NAGRA v SABHA AUCKLAND INCORPORATED (1229571) [2023] NZHC 852

NAGRA v SABHA AUCKLAND INCORPORATED (1229571) [2023] NZHC 852 [20 April 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2021-404-1178[2023] NZHC 852IN THE MATTER of an application under the Judicial ReviewProcedure Act 2016BETWEEN DALJIT SINGH NAGRA AND GURNEKSINGH NIJJARPlaintiffsAND SRI GURU SINGH SABHA AUCKLANDINCORPORATED (1229571)DefendantHearing: On the papersAppearances: P Amaranathan for Applicant/DefendantM S Khan for Respondents/PlaintiffsJudgment: 20 April 2023JUDGMENT OF PAUL DAVISON J[Re: Costs]This judgment was delivered by me on 20 April 2023 at 4:30pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:Rice Craig, AucklandFortune Manning, AucklandIntroduction[1] Daljit Singh Nagra (Daljit) and Gurnek Singh Nijjar (Gurnek), the plaintiffs,were formerly members of Sri Guru Sabha Auckland Inc, the defendant.[2] The plaintiffs claim that the defendant has acted in breach of its own rules, andin breach of natural justice in carrying out the actions by which Daljit has beenexcluded from membership and both plaintiffs have been issued with trespass notices.The plaintiffs apply for judicial review seeking relief by way of declarations that: thedefendant has acted unlawfully by purporting to remove members of the defendant;any person whose membership of the defendant has been terminated for non-paymentof subscriptions remains members of the defendant; and the decision to issue theplaintiffs with trespass notices was unlawful.[3] By judgment dated 27 January 2023 I determined an interlocutory applicationby the defendant seeking pre-trial orders that a large number of statements made bythe plaintiffs in their affidavits and in the affidavit of another plaintiff witness areinadmissible as evidence in the proceeding.1 The defendant succeeded in a limitednumber of its 88 separate objections to the plaintiffs' evidence.2 Taking into accountthe modest success of the defendant, and by comparison the substantial success of theplaintiffs in resisting the defendant's objections, I considered the plaintiffs to beentitled to an award of costs.3 The parties were directed to file memoranda as to costs.4SubmissionsPlaintiffs' submissions[4] The plaintiffs seek 2B scale costs of $7,050.50 and disbursements of $115.22.The plaintiffs seek a 20 per cent uplift on the scale costs, amounting to $8,460.60.[5] Mr Khan, counsel for the plaintiffs, submits that 61 of the defendant's 88evidential challenges failed and therefore the plaintiffs are clearly the successful party.1 Nagra v Sri Guru Singh Sabha Auckland Inc (1229571) [2023] NZHC 34.2 At [93]–[94].3 At [96].4 At [97].He says a 20 per cent uplift is warranted due to the lack of merit in many of thechallenges advanced by the defendant, which needlessly prolonged the determinationof both this application and the substantive proceeding. Mr Khan says the plaintiffswere put to the cost of responding to the meritless challenges and the costs awardshould reflect this.[6] Mr Khan submits the Court should increase costs because the defendant hascontributed unnecessarily to the time and expense of the proceeding, or a step in it, bypursuing an unnecessary step or argument that lacks merit. He says the applicationhas caused a delay of at least 18 months. This is because a two-day substantive hearingwas set down for 13 June 2022. The defendant's application regarding evidenceadmissibility was filed on 12 April 2022. A one-hour hearing was allocated for theapplication to be heard on 18 May 2022. However, counsel contracted Covid-19 afew days before the 18 May 2022 hearing which was then adjourned. The substantivehearing was no longer able to be accommodated before the 13 June 2022 date, whichwas therefore vacated. No new substantive hearing date has been allocated. Mr Khansays were it not for the defendant's application or had the defendant adopted a morepragmatic approach the parties could have resolved the issues and not vacated the13 June 2022 substantive hearing.Defendant's submissions[7] The defendant says costs should lie where they fall.[8] Ms Amaranathan, counsel for the defendant, submits that each party had mixedsuccess and therefore there should be no award of costs. Ms Amaranathan says Daljitwas the key plaintiff and a significant number of the objections to his evidence hadmerit. Further, she says Gurnek's evidence contained admissibility issues that thedefendant did not want left for the trial judge to determine.[9] In response to the plaintiffs' submission that the substantive hearing wouldhave proceeded in June 2022 had the defendants taken a different approach,Ms Amaranathan says the substantive hearing was unlikely to proceed regardless ofadmissibility issues. Once the defendant received the plaintiffs' briefs of evidence on16 and 17 March 2022, it was apparent that if the Court was going to make factualfindings about all the matters raised in the briefs of evidence the substantive hearingwould take more than two days. She says the defendant attempted to informally andpromptly resolve the admissibility issues. On 23 March 2022 the defendant gavenotice to the plaintiffs of the evidence challenges and followed up after that seekingto resolve the issues. The application objecting to evidence was required to be filedwithin 10 working days, so in the absence of a substantive response from the plaintiffsthe defendant filed their application.[10] Ms Amaranathan also submits that the real reason the substantive hearing wasvacated was that both counsel contracted Covid-19 the week the admissibility hearingwas to be heard. The admissibility hearing was adjourned by consent becauseMr Khan was unable to instruct alternative counsel.Discussion[11] Costs on interlocutory applications are to be fixed when the application isdetermined and become payable when they are fixed.5 There being no special reasonsto depart from this rule I shall determine costs in regard to the defendant's pre-trialapplication.Successful party[12] A party who fails with respect to an interlocutory application should pay coststo the party who succeeds.6[13] In my judgment I noted the plaintiffs had achieved substantial success inresisting the defendant's objections, and also noted the defendant's comparativelymodest success in objecting to the plaintiffs' evidence. The plaintiffs were put to theexpense of defending the defendant's application that involved 88 separate objectionsthat in many instances I found to be meritless and repetitious.[14] The Court of Appeal in Middeldorp v Avondale Jockey Club Inc upheld a costsaward against the plaintiff in judicial review proceedings who succeeded on one of5 High Court Rules 2016, r 14.8.6 Rule 14.2(1)(a).three challenges made and failed on the other two.7 The Court found that on a realisticappraisal, the respondent had greater success because it had successfully resisted reliefin relation to two of the challenged matters, and the plaintiff had only succeeded inobtaining relief on one challenge.8[15] Adopting a realistic appraisal of the current case, in which the plaintiffssuccessfully defended a much greater proportion of the defendant's challenges andachieved substantive success viewing the application as a whole, the plaintiffs areclearly the successful party.[16] I therefore reject the defendant's submission that because of its partial successcosts should lie where they fall. As the successful party, the plaintiffs are entitled toan award of costs.Scale costs[17] The plaintiffs have correctly determined the appropriate costs category for thisapplication. This application falls within category 2 as it is of average complexity.9The reasonable time for the steps taken by the plaintiffs fall within band B.10[18] In the costs memorandum for the plaintiffs, Mr Khan has set out the steps takenand the disbursements claimed, attached to this judgment as "Table A". I consider thesteps taken and disbursements claimed of the court filing fee for the plaintiff's noticeof opposition and parking to be reasonable.Should scale costs be increased?[19] Pursuant to r 14.6(3) of the High Court Rules 2016, the Court has the power tomake an order for increased costs. The Court may order a party to pay increased costsif the party opposing costs has contributed unnecessarily to the time or expense of theproceeding, or a step in the proceeding, by pursuing an unnecessary step or an7 Middeldorp v Avondale Jockey Club Inc [2021] NZCA 238.8 At [26].9 High Court Rules, r 14.3(1).10 Rule 14.5(2)(b).argument that lacks merit.11 As the party claiming increased costs, the plaintiffs carrythe onus of persuading the Court that an award of increased costs is justified.12[20] The Court of Appeal commented on the distinction between the three broadoptions for costs:13(a) standard scale applies by default where cause is not shown to depart from it;(b) increased costs may be ordered where there is a failure by the paying party toact reasonably; and(c) indemnity costs may be ordered where that party has behaved either badly orvery unreasonably.[21] At the conclusion of my judgment delivered on 27 January 2023, I said:14[93] The defendant's numerous and detailed challenges to the plaintiffs' evidencedemonstrate the nature of the dispute between the parties which is characterised bydogged opposition, and in many instances meritless challenges to the admission ofevidence on the part of the defendant. As a result the Court has had to consider anddetermine in the order of 88 separate objections to the plaintiffs' evidence.[94] The defendant has nevertheless succeeded in a limited number of itsobjections. [22] I agree with the plaintiffs' submission that the defendant raised numerousmeritless challenges to the admission of evidence that contributed unnecessarily to thedetermination of the present application. The plaintiffs were put to the expense ofdefending the defendant's 88 separate objections, of which a limited number weresuccessful.[23] However, I cannot accept, as the plaintiffs have submitted, that the delaycaused by the vacation of the June 2022 substantive hearing date was due to thedefendant's conduct regarding this application. The defendant was entitled tochallenge evidence before the substantive hearing. While a more pragmatic approach11 Rule 14.6(3)(b)(ii).12 Strachan v Denbigh Property Ltd HC Palmerston North CIV-2010-454-232, 3 June 2011 at [27],citing Radfords Ltd v Advertising Work New Zealand Ltd, HC Auckland CIV-2006-404-325, 26April 2006.13 Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400 at [27].14 Nagra v Sri Guru Singh Sabha Auckland Inc, above n 1.to its evidential challenges would have aided in determining this application moreexpeditiously, the substantive proceeding could not go ahead in June 2022 due to thefact that counsel contracted Covid-19 before the admissibility hearing. This is anunfortunate reality that impacted the timeline of this proceeding and that was not atthe fault of the defendant.[24] The determination of costs, so far as possible, should be both predictable andexpeditious.15 As MacKenzie J stated:16[24] The ordinary consequence of advancing an unsuccessful claim or defence isan adverse award of scale costs. An important principle, expressed in r 14.6(3)(d), isthat the determination of costs should be predictable and expeditious. That principlewould not be promoted if it was routinely necessary to embark on a further analysisof the overall position taken by the unsuccessful party, to decide whether that positionwas unmeritorious. An award above scale because of an overall lack of merit is, ingeneral terms, justified only in an obvious case, which falls to be considered underr 14.6(4)(a) for indemnity costs[25] It was not unreasonable for the defendant to bring the application in itself,which was not the cause of the delay to the substantive hearing but rather due tocircumstances beyond the parties' control.[26] Nevertheless, in my view a significant number and proportion of the objectionstaken by the defendant were obviously unmeritorious such that a moderate award ofincreased costs is warranted. I find the defendant's unmeritorious arguments didcontribute unnecessarily to the time or expense of a step in the proceeding and justifya 20 per cent uplift from scale costs.[27] Accordingly, I shall make an order for 2B scale costs in favour of the plaintiffsof $8,460.60 which includes the 20 per cent uplift, together with $115.22 indisbursements.15 High Court Rules, r 14.2(1)(g).16 Gough v Strahl [2014] NZHC 1038 at [23].Result[28] For the reasons set out above I make an order that the defendant Sri Guru SinghSabha Auckland Inc (1229571) pay costs (including disbursements) to Daljit SinghNagra and Gurnek Singh Nijjar (jointly) of $8,575.82._____________Paul Davison J