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E-Trans International Finance Limited v Kiwibank Limited [2015] NZHC 2481 (9 October 2015)

Last Updated: 3 November 2015

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-000694 [2015] NZHC 2481

_{JUDGMENT OF ASHER J}

This judgment was delivered by me on Friday, 9 October 2015 at 4 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Forest Harrison, Auckland.

Russell McVeagh, Wellington. J Farmer QC, Auckland.

FC Deliu, Auckland.

E-TRANS INTERNATIONAL FINANCE LTD v KIWIBANK LTD [2015] NZHC 2481 [9 October 2015]

Introduction

[1] On 8 September I delivered a decision declining the application of BN Global Trading Ltd (Global) for non-party discovery, and ordering scale costs.¹ This followed a full half day hearing with written submissions. On 10 September 2015

Mr Deliu for Global sought recall, variation or rescission of the costs order. On

18 September 2015 E-Trans International Finance Ltd (E-Trans) and Kiwibank Ltd

(Kiwibank) filed memoranda opposing Mr Deliu’s requests. On 18 September 2015

Mr Deliu filed a second memorandum making more detailed submissions in opposition to costs.

[2] On 18 September 2015 I issued a minute stating that I was prepared to treat Mr Deliu’s memorandum as an application to vary or rescind the order for costs under r 7.49 of the High Court Rules (the Rules), and I noted that a Court may reverse, discharge or vary an order for costs on an interlocutory application under r 14.8(2).

[3] Since then I have received a further submission from Mr Deliu raising substantive issues about costs dated 22 September 2015 and a further submission from Kiwibank submitting that costs on a 2B basis were appropriate.

[4] Given this history and the exchange that has occurred, I have decided to determine the issue of costs afresh.

Costs against a non-party

[5] Mr Deliu in answer to the rule that costs follow the event,² relied on the principle that the jurisdiction to make costs orders against non-parties has been described as “exceptional”.³ He also relied on the proposition that a party who

_{intends to seek costs from a non-party needs to bring that to the attention of the}

¹ _{E-Trans International Finance Ltd v Kiwibank Ltd [2015] NZHC 2164.}

² _{See r 14.2(a).}

³ See Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) [2005] 1 NZLR 145, (2004) 17

PRNZ 115 (PC) at [25] and Asset Building M Pritchard Ltd v Hambeg Ltd HC Auckland CIV-

2008-404-3781, 21 November 2008 at [10] and [14].

non-party promptly, otherwise the non-party is not aware that their actions are placing them at risk for the costs of the proceeding.⁴

[6] Mr Deliu pointed to the fact that neither the plaintiff nor the defendant sought costs in the memoranda that they filed in opposition to his application and never signalled that costs would be sought if Global failed. He argues that they have therefore by laches waived any entitlement to seek costs that they might have had.

[7] Mr Deliu submits in his most recent memorandum that the best course would be to reserve costs. The application for access was bona fide and might be resumed later once the case has progressed and might well be successful. He also made specific submissions on the quantum of costs which I will address later.

Should the non-party have costs?

[8] A new regime for access to court documents was created by the High Court (Access to Court Documents) Amendment Rules 2009. Such applications are now frequent, most commonly brought by members of the media, academics and authors, and parties in other proceedings who have an interest in the case. They are generally dealt with on the papers, but on occasions, such as this, where there is a significant

contest, there may be a hearing.⁵

[9] A non-party seeking access to court documents for the purpose of other proceedings will generally have no direct interest in the outcome of the proceedings. The position of such a non-party is very different from that of a non-party who is financing a party in the proceeding as was the case in Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) and Asset Building M Pritchard Ltd v Hambeg Ltd. Such a non-party has an interest in the outcome of the case. In contrast a person seeking access to court documents to assist in other proceedings, will bring an application and following its determination the applicant’s direct connection with the

_{proceeding will end.}⁶ _{The time to determine costs is at that point, when the}

⁴ Digital Masters Ltd v The Country Channel Ltd HC Auckland CIV-2009-404-6545, 24 June

_{2011 at [38]–[39].}

⁵ _{Rule 3.13(7).}

6. In this case there remains the possibility of a further application for court documents by Global should circumstances develop.

application for access is determined, and not later when the costs have been long incurred and the issue long determined. In this regard r 14.8(1)(a) provides that costs on an opposed interlocutory application shall be fixed in accordance with the rules “when the application is determined”, unless there are special reasons to the contrary. This rule is not specific to parties and is an indication that costs should be determined now.

[10] The High Court has always had an inherent jurisdiction to order costs on matters that it determines,⁷ but the award of costs is now regulated by the Rules.⁸

The Rules are couched in very broad terms. All matters are at the discretion of the

Court if they relate to costs incidental to a proceeding, or of a step in a proceeding.⁹

An application for non-party discovery is incidental to a proceeding and a step in a proceeding, although not a step by a party.

[11] It is a general principle at r 14.2(a) that the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds. A party is defined in r 1.3 as meaning any person who is a plaintiff or a defendant or a person added to a proceeding. Plaintiff means the person by whom, or on whose behalf, a proceeding is brought, and proceeding means an application to the Court for the exercise of the civil jurisdiction of the Court other than an interlocutory application.

[12] Thus, Global as a non-party seeking documents is not a party to whom r 14.2(a) directly applies as it has not brought a proceeding. However, r 1.6(1) of the Rules provides that in any case for which no formal procedure is prescribed by an Act or rules or regulations, the Court may dispose of the case as nearly as may be practicable in accordance with the provisions of the Rules affecting any similar case. If there are no such rules, it must be disposed of in the manner that the Court thinks is best calculated to promote the objective of the rules of just, speedy and

_{inexpensive determinations.}¹⁰

⁷ _{Harley v McDonald [2002] 1 NZLR 1 (PC) at [45].}

⁸ _{Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7].}

⁹ _{High Court Rules, r 14.1(1).}

¹⁰ Rule 1.6(2) and 1.2.

[13] By analogy the provision in r 14.2(a) could be expected to apply to a one-off application such as this by a non-party. It would be unjust and contrary to the objective of the Rules if non-parties could proceed with opposed applications to the Court with no costs consequences should they fail after a hearing. Such an applicant chooses to bring the application for its own purposes. If it is opposed and goes to a hearing as this did, with the filing of formal submissions, the opposition will necessarily involve professional time and expense. In my view the established costs principles in r 14.2 should apply when such a hearing takes place.

[14] This will be the case not only for non-parties who unsuccessfully apply for access to court documents, but also for non-parties who successfully apply and when there has been unsuccessful opposition to the application. Costs orders provide some compensation to a party who has been put to the trouble and expense of appearing and resisting an unsuccessful application, or successfully pursuing an opposed application. Cost orders also act as a disincentive to parties bringing applications that are not well founded.

[15] I do not accept the submission that it is relevant that the successful parties did not signal that they would seek costs. It is never the case that a party opposing another has to signal a possible costs application should it succeed. Any person who pursues a course of action in court in the face of opposition should assume there could be costs consequences upon failure.

[16] It will not of course be an invariable rule that costs will follow the event should a request for court documents be unsuccessful. It will always depend on the circumstances. To give examples, a short ruling determining an informal request and an informal response may well not require a costs response. No issue as to costs might arise if the access to court documents application was initially opposed, and the opposition was withdrawn in the face of new information. Costs might not be

awarded if the documents had been sought in a matter of public interest.¹¹

[17] Here there was a straightforward application brought by Global, which in the event led to a hearing which involved written and oral submissions. I found Global’s

¹¹ Rule 14.7(e).

reason for the application to be legitimate, but despite that legitimate reason, it was unsuccessful, and costs should follow the event in the usual way. To put it the other way around, E-Trans and Kiwibank were successful, and were put to costs, and an award should follow.

[18] Having considered the matter de novo I have concluded that Global should pay the costs of the plaintiff and the defendant on a 2B basis.

Quantum of costs

[19] Mr Deliu submitted that the costs sought were unreasonable when considered in relation to the “complexity and significance of the proceedings” relying on r 14.2(b) of the High Court Rules. He points out that counsel involved for the plaintiff and defendant were experienced and the issues were not complex. He submitted that the claim for 1.5 days for written submissions was excessive.

[20] The parties should not obtain costs orders where the actual costs are less than the amount available in accordance with the scale. However, Mr Butler has indicated that his costs exceed the scale and I assume that the case is the same with Mr Farmer’s costs. The whole function of the scale is to avoid the minute examination of the appropriate time or actual time spent on particular attendances. Given my assumption that actual costs exceeded scale, I will not examine the specific costs further.

[21] I do agree, however, with Mr Deliu’s submission that despite the fact that it is perfectly understandable for Mr Farmer QC to have had second counsel, the relatively straightforward nature of the application means that there should be no costs awarded for second counsel.

[22] I record that one document appears not to have been served. However, it was referred to at the hearing without objection and again this is the sort of detailed objection that the rules are designed to avoid. From an overview I see no unfairness in the scale applying.

[23] The earlier award of costs I made in the judgment of 8 September 2015 is rescinded. Instead I order costs against BN Global Trading Ltd on the unsuccessful non-party discovery application on a 2B basis for one counsel for each party, plus reasonable disbursements (including taxi fares).

[24] Given the costs on the application issues were dealt with on the papers, and the fact that this was a novel point in that it was a non-party access to documents application, I make no order for costs on this costs application.

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

Asher J