Americhip, Inc v Dean - [2015] NZHC 1871

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4247 [2015] NZHC 1871

BETWEEN
AMERICHIP, INC

Plaintiff

AND

JASON CHARLES DEAN

Defendant

Hearing: On the papers

Counsel:

L Theron for Plaintiff
D P H Jones QC for Defendant

Judgment:

10 August 2015

JUDGMENT OF KATZ J [Costs]

This judgment was delivered by me on 10 August 2015 at 3:30pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors: Meredith Connell, Wellington
Winston Wang & Associates, Auckland

Counsel: D P H Jones QC, Auckland

AMERICHIP, INC v DEAN [2015] NZHC 1871 [10 August 2015]

Introduction

[1] The plaintiff, Americhip, Inc (“Americhip”) alleges in these proceedings that

the defendant, Jason Dean, defrauded it of approximately US$10 million between

2003 and 2012. Americhip further alleges that Mr Dean, who is a New Zealander, has used approximately NZ$2 million of those funds to buy a house in Auckland.

[2] Mr Dean applied to stay Americhip’s proceedings against him on the basis that New Zealand is not the appropriate forum for the claims to be heard and determined. Rather, he argued, Americhip should issue proceedings against him in China. I dismissed that application on 14 April 2015.1

[3] Americhip now seeks costs in respect of the stay application, as well as costs in respect of an earlier interlocutory hearing before Ellis J. In respect of the stay application, Mr Dean accepts that scale costs, the filing fee and photocopying costs (together totalling $5,981.50) are properly payable in respect of the stay application. He contests, however, the expert witness fess claimed of $19,830.83. In respect of the earlier interlocutory hearing before Ellis J, in which Mr Dean sought to set aside the proceedings for lack of jurisdiction, he challenges the entirety of the costs claim ($6,080) and says, in essence, that costs should lie where they fall.

Are the expert costs incurred in relation to the stay application properly recoverable?

[4] Americhip seeks to recover a disbursement of $19,830.82 in respect of the costs incurred in obtaining an affidavit on Chinese law by Hu Xiaohong, a lawyer from the Jun He law office in Shanghai.

[5] Mr Dean submitted that the Court should either not allow the entire disbursement, as it is unreasonable, or that the disbursement should be reduced or disallowed as disproportionate in the circumstances of the proceedings. The information provided in the affidavit was said to be “not complex” and did not merit
the level of time spent on it by a senior practitioner.

1 Americhip Inc v Dean [2015] NZHC 700.

[6] Rule 14.12 of the High Court Rules sets out the requirements relating to recovery of disbursements. It provides:

(1) In this rule,—

disbursement, in relation to a proceeding,—

(a) means an expense paid or incurred for the purposes of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor’s bill of costs; and

(b) includes—

(i) fees of court for the proceeding:

(ii) expenses of serving documents for the purposes of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] NZHC 1871
Decision Date: 10 August 2015

CaseChat Overview and Summary

The case of Americhip, Inc v Dean was heard in the High Court of New Zealand and involved a claim by the plaintiff, Americhip, Inc against the defendant, Jason Dean, for approximately US$10 million in alleged fraud, with an additional claim that Dean had used approximately NZ$2 million of the funds to purchase a house in Auckland. The defendant sought to stay the proceedings on the basis that China was the appropriate forum for the claims. The plaintiff sought costs associated with the stay application and an earlier interlocutory hearing. The court was required to determine whether the expert costs incurred in relation to the stay application were properly recoverable and if the costs associated with the earlier interlocutory hearing were payable by the defendant.

The court found that the expert costs incurred by the plaintiff were within the definition of disbursements under Rule 14.12 of the High Court Rules and needed to be approved by the court if they were not within the specified categories. The court had discretion to grant approval if the disbursement was specific to the proceeding, reasonably necessary, and reasonable in amount. The court determined that the expert costs were necessary for the proceeding, considering the nature of the stay application and the necessity of expert evidence on Chinese law. The court also found that the quantum of costs claimed was reasonable, despite the defendant's submissions to the contrary. Regarding the costs of the earlier interlocutory hearing, the court held that the costs were at large and at the discretion of the court, as the Court of Appeal had quashed the High Court costs order but did not remit the matter back for reconsideration of costs. The court concluded that the plaintiff was entitled to costs on a 2B basis.

The court ordered the defendant to pay the plaintiff’s costs and disbursements in the sum of $25,812.33 in respect of the stay application and $6,080 on a 2B basis in respect of the earlier interlocutory hearing.

Orders