SIMISTER v TAURANGA CRUISE TOURISM OPERATORS ASSOCIATION INCORPORATED [2015] NZHC 2133

SIMISTER v TAURANGA CRUISE TOURISM OPERATORS ASSOCIATION INCORPORATED [2015] NZHC 2133 [4 September 2015]IN THE HIGH COURT OF NEW ZEALANDTAURANGA REGISTRYCIV-2015-470-000036[2015] NZHC 2133BETWEEN ROGER ALAN SIMISTERPlaintiffAND TAURANGA CRUISE TOURISMOPERATORS ASSOCIATIONINCORPORATEDDefendantHearing: (on the papers)Counsel: T J Castle and T A Castle for PlaintiffP J Wright and A J Sinclair for DefendantJudgment: 4 September 2015(COSTS) JUDGMENT OF ANDREWS JThis judgment is delivered by me on 4 September at 10.30ampursuant to r 11.5 of the High Court Rules......................................................Registrar / Deputy RegistrarSolicitors:Burley Attwood Law, TaurangaGarth Mathieson, Mt MaunganuiCounsel:T J Castle, WellingtonP J Wright, AucklandIntroduction[1] I delivered my judgment in this proceeding on 6 August 2015.1 On 10 August 2015, Tauranga Cruise Tourism Operators Association Inc (TCTOA) applied for the judgment to be recalled. That application was withdrawn on 21 August 2015. Counsel have now filed memoranda as to costs. Counsel for both parties filed submissions and reply submissions.[2] I note that I said at [112] of my judgment:[112] I did not receive submissions as to costs. My present view is that any order for costs in favour of Mr Simister should be very modest, givenTCTOA's limited ability to meet an order for costs. Submissions[3] On behalf of Mr Simister, Mr T J Castle claimed costs on a 2B scale, totalling$37,081. He submitted that this sum is a reasonable contribution to Mr Simister's costs, and more appropriate in the circumstances than a "very modest" award. Thissubmission was made on the basis of:(a) Mr Simister's instructions to counsel that members of TCTOA had been and/or were to be levied to meet the costs of TCTOA's case, somust be prepared to meet the costs of an unsuccessful defence in the same way.(b) TCTOA had been the author of its own flawed process, and had put Mr Simister to significant costs.(c) Mr Simister's cause of action for breach of contract was upheld andnotwithstanding that no damages were awarded, it would be unjust to refuse him recovery of a reasonable contribution to legal costs.(d) TCTOA's anticipated reliance on a letter sent to Mr Simister's solicitors on 2 February 2015 (the morning of TCTOA's appealhearing) was misplaced, as it was required in that letter that1 Simister v Tauranga Cruise Tourism Operations Association Inc [2015] NZHC 1852.Mr Simister accept that the termination of his membership was justified and that he pay TCTOA costs of $5,000. As such, Mr Castle submitted, the letter is ineffective to protect TCTOA from a costs award against it.[4] Mr Wright submitted for TCTOA that the appropriate award of costs and disbursements is $5,000. He submitted that:(a) TCTOA could not afford to pay the amount claimed. It is a non-profit organisation and cannot levy its members. Its representation in the proceeding to date has been pro bono. If ordered to pay the claimed costs it is likely to go into liquidation.(b) Mr Simister's claim is close to a claim for increased, or indemnity, costs (given the plaintiff's estimate of actual costs at approximately$52,000 (GST inclusive)), and cannot be justified as such. Further, it could not be regarded as a "very modest" claim.(c) The letter of 2 February 2015 should be taken into account, as Mr Simister would have been better off financially had it been accepted.(d) The final outcome of the proceeding was "relatively even" betweenthe parties, and Mr Simister's own conduct had brought about TCTOA's actions regarding his membership.(e) The Court should endeavour to do justice between the parties. An award of $37,081 is not justifiable; the appropriate award is $5,000.[5] In reply Mr Castle challenged the assertion that TCTOA members could not be, and not been, levied for costs relating to the proceeding, and submitted that TCTOA was now attempting to hide behind its asserted impecuniousity. He referredto Mr Simister's own financial position, as a result of his membership of TCTOAhaving been terminated. Mr Simister had no option but to pursue the High Court litigation in order to retain the ability to operate his business.[6] Mr Castle also submitted that in light of the finding that TCTOA's threedecisions concerning Mr Simister were flawed, and that Mr Simister should bereinstated, it could not be said that the outcome was "relatively even". Nor could itbe submitted that Mr Simister had been the author of his own misfortune.[7] In his reply submissions, Mr Wright confirmed that TCTOA has not levied, and will not levy, members for costs after the TCTOA appeal hearing. He submitted that in the event that costs are awarded against TCTOA it will have to levy members to pay such costs.Analysis[8] As both counsel submitted, costs are at the discretion of the Court. I acceptthat "the Court must endeavour to do justice to both sides, bearing in mind all material features of the case".2[9] Regarding counsel's submissions, I do not accept that in this case the outcome was "at least relatively even as between the parties" as submitted byMr Wright. I held in the judgment that three decisions of TCTOA concerning Mr Simister were made in circumstances where there was a breach of natural justice, and should be quashed. I was not required to consider (and could not consider) whether, if natural justice had been observed, the decisions were justified. That issue was not before me.[10] Nor am I persuaded that I can give weight to the letter of 2 February 2015 as a written offer under r 14.10. At the time of that letter, the parties were not "parties to a proceeding".[11] The task is, as noted above, to "do justice". In this proceeding, pleadingswere filed, and both parties filed affidavits. The hearing was over two days.2 Packing In Ltd v Chilcott (2003) 16 PRNZ 869 (CA).Following the judgment, both parties expended time in relation to TCTOA'sapplication for recall.[12] As Mr Simister had been a member of TCTOA (and was seeking to be reinstated as such) he cannot have been unaware of TCTOA's financial position. Hewould certainly have been aware of the annual membership fee of $40. Mr Simister's own position, particularly in relation to the impact of the terminationof his membership on his ability to earn a living, was at the forefront of his case before me.[13] It would have been in both parties' interests if litigation could have beenavoided. However, it was not avoided and both parties participated actively, and both were represented by two counsel. Mr Simister succeeded in his claim for review.[14] As I noted in the judgment at [5] (and as noted by Mr Wright in his submissions) TCTOA had, as at the date of hearing, 27 members, who pay an annual subscription of $40. Mr Wright said that TCTOA has $780 in its bank account.[15] Mr Wright referred me to cases where a parties' impecuniousity has been raised in relation to a claim for costs.3 Simply put, impecuniousity may be taken into account as a relevant factor under r 14.7(g), but it is not an answer to a costs claim. In this case, both TCTOA and Mr Simister are of limited means, and the circumstances of both of them are relevant.[16] I have concluded that an award of costs must be made against TCTOA, but Itake note of Mr Wright's submission that an award which would mean TCTOA be liquidated would not be of any benefit to either party. I have concluded that an order for costs should be made in the sum of $10,000, together with an order for payment of court filing fees and hearing fees paid by Mr Simister. I accept that such an order is likely to require a levy on the members of TCTOA. However, Mr Simister should be excluded from such a levy.3 Te Whare O Te Kaitiaka Ngahere Inc Society v West Coast Regional Council [2014] NZHC 2969; Howard v ACC [2015] NZHC 351; White v Bank of New Zealand [2014] NZHC 1672.Result[17] TCTOA is ordered to pay costs to Mr Simister in the sum of $10,000, together with court filing fees and hearing fees paid by Mr Simister.[18] In the event that members of TCTOA are levied in order to meet the award of costs, Mr Simister is to be excluded from any such levy._________________________Andrews J