AUCKLAND TROTTING CLUB INC v LANE NEAVE [2023] NZHC 704

AUCKLAND TROTTING CLUB INC v LANE NEAVE [2023] NZHC 704 [3 April 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2021-404-002011[2023] NZHC 704BETWEEN AUCKLAND TROTTING CLUBINCORPORATEDPlaintiffAND LANE NEAVEFirst DefendantVERO LIABILITY INSURANCELIMITED as insurer of N-Compass Limited(in liquidation)Second DefendantVERO LIABILITY INSURANCELIMITED as insurer of Max RussellConsultancy LimitedThird DefendantWHITE ASSOCIATES LIMITEDFourth DefendantHearing: On the papersAppearances: M C Black for the Plaintiff / RespondentJ Bierre / L G Cox for the Second Defendant / ApplicantJudgment: 3 April 2023COSTS JUDGMENT OF ASSOCIATE JUDGE GARDINERThis judgment was delivered by me on 3 April 2023 at 4.00 p.m.pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate.......................................[1] The second defendant applied for leave to appeal the interlocutory decision tojoin it to the proceeding pursuant to s 9 of the Law Reform Act 1936.1 The applicationwas opposed by the plaintiff and was set down for a hearing on 8 March 2023.[2] The second defendant withdrew its application for leave to appeal afterreceiving the plaintiff's submissions in opposition in which it was indicated that thebasis of the claim against the second defendant was to be re-pleaded. The seconddefendant accepted that the indicated amended claim met the threshold for joinderunder s 9 and agreed to withdraw the application, provided that the indicatedamendments would be included in a future statement of claim to be filed in theproceedings.2 The application was withdrawn by consent on that basis, with costs tobe determined by the Court.[3] The second defendant submits that costs should lie where they fall as theplaintiff's indicated amended claim (and commitment to include those amendmentsinto a formal amended statement of claim in due course) rendered the originally filedapplication nugatory. The second defendant says that if those developments had notoccurred, the application would not have been withdrawn and the second defendantwould have maintained the position set out in its synopsis of submissions for thehearing.[4] The plaintiff seeks its costs on a 2B basis of $5,497 plus the $110 filing fee.The plaintiff argues that the fact that the application was withdrawn, rather thandetermined by the Court, does not limit the applicability of the general principle thata party who fails with respect to a proceeding or interlocutory application should paycosts to the party who succeeds.3 The plaintiff also submits that the position is akin toa discontinuance, for which r 15.23 provides the principle that the discontinuingplaintiff will pay costs to the defendant, this principle having been applied where anapplicant has terminated an interlocutory application.41 Auckland Trotting Club Inc v Lane Neave [2022] NZHC 2208.2 Joint memorandum of counsel dated 6 March 2023 at [1](b).3 High Court Rules 2016, r 14.8.4 Rocket Surgery Ltd v Goodwin [2013] NZHC 2667; MV Celebre Ltd v Airwork Flight OperationsLtd [2015] NZHC 1400.[5] The plaintiff says that it should not be precluded from recovering its costssimply because it did not provide an amended statement of claim earlier. The plaintiffsubmits that the second defendant was unduly focused on the drafting of the originalpleading, that the plaintiff had made it clear that it would amend its pleading followingdiscovery, and its ability to do so was hampered by the second defendant's failure tocomply with its discovery obligations.[6] Costs are at the discretion of the Court.5 In some situations it is appropriate tofollow by analogy the general principle that a plaintiff who discontinues a proceedingshould pay costs to the defendant up to that point.6 However, whether that isappropriate in a particular case depends on a range of factors including the reason whythe interlocutory application was withdrawn.[7] Here, the draft amended statement of claim provided by the plaintiff with itssubmissions in opposition to the application for leave to appeal substantially reframesthe claim and addresses the basis for the second defendant's opposition to theplaintiff's application for leave to join the second defendant to the proceeding and itsapplication for leave to appeal the interlocutory decision granting that leave. Whilestrictly speaking the application for leave to appeal needed to be dealt with based onthe original pleading, it should have been readily apparent to the plaintiff that thisprocedural step might have been avoided if it had provided the second defendant withits intended amended statement of claim promptly after the interlocutory decision. Inthe absence of a firm indication of the intended amendments I do not think the seconddefendant can be criticised for pursuing its application for leave to appeal.[8] The draft amended statement of claim rendered the application for leave toappeal nugatory as it satisfied the second defendant that the threshold for joinder wasmet. As the costs associated with the application for leave to appeal might have beenavoided had the draft amendments been provided sooner, I find that it is appropriatethat costs lie where they fall.5 High Court Rules 2016, r 14.1.6 High Court Rules 2016, r 15.23.[9] The second defendant's delay in providing its discovery is irrelevant. Self-evidently the plaintiff's ability to amend the claim was not dependent on discoveryfrom the insurer.Result[10] Costs in relation to the second defendant's application for leave to appeal theinterlocutory decision to join it to the proceeding will lie where they fall._____________________Associate Judge GardinerSolicitors:Gilbert Walker, AucklandMcElroys, AucklandMorgan Coakle, Auckland