

The circumstances of this case

• [12] Here, by her application, the plaintiff sought particular discovery of five categories of documents. This is how the plaintiff’s application fared:

(a) In respect of one category (category (b)), the first and second defendants did not oppose the order sought by the plaintiff. The documents were to be supplied by consent, although the plaintiff complains this has still not occurred.

(b) In respect of another category (category (e)), the second defendant was required to give further discovery to the plaintiff, albeit on a more limited basis than had been sought.

(c) In respect of the remaining three categories of documents (categories (a), (c) and (d)), the application was dismissed.

• [13] The first defendant submits the plaintiff’s application failed as no order was made against her to provide additional discovery of documents to the plaintiff and the application was unnecessary in any event as discovery issues could have been resolved between counsel. While acknowledging she had, after the application was made, filed a second affidavit of documents, the first defendant submits that affidavit did not disclose additional material documents relevant to the dispute.

• [14] Alternatively, the first defendant argues, costs should be awarded in her favour because given her additional disclosure the plaintiff gained nothing by pursuing the application to a hearing.

• [15] Furthermore, the first defendant contends that in several respects the manner in which the plaintiff’s application was presented led to the first and second defendants incurring unnecessary and avoidable costs.

• [16] The second defendant adopts the submissions made on behalf of the first defendant. Although the plaintiff had success in respect to disclosure from the second defendant of one category of document, namely annual financial accounts of Levels Estate Company Ltd, the second defendant says the plaintiff has now agreed that disclosure of the company’s annual accounts for the years ending 30 June 2005 to 30 June 2007 satisfies the requirement for disclosure, whereas the plaintiff had previously sought annual accounts for a further 13 years. On this basis, the second defendant claims success and seeks an award of 2B costs but accepts a deduction of, say, 20 per cent as appropriate.

• [17] I do not accept the first or second defendant’s analysis because it is undoubtedly the case that the plaintiff achieved success on her application in at least three respects.

• [18] First, the first and second defendants acknowledged the plaintiff’s entitlement to further disclosure in respect of the category (b) documents. I made no order for disclosure only because counsel acknowledged the documents would be provided on a consensual basis.
• [19] Second, the plaintiff achieved success in that I accepted her entitlement to disclosure from the second defendant of at least some annual financial accounts of Levels Estate Company Ltd. While it is true that the disclosure sought went beyond what was required upon the plaintiff’s pleadings and she has now accepted disclosure on a more limited basis, partial success is still success.

• [20] Third, and perhaps most significantly, it was only as a result of the making of the application that the first defendant sought and made disclosure of files held by RSM Law and also then filed her second affidavit of documents. This was primarily the reason the plaintiff’s application in respect of categories (a), (c) and (d) documents was dismissed.

• [21] I do not accept Mr Prendergast’s submission the first defendant’s further affidavit did not disclose any additional “material documents”. The importance of, say, documents on the RSM Law files is a matter that will only become clear at trial but it appears to me that the additional disclosure was of obvious relevance.

• [22] I also do not accept the application was unnecessary. As I said in the judgment, I regard steps taken by Mr Prendergast on the first defendants behalf in response to the plaintiff’s discovery requests to have been constructive.⁹ However, ultimately it was the making of the application that was the impetus for the first defendant providing further disclosure and it was only after the issue of the Court’s judgment that the second defendant agreed to disclose any of the annual financial accounts of Levels Estate Company Ltd.

• [23] Mr Prendergast is also critical of the plaintiff’s decision to pursue the application even after the first defendant filed her second affidavit of documents and of the manner in which the application was argued. In this latter respect he relies on matters in my judgment and there is no need to repeat them. There is some force in his arguments. But it is also the case that the first defendant’s second affidavit of documents was filed well after the plaintiff’s application and at a relatively late stage within two weeks of the hearing. It is also the case that it cannot be said the plaintiff achieved nothing from proceeding with her application to hearing.

⁹ At [44].

• [24] The plaintiff achieved partial success on her application and prima facie could advance an argument she is entitled to costs. However, due to the factors identified by Mr Prendergast in his submissions there is a strong case she would be refused costs under r 14.7(d) and (f) High Court Rules. I do not need to consider that possibility further as the plaintiff has not sought costs. In the result costs will lie where they fall which, in my view, is an equitable outcome.

Result

• [25] In relation to the second, fifth and seventh defendants’ application for particulars of the statement of claim, they are awarded 2B scale costs and disbursements amounting to $6,314.

• [26] In relation to the plaintiff’s application against the first and second defendant for particular discovery, costs shall lie where they fall.

O G Paulsen Associate Judge

Solicitors:

Wilkinson Rodgers Lawyers, Dunedin Simpson Grierson, Christchurch

Gresson Dorman & Co, Timaru