RPNZ LTD V THE REAL ESTATE INSTITUTE OF NZ INC HC AK CIV 2005-404-976

RPNZ LTD V THE REAL ESTATE INSTITUTE OF NZ INC HC AK CIV 2005-404-976 4 April 2006IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2005-404-976BETWEEN RPNZ LIMITED Plaintiff AND THE REAL ESTATE INSTITUTE OF NEW ZEALAND INCORPORATED Defendant Hearing: 4 April 2006 (on the papers) Counsel: H Wilson for intending plaintiff D Bigio for intended defendant Judgment: 4 April 2006 at 16:30JUDGMENT OF ASSOCIATE JUDGE FAIRE [for costs]Solicitors: Kensington Swan, PO Box 10 246, Wellington for intending plaintiff Ellis Gould, PO Box 1509, Auckland for intended defendant[1] The intended defendant seeks costs against the intending plaintiff. [2] In my judgment of 9 March 2006 I declined the intending plaintiff's application for pre-issue discovery pursuant to r 301 of the High Court Rules. At the conclusion of my judgment I invited counsel to confer and reach agreement on costs. I directed that if they could not agree, memoranda in support, opposition and reply should be filed at seven-day intervals. Those memoranda have been filed. Hence it is necessary now to fix costs. [3] The intending plaintiff's position is that the appropriate order for costs is an order based on Category 2 Band B for an interlocutory application. [4] Rule 301 of the High Court Rules makes an application for discovery of particular documents before proceedings are commenced, by definition, an interlocutory application. (See r 301(3)). [5] The appropriate steps, in terms of r 48B, which apply in respect of this application are those set out in the Third Schedule at: 4.10 - the filing and service of memoranda in anticipation of mentions hearings, 4.13 - preparing and filing opposition documents to the interlocutory application; 4.14 – preparation for hearing of the defended interlocutory application, 4.15 – appearance at hearing of the interlocutory application. [6] It is appropriate that I refer briefly to the approach which the Court must take on an applications for costs. Rule 46 provides that costs are to be in the discretion of the Court. In Mansfield Drycleaners Ltd v Quinny's Drycleaning (Dentice Drycleaning Upper Hutt) Ltd CA 296/01 29 September 2002 the Court of Appeal, in noting the Court's over-riding discretion pursuant to r46 said:there is a strong implication that a Court is to apply the regime in the absence of some reason to the contrary: Body Corporate 97010 v Auckland City Council. We do not think that a Court should hesitate to depart from the regime where appropriate but we agree that some articulation of the reason for doing so is to be expected, however succinct. If no reason is given it will expose the award to close appellate scrutiny.[7] The general principles to be applied in the exercise of that discretion are those contained r47. The first general principle there stated is that the party who fails with respect to an application should pay the costs to the party who succeeds. [8] In Glaister & Ors v Amalgamated Dairies Ltd & Anor [2004] 2 NZLR 606 the Court of Appeal endorsed the proposition it made in the earlier decision inMansfield Drycleaners Ltd v Quinny's Drycleaning (Dentice Drycleaning Upper Hutt) Ltd. It noted that if there was any departure from the costs regime as set out by the High Court Rules, that could only be done on a particularised and principled way. [9] The intended defendant's position is that a cost order in the sum of $15,000 should be made on the basis that that is appropriate as a reasonable allowance for indemnity costs or an appropriate award of costs based on an increased order for costs. The application is principally made because, following the issue of the application, one of the important evidential pieces of information, being agreements entered into by the intended defendant with Terralink International Limited, was made available to the intending plaintiff. What those agreements disclosed was that there was no joint statistical service being developed by the intended defendant and Terralink International Limited that might have been developed using confidential information acquired under the arrangement with the intending plaintiff. Some four- and-a-half months after the agreements were supplied, the intending plaintiff's legal advisers advised the intended defendant that they nevertheless wished to proceed with the application. [10] Increased costs and indemnity costs are dealt with in r 48C of the High Court Rules. Two of the grounds set out in r 48C(3) require consideration. They raise the following issues:a) Did the time spent by the intended defendant in preparing its defence substantially exceed the time allocated under Band C? or b) Has the intending plaintiff contributed unnecessarily to the time or expense of the proceeding or step in the proceeding by pursuing the application after the disclosure when it really lacked merit? [11] Mr Bigio points out that, despite the production of the Terralink International Limited agreements, there were no further factual bases advanced by the intending plaintiff for the order it was seeking. Certainly, when the matter was argued before me, the basis for the application did change because, of course, the matters pertaining to the Terralink International Limited agreements were not advanced. [12] Mr Bigio added, what might be a further basis for considering costs, however. That was that, in terms of the steps taken in this proceeding, and applying r 48(b)(2)(c), the time taken in preparation of the opposition and opposing affidavits was a comparatively large amount of time than one would expect in a normal interlocutory application where, of course, Band B would be ordered. [13] The time allowances for Band B on an interlocutory application in relation to preparation as set out in the Third Schedule is .6 of a day. The time allowed under Band C is 2 days. [14] I am not satisfied that a proper foundation exists for dealing with this case on either an indemnity or an increased cost basis, having regard to the Rules that I have earlier referred to in this judgment. Certainly, the intending plaintiff took an application and has lost it. But, it did so against a background where the parties had been in a relationship, found in other proceedings not to be of a contractual nature, where there might exist some fear that its information had been used by the intended defendant when it embarked on an alternative course. [15] However, that conclusion, in my view, does not end the matter because it is apparent:a) That the intended defendant has been successful in its opposition; and b) That a considerable amount of work has been expended in the preparation of the opposition to the application. These applications which involve an analysis of a potential cause of action are, in that sense, quite different from the normal type of interlocutory application which is issued in respect of an extant proceeding. The affidavits, the notice of opposition, and counsel's submissions all helpfully focussed on what a potential cause of action required and how it should be approached. [16] When I consider this material I am not satisfied that the preparation of the opposition and affidavits in opposition would be covered by what is the normal amount of time for that particular step. That, then, leads to the question of whether or not a Band C designation, or a comparatively larger amount of time is considered reasonable for the preparation in this case. I have already referred to the fact that the Schedule gives guidance as to what that time allowance is by reference to an allowance of two days. In my judgment, that is an appropriate allowance for preparation of the notice of opposition and opposing affidavits in this case. [17] It all other respects, however, the allowance for the remaining steps are appropriately covered by the normal allowance and therefore are justified by a Band B allowance. [18] The result that follows from my conclusions can be tabulated in the following summary. The reference in the left-hand column to a number is a reference to the step that appears in the Third Schedule. The table, then, is as follows:Step Band $4.13 Preparing and filing opposition to interlocutory application and supporting affidavits Band C 2 days 2,900.00 4.10 Filing and serving memoranda in anticipation of Judicial conferences or mention hearings x 3 Band B 1,740.00 4.11 Appearance at Judicial conference Band B .3 435.00 4.14 Preparation for hearing of defended interlocutory application Band B .75 1,087.50 4.15 Appearance at hearing of defended interlocutory application Band B .75 1,087.50Total $7250.00Orders[19] I order that the intending plaintiff pay the intended defendant costs in the sum of $7,250 plus disbursements as fixed by the Registrar. _____________________ JA Faire Associate Judge