Lee v Lee

[2018] NZHC 1315

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-3204

[2018] NZHC 1315

BETWEEN

DONKEUN LEE AND ILSOOK KANG

Plaintiffs

AND

HEE HYUN LEE AND MYUNG JUN LEE

as executors of the estate of TECK-KEUN LEE
First Defendants

HEE HYUN LEE AND MYUNG JUN LEE

as executors of the estate of JUNG JA YUN Second Defendants

Hearing:

6 June 2018

Appearances:

T A Hwang for Plaintiffs

A Manuson & E Hong for Defendants

Judgment:

6 June 2018

COSTS JUDGMENT OF JAGOSE J

This judgment is delivered by me on 6 June 2018 at 3.00pm pursuant to r 11.5 of the High Court Rules.

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

Registrar / Deputy Registrar

Solicitors:

Queen City Law, Auckland

Prestige Lawyers Ltd, Auckland

LEE v LEE - Costs [2018] NZHC 1315 [6 June 2018]

[1]                  My judgment of 8 May 2018 at [13] took the preliminary view “costs are better reserved for determination in connection with the substantive result of this proceeding”. I reserved costs for determination on short memoranda, if parties differed.

[2]                  My judgment dismissed the defendants’ application for security for costs against admittedly impoverished plaintiffs. I took the view “there seems a reasonable evidential foundation for the plaintiffs’ allegations”, which deserved trial.1

[3]The plaintiffs now seek $44,234.10 comprised of:

(a)“scaled costs” calculated to the time of their 8 April 2018 offer to consent to the defendants’ withdrawal of the application on payment of

$30,000 costs; and

(b)solicitor-client indemnity costs thereafter; plus

(c)$3,735.00 in disbursements (primarily for affidavit translations).

[4]                  Given “an award of costs should not exceed the costs incurred by the party claiming costs”,2 and the plaintiffs accepted their threshold impecuniosity was established for the purposes of the defendants’ application, there may be room to contemplate the strategic nature of the plaintiffs’ concession or the costs claim’s bona fides. But the point was not taken by the defendants, and I do not in any event need to pursue it, given my decision on the costs claim.

[5]                  Also of note – in the context of an application for security for costs, sought at the outset of the proceeding – are costs claimed for:

(a)case management interventions on 27 and 29 March, 31 May, 6 and 12 June, 8 November, and 7 December 2017, and 31 January and 5 April 2018; and

1      Lee v Lee [2018] NZHC 991 at [10].

2      HCR 14.2(f).

(b)affidavits filed in opposition on 23 and 25 May, 13 (x 2), 14, and 18 July 2017, and 23 January, and 9 and 12 (x 3) February 2018.

[6]                  The defendants respond they gave the plaintiffs the opportunity to progress to trial but with no issues as to costs on the security for costs application (to be withdrawn). That offer, however, was not made until 3 April 2018, when the bulk of those costs had been incurred by the plaintiffs. The defendants now accept costs should be reserved for determination with the substantive proceeding.

[7]                  In reply, the plaintiffs say the defendants point to, and there is, no ‘special reason’ justifying reservation of costs.3 Rather, costs should follow the event,4 as “the merits of particular applications and those of the substantive proceeding are different matters”.5

[8]                  However, as I said at [9] of my judgment, the threshold merits of the present application were made out; the application failed only because I favoured the plaintiffs’ access to justice on their substantive case over the defendants’ protection from otherwise unmeritorious litigation. This peculiar linkage to substantive merits is the special reason why costs should be reserved for determination in conjunction with the proceeding. That was my preliminary view. Everything I have seen in memoranda since affirms the correctness of that view.

[9]                  Costs on the defendants’ security for costs application are reserved for determination in conjunction with the substantive proceeding.

—Jagose J

3      HCR 14.8(1).

4      HCR 14.2(a).

5      Chapman v Badon Ltd [2010] NZCA 613, (2010) 20 PRNZ 83 at [12].