Ballance Agri-Nutrients Limited v Ravensdown Fertiliser Co-Operative Limited HC Auckland CIV-2009-404-002171

[2011] NZHC 1366

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-002171

BETWEEN  BALLANCE AGRI-NUTRIENTS LIMITED

Appellant

ANDRAVENSDOWN FERTILISER CO- OPERATIVE LIMITED & LINCOLN UNIVERSITY

Respondent

Judgment:      11 August 2011 at 4:00 PM

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 11 August 2011 at 4:00 pm

pursuant to R 11.5 of the High Court Rules.

Registrar / Deputy Registrar

Date……………………….

Solicitors:           A J Park, P O Box 565, Auckland

Fax: [phone] – K W McLeod / A Baker

Baldwins Law Limited, P O Box 5999 Wellesley Street, Auckland 1141
Fax: [phone]

Counsel:             B W F Brown QC, P O Box 5161, Lambton Quay, Wellington 6015

Fax: [phone]
J G Miles QC, P O Box 4338 Shortland Street, Auckland 1140

Fax: [phone]

BALLANCE AGRI-NUTRIENTS LTD V RAVENSDOWN FERTILISER CO-OPERATIVE LTD & LINCOLN UNIVERSITY HC AK CIV-2009-404-002171 11 August 2011

[1]      In my decision of 4 March 2011 I dismissed Ballance’s appeal and allowed Ravensdown’s cross-appeal.  Ravensdown now seeks costs.  In doing so, it seeks to re-categorise the proceeding from the original category 2 basis to category 3.  It also seeks costs not usually allowed on an appeal to recognise work required as a result of the further evidence adduced and increased costs to reflect the time required to deal with it.  Ballance resists the re-categorisation of the proceeding and any increase in costs.

Costs categorisation

[2]      Generally, a costs categorisation will remain the same for the life of the proceeding.  Rule 14.3(2) does allow for a proceeding to be re-categorised, but there must be special reasons  for doing so.   In Tindall v Far North District Council Winkelmann J, refusing to alter the costs categorisation, commented that:[1]

[11]     When a party is seeking a retrospective re-classification of entire proceedings at the point in time when judgment has been delivered, the fact that the skill classification initially determined for the proceedings is not adequate is unlikely to be itself a “special reason”.

[1] Tindall v Far North District Council HC Auckland CIV-2003-488-135, 25 May 2007.

[3]      I respectfully agree with that statement.  In Tindall, however, it did not appear that anything had occurred between the initial categorisation and the date of trial to increase the issues or the complexity and scope of the proceeding.  That cannot be said  of  the  present  proceeding,  in  which  the  parties  were  required  to  spend significant time and effort addressing evidence that had not been part of the original proceeding.

[4]      In May 2009 Venning J, with the consent of both parties, categorised this proceeding as category 2B.  At that stage the matter was a straightforward appeal from the decision of the Assistant Commissioner of Patents.  Even then the case was one of some complexity; both parties were represented by senior counsel, there was

a substantial volume of technical evidence and at least one novel legal issue was in

contention.   Ravensdown does not, however, say that the 2B category was inappropriate at that stage.    Rather, it asserts that because of subsequent developments the appeal became much more complex and should be re-categorised as a category 3.

[5]      The reason that the case became more complex was that leave was given to Ballance to adduce further evidence on its appeal and this led to a very large amount of evidence from both parties.   In February 2010 Ballance obtained leave to file affirmations by two additional witnesses.  Ravensdown answered that new evidence by way of further affirmations from three of its existing witnesses.  Ballance’s reply to those affirmations came from a new witness, Dr Edmeades, whose involvement was controversial because of his previous relationship with Ravensdown and whose evidence was hotly contested.   This led to the filing of further evidence from Ravensdown (and the vacation of the allocated hearing date).

[6]      As  a  result,  the  form  in  which  the  appeal  came  before  me  required consideration  of a substantial  amount  of  evidence that  had  not  been  before the Assistant Commissioner and of new issues arising therefrom (such as Dr Edmeades’ objectivity).   What was expected to be a one-day appeal from the decision of the Assistant Commissioner turned into a hearing that ran for slightly more than three days and involved, not only questions of error by the Assistant Commissioner, but also assessment of the new evidence.

[7]      Whilst  the appeal  in  its  original  form  might  have justified  a category 3 categorisation, I would not have been inclined to make any alternation to Venning J’s categorisation had it not been for the subsequent developments.  The very significant amount of new material added in the months leading up to the appeal hearing has led me to conclude that the matter cannot properly be regarded as a category 2 proceeding; it is properly regarded as category 3, being a proceeding that because of its complexity and significance required counsel to have special skill and experience in the High Court.

[8]      The change to category 3 does not say anything about the appropriate time band.  Ravensdown suggests that band C is appropriate for the steps in the case that occurred following Ballance’s application for leave to adduce further evidence.

[9]      In addition, because the steps provided in Schedule 3 in relation to appeals do not include the preparation of evidence, Ravensdown seeks to have allowance made to recognise this additional cost, as was done in Paul v Hume Pine (NZ) Ltd.[2]  It also seeks increased costs, as provided for under r 14.6(3)(a) which applies where the nature of the proceeding is such that the time required by the party claiming costs would substantially exceed the time allocated under band C.

[2] Paul v Hume Pine (NZ) Ltd HC Auckland CIV-2005-404-1752, 18 May 2006, Rodney Hansen J at [28].

[10]     Ballance maintains that the time allocation for all steps should remain on a band B basis.  It also resists an order for increased costs under r 14.6(3)(a) because there was no suggestion by Ravensdown that the time actually spent by it substantially exceeded the relevant time allocation and maintains that the uplift of

50%  being  sought  by  Ravensdown  would  be  unjustified  and  would  penalise Ballance.   Ravensdown, however, has responded by saying that it did spend considerably more time on the appeal than the time allowed and would be prepared to provide copies of its solicitors’ invoices.

[11]     It is clear that a very large amount of work was undertaken by both parties as a result of the additional evidence that was allowed to be adduced and that this work is beyond the steps recoverable in relation to appeals under Schedule 3.  It would be unfair to Ravensdown to limit the costs to the steps recoverable in relation to appeals under Schedule 3.  The reality of this appeal is that it involved steps that were in the nature of work normally undertaken in relation to the substantive hearing.  A good deal of the evidence that I was directed to had been filed following the Assistant

Commissioner’s judgment and the filing of the original notice of appeal.

[12]     I consider that the work undertaken in preparation and the conduct of the appeal hearing justifies band C.   Ravensdown is entitled to recognition of the additional work required as a result of the leave granted to adduce further evidence. This can be achieved by allowing a 50% uplift in respect of the work attracting the

3C costs.

Ravensdown’s interlocutory application of 28 May 2010

[13]     I have already referred to the fact that, following the filing of Dr Edmeades’ affirmation, Ravensdown obtained leave to file further evidence in response, leave to cross-examine Dr Edmeades and vacation of the hearing date then set for 9-10 June

1010.  It filed further evidence from Dr Cameron, Dr Di and Messrs Manning and

Russell.  It did not, however, exercise its right to cross-examine Dr Edmeades.

[14]     Having succeeded overall in opposing the appeal Ravensdown has included that interlocutory application in its claim for costs.  Ballance maintains that because the application involved an indulgence to allow Ravensdown to file further evidence it should not be entitled to costs on the application.  Further, it points to the fact that cross-examination was not pursued and that I found it unnecessary to make any finding in relation to the serious allegations of bias levelled against Dr Edmeades.

[15]     I do  not  see any reason  that  Ravensdown  should  not  have  costs  on  the successful   interlocutory   application.      The   application   was   prompted   by Dr Edmeades’ extensive affirmation and it was not an unreasonable application to make in the circumstances; the fact that I found it unnecessary to deal with the allegations of bias does not mean that it was unreasonable for Ravensdown to raise those concerns.  The fact that Ravendown’s counsel ultimately concluded that cross- examination of Dr Edmeades was unnecessary should not preclude costs being awarded, since that aspect of the application would not, in itself, have required significant time.

[16]     I do not, however, consider that the application should attract costs on a 3C

basis.

[17]     Ravensdown is entitled to costs on the following basis: (a)     Category 3.

(b)Time band B for steps up to and including its interlocutory application of 28 May 2010.

(c)       Time band C for all subsequent steps.

(d)      An uplift of 50% in respect of the steps calculated on the 3C basis. (e)           Disbursements as sought.

[18]     These directions will require re-calculation by counsel.    If counsel cannot agree they should file further memoranda.

[19]     I note that the Court holds $3,200 in security for costs.  That may be paid out to Ravensdown in part payment of the costs awarded.

P Courtney J