Antons Trawling Limited v Dawson & Associates Limited

[2016] NZHC 2028

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV 2014-442-070 [2016] NZHC 2028

BETWEEN

ANTONS TRAWLING LIMITED

Plaintiff

AND

DAWSON & ASSOCIATES LIMITED Defendant

In Chambers:	On the papers
Counsel:	C M Meechan QC for Plaintiff M C Harris for Defendant
Judgment:	30 August 2016

JUDGMENT OF BROWN J (COSTS)

[1]      In my judgment dated 16 May 2016 I found that the defendant was negligent on the first particular of the plaintiff’s claim but that that aspect of the claim was time-barred.1    I rejected the plaintiff’s second and third particulars of claim.   The defendant having been successful is consequently entitled to costs in accordance with the fundamental principle that costs follow the event.2

[2]      While there is a substantial measure of agreement between the parties on the calculation of costs, there are four aspects of the defendant’s claim for costs which are in dispute:

(a)    The  request  for  Band  C  costs  in  respect  of  preparation  of  briefs  and preparation for hearing.

(b)The defendant’s request for a 50 per cent uplift on the steps taken after briefing evidence.

1      Antons Trawling Ltd v Dawson & Associates Ltd [2016] NZHC 982.

2      Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [8].

ANTONS TRAWLING LIMITED v DAWSON & ASSOCIATES LIMITED [2016] NZHC 2028 [30 August 2016]

(c)    The costs of the defendant’s maritime expert, Mr Gresson.

(d)    The costs of a Russian maritime lawyer, Ms Popova.

Allowance for briefs and trial preparation

[3]      Band B in the time allocations in Schedule 3 of the High Court Rules allows

2.5 and 3 days for preparation of briefs and preparation for hearing respectively.

[4]      The defendant argues that by the time the evidence was briefed the events in question had taken place more than seven years earlier, discovery was substantial and the plaintiff served five briefs including substantial briefs from New Zealand and Russian maritime law experts.   It submits that the preparation of briefs required a detailed reconstruction of events in the past from a stale documentary record and that the exercise took longer than it would have taken had the plaintiff not delayed in bringing its claim.

[5]      The plaintiff responds that any case whose genesis is recorded in emails and successive drafts of documents will require an attentive review of the contemporaneous  documents.    It  submits  that  its  claim  was  a classic solicitor’s negligence claim and that there was nothing in terms of factual or legal complexity that took it out of the realms of a standard claim and a Band B costs categorisation.

[6]      Notwithstanding the plaintiff’s points, I consider there is justification in the defendant’s request.   The case involved what the plaintiff’s own maritime expert, Mr Stolberger,  called  a  “challenging”  multi-jurisdictional  ship  sale  and  finance transaction  which  called  for  experts  and  specialist  legal  disciplines  in  both New Zealand and Russia.  I accept that an allocation of Band C is appropriate for the two relevant tasks.

Increased costs

[7]      On 11 January 2016 the defendant made an offer of $500,000 in full and final settlement of all claims against it.  The offer was not accepted.  Consequently the defendant seeks an uplift on the steps taken after the briefing of evidence in the

measure of 50 per cent.   Rule 14.6(3) of the High Court Rules provides that the

Court may order a party to pay increased costs if:

(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

…

(v)failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding…

[8]      While a party who declines a settlement offer and is ultimately unsuccessful will very likely have contributed to the time and expense of the proceeding subsequent to the point of the offer, some of the subsequent cost for the successful party will be reflected in the costs ultimately awarded to it.   The extent of the unnecessary contribution to costs can only be in the extent of actual costs above scale costs which are not recovered.  In the present case I do not have details of the defendant’s actual costs.

[9]      In resisting an uplift the plaintiff submits that the question of reasonable justification is to be assessed on the basis of the circumstances that prevailed at the time the offer was rejected.  It makes the point that there is no mention in the offer of the limitation point on which the defendant succeeded, a point which it maintains was by no means straightforward.

[10]     By contrast the defendant submits that the limitation defence called only for an orthodox application of law that has been comprehensively settled at the highest level for some years.  It submits that the 50 per cent uplift sought is also supported by what it described as the plaintiff’s unjustified post-trial application to adduce further evidence that fell “well short” of the threshold for admission.

[11]     I accept the defendant’s submission that some uplift is warranted to reflect its substantial settlement offer, albeit at a point which was less than one month before

trial.  However I am not satisfied that an uplift of 50 per cent is justified, particularly in circumstances where the actual cost figures are not available to me.  An uplift of

25 per cent is allowed.

Mr Gresson’s costs

[12]     The plaintiff objects to paying all of Mr Gresson’s fee because it includes the time he spent addressing what it describes as the successful allegation of negligence, as well as time spent assisting the defendant in identifying a Russian maritime law expert.

[13]     Mr Gresson’s evidence has to be viewed in its entirety.   As my judgment noted, he was in accord with Mr Stolberger that the wording of the second draft of the relevant clause was adequate.3     In the course of giving his evidence he also

recognised  that  the  third  clause  was  unsatisfactory  in  its  drafting.4      As  with

Mr Stolberger, Mr Gresson’s evidence was helpful to the Court in a specialist area of

practice.

[14]     An expert witness is not an advocate for the party who engages him or her but has an overriding duty to assist the Court impartially on relevant matters within the expert’s area of expertise.5    While I rejected the defendant’s contention that it was not negligent in respect of the first particular of the claim, I do not consider that that warrants allowing a discount on Mr Gresson’s fee.  The same applies in relation to the allegation of contributory negligence.

[15]     While  I  consider  there  is  more  justification  for  the  plaintiff ’s  complaint concerning time spent by Mr Gresson in assisting the defendant to find a Russian expert, I agree with the defendant’s submission that those costs are not material in

the context of this case.

3      Antons Trawling Ltd, above n 1, at [123].

4 At [125].

5      High Court Rules, sch 4.

Ms Popova’s costs

[16]     The defendant served a brief from a Russian maritime lawyer, Ms Popova, on

3 February 2016 and advised the plaintiff that it might seek leave to introduce it. The defendant submits that the brief was served on a precautionary basis with the position to be reviewed following the close of the plaintiff’s case.   Ultimately the defendant elected not to seek leave to lead the evidence of Ms Popova.

[17]     The plaintiff submits that in circumstances where the evidence was not led, no explanation was given as to why it was not led (for example, a failure by the plaintiff to call a witness) and, significantly, it did not appear to relate to any of the contentious issues raised by the case, the costs of the Popova brief should be disallowed.

[18]     The defendant responds that expert witness fees are recoverable even when the witness does not give evidence at trial if the fees are reasonably necessary for the conduct of the proceeding and reasonable in amount.6    It also contends that a party can claim for time spent by its expert critiquing other parties’ experts and to assist counsel in cross-examination.7

[19]     Ms Popova’s brief was in the materials provided in relation to the issue of costs.  Having read it, it does not appear to me to be of significance in the case.  The fact that the evidence was not led does not surprise me.  In all the circumstances I consider that the plaintiff ’s objection is justified.

Conclusion

[20]     The consequence of my rulings above is that in the schedule of costs lodged

with the defendant’s submissions:

(a)       items 30 and 33 are allowed;

6      Murray v BC Group (2003) Ltd HC Wellington CIV-2007-485-198, 3 August 2009; and K v

Crown Health Finances Agency HC Wellington CIV-2005-483-2678, 13 February 2008.

7      Air New Zealand Ltd v Commerce Commission [2007] NZCA 27, [2007] 2 NZLR 494 at [62].

(b)a 25 per cent uplift for steps commencing at item 31 is permitted in the sum of $11,902.63;

(c)       the fees and disbursements of Mr Gresson are allowed; and

(d)      the fee of Ms Popova is disallowed.

[21]     While counsel are at liberty to draw attention to any error in my calculation,8 costs of $85,907.13 and disbursements of $23,163.14, being in total $109,070.27, are approved.

[22]     I make no order for costs on the costs application.

Brown J

Solicitors:

Vlatkovich McGowan, Auckland for Plaintiff

Gilbert/Walker, Auckland for Defendant

8      There appears to be an error in the subtotal at the bottom of the first page of the schedule:

$74,999.50 should be $74,004.50.