CAYMAN SPECTRUM (NZ) CO v SPARK NEW ZEALAND TRADING LTD [2023] NZHC 1367

CAYMAN SPECTRUM (NZ) CO v SPARK NEW ZEALAND TRADING LTD [2023] NZHC 1367 [1 June2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2018-404-2687[2023] NZHC 1367BETWEEN CAYMAN SPECTRUM (NZ) COFirst PlaintiffEVEREST WIRELESS PARTNERS I LPSecond PlaintiffAND SPARK NEW ZEALAND TRADINGLIMITEDDefendantHearing: On the papersCounsel: F Pilditch KC and M B Wigley for PlaintiffsZ Kennedy and T Leggatt for DefendantJudgment: 1 June 2023JUDGMENT OF LANG J[on costs]This judgment was delivered by Justice LangOn 1 June 2023 at 11.00 amPursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors/counsel:Wigley and Company, Wellington/F Pilditch KC, AucklandMinterEllisonRuddWatts/Z G Kennedy/T J B Leggat, Auckland[1] I have recently delivered three judgments in this proceeding. It is nownecessary for me to determine costs issues relating to each of them.The judgments[2] On 8 May 2023, I issued a judgment in which I granted an application by thedefendant, Spark New Zealand Trading Ltd (Spark), seeking orders striking outspecific pleadings in the current version of the statement of claim.1[3] On 10 May 2023, I issued a further judgment declining an application by theplaintiffs (Cayman) seeking leave to use documents discovered in this proceeding fora collateral purpose.2 Cayman wished to provide the documents in question to theCommerce Commission and to the New Zealand Law Society in support of complaintsit wishes to make against several of Spark's employees.[4] On 15 May 2023, I issued a third judgment in which I fixed costs in relation toearlier applications by Cayman seeking various orders against Spark.3 Cayman hadwithdrawn those applications during and at the end of a hearing conducted on 7 and 8February 2023. I also fixed costs in relation to an application by Spark for non-publication orders and an application by Cayman requiring Spark to provide answersto interrogatories.[5] I am now required to determine the quantum of costs payable under myjudgment issued on 15 May 2023. I am also required to fix costs in relation to theapplications that led to the judgments delivered on 8 and 10 May 2023.Quantum of costs payable under judgment issued on 15 May 2023[6] In this judgment I directed that Cayman was to pay costs to Spark on a category3B basis for all steps taken in relation to the discovery applications prior to the filingand service of Spark's submissions.4 I directed that Cayman was to pay costs on acategory 3C basis for memoranda prepared for a case management conference on 251 Cayman Spectrum (NZ) Co v Spark New Zealand Trading Ltd [2023] NZHC 1063.2 Cayman Spectrum (NZ) Co v Spark New Zealand Trading Ltd [2023] NZHC 1094.3 Cayman Spectrum (NZ) Co v Spark New Zealand Trading Ltd [2023] NZHC 1152.4 At [19].October 2022 and in support of a challenge to the admissibility of Cayman'sevidence.5 I also directed Cayman to pay Spark costs on a category 3C basis for thefiling of submissions prior to the hearing that took place on 7 and 8 February 2023.6[7] I then directed that Cayman was to pay costs on a category 3C basis for thehearing on 7 and 8 February 2023, together with an uplift of 60 per cent.7 Thisreflected the fact that Cayman should not have proceeded with its argument once itreceived Spark's submissions.[8] I also directed Spark to pay costs to Cayman on a category 3B basis for itsnotice to answer interrogatories.8[9] Finally, I awarded Spark costs and disbursements on a category 3B basis inrelation to its application seeking non-publication orders.9[10] The costs claimed by Spark on the various applications are set out Schedule Bof its counsel's memorandum dated 25 May 2023. They total the sum of $29,299together with disbursements of $530.43. I consider the costs and disbursements havebeen correctly calculated in accordance with my judgment. Mr Wigley does not raiseany issue in relation to the calculations on Cayman's behalf.[11] I therefore make orders requiring Cayman to pay costs as sought by Spark inSchedule B.Costs on Spark's strike out application[12] Spark seeks costs on a category 3B basis in relation to the strike outapplication. These are set out in Schedule A to its counsel's memorandum dated 25May 2023 and amount to $8,730.28 inclusive of disbursements. Mr Wigley does notchallenge these on Cayman's behalf.5 At [19].6 At [20].7 At [22].8 At [24].9 At [26].[13] I consider the calculations to be correct and make an award of costs to Sparkas sought in Schedule A.Application to use discovered documents for a collateral purpose[14] Spark seeks costs on a category 3B basis for this application, together with anuplift of 50 per cent to reflect the fact that the applicants should never have broughtthe application. Mr Wigley confirms that his clients have no objection to an award ofcosts on a category 3B basis but oppose any uplift.[15] In seeking an uplift Spark relies on observations I made during the hearing ofanother application on 7 February 2023. On that occasion I was required to determinean application by Cayman seeking orders under s 67 of the Evidence Act 2006 settingaside legal privilege claimed by Spark in relation to certain documents. Section 67allows the Court to make such orders where documents have been prepared for adishonest purpose or to enable the commission of an offence. Having viewed thedocuments in question, I observed that I did not consider they came close to satisfyingthe threshold required to satisfy s 67. Following the hearing counsel for Cayman fileda memorandum confirming that Cayman withdrew the application.[16] Cayman subsequently sought orders under r 8.30(4) of the High Court Rules2016 permitting it to forward copies of documents discovered in this proceeding to theCommerce Commission and the Law Society. These included several of thedocuments that had been the subject of the earlier application seeking orders under s67 of the Evidence Act. Cayman wished to provide the documents to the CommerceCommission and the Law Society in support of complaints alleging criminalwrongdoing by Spark's employees.[17] In the judgment delivered on 10 May 2023 I declined the application for thefollowing reasons:10[41] The applicants submit that the discovered documents constituteevidence that Spark's staff members misled the Commission and therebycommitted an offence under s 103(2) of the Commerce Act. They also contendthe documents are evidence of offences against several provisions of the10 Cayman Spectrum (NZ) Co v Spark New Zealand Trading Ltd, above n 2.Crimes Act. These include perjury (s 109), making a false statement ordeclaration (s 111), conspiring to defeat the course of justice (s 116) andobtaining a benefit by deception (s 240).[42] The threshold under the present application is obviously lower thanunder that required under s 67 of the Evidence Act. The Court is not beingasked to determine, even to a prima facie standard, whether the documentscontain evidence of dishonesty or criminal wrongdoing. However, evenapplying the lower threshold required for present purposes, I consider thediscovered documents cannot be viewed in isolation. They need to be viewedin light of what Spark told the Commission both before it filed the applicationfor clearance and in the application itself. When this is done the discovereddocuments fall well short of constituting evidence of commission of any ofthe offences to which the applicants refer.[18] Counsel for Spark contend that the applicants ought to have taken heed of theseremarks. It says they should have known they could not succeed in an applicationunder r 8.30(4) notwithstanding the fact that the evidential threshold is lower underthat rule. They therefore seek an award of costs increased by 50 per cent.[19] In opposing any award of increased costs Mr Wigley relies on my observationthat the threshold for an order under r 8.30(4) was lower than that for the earlierapplication seeking orders under s 67. He also confirms that in advancing theapplication the applicants continued to take advice from senior counsel.[20] I am satisfied that Cayman should not have brought its application given theindications I had given during the hearing on 7 February 2023. Although the thresholdis lower under r 8.30(4), the applicants were essentially relying on the same evidenceas in their previous unsuccessful application. The documents on which they reliedcould not be viewed in a vacuum. As is evident from the passage set out above, I heldthat they needed to be viewed in light of the advice Spark conveyed to the CommerceCommission orally before it lodged its application for clearance and in the applicationfor clearance itself. When this was done the documents could not be said the beevidence of criminal wrongdoing as the applicants alleged.[21] I am satisfied that in making this application the applicants contributedunnecessarily to the expense of the proceeding by taking an unnecessary step andadvancing an argument that did not have merit. They also failed without reasonablejustification to accept Spark's argument, much of which had been traversed at theearlier hearing. Jurisdiction therefore exists under r 14.6(3)(b)(ii) and (iii) to make anaward of increased costs in Spark's favour. I am satisfied it is appropriate to awardSpark an uplift of 50 per cent to reflect this factor.[22] Spark seeks costs totalling $15,186.40 inclusive of disbursements. These areitemised in Schedule A to the memorandum filed by its counsel on 25 May 2023. Iam satisfied Spark's calculations are correct and that they reflect the terms of thisjudgment. Spark will therefore be entitled to costs and disbursements totalling$15,186.40 on Cayman's application for leave to use documents for a collateralpurpose. I make an order accordingly.____________________________Lang J