Andrews v Lomax

[2023] NZHC 3043

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2021-425-72

[2023] NZHC 3043

UNDER

Section 174 of the Companies Act 1993

BETWEEN

ROBERT ANTHONY ANDREWS

First Plaintiff

KERRY ANDREWS
Second Plaintiff

ROBERT ANTHONY ANDREWS, KERRY ANDREWS and BERYL ANDREWS, as

trustees of the Ruby Trust Third Plaintiffs

AND

PAUL JOHN LOMAX

First Defendant

CHESTER HOSPITALITY LIMITED
Second Defendant

NH TRUSTEES NO. 9 LIMITED, as trustee

of the Lomax Family Trust Third Defendant

ARROW HOSPITALITY LIMITED

Fourth Defendant

Hearing:	(On the papers)
Counsel:	S D Williams and B B Gresson for Andrews parties P C Murray for Lomax parties
Judgment:	30 October 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

(non-party costs)

ANDREWS v LOMAX [2023] NZHC 3043 [30 October 2023]

[1]                 Having obtained an order for non-party discovery against Mr Townsend, with the  usual  costs  order,  the   Lomax   parties   disputed   the   reasonableness   of   Mr Townsend’s solicitor-client costs. In a Minute of 26 September 2023 I dealt with Mr Townsend’s own costs and disbursements, leaving his legal fees of $15,000.00 plus GST. As Mr Townsend is GST registered, his claim is for $15,000.00 only.

[2]                 In  the  26  September  2023  Minute,  I  called  for  the  time  records  of    Mr Townsend’s solicitors. Given I anticipated there may be privileged material in the time narrations, I directed the time records would be available only to me. Those records, while they will remain on the file, will be sealed.

[3]                 The only issue for me is whether the $15,000.00 fee is unreasonably high.1 The process adopted by the Court in assessing the reasonableness of the fees is not as involved as a costs revision process. As McGechan records:2

The time and other pressures on judges and associate judges leave “room for robust judgment as to the costs considered reasonable in all the circumstances”.

[4]                 In short, are the costs Mr Townsend incurred with his solicitors so high as to be outside a “reasonable range”? I am satisfied they are not.

[5]                 I have previously commented that in a practical sense, in non-party discovery, the benefit of the doubt in respect of costs goes to the non-party. The time records produced record that a total time of $18,036.00 (excluding GST), was recorded. Time was written off to bring the account down to $15,000.00 plus GST.

[6]Scale costs on a 2B basis for the preparation of a list of documents is

$5,975.00.3 This fee is presumed to be two-thirds of a reasonable fee, making the presumed reasonable fee just under $9,000.00. However, where a non-party is required to give discovery, their legal advisers do not have the benefit of having been involved in the proceeding from the outset. No prior collation or review of documents

1      See  Robert  Osborne  and  others  McGechan  on  Procedure  (online  ed,  Thomson  Reuters)  at [HR14.6.03(2)(a)].

2      At [HR14.6.3(e)(iv)].

3      High Court Rules 2016, schedule 3.

has taken place. When it comes to assessing relevance and privilege, a non-parties’ solicitor starts from scratch. The need for advisers to “get up to speed” has to be recognised in assessing the reasonableness of costs.

[7]                 Once the need for counsel to get up to speed is factored in, I cannot conclude that the $15,000.00 charge is beyond a reasonable cost for the work that took place.

[8]The Lomax parties are to pay Mr Townsend $15,000.00.

Associate Judge Lester

Solicitors:

Todd and Walker, Queenstown

Fortune Manning, Auckland (for Lomax parties)

Copy to counsel:
S D Williams, Barrister, Auckland (for Lomax parties)