APOSTOLAKIS V WELLINGTON COMBINED TAXIS LIMITED HC WN CIV-2009-485-2152

APOSTOLAKIS V WELLINGTON COMBINED TAXIS LIMITED HC WN CIV-2009-485-2152 30 September 2010IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2009-485-2152BETWEEN KATHY APOSTOLAKIS Applicant AND WELLINGTON COMBINED TAXIS LIMITED Respondent Hearing: 31 March 2010 Appearances: K Jefferies for Applicant B Shone for Respondent Judgment: 30 September 2010JUDGMENT ON COSTS OF JOSEPH WILLIAMS JIn accordance with r 11.5, I direct the Registrar to endorse this judgment with the delivery time of 3pm on 30 September 2010.Solicitors: Jefferies Raizis, Barristers & Solicitors, PO Box 10641, Wellington Buddle Findlay, PO Box 2694, WellingtonIntroduction[1] On 9 December 2009 Mrs Apostolakis issued proceedings in this court in order to set aside an arbitral award of Helen Cull QC delivered on 28 September 2009. Mrs Apostolakis alleged, as argued before me on 31 March 2010, that the award was in conflict with the public policy of New Zealand, under art 34(2)(b)(ii), Sch 1 of the Arbitration Act 1996. In my judgment delivered on 7 April 2010 I dismissed that application as the award of 28 September 2009 was not in conflict with the public policy of New Zealand. In that judgment costs were reserved. [2] Wellington Combined Taxis Ltd (Combined) now claims that it is entitled to increased costs against Mrs Apostolakis. This judgment deals with this costs issue.Facts and background[3] The facts are set out in full in my 7 April judgement. To the extent that certain of those facts are relevant to this proceeding I briefly set those out here. [4] A complaint was sent by a passenger of Mrs Apostolakis, a Dr Warman, to Combined's Training and Compliance Manager, Mr Smith. An incident report was also filed by two of Combined's "hosts" at Wellington Airport, who also witnessed the event. Mr Smith upheld that complaint and accordingly penalised Mrs Apostolakis. Mrs Apostolakis appealed under the Wellington Combined Taxis Rules (the rules) to Combined's Appeal Board. The decision of Mr Smith was upheld. Mrs Apostolakis then appealed by way of arbitration under the rules. That arbitration was heard before Helen Cull QC. Ms Cull upheld the Appeal Board's decision. However, she reduced the penalty that Mrs Apostolakis was liable for and the costs awards before the Appeal Board. [5] Mrs Apostolakis, at that time self represented, initially filed her claim against Combined in the form of a notice of appeal on 23 October 2009. Counsel for Combined filed a memorandum in this court setting out the procedural and substantive inadequacies of Mrs Apostolakis's claim as pleaded. On 23 November 2009 Simon France J, at a call over hearing, directed that Mrs Apostolakis read the memorandum from counsel for Combined and gave her an opportunity to amend her claim.[6] On 9 December 2009 Mrs Apostolakis filed a second claim. The intituling reads "Application for an order setting aside as exclusive recourse against arbitral award". The grounds upon which Mrs Apostolakis sought to set aside Ms Cull's award were: a) "I was incapacitated by not being present at the hearing". b) "Witnesses were not called to testify in conflict with public policy in New Zealand". c) "A breach of natural justice occurred during the arbitral hearing". [7] On 14 December 2009 Ronald Young J, at the second call over hearing, directed that Combined file its notice of opposition. Mrs Apostolakis was also advised to get legal advice. Combined filed its notice of opposition on 22 December 2009. [8] Before Wild J on 8 February 2010, at the third call over hearing, it became apparent that Mrs Apostolakis wished to have an opportunity to have a full rehearing of the facts. Wild J recorded in his minute of 8 February 2010 that that is not the position. If she wished to adduce further evidence it must be relevant, cogent and fresh. Wild J considered it necessary for Mrs Apostolakis to make a proper application to call further evidence. Wild J made directions accordingly. Mrs Apostolakis obliged and filed her application on 12 February 2010. [9] On 22 February 2010 MacKenzie J heard Mrs Apostolakis's application to adduce further evidence. MacKenzie J allowed her application and granted leave to adduce the affidavits filed by Mrs Apostolakis (one filed in reply to that filed by Mr Smith) and that filed in opposition by Mr Smith. [10] On 7 April 2010 I found that the award of 28 September 2009 was not in conflict with the public policy of New Zealand.Counsel's submissions and my decision[11] For Combined, Ms Shone argues that increased costs should be ordered against Mrs Apostolakis on the basis that she contributed unnecessarily to the time or expense of the proceeding because the claim brought and pursued by her lacked merit. [12] For Mrs Apostolakis, Ms Jeffries appears to accept that costs should follow the event. However, Ms Jeffries argues that not only should Combined not be awarded increased costs but costs should be awarded well under those claimed as being calculated on a 2B basis. [13] I cannot see any reason here why costs should not follow the event against Mrs Apostolakis. [14] In Holdfast NZ Ltd v Selleys Pty Ltd the Court of Appeal offered guidance as to the correct approach to an award of increased costs.1 As interpreted by McGechan on Procedure: 2Step 1: categories [sic] the proceeding under r 14.3. Step 2: work out a reasonable time for each step in the proceeding under r 14.5. Step 3: as part of the step 2 exercise a party can, under r 14.6(3)(a), apply for extra time for a particular step. Step 4: the applicant for costs should step back and look at the costs award it could be entitled to at this point. If it considers it can argue for additional costs under r 14.6(3)(b) it should do so, but any increase above 50% on the costs produced by steps 1 and 2 is unlikely, given that the daily recovery rate is two-thirds of the daily rate considered reasonable for the particular proceeding.[15] I adopt that approach. As to the categories of the proceeding, Combined argues that costs should be calculated on a category 2B basis. Such costs amount to $9,280.00. That is calculated on the basis of two days for the commencement of1 (2005) 17 PRNZ 897 at [43]-[48].2 Andrew Beck and others McGechan on Procedure (online looseleaf ed, Brookers) at [HR14.6.02(1)].defence to the application to set aside the arbitral award ($3200), 0.6 days pleading in response to Mrs Apostolakis's amended pleading ($800), 0.4 days (x3) filing memorandum of counsel for the three call-overs ($1920), 0.2 days (x3) appearance at the call-overs ($960), 0.5 days preparation for two counsel for the hearing ($1600) and 0.5 days appearance at the hearing for sole counsel ($800). [16] For Mrs Apostolakis, no issue appears to be taken with costs awarded on a 2B basis. Mrs Apostolakis, however, argues that the following means that costs should be awarded well under those claimed as being calculated on a 2B basis: a) Combined should not be awarded costs for pleading in response to Mrs Apostolakis's amended pleading; b) Combined should not be awarded costs for any memoranda or appearances at the second, third and fourth call-overs; and c) Combined should not be awarded costs for the preparation and appearance at the hearing on 31 March 2010. [17] With regard to the first, Mrs Apostolakis outlines seven points in response. In short, Mrs Apostolakis contends that as she was acting for herself at the time when the proceedings were prepared and that her main ground for challenging the award – the person who was involved in the incident at the airport was not the person who made the complaint – was sufficiently clear in that initial application, Combined's claim for costs regarding the amended pleading is not justified. [18] In Belling v Belling, Hammond J endorsed Fisher J's comment in Aplin v Lagan3 that:4While an unrepresented party should not be penalised on that account alone, if the result has been to throw an extra burden of legal cost upon the represented party, there is no reason why some recognition should not be given to that.3 (1993) 10 FRNZ 562 at 576.4 (1996) 9 PRNZ 296 at 299.[19] In light of that, there is no reason why an award of costs should not be made against Mrs Apostolakis for the pleading in response to her amended pleading. Combined, by its solicitors, had to respond to that amendment which was due to an error by Mrs Apostolakis, as required by the Minute of Ronald Young J on 14 December 2009. That placed extra burden of legal cost upon Combined and there is no reason why recognition should be given to that. Further, Mrs Apostolakis argues that that her argument was sufficiently clear and therefore Combined should have been able to respond to it in any event. However, it is noteworthy that Wild J, in His Honour's 8 February 2010 Minute and Directions stated his difficulty in grasping Mrs Apostolakis's case (at [10]). [20] With regard to the second, Combined accept, as directed by McKenzie J, that they are not entitled to costs associated for the application to admit new evidence was heard. However, that still leaves open counsel's appearance at the call-over. As noted in McGechan on Procedure: 5Rule 14.1(a) encapsulates the primary principle that "costs follow the event" unless particular considerations dictate otherwise. The approach where the costs-claiming party has been only partially successful, or where each party has had similar success, is outlined by the Court of Appeal in Packing In Ltd (in liq) formerly known as Bond Cargo Ltd v Chilcott (2003) 16 PRNZ 869 (CA), at para 5.[21] Here, Mrs Apostolakis was unsuccessful in her claim. Mrs Apostolakis has asserted no sufficient reason why that general principle should be disturbed with respect to the call-over hearings. [22] With regard to the third, Ms Jeffries's argument is that Combined did not dispute the substance of Mrs Apostolakis's argument that the person who made the complaint was not the person involved in the incident at the airport. Rather, it is argued, because Combined did not seek to cross-examine Mrs Apostolakis on her affidavit it relied on an indulgence granted by me to allow Combined to rely on assertions from the bar to establish that her evidence was not credible.5 Andrew Beck and others McGechan on Procedure (online looseleaf ed, Brookers) at [HR14.2.01(1)].[23] With respect, that submission is misguided. I found at [14] of my 7 April judgment that "her argument is so inherently implausible that it can be safely discounted". As she was the applicant in these proceedings the onus was on Mrs Apostolakis to satisfy the relevant burden. She did not. Therefore, again, there is no reason why the principle that "costs follow the event" should be disturbed. [24] Turning now to the fourth of the Court of Appeal steps in Holdfast. Increased costs may be ordered "where there is a failure by the paying party to act reasonably". 6 As noted by French J in Henderson v Reddiford: 7Determination of costs should be predictable and expeditious. Accordingly, it is well established that something more than mere failure of a factual or legal argument is necessary in order for there to be increased costs under r 14.6(3)(b)(ii).[25] Rule 14.6(3) of the High Court Rules provides the grounds on which a court may order a party pay increased costs. Combined relies on r 14.6(3)(b)(ii):(b) the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by— (ii) taking or pursuing an unnecessary step or an argument that lacks merit; or[26] Combined asserts five heads of argument in this respect. I combine those heads into two main points. First, that Mrs Apostolakis's argument was "inherently implausible" and second, that Mrs Apostolakis withdrew certain of her claims during the hearing. [27] Taking the second of those points first. Combined argues that the failure to withdraw her first two pleaded claims caused Combined to incur significant and unnecessary legal costs in preparing its opposition which included filing evidence, researching the law and preparing submissions. However, this is not a case where the actions of one party have significantly led to an increase in the time taken for the hearing or the proceedings to be prosecuted. 8 Indeed, Mrs Apostolakis withdrew6 Bradbury v Westpac Banking Corp [2009] 3 NZLR 400 (CA) at [27].7 HC Christchurch CIV-2009-409-1426, 19 March 2010 at [6].8 See for example Time v Fagalilo HC Wellington CIV-2008-485-540, 30 June 2010.those arguments in avoidance of needlessly prolonging the hearing. Nor has Mrs Apostolakis's required amendment to her claim or her poorly worded documentation meant that it can be said that that conduct was "unreasonable". [28] Turning now to the first, that Mrs Apostolakis's litigation was misconceived. As noted above, I stated at [14] of my 7 April judgment that the argument pursued by Mrs Apostolakis was inherently implausible. I clarified at [15] that further evidence would be required for her to establish that argument on the balance of probabilities. While it is by a slim margin, I do not consider that in pursuing that argument Mrs Apostolakis acted "unreasonably" in the sense that increased costs should be ordered against her. [29] Nevertheless, had I been minded to award increased costs in the present case, considering the warning issued by the Court of Appeal in Holdfast at [48], I would not have done so at an amount above 50 per cent of scale costs.Conclusion[30] Combined's application for increased costs is dismissed, costs are awarded at scale. That is, based on the schedule of costs provided by Combined, $9,280.00. ___________________________Joseph Williams J