Baba Nyonya Limited v Loh

[2024] NZHC 3348

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-1656

[2024] NZHC 3348

BETWEEN

BABA NYONYA LIMITED

First Plaintiff

PETER WEN FONG KUOK
Second Plaintiff

AND

TZE HWAI LOH

First Defendant

PPR RICCARTON LIMITED

(in liquidation) (Stayed) Second Defendant

Hearing:	On the papers
Counsel:	SD Campbell and AM Kokje for the Plaintiffs No memorandum for the First Defendant
Judgment:	12 November 2024

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

[Costs]

This judgment was delivered by me on 12 November 2024 at 11 am pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Wynn Williams, Christchurch Sutcliffe Matson, Auckland

BABA NYONYA LTD v LOH [2024] NZHC 3348 [12 November 2024]

Introduction

[1]    Baba Nyonya Ltd and Peter Kuok, the plaintiffs, apply for costs following their successful application for summary judgment against the first defendant, Tze Loh (Judgment). In the Judgment, I held that the first plaintiff had a right to full costs recovery under cl 9.6 of the loan agreement in issue, including costs on a solicitor- own-client basis. I directed that the parties confer to try to agree costs with evidence of costs to be provided by the plaintiffs to Mr Loh including breakdowns by staffing level.1

[2]    The plaintiffs filed a costs memorandum on 7 August 2024 and recorded that attempts were made to confer but no response was received. Correspondence confirming this was annexed to the costs memorandum filed. No memorandum has been filed in response on behalf of Mr Loh. The Registry has followed up with counsel for Mr Loh who advised he was without instructions and indicated he would file an application to withdraw as solicitor on the record. No application or costs memorandum has been filed since. This includes following  a  minute  directing Baba Nyonya to confirm whether it was registered for GST and if so to provide a GST exclusive figure for the costs claimed.

[3]    The plaintiffs have now confirmed Baba Nyonya is registered for GST and so seeks $64,980.07 in costs exclusive of GST.

[4]    Sufficient time has been allowed for a response and so I proceed to determine costs in the absence of submissions from Mr Loh.

Relevant legal principles

[5]    The starting point in any costs decision is that costs are at the discretion of the Court.2 Although the discretion is a wide one, it is not unfettered. Rule 14.2 of the High Court Rules 2016 sets out the general principles and includes:3

(a)the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:

1      Baba Nyonya Ltd v Loh [2024] NZHC 1774 at [62].

2      High Court Rules 2016, r 14.1.

3      Rule 14.2(1).

(b)an award of costs should reflect the complexity and significance of the proceeding:

…

(g)so far as possible the determination of costs should be predictable and expeditious.

[6]    Rule 14.6(4)(e) expressly provides that the Court may award costs on an indemnity basis where the party claiming costs is entitled to costs under a contract as the first plaintiff is here.

What is the appropriate costs award?

[7]    The costs claimed arise from invoices for legal fees issued to the plaintiffs between August 2023 to March 2024. Redacted copies of the invoices together with breakdowns of the hourly rates and staffing levels have been provided for all eight invoices,  either  annexed  to  the  affidavit  of  Toni   Marie  Randles   sworn  on     11 March 2024 or, for the March 2024 invoice, attached to the costs memorandum filed.

[8]    From the breakdown of the fees charged in the August 2023 to February 2024 invoices, I am satisfied that the fees have been reasonably incurred.

[9]    However, the fees charged in the March 2024 invoice are $17,500 yet the breakdown of hours provided is only in respect of fees of $14,179.50. Counsel acknowledges there is a delta of $3,320.50 between the fees invoiced and the time spent but says that as the amounts were invoiced in March 2024, he can no longer accurately recall why a premium has been applied. Counsel explains, however, that where time has not been recorded for work completed in a given period a premium will be applied to represent the time not recorded. Counsel emphasises that the overall invoice has been considered in light of the reasonable fee factors in r 9.1 of the Lawyers and Conveyances Act (Lawyers Conduct and Client Care) Rules 2008 and so he is satisfied the fees charged are reasonable.

[10]   In the circumstances, I am not prepared to award costs in respect of the premium charged on the March 2024 invoice. Whilst a premium might be consistent with r 9.1 in certain circumstances, in my view those circumstances need to be

recorded contemporaneously when settling the invoice. I am grateful to counsel for being candid in respect of his lack of recollection but am concerned that awarding costs for a premium where the reasons have not been recorded would not be awarding “costs recovery” as the indemnity provides for.

[11]The overall cost of the proceedings and associated steps are significant, with

$104,516 in costs already having been awarded in the Judgment for the period from April 2023 to July 2023.

[12]   The summary judgment proceedings resulted in an order for the first defendant to pay $1,133,717.92. I acknowledge that the costs already awarded include steps taken other than in these summary judgment proceedings but they are still relevant to the overall assessment.

[13]   A fair result, in my view, is for the premium not to be included in this further costs award. The appropriate award is therefore $61,659.57.4

GST on previous costs award

[14]   In addition, the costs awarded in the Judgment for the period from April 2023 to July 2023 were not awarded on a GST exclusive basis.

[15]I therefore reduce the amount payable by Mr Loh by the GST portion of the

$104,516 in costs already awarded in the Judgment. Baba Nyonya will be able to claim the GST back and otherwise there would be double recovery. The GST component of $104,516 is $13,632.52.

[16]Deducting $13,632.52 from the further costs award made in this judgment of

$61,659.57 results in the amount payable by Mr Loh reducing to $48,027.05.

Result

[17]   Mr Loh is to pay costs and disbursements to Baba Nyonya of $61,659.57 (excluding GST) for the period August 2023 to March 2024 on an indemnity basis less

4      $64,980.07 (costs sought exclusive of GST) – $3,320.50 = $61,659.57.

GST of $13,632.52 on the costs award of $104,516 in the Judgment issued on 7 July 2024 for a total to pay by Mr Loh of $48,027.05.

Associate Judge Sussock