Littleton v Serco New Zealand Limited

[2017] NZHC 2023

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-000019 [2017] NZHC 2023

BETWEEN

ALEXANDA KEREI REKENE

LITTLETON Plaintiff

AND

SERCO NEW ZEALAND LIMITED Defendant

Hearing:	On the papers
Judgment:	23 August 2017

JUDGMENT OF WYLIE J [COSTS]

This judgment was delivered by Justice Wylie

On 23 August 2017 at 11.00am Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:

Stephen Ross/J H Waugh, Whanganui

Kensington Swan, Wellington

LITTLETON v SERCO NEW ZEALAND LTD [2017] NZHC 2023 [23 August 2017]

Introduction

[1]      I refer to my judgment issued on 7 July 2017.  I declined Serco’s application for security for costs, and granted Mr Littleton’s application for particular discovery. I observed – at [42] – that Mr Littleton, as the successful party, was entitled to his costs and reasonable disbursements.

[2]      Counsel have been unable to agree on the issue, and memoranda have been filed.

[3]      Counsel for Mr Littleton seeks costs, on a 2B basis, in the sum of $12,934, together with disbursements of $622.65.

[4]      Serco says that there are special reasons such that any costs order should be reserved until the conclusion of the substantive proceeding.   In the alternative, it submits that those reasons support the payment of any costs fixed being deferred until the conclusion of the substantive proceeding.

Analysis

[5]      In a minute dated 28 June 2016, Associate Judge Christiansen categorised the proceeding as category 2 for costs purposes under r 14.3 of the High Court Rules

2016.

[6]      Neither party criticises that categorisation, and there is no reason to depart from it.

[7]      Category 2 proceedings are proceedings of average complexity, requiring counsel of skill and experience considered average in the High Court.  Counsel for Mr Littleton suggests that, for time allocation purposes, band two, as set out in r 14.5(2) of the High Court Rules, is appropriate.   Counsel for Serco does not disagree.

[8]      Counsel agree that, if costs are fixed as on a 2B basis, the total costs awarded should be $12,934.

[9]      The sole issue turns on whether or not costs should be fixed, and ordered to be paid, now.

[10]     This  issue  is  straightforward.     Costs  on  interlocutory  applications  are governed by r 14.8.  Relevantly, it provides that costs on an opposed interlocutory application, unless there are special reasons for the contrary, must be fixed in accordance with the rules when the application is determined, and that they become payable when they are fixed.

[11]     The  rule  reflects  the  fact  that  the  merits  of  a  particular  interlocutory application, and the merits of a substantive proceeding, are different matters.1     It recognises that the costs of an interlocutory application are best fixed contemporaneously by the Judge or Associate Judge who decides it.

[12]     Counsel for Serco suggests that there are special reasons to depart from the rule, namely:

(a)       Mr Littleton accepts that he is impecunious.   In the event his claim

fails at trial, he will be unable to pay Serco’s costs;

(b)counsel for Mr Littleton has indicated the likelihood of further interlocutory applications;

(c)      Serco is in the invidious position of paying costs on any interlocutory applications, where it is likely to be unable to recover its costs in relation to the substantive hearing if it succeeds at trial.  It says that, if it successfully defends the substantive claim, it should be entitled to set off the costs that it will ultimately recover against such costs as it will owe to Mr Littleton in relation to those interlocutory applications where it has been unsuccessful.  If Mr Littleton succeeds at trial, the costs in respect of the interlocutory applications can simply be added to the further costs Mr Littleton will be awarded as a result of the

substantive hearing.

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

[13]     I do not consider that the reasons advanced by Serco are special reasons requiring a departure from r 14.8.

[14]     In   my   judgment,   the   circumstances   outlined   by   Serco   are   wholly unremarkable.  Similar circumstances occur in almost every case where one of the parties to the litigation is legally aided.  That does not preclude a legally aided party from recovering costs on a successful interlocutory application.  In effect, Serco is seeking security for costs by the back door.  It has already failed to obtain an order for security, and it is not now in the interests of justice for the Court to either reserve costs or defer their payment.  Such orders would permit Serco to obtain what would, in effect, be a measure of security for costs.  Agreeing to the course proposed would simply encourage Serco to take an irresponsible attitude to any future interlocutory applications and either force Mr Littleton to abandon the proceedings, or require counsel or the legal aid providers to fund them in the interim.

[15]     Accordingly, I reject Serco’s argument and fix costs in favour of Mr Littleton,

and against Serco, in the sum of $12,934.

[16]     The disbursements sought total $622.65.  This includes $237.66 for air travel and $76 for meals.   These costs were incurred because Mr Littleton’s counsel is based in Whanganui.

[17]     It seems from the memoranda filed that, at the time the proceedings were commenced, Mr Littleton lived in Whanganui.  He no longer does so.  He now lives in Auckland.

[18]     There was no justification for Mr Littleton to retain counsel from out of Auckland for the interlocutory applications.  They were not applications of any great complexity,  and  Mr  Littleton  could  readily  have  obtained  local  representation without incurring travel or related disbursements.

[19]     I agree with counsel for Serco that the sum of $313.66 should be deducted from the disbursements claimed.

[20]     Accordingly, I fix an order for disbursements in the sum of $308.99.  This amount is to be paid by Serco to Mr Littleton.

[21]     The costs and disbursements, in the amounts fixed in this judgment, are to be payable forthwith.

Wylie J