SWISHER HYGIENE FRANCHISE CORPORATION V HI-GENE LTD HC AK CIV-2009-404-001573

SWISHER HYGIENE FRANCHISE CORPORATION V HI-GENE LTD HC AK CIV-2009-404-001573 30 March 2010IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2009-404-001573BETWEEN SWISHER HYGIENE FRANCHISE CORPORATION Plaintiff AND HI-GENE LIMITED Defendant Hearing: 29 March 2010 Appearances: A C H Clemow and N P Tetzlaff for the Plaintiff W G C Templeton for the Defendant Judgment: 30 March 2010JUDGMENT OF DUFFY J [Re Costs on Leave Application]This judgment was delivered by Justice Duffy on 30 March 2010 at 3.00 pm, pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar Date:Counsel: W G C Templeton P O Box 5444 Wellesley Street Auckland 1141 for the Defendant Solicitors: Gaze Burt P O Box 91345 Victoria Street West Auckland 1142 for the Plaintiff Foley and Hughes P O Box 6829 Wellesley Street Auckland 1141 for the Defendant[1] In an oral judgment delivered on 29 March 2010, I dismissed the defendant's, (Hi-Gene), application for leave to appeal a judgment I issued in this proceeding on 2 December 2009 to the Court of Appeal. [2] The application for leave to appeal was dismissed because by the time it came to be heard, Hi-Gene had decided that its appeal was more appropriately brought as an appeal under Schedule 1 of the Arbitration Act 1996. Such an appeal entitled Hi-Gene to appeal as of right to the Court of Appeal. However, since Hi- Gene only came to this view after the time for filing an appeal had expired, it now requires leave from the Court of Appeal to bring an appeal out of time. [3] Hi-Gene sought to have its leave application adjourned, just in case its view on it having a right of appeal under Schedule 1 was incorrect. The plaintiff, Swisher, successfully opposed the application for an adjournment and as a consequence, Hi- Gene's leave application was dismissed. I decided that in all the circumstances it would be inappropriate and an abuse of process for Hi-Gene to be able to park its leave appeal pending the Court of Appeal's determination of Hi-Gene's appeal under Schedule 1, and its application to bring this appeal out of time: see HC Auckland CIV-2009-404-001573, 29 March 2010. [4] Swisher now seeks costs for the time and trouble it has undergone in preparing its opposition to Hi-Gene's application to this Court for leave to appeal. As the party who successfully opposed the adjournment and obtained the dismissal of Hi-Gene's application for leave to appeal, Swisher is entitled in the usual way to costs. As a matter of general principle, costs follow the event. [5] The written submissions Swisher had prepared for opposing the leave to appeal application are before me. They were due to be filed and served on 25 March 2010 and they were. It was not until very late in the day on 19 March 2010 (which was a Friday) that Swisher's solicitors were informed that Hi-Gene had changed its view on the jurisdictional foundation for its appeal. Swisher submits that by then, its submissions opposing the leave application were already well advanced. Having had the benefit of reading those submissions, I can see that they were likely to be welladvanced by 19 March 2010. The submissions are careful, well thought through and comprehensive. I expect they would have taken some time to prepare. [6] Hi-Gene contends that the jurisdictional issue regarding the foundation for its appeal should have been apparent to Swisher. In making this submission, Hi-Gene is essentially arguing that Swisher should have done its own research on the jurisdictional foundation for Hi-Gene's appeal. Hi-Gene also contends that Swisher was given sufficient notice of the change in position and that, in any event, the work Swisher has done will be relevant to opposing the appeal in the Court of Appeal. Hence, there has been no wastage of effort on Swisher's part. [7] Swisher's response to Hi-Gene's submissions is that Hi-Gene's attempt to bring the appeal under Schedule 1 is an abuse of process. This argument relates to whether the decision I made on the enforcement of the arbitral award should be categorised as involving r 34, as opposed to rr 35 and 36 of the First Schedule of the Arbitration Act. [8] In my view, Hi-Gene has had sufficient time to work out the jurisdictional basis for its appeal. My judgment was issued on 2 December 2009. Hi-Gene filed its application for leave to appeal on 21 December 2009. It has had from that date to revisit its thoughts on the jurisdictional basis of the appeal right it seeks to exercise. Leaving it until 19 March 2010 to inform Swisher about a change of stance in circumstances where Swisher was due to file its submissions by 25 March 2010, and the hearing was to be on 29 March 2010, is unacceptably late. I can understand that counsel may adopt a mistaken view of the law and come to realise that late in the day. But when this happens, the consequences of the late recognition of such a mistake should be borne by the party responsible for it. There are good policy reasons for awarding costs in circumstances like this. If parties make a mistake which leads them to commencing the wrong interlocutory application, the onus is on them to recognise it at the earliest opportunity, so that a change of position can be communicated to the opposing party at a time when the opposing party has not been put to the trouble of preparing its opposition. I do not consider Hi-Gene's argument that Swisher's work can be of use when it comes to the hearing in the Court of Appeal to be of any relevance or weight. It is often the case that arguments raised inone aspect of a proceeding are applicable at a later stage as well. That has never been a ground for refusing costs on the first matter. [9] When it comes to the amount of costs, Swisher seeks costs at category 2B. Hi-Gene did not oppose that categorisation. Accordingly, Swisher is entitled to costs at category 2B; it is also entitled to reasonable disbursements. Duffy J