WAYNE GRAHAM REALTY LIMITED v BROOK [2016] NZHC 950

WAYNE GRAHAM REALTY LIMITED v BROOK [2016] NZHC 950 [11 May 2016]IN THE HIGH COURT OF NEW ZEALANDDUNEDIN REGISTRYCIV-2016-412-000022[2016] NZHC 950BETWEEN WAYNE GRAHAM REALTY LIMITEDAppellantAND KRISTINA-LORRAINE BROOKRespondentHearing: 11 May 2016 (On the papers)Appearances: J Eckford for AppellantD R Tobin for RespondentJudgment: 11 May 2016JUDGMENT OF DUNNINGHAM J[1] An interlocutory application has been filed by the appellant seeking leave to adduce and rely on further evidence in this appeal.[2] The appeal itself relates to a costs decision made in the District Court on 20 January 2016, following the respondent's concession that her claim should be struck out because the parties had reached a binding settlement agreement on 7 August 2015.[3] The appellant was represented at the mentions hearing on 20 January 2016, through a solicitor, appearing on agency instructions, as its lawyers understood that costs would be argued subsequently and with the benefit of submissions and evidence. However, the Judge simply determined that the second defendant was entitled to costs against the plaintiff on a scale 2B basis, plus disbursements, and made orders accordingly.[4] On 17 February 2016, the appellant filed an appeal of that costs decision.[5] By consent, standard timetabling directions were made. These included that the appellant was to file and serve, by Friday 15 April 2016, a common bundle of paginated and indexed copies of all relevant documents.[6] Prior to provision of the common bundle, there was also agreement between the parties that further evidence should be adduced on appeal as set out in the affirmation of Alexandra Marguerite Cunninghame dated 22 March 2016. This was an affidavit from the solicitor who appeared on the appellant's behalf on 20 January 2016, on agency instructions. There is no dispute that this evidence is appropriately admitted as further evidence on appeal.This application[7] The present interlocutory application seeks leave to introduce further evidence in the form of an affidavit affirmed by Sarah Elizabeth Basarge, a solicitor employed by the firm acting for the appellant. It annexes the chain ofcorrespondence between the appellant's and the respondent's solicitors, relating to the dispute over whether the matter had settled on 7 August 2015, and the attempts by the solicitors of the appellant to argue that the respondent's continued prosecution of the proceedings was an abuse of process. Some of this correspondence is labelled"without prejudice except as to costs". It also annexes the appellant's invoices forlegal costs incurred since 7 August 2015.[8] The parties have filed extensive submissions on the application and have advised that the application can be dealt with on the papers prior to the hearing on 18 May 2016. I have proceeded on that basis.[9] The grounds on which the further evidence is sought to be adduced are extensive. However, as summarised in the memorandum of counsel for the appellant on the application to introduce supplementary evidence:The correspondence sought to be relied on demonstrates that it was vexatious, improper or unnecessary, or in the alternative, unreasonable for the respondent to maintain the proceeding from the date following the judicial settlement conference until its concession, because the proceeding had settled on 7 August 2015.[10] That general submission is supported in the application itself, where the grounds for the application listed by the appellant include:(a) there are special reasons why the evidence annexed to the affirmation of Sarah Elizabeth Basarge filed in support of the application should be adduced;(b) the evidence is cogent and material to the issue as to whether standard, increased or indemnity costs are appropriate;(c) the appellant was not afforded time, following receipt of therespondent's concession, to serve evidence or make submissions oncosts for the hearing the following day and anticipated that any costs orders would be made after evidence and submissions had been provided on the costs issue;(d) it would be unreasonable and unjust to consider the issues on appeal without the benefit of that correspondence;(e) the appellant had sought the respondent's agreement to the evidencebeing admitted, but the respondent had refused to agree to its admission.[11] The respondent opposes the interlocutory application to introduce the further evidence, saying, in summary:(a) the matters in it should have been covered when the bundle of documents was settled, or earlier;(b) there are no special reasons to introduce this further evidence;(c) none of the evidence has any probative weight in the hearing of the appeal;(d) some of the documents are already in the common bundle of documents;(e) none of the correspondence is new or not reasonably available as at the time of hearing on 20 January 2016.Should the further evidence be admitted[12] Both the interlocutory application, and the notice of opposition to it refer to High Court r 20.16, regarding when further evidence may be adduced on appeal. That rule provides:20.16 Further evidence(1) Without leave, a party to an appeal may adduce further evidence on a question of fact if the evidence is necessary to determine an interlocutory application that relates to the appeal.(2) In all other cases, a party to an appeal may adduce further evidence only with the leave of the court.(3) The court may grant leave only if there are special reasons for hearing the evidence. An example of a special reason is that the evidence relates to matters that have arisen after the date of the decision appealed against and that are or may be relevant to the determination of the appeal.(4) Further evidence under this rule must be given by affidavit, unless the court otherwise directs.[13] However, the relevance of this rule in the present case is complicated by the fact that a key plank of the appeal is that the question of costs was dealt with summarily by the Judge, without the opportunity to provide any evidence or submissions on that issue.[14] It is clear that the evidence which would be relied on for costs is not evidence which would already be before the Court for the substantive hearing. For example,evidence of correspondence which is "without prejudice as to costs" is inevitablyonly going to be produced to the Court in the context of resolving a dispute over costs. Here the respondent says the appellant should have anticipated the need to file this evidence before the mentions hearing on 20 January 2016. However, that is amatter for me to resolve on appeal and cannot of itself be a barrier to introducing that evidence on this appeal.[15] In addition, the respondent says the evidence is not relevant on appeal as each decision by the Judge was a decision made in the exercise of his discretion and was not in error, and the further evidence is not relevant to those issues. However, again, whether that is so is a matter to be determined on appeal and in my view, is not a barrier to the introduction of such evidence.[16] In the circumstances that have arisen, this is not a case of seeking to adduce evidence in addition to that which was before the District Court. All the evidence in this hearing is necessarily evidence which was not before the District Court and the failure to have an opportunity to place it before the Court is at the heart of this appeal. If the Judge was not entitled to proceed without it on 20 January 2016, then I need to see the evidence that would have been adduced and determine the appeal in light of it. I consider that this is a "special reason" for allowing further evidence under r 20.16.[17] In any event, it seems to me that the real issue in dispute is that the evidence should have been incorporated as part of the agreed common bundle of documents prepared in accordance with the timetabling directions for this appeal. Indeed it appears that a number of the documents annexed to the present affidavit are already in the bundle of documents.1[18] Having reviewed the documents I consider they simply provide a more comprehensive picture of the communications the appellant is relying on to argue that there was a basis on which to award increased or indemnity costs, which the Judge did not consider because of the way he dealt with the costs issue.[19] Given this is the key plank of the appellant's appeal, and documents have already been provided in the common bundle in support of this, there is no obvious1 Being documents 2, 4, 17, 18, 24, 46 and 47 as attached to the affirmation of Sarah Elizabeth Basarge.prejudice to the respondent if the further evidence is admitted as it simply gives a more complete picture of that correspondence.[20] In my view, the correspondence also clearly identifies why the respondent resists the claim that her continued pursuit of the proceedings should be characterised as vexatious or unreasonable. I consider it will assist the Court to assess those competing contentions more holistically (should I determine they are relevant), if the complete chain of correspondence is before the Court. Importantly, it does not preclude the respondent arguing that the evidence should have been before the Court by 20 January 2016 or that the Judge was entitled to proceed to award the costs he did in the exercise of his discretion.[21] Accordingly, the interlocutory application to adduce, and rely on, the supplementary evidence annexed to the affidavit of Sarah Elizabeth Basarge affirmed on 27 April 2016 is granted. However, the issue of costs on the application is reserved, and, given this is a form of indulgence,2 it is likely that costs for this step would be excluded in any costs award on appeal if it is successful, or would be costs in favour of the respondent if she succeeds.Solicitors:Parker Cowan Lawyers, QueenstownD R Tobin, Barrister, Dunedin2 As the documents should at the least have been included in the common bundle which was required to be served by 15 April 2016.