FRASER v TOWER INSURANCE LIMITED [2019] NZHC 2768

FRASER v TOWER INSURANCE LIMITED [2019] NZHC 2768 [30 October 2019]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2016-409-954[2019] NZHC 2768BETWEEN MANDY JOAN FRASER as Executive ofthe Estate of Violet FraserPlaintiffAND THE EARTHQUAKE COMMISSIONFirst Defendant (discontinued)AND TOWER INSURANCE LIMITEDSecond DefendantHearing: 14 October 2019Appearances: M J Fraser (self-represented) and J BernieT J Mackenzie as AmicusM C Harris and J M Alexander for Second DefendantJudgment: 30 October 2019JUDGMENT OF ASSOCIATE JUDGE LESTERThis judgment was delivered by me on 30 October 2019 at 3.00pmpursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy Registrar30 October 2019[1] The plaintiff, Ms Fraser, applied to have this proceeding transferred to theCanterbury Earthquakes Insurance Tribunal ("the Tribunal") pursuant to s 16 ofthe Canterbury Earthquakes Insurance Tribunal Act 2019 ("the Act").[2] Counsel for Tower Insurance Ltd ("Tower") advised by memorandum thatwhile the transfer was not opposed, Tower submitted that it was in the interests ofjustice that the transfer be deferred until after an outstanding application for wastedcosts made by Tower had been resolved.[3] Tower sought that its costs application be resolved prior to transfer lest the factof transfer meant that its outstanding application for wasted costs could not beresolved.[4] By the time the transfer application was made, Ms Fraser was self-represented.That led me to appoint Timothy Mackenzie of Christchurch, Barrister, to act ascontradictor in relation to the merits of the wasted costs application and to actas amicus in respect of the broader question of whether, following the transfer ofa proceeding from this Court to the Tribunal, this Court retained the ability to dealwith costs issues relating to steps taken in this Court.[5] Counsel filed detailed submissions ahead of the hearing and I am grateful fortheir assistance.[6] I also record that Ms Fraser attended the hearing on 14 October 2019. Shebriefly addressed the Court at my invitation towards the end of the hearing and I willrefer to the points she made below.Do grounds exist for a wasted costs order?[7] Tower made its application for wasted costs some time ago by way ofa memorandum dated 9 May 2018.[8] The application, in general terms, asserted that the plaintiff having changedlawyers, at that stage three times, having abandoned expert reports after they had beenserved, and after those now disengaged engineers had liaised with experts instructedfor the plaintiff, caused wasted costs to Tower.[9] I asked Mr Mackenzie as contradictor on this issue whether there were anyarguments that could be raised on behalf of Ms Fraser as to why liability for a wastedcosts order did not exist. Mr Mackenzie advised that he did not think there were anyreasonable arguments and I am in agreement with that view.[10] At this juncture, I mention Ms Fraser's input. One of the grounds upon whichshe resists the wasted costs order is that she is not responsible for the changes ofsolicitors and engineers, but rather they are due to having been let down by some of heradvisers from time to time.[11] Mr Mackenzie recognised that such issues do not impact on the party and partycosts claim made by Tower. Mr Mackenzie submitted that if Ms Fraser finds herselfthe subject of a wasted costs order because she in turn was let down by others, thenthat is a matter between her and those who let her down, it is not a defence to thewasted costs claim.[12] Again, I agree with Mr Mackenzie's analysis and so I find that Ms Fraser isliable for a wasted costs order in respect of Tower's wasted costs arising from herchanging engineers, the impact of that on the joint consultation process and thecompletion of joint reports. Wasted costs caused through numerous changes ofsolicitors, including otherwise unnecessary memoranda deferring timetabling steps,also contributed to wasted costs.Quantum[13] The wasted costs claim is made up as follows:Tower1. 2B Costs of seven memoranda at the Band B allowance of0.4 of a day at $2,230 per day being ($2,230 x 0.4) x 7$6,244.002. Two days of additional wasted costs in unsuccessfulattempts to progress the proceeding and arrange the jointexpert site visit$4,660.003. Attending conference on 10 May 2018 $669.004. Experts' costs as per schedule $6,959.58Total $18,532.58Schedule of disbursements claimedInvoice date Amountclaimed*21.12.17 **$652.7029.06.18 $750.5631.07.18 $1,893.2031.07.18 $1,363.1231.08.18 $1,100.0031.10.18 $600.0030.11.18 $600.00Total $6,959.58* Excluding GST** 50% of total invoice[14] Mr Mackenzie has helpfully analysed the components of the claim. Bothcounsel agree that the fixing of such costs orders are often a matter of impression andjudgment.1[15] The approach Mr Mackenzie took to the claim for wasted experts' costs, wasalso shaped by his view that this Court did retain jurisdiction to deal with costs issuesthat arose in this Court after transfer. Because I have agreed with Mr Mackenzie'ssubmissions, that has had a corresponding impact on my approach to the wasted costsclaim.1 Simpson v Hubbard [2012] NZHC 3020.[16] I agree with Mr Mackenzie's view that a claim of 0.4 of a day for each of theseven memoranda that Tower was involved in, often as a result of changes of counselor of expert, is too high an allowance.[17] There is force in Mr Mackenzie's submission that of the various memorandaclaimed for, most were not drafted by Tower and the dominant theme is a series ofsimple timetable extensions.[18] Mr Mackenzie has gone through and analysed each memoranda and suggestedan allowance per memorandum.[19] Adopting the guideline that the matter is one of overall impression and becauseof the view I take of the second item in the list of wasted costs claimed, I allow 0.2 ofa day in respect of the seven memoranda.[20] I do not allow the claim for two days of additional wasted costs said to be forunsuccessful attempts to progress the proceeding. It is difficult to separate the timespent on advancing the proceeding from the time spent on considering the memorandawhich often dealt with timetabling.[21] Dealing with a request for a timetable extension, even where the memorandais drafted by the other side, does involve the time of taking instructions andconsidering the request in the context of the case as a whole. Hence my allowing0.2 of a day for memoranda where Mr Mackenzie has suggested 0.1. I have allowedthe greater time to recognise that such apparently straightforward memoranda doinvolve more time than simply reading and signing a one page document.[22] There is an element of "unders and overs" in the approach that I have adopted,but again, as a matter of broad impression, I consider that a fair outcome overall.[23] Mr Mackenzie did not dispute the attendance at the conference on10 May 2018 and I am of the same view that it is claimable.[24] That leaves what is said to be wasted experts' costs. Mr Harris, counsel forTower, explained how they have been identified. However, I am not prepared toconclude at this time that it is clear that all those attendances were wasted. The realityis that Tower's experts' time spent on considering the property and the different viewsadvanced in respect of the engineering issues relating to that property on behalf of theplaintiff are likely to have some value and relevance to the proceeding. Even withthe plaintiff changing engineers and the plaintiff's engineers taking differentapproaches, the fact that the defendant's expert has had to consider and examine thosecompeting views will be of some assistance to Tower's experts in assessing and testingtheir own views of the property.[25] Whether, and to what extent, the defendant's experts' involvement with thedifferent experts to the plaintiff is truly wasted, is something that cannot be determinedat this stage. I do not dismiss this aspect of the plaintiff's application, but leave itadjourned given the view I have taken of this Court's ability to deal with costs issuesthat have arisen in this Court after the proceeding is transferred to the Tribunal.[26] Accordingly, there is a wasted costs order in favour of Tower against theplaintiff in terms of item 1 of the Schedule at [13] above, save the rate shall be 0.2 ofa day and not 0.4. The costs award also includes item 3 of the Schedule. The claimfor item 2 is dismissed and for item 4 reserved.[27] I record Tower undertakes not to take any steps to recover the costs until theoutcome of the plaintiff's insurance claim is known and payable, at which time andnot until then, the costs will be deducted from the amount ultimately held to be payableto the plaintiff.High Court costs following transfer[28] The Tribunal's ability to award costs is set out in s 47 of the Act whichprovides:47 Costs(1) The tribunal may award costs against a party only in accordance withthis section.(2) A costs award may be made against a party whether the party issuccessful or not (with all or part of the party's claim or response) ifthe tribunal considers that—(a) the party caused costs and expenses to be incurredunnecessarily by—(i) acting in bad faith; or(ii) making allegations or objections that are withoutsubstantial merit; or(b) the party caused unreasonable delay, including by failing tomeet a deadline set by the tribunal without a reasonableexcuse for doing so.(3) A costs award must relate to costs and expenses incurred by the partiesonly and not to costs and expenses incurred by the tribunal.(4) If the tribunal does not make an order under this section, the partiesmust meet their own costs and expenses.(5) An order for costs may, on registration of a certified copy of thetribunal's decision, be enforced in the District Court as if it were anorder of that court.[29] The Act does not make any specific reference to this Court's jurisdiction inrelation to costs for steps in a proceeding prior to transfer.[30] The issue is potentially one of significance. Many proceedings in this Courteligible for transfer have been underway for some years. The parties may haveincurred substantial sums on steps in this Court and/or by way of disbursements onexperts. Some proceedings have been transferred when virtually all of the workrequired to have the case ready for hearing has been undertaken.[31] Did Parliament intend that all of that "sunk cost" by the parties was to bewritten off as a result of transfer?[32] My view is that Parliament did not intend to create such a disincentive toa plaintiff considering transfer to the Tribunal. Under the Act it is only the insuredhome owner who has the ability to seek transfer. The Tribunal was created in responseto what Parliament perceived as being delays in the resolutions of issues between homeowners and insurance companies arising from the Canterbury earthquake sequence.[33] Where the creation of the Tribunal was intended to confer on home owners anoption to allow them to advance their claims in a specialist, flexible tribunal, I do notconsider Parliament intended to create a significant disincentive to transfer byrequiring home owners to abandon claims to costs in this Court.Discussion and Reasons[34] In dealing with a costs application, the Court will be exercising its inherentjurisdiction.2[35] Fogarty J in Chief Executive of the Department of Corrections v Chisnall(No 3) dealt with a costs issue arising under the Public Safety (Public ProtectionOrders) Act 2014 ("the PSA"). His Honour in relation to costs explained thejurisdiction in the following way:3[11] In my view it is sufficient that this Court is exercising a jurisdictiongranted to it by statute. The statute confers this jurisdiction to the High Court,a Court of inherent jurisdiction. As a Court of inherent jurisdiction this Courtcan order parties to litigation before it to pay costs.[12] In Halsbury's Laws of England, the jurisdiction is described as being"inherent and does not depend on any statute".[13] Similarly, in The Laws of New Zealand, the authors say:The [High] Court has an overriding discretion, notwithstandingcertain specific Rules in the High Court Rules, as to the fixing andpayment of costs. the only exception in the exercise of this widediscretion is if there is express provision in any statute to the contrary.[14] Rule 14.1 provides:14.1 Costs at discretion of court(1) all matters are at the discretion of the court if theyrelate to costs –(a) of a proceeding; or(b) incidental to a proceeding; or(c) of a step in a proceeding.2 McGechan on Procedure (online loose-leaf ed, Thomson Reuters at [SC12.02(5)(a)(iii)].3 Chief Executive of the Department of Corrections v Chisnall (No 3) [2016] NZHC 1725 (citationsomitted).(2) rules 14.2 to 14.10 are subject to subclause (1).(3) the provisions of any Act override subclauses (1) and(2).[15] I am not sure that r 14.1 was ever intended to preserve the inherentjurisdiction of the Court. It was, however, never necessary for the Rules topreserve the inherent jurisdiction of the Court.[36] Having set out the above, Fogarty J concluded that it was not necessary to findin the PSA a specific power to impose costs and His Honour concluded that he had aninherent jurisdiction to award costs to the successful party.[37] The High Court retains its inherent jurisdiction except as limited by statute.4Does the Act limit this Court's inherent jurisdiction in respect of costs?[38] As noted, the Act does not specifically deal with costs in this Court. RosaraJoseph writing in the Canterbury Law Review said in respect of the relationshipbetween the inherent jurisdiction and statute:5The relationship between inherent jurisdiction and statute was considered bythe Supreme Court in Zaoui v Attorney-General.6 It held that the inherentsubstantive jurisdiction of the High Court to grant bail can only be excludedby clear statutory wording. An exclusion of the inherent jurisdiction will notbe inferred where the statute is silent.It is not clear whether all categories of the inherent jurisdiction can only beexcluded by clear statutory words, rather than by mere implication. In Zaoui,the Court highlighted the constitutional importance of the jurisdiction to grantbail. It is unclear whether a similar presumption against erosion applies toother categories of the inherent jurisdiction, which may not be of suchconstitutional importance.It is arguable that all categories of the High Court's inherent jurisdiction areof constitutional significance. It is likely that the courts will applya presumption that clear statutory words are required to exclude any of theinherent jurisdiction of the High Court. This is consistent with principles ofstatutory interpretation which declare that clear words are required to takeaway an existing jurisdiction or power.74 Black v Taylor [1993] 3 NZLR 403 (CA) at 408.5 Rosara Joseph "Inherent Jurisdiction and Inherent Powers in New Zealand" [2005]CanterLawRw 10.6 Zaoui v Attorney-General [2004] NZCA 228, [2005] 1 NZLR 577.7 Jacobs v Brett (1875) LR 20 Eq 1, 6 (Jessel MR); Henderson v Wangapeka Gold-Dredging Co Ltd[1904] 23 NZLR 833 (SC).[39] To similar effect is the following from Constitutional and Administrative Lawin New Zealand:8Jurisdiction is excluded where Parliament vests exclusive jurisdiction overproceedings in another court. But the statutory intention must be clear. Thecourts presume that Parliament does not intend to deprive the superior courtsof jurisdiction.[40] The high point for an argument that the Act has impliedly removed the inherentjurisdiction of the High Court as to costs on proceedings transferred to the Tribunal iss 47(4) of the Act, which says the parties must meet their own costs and expenses ifthe Tribunal does not make an order under s 47. However, I read that in the contextof s 47(1) which limits the Tribunal's jurisdiction to award costs to the powers createdby s 47. Section 47(1) provides the Tribunal may award costs against a party only inaccordance with that section. Accordingly, the limitation in s 47(4) is in respect of thecosts order that could have been made by the Tribunal, that is in respect of costs ofthe parties in the Tribunal and not otherwise.[41] Had s 47(4) been intended to require parties to meet their own costs andexpenses beyond those that could have been awarded by s 47 then I would haveexpected that to have been made clear.[42] Mr Harris for Tower submitted:An order transferring "the proceedings" to the Tribunal transfers the whole ofthe proceedings including any part. Once the Court has transferreda proceeding to the Tribunal it has no jurisdiction over the dispute between theparties other than as provided for under the Act. It does not retain a residualdiscretion, post-transfer, to award costs either immediately post-transfer (assome kind of 'wash-up' of the Court proceeding) or later, after the Tribunalhas determined liability.The position here is distinguishable from that which applies whereproceedings in the High Court are discontinued. In those circumstances, theCourt retains a power to award costs for pre-discontinuance steps. Thedistinguishing feature there is that rule 15.21(2) and 15.23 of the High CourtRules expressly reserve the power of the Court to award costs(notwithstanding the discontinuance of the proceedings). Where proceedingsare transferred under the Act, however, there is no express power for the Courtto award costs. Nor, Tower submits, is there any implied one.8 Philip A Joseph Constitutional and Administrative Law in New Zealand (4th ed, Thomson Reuters,Wellington, 2014) at 847.[43] However, consistent with what Fogarty J said in respect of the impact of theHigh Court Rules at [35] above, rr 15.21, 15.22 and 15.23 referred to by Mr Harris donot create the High Court's ability to deal with costs on a discontinued proceeding.Again, issues as to costs are part of the inherent jurisdiction. Nor do I considerthe issue to be whether an express or implied power to award costs must be found inthe Act before this Court could deal with costs claims relating to pre-transfer steps.The starting point is that the power to deal with costs exists by virtue of the inherentjurisdiction. The question is whether that power has been removed by a necessaryimplication as a result of the passing of the Act. In my view it has not.[44] The next issue is whether the transfer of the proceeding to the Tribunal itselfrenders this Court functus officio – that being the gravamen of Mr Harris' submission.[45] As summarised by Walker J in Maehl v Lenihan, "functus officio" is an"expression applied to a judge who has given a decision so that his or her authority isexhausted".9 The rationale for the doctrine is that: for the due and proper administration of justice, there must be finality toa proceeding to ensure procedural fairness and the integrity of the judicialsystem.[46] If the jurisdiction the Court is asked to exercise is to supplement the decisionupon which the claim that the Court is functus is based, then the Court will retainjurisdiction.[47] Fogarty J in Wilson v Selwyn District Council had to consider an applicationfor costs where an appellant whose appeal had been allowed had not sought costs inthe notice of appeal or asked for costs in the course of argument.10 Costs were notreserved. The unsuccessful respondent had sealed the judgment without reference tocosts.9 Maehl v Lenihan [2019] NZHC 1457 at [36], quoting Peter Spiller Butterworths New ZealandLaw Dictionary (9th ed, LexisNexis, Wellington, 2005).10 Wilson v Selwyn District Council (2004) 17 PRNZ 461 (HC)17 PRNZ 461.[48] His Honour said:[14] In my view the application for costs here is supplemental. I amimpressed by the fact that I do not think I could have denied an application forcosts by Mr and Mrs Rickerby had the decision gone the other way. Such anapplication would be supplemental. Hearing an application for costs by eitherthe respondent or the applicant when the main judgment is silent on costs doesnot amount to varying or altering a judgment already given and thusundermine the principle of the need for finality of litigation. I consider thatthere ought to be the basic reciprocity of ability of appellants or parties servedincluding respondents to apply for costs.[49] In this case, one has to ask what is the judgment that would be said to foundthe claim that this Court was functus. The only order that the Court is asked to make(save for the wasted costs already dealt with) is to transfer this proceeding to theTribunal. The order of transfer is of course not a judgment on the merits. There is noruling made on costs in this Court and when the proceeding is concluded in theTribunal, there will still not have been a ruling on costs in this Court. A party whowishes to seek a ruling in this Court in respect of costs can still do so. The applicationto this Court for a ruling on costs will bring the issue of costs before this Court fordetermination.[50] Hence my conclusion referred to above, that this Court retains jurisdiction todeal with costs issues for steps in this Court in respect of a proceeding that istransferred to the Tribunal. That is of course not to invite applications for costs in thisCourt before there has been a ruling on the merits in the Tribunal, but if counselconsidered an application to be warranted on the facts then an effect of this judgmentis that such an application can be made. Practically, of course, it would be moreefficient if all costs issues were dealt with at one time.Orders[51] Accordingly, the following orders are made:(a) There is an order for wasted costs against the plaintiff as set out at [26].(b) Tower's application for wasted costs represented by its experts' fees isadjourned to be brought back on upon 10 working days' notice byTower.(c) This proceeding is transferred to the Canterbury Earthquakes InsuranceTribunal._________________________________Associate Judge LesterSolicitors:Gilbert Walker, AucklandCopy to counsel:T J Mackenzie, Barrister, Christchurch (Amicus)M Fraser, Christchurch (self-represented plaintiff)