NEW ZEALAND BLOODSTOCK FINANCE & LEASING LTD v JONES (COSTS) [2020] NZHC 1962

NEW ZEALAND BLOODSTOCK FINANCE & LEASING LTD v JONES (COSTS) [2020] NZHC 1962 [6August 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-1822[2020] NZHC 1962BETWEEN NEW ZEALAND BLOODSTOCKFINANCE & LEASING LIMITEDPlaintiffAND GREGORY JOHN JONESDefendantHearing: On the papersAppearances: F A King for the plaintiffG J Jones in personJudgment: 6 August 2020JUDGMENT OF JAGOSE J[Costs]This judgment was delivered by me on 6 August 2020 at 2.30pm.Pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors/Party:McKenna King Limited, HamiltonG J Jones, Auckland[1] On 20 and 25 May 2020, I deferred determination of Mr Jones' interlocutoryapplications dated 19 and 25 May 2020 for at or after the substantive hearing.1 Myjudgment of 5 June 2020 also dismissed the applications.2[2] Mr Jones has appealed my judgment to the Court of Appeal. Mr Jones thensought leave to appeal against my decisions on his interlocutory applications, and alsoto stay execution of my judgment.3[3] My judgment of 9 July 2020 dismissed those latter applications also.4I expressed my preliminary view costs incurred in opposing those applications did notfall within the advances contract's and lease's indemnities. Instead, as the successfulparty, NZ Bloodstock may be entitled to 1B costs and disbursements for steps takenon the appeal, as the appeal was of a straightforward nature occupying a normalamount of time. If that was not accepted by the parties, or they could not otherwiseagree, I reserved costs for determination.5[4] NZ Bloodstock now seeks indemnity costs in the amount of $20,337.40,including on its costs application (alternatively calculating 1B scale costs at$7,791.00) plus disbursements of $372.00 (including GST). Mr Jones says thethreshold for indemnity costs is not met.[5] For NZ Bloodstock, Fraser King argues the contractual indemnities' inclusionof expenses incurred on a judgment's 'enforcement' extends to opposing steps takento stay the judgment as, if successful, such steps would prevent the judgment'senforcement. (Presumably the same logic applies in opposing steps taken to obtainleave to appeal, and in opposing appeal, although Mr King does not expressly say so.)He says I am to be taken to have accepted that logic, by accepting NZ Bloodstockwould be detrimentally affected by stay of execution "in not being able to obtain thefruits of its judgment (at least to the extent 'immediately payable by Mr Jones')".61 New Zealand Bloodstock Finance & Leasing Ltd v Jones CIV 2019-404-1822, 20 and 25 May2020 (minutes).2 New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1233 at [42].3 Mr Jones' application was amended on 3 July 2020 to include specific reference to s 56(3) of theSenior Courts Act 2016 and related caselaw. No objection is taken to the belated amendment.4 New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1633.5 At [25].6 At [21].[6] I disagree. Deferred enforcement, as may follow stay or unsuccessful appeal,is not prevented enforcement. 'Enforcement' means exactly that: steps taken to obtainthe judgment's performance, "to compel [its] observance".7 And preparatory stepsmay be excluded.8 NZ Bloodstock's contractual indemnities do not extend to expensesincurred in opposing Mr Jones' applications for leave to appeal and stay.[7] Mr King alternatively contends indemnity costs are payable underHCR 14.6(4)(a) on grounds Mr Jones has acted frivolously and unnecessarily on hisapplications. I disregard Mr King's recitation of Mr Jones' contended misconduct inthe course of the substantive proceeding as irrelevant to my decision on costs arisingfrom the anterior applications.[8] The statutory threshold is such actions be taken in "commencing [or]continuing", here, a step in a proceeding. Mr Jones was entitled to seek leave to appealagainst my decisions on his interlocutory applications, and also to seek to stayexecution of my judgment. That neither was successful, even on the groundsI expressed (including the former seemed superfluous given Mr Jones' substantiveappeal as of right), is not to elevate his actions in bringing the applications to therequisite threshold. In particular, "unnecessarily" in connection with indemnity costscarries with it the meaning of "distinctly bad behaviour",9 not merely superfluity.[9] NZ Bloodstock is not entitled to indemnity costs on Mr Jones' applications forleave to appeal and stay. Its application for such is unsuccessful. It therefore also isnot entitled to claim costs on preparation of its written submissions on costs – whichin any event may be exceptional in following the event,10 and on which coordinateauthority is conflicting11 – reducing 1B costs to $5,406.00. And, assumingNZ Bloodstock to be GST-registered, neither is GST recoverable on disbursements.127 R v Bates [1982] 2 NSWLR 894 (CCA) at 895.8 McGuffick v Royal Bank of Scotland plc [2009] EWHC 2386 (Comm), [2010] 1 All ER 634 at[80], citing Rankine v American Express Services Europe Ltd [2009] CCLR 3.9 Bradbury v Westpac Banking Corporation [2009] 3 NZLR 400 (CA) at [26].10 Strata Title Administration Ltd v Body Corporate Administration Ltd [2014] NZCA 96 at [10]–[14]; Hojsgaard v Chief Executive of Land Information New Zealand [2019] NZCA 84, [2019] 2NZLR 864 at [130].11 David Bullock and Julian Long "Costs of costs applications" [2014] NZLJ 348.12 New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282, (2016)27 NZTC 22-058 at [17].[10] I therefore order Mr Jones to pay NZ Bloodstock costs in the amount of$5,406.00, plus disbursements of $349.24 (plus any GST paid, if NZ Bloodstock isnot GST-registered).—Jagose J