GEARY v ACCIDENT COMPENSATION CORPORATION [2014] NZHC 1408

GEARY v ACCIDENT COMPENSATION CORPORATION [2014] NZHC 1408 [20 June 2014]IN THE HIGH COURT OF NEW ZEALANDTIMARU REGISTRYCIV-2014-476-000299[2014] NZHC 1408BETWEEN IAN RUSSELL GEARYAppellantAND ACCIDENT COMPENSATIONCORPORATIONRespondentJudgment: 20 June 2014JUDGMENT OF GENDALL JAS TO COSTS(Dealt with on the papers)[1] On 6 May 2014 I heard two appeals in this Court against decisions of Judge Maze in the District Court dated 23 July 2013 (the substantive decision) and 10 August 2013 (the costs decision).[2] The appeal against the substantive decision was effectively dismissed except that an error which was identified at the very conclusion of the hearing on that appeal was corrected. Interest commensurate with the additional amount by which the appellant succeeded was also awarded.[3] Insofar as the appeal against the costs decision was concerned, it succeeded to the extent that an award of $70,000 plus disbursements which had originally been made in favour of the respondent in the District Court was replaced with an award of $21,000 plus disbursements.[4] An appeal against Judge Maze's decision with respect to the costs of Mr Copland, an independent accountant who had been appointed, was dismissed.[5] As a result of all of this, as I understand the position (with a minor adjustment referred to by counsel for the respondent), the extent of the awardobtained by the appellant on the substantive decision is now $19,758.84. This is to be offset against the costs award of $21,000 plus disbursements made in favour of the respondent as noted at [3] above.[6] On the 6 May 2014 appeal, costs were reserved on the basis that counsel were to file sequential memoranda. Counsel for the appellant on 6 June 2014 has filed his memorandum on costs and counsel for the respondent on 18 June 2014 has filed his memorandum on costs.[7] I have now had an opportunity to consider those memoranda and I give this decision on costs.[8] The appellant was legally aided with respect to its claim and with regard to the appeal to this Court.[9] It needs to be noted also that this appeal was classified earlier as a category 2 matter by His Honour Panckhurst J.[10] Although matters of costs are always at the discretion of the Court (r 14.1 High Court Rules) the starting point outlined at r 14.2(a) is the principle that the party who fails with respect to a proceeding is to pay costs to the party who succeeds.[11] As the Supreme Court noted in Shirley v Wairarapa District Health Board:1Rule 47(a) (now rule r 14.2) reflects the longstanding principle that, unless there are exceptional reasons, costs should follow the result. That is, the loser, and only the loser, pays.[12] And, regarding costs on appeals, in Manukau Golf Club Inc v Shoye Joint Venture Ltd2 the Supreme Court said at paras 13 – 13:In virtually every case where an appeal succeeds, the appellate court has formed the view that the Judge below went wrong in some way or other. For the purposes of costs in the appellate court, it does not matter why the Judge went wrong. The losing party on the appeal almost always has to pay costs1 Shirley v Wairarapa District Health Board [2006] 3 NZLR 523 (SC) at para [19].2 Manukau Golf Club Inc v Shoye Joint Venture Ltd [2013] 1 NZLR 305 (SC).to the winning party – and in that sense "pays for" the error (as found) of the judge below. That is the consequence of a respondent fighting to maintain its win and supporting the findings of the judge below. If the respondent accepts the Judge below was wrong, then it should settle with the appellant or not seek to defend the appeal. In those circumstances, it would avoid liability for costs. Shoye did not adopt that stance in the Court of Appeal. We have seen its submissions. It sought to uphold what the Judge had found in its favour.All that mattered so far as costs in the Court of Appeal were concerned was how the appeal was conducted. Since Shoye chose to seek to uphold the judgment in its favour but was unsuccessful, it became liable to costs inaccordance with the fundamental principle of costs that "the party who failswith respect to an appeal should pay costs to the party who succeeds". Therewas in this case no suggestion of any disentitling conduct on the part of the Club, justifying a refusal to award costs on the basis of r 53F.[13] In this case, the appellant's position is that he is entitled to costs as thesuccessful party to the appeal, whereas the respondent's position is that costs shouldlie where they fall.[14] On this, the respondent contends that with regard to the substantive decision, other than the correction of the judgment to reflect an amount which was overlooked in the District Court by Judge Maze and all parties until the day of the hearing beforeme, the appellant's substantive challenges to Judge Maze's decision failed entirely. The appellant contends that most of the time and preparation for the hearing in this Court was allocated to the appeal against the substantive decision, and that was reflected in the time spent on the hearing of that appeal on 6 May 2014 as well.[15] With respect to the appeal against the District Court decision as to costs, while the appellant succeeded in having this amount reduced, he still remained liable to pay the respondent costs of $21,000 plus disbursements as well as payment of Mr Copland's costs amounting to $10,599.[16] The respondent has contended that most of the appeal hearing before meinvolved a consideration of the appellant's particular challenges to the substantiveDistrict Court decision in the sense that Judge Maze had erred in respect of onus of proof, she had erred by testing the appellant's claim against requirements orguidelines which did not exist or apply, and she had erred by failing to enforce discovery orders that it was asserted had been made against the respondent. Allthose grounds failed and I agree with counsel for the respondent that it could hardly be said therefore that the appellant had succeeded in his substantive appeal.[17] And, insofar as the costs appeal is concerned, I do not accept the appellant'scontention that it is the respondent's unacceptable conduct in the course of the appeal here which is reflected in this and other aspects of this Court's decision and thereforeshould be recognised in a costs award. Judge Maze in the District Court had awarded $70,000 costs in favour of the respondent which award was reduced in this Court to one of $21,000 plus disbursements.[18] I accept that a significant aspect here relating to costs concerned the effect of r 14.11 High Court Rules, the comments noted in my original judgment at paras [90]– [102] and the position taken by the appellant throughout.[19] Although if one takes an overview of all matters it would appear that from a financial viewpoint, the appellant enjoyed a measure of success with his appeal, in essence the grounds he advanced for his substantive appeal in particular have failed.[20] Given that aspect, and under all the circumstances prevailing in this case, I am of the view that it is appropriate here for costs to lie where they fall as counsel for the respondent seeks in his 18 June 2014 memorandum on costs.[21] There is to be no order made as to costs with respect to this appeal....................................................Gendall JSolicitors:Andrew Beck, GreytownYoung Hunter, Christchurch