COMMISSIONER OF INLAND REVENUE v LIVINGSPACE PROPERTIES LIMITED [2019] NZHC 3208

COMMISSIONER OF INLAND REVENUE v LIVINGSPACE PROPERTIES LIMITED [2019] NZHC 3208 [5December 2019]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2010-409-002323[2019] NZHC 3208BETWEEN COMMISSIONER OF INLANDREVENUEPlaintiffAND LIVINGSPACE PROPERTIES LIMITEDDefendantCounsel: A Ho for liquidator of Livingspace PropertiesLtd (in rec and in liq)J Moss for K Buxton and respondentsJudgment 5 December 2019(Determined on the papers)JUDGMENT OF OSBORNE J(wasted costs)[1] Kristina Buxton applies for a wasted costs order.The context[2] Associate Judge Johnston made a number of interlocutory orders on 6September 2019.1 Robert Walker, the liquidator of Livingspace Properties Limited (inrec and in liq) through his then solicitor (Mr Neil) applied for review of that judgment.2[3] Kristina Buxton filed a notice of opposition to the review application.[4] My Minute of 14 November 2019 records subsequent procedural matters:1 Commissioner of Inland Revenue v Livingspace Properties Ltd [2019] NZHC 2213.2 Under s 26P Judicature Act 1908, which continued to apply under transitional provisions.[3] Before its first call, the Court on 10 October 2019 made directions forthe exchange of submissions in anticipation of the Registrar's allocation of aprompt hearing date.[4] Beginning on 23 October 2019, the Registry offered hearing dates tothe parties which were acceptable to Ms Buxton. Counsel for Mr Walkerrejected the first date offered as being too early and initially did not respondto the second date offered (3 December 2019).[5] On 8 November 2019, Mr Neil, solicitor on the record for theliquidator, filed a memorandum "foreshadowing application for leave towithdraw as solicitor on the record." Mr Neil explained that his firm,Meredith Connell, has ceased to act for the liquidator in relation to thisproceeding. He indicated that if Mr Walker did not arrange for a notice ofchange of solicitor or change of address for service to be filed, he (Mr Neil)would make the appropriate interlocutory application under r 5.1(4) HighCourt Rules.The basis of the wasted costs application[5] The Court convened an urgent telephone conference to take place on 13November 2019. Mr Moss, for Ms Buxton, filed a memorandum in advance of theconference.[6] At the conference Mr Neil was able to advise the Court that he understood thatMr Walker had made contact with a barrister and that a notice of change ofrepresentation would be filed that day. The previously-directed timetable had to besignificantly adjusted to accommodate the change of solicitor.[7] Mr Moss identifies his attendance at the conference and his memorandum forthe conference as wasted costs.[8] Mr Ho (now Mr Walker's counsel) opposes the application for wasted costs.DiscussionThe law[9] I adopt what I stated in Bligh v Earthquake Commission:33 Bligh v Earthquake Commission [2017] NZHC 2179 at [9].The determination of any award in relation to costs which have been wastedis, as with all cost matters, at the discretion of the Court.4 Jurisdiction to makea wasted costs order where a party's default causes a trial to be vacated oradjourned is usually an exception to the usual rule that costs follow the eventbecause there has usually been no "event".5[10] I adopt also what was further stated in Bligh v Earthquake Commission:6Wasted costs awards have a two-fold purpose:(a) to compensate parties not in default who have truly wasted costs(including disbursements); and(b) to impose a sanction on a defaulting party in an effort to avoid futurewastage of costs and of judicial and Court resources and disadvantageto other parties yet to be allocated trials.(Footnotes omitted)Mr Ho's submissions[11] Mr Ho submits that this is not a case for a wasted costs order. He records thatno fixture date had been allocated and the conference of 13 November was called todeal with that. Mr Ho submitted that there did not appear to have been any preparatorysteps taken by Ms Buxton that appeared to have been "wasted".[12] Mr Ho emphasised that the liquidator's inability to respond to the Registry'sproposed fixture dates had been due to a change in the liquidator's representation. MrHo observed that "while the timing of this was unfortunate, this was not intended towaste the resources of Ms Buxton or the Court. The parties are entitled to counsel oftheir choice".Application of the law[13] There clearly were wasted costs in this case for Ms Buxton, both in relation tothe conference and Mr Moss's memorandum for the conference. Ms Buxton had toincur those costs because Mr Walker, as applicant for review, had been unable to co-4 High Court Rules, r 14.1(1).5 A C Beck & Others McGechan on Procedure (online loose leaf ed, Thomson Reuters) at [HR Pt14.16A(1)].6 Bligh v Earthquake Commission above n 3, at [11].operate in progress the application to a hearing and to meet the directed timetable forsubmissions.[14] While Mr Ho emphasises that any wasting of costs was not intended by MrWalker, the Court's focus in this regard is not on intention but on consequence. TheCourt seeks to protect from the burden of wasted costs the party who is not in default.[15] Here, of course, Mr Walker had his right to counsel of his choice. In that regardhe was accommodated (to the concern and frustration of Ms Buxton) by the pushingout of the timetable and the pushing out of the target date for hearing. With the Courthaving accommodated Mr Walker's intended change of representation in that way, itdoes not follow that the Court should ignore the fact that Ms Buxton's costs incurredin that process had been truly wasted.[16] It is just, as between the parties, that Mr Walker pay in any event to Ms Buxtonthe costs of the two items claimed.Order[17] I direct that Mr Walker pay in any event to Ms Buxton the wasted costs incurredon 12 November 2019 and 13 November 2019 which I fix in the sum of $1195.00.Osborne JSolicitors:Norling Law Limited, AucklandCanterbury Legal, ChristchurchJ Moss, Barrister, ChristchurchCopy to: Mr R B WalkerThis judgment was delivered by me on 5 December 2019 at pursuant to Rule 11.5of the High Court RulesRegistrar/Deputy RegistrarDate: