SINGH & ANOR V AUCKLAND CO-OPERATIVE TAXI SOCIETY LTD HC AK CIV-2010-404-001445

SINGH & ANOR V AUCKLAND CO-OPERATIVE TAXI SOCIETY LTD HC AK CIV-2010-404-001445 26 August 2010IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2010-404-001445BETWEEN SUKHDEV SINGH First Plaintiff AND AJAY RAM Second Plaintiff AND AUCKLAND CO-OPERATIVE TAXI SOCIETY LIMITED Defendant Judgment: 26 August 2010 at 4:30 pmJUDGMENT (2) OF COURTNEY J [Costs]This judgment was delivered by Justice Courtney on 26 August 2010 at 4:30 pm pursuant to R 11.5 of the High Court Rules. Registrar / Deputy Registrar Date Solicitors: Fortune Manning, P O Box 4139, Auckland Fax: (09) 915-2402 – M Edwards / S Khan K J Patterson, P O Box 13006, Tauranga Fax: (07) 579-0404Introduction[1] On 2 July 2010 I delivered a decision in favour of the plaintiff on its application for judicial review of decisions made by the defendant, Auckland Co- operative Taxi Society Limited, imposing various penalties on the plaintiffs for alleged breaches of the Society's rules. Efforts by the Society to deprive the plaintiffs of their membership had been stayed as a result of an interim injunction granted by Venning J on 12 March 2010. The plaintiffs now seek costs in respect of both the interim injunction and the substantive decision. [2] The Court has a discretion under R 14.1 of the High Court Rules regarding the award of costs, though that discretion is invariably exercised in accordance with the general principles in R 14.2. Relevant to this case are the principles that a successful party is entitled to have his or her costs paid and costs are to be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step. In addition, there is provision under R 14.6 for increased costs or indemnity costs in certain circumstances. The plaintiffs essentially argue that they should be entitled to increased or indemnity costs but that if scale costs are to be awarded they should be awarded on a category 2C basis.Scale costs[3] In his memorandum on behalf of the plaintiffs, Mr Coltman submitted that this case required a comparatively large amount of time spent on it because of the nature of the proceedings and the circumstances in which the proceedings were filed. There were two plaintiffs with different factual situations and a certain level of urgency. Mr Patterson, for the Society, submitted however that 2B was the appropriate scale given that the time for preparation was normal, no evidence was required beyond the affidavits. [4] The plaintiffs raise a number of issues regarding the defendant's conduct which they say impact on the award of costs. I come to those in considering the issue of increased costs. In terms of the scale costs, however, this matter does not seem to me to justify category 2C costs. Although the facts relating to each plaintiffwere slightly different, in each case they were within a fairly narrow scope and there were high degrees of similarity between them. The plaintiffs would have enjoyed savings as a result of being represented by the same firm of solicitors. [5] Nor were there any complex legal issues arising from the narrow compass of facts. The evidence was adduced by affidavit without cross-examination and was straightforward. As a result, I consider category 2B to be the appropriate basis for awarding scale costs in this case.Increased or indemnity costs[6] The plaintiffs seek either increased or indemnity costs under R 14.6. Rule 14.6(3) permits increased costs in various circumstances. Relevantly in this case increased costs are permitted where the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step by pursuing an argument that lacks merit. Indemnity costs are permitted under R 14.6(4) in more serious circumstances including acting vexatiously, frivolously, improperly or unnecessarily in commencing, continuing or defending a proceeding or step. [7] The circumstances relied on by the plaintiffs in this case relate mainly to the defendants on proceeding with the Board of Governance's meeting regarding whether they would remain members of the Society. Despite the plaintiffs making it plain that they did not consider they had had a fair hearing and intended to file judicial review proceedings the defendants refused to postpone the meeting, necessitating the application for interim relief. The defendant's attitude was recorded in its solicitor's letter 26 January 2010 in which the Society's solicitor suggested that any application for judicial review would "hold up the process andwould therefore be a pointless waste of time and money". [8] Ultimately, as a result of matters discussed at a telephone conference with Venning J, the defendant did agree to postpone the hearing until after the judicial review application had been determined, with Venning J making interim orders without the need for a hearing.[9] Given the potential significance to the plaintiff s of the outcome of the Board of Governance's decision it was clear, or should have been, that the appropriate course was to postpone that meeting pending the outcome of the judicial review application. That course could have no prejudicial effect on the defendant. The defendant's proposal that it proceed with the hearing yet reserve its decision would have placed the plaintiffs in the invidious position of having to attend the hearing and deal with matters that might be affected by the judicial review proceedings. [10] In these circumstances I consider that the defendant did act unreasonably in taking the position it did, thereby forcing the plaintiffs into the cost of applying for interim relief. That step should have been unnecessary and I consider that the plaintiffs are entitled to indemnity costs in respect of the application for interim relief. [11] I do not, however, consider that either indemnity or increased costs are justified in relation to the substantive proceeding, which was the subject of legitimate argument.Result[12] The plaintiffs are entitled to: a) Indemnity costs in respect of the application for interim relief; b) Costs on a 2B basis for the judicial review proceedings; c) Disbursements incurred in respect of both. [13] A calculation of the awards I have made do not appear readily in any of the schedules attached to counsels' submissions. Counsel should therefore confer to agree on the correct calculation. If they cannot reach agreement they may refer the matter to me within 14 days. ____________________ P Courtney J