Banicevich v AMP Services (NZ) Limited

[2016] NZHC 274

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2013-404-5272

[2016] NZHC 274

BETWEEN

GREGORY IVAN BANICEVICH

Plaintiff

AND

AMP SERVICES (NZ) LIMITED

First Defendant

THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA LIMITED

Second Defendant

Hearing:

(on the papers)

Appearances:

M Black and S I Perese for the Plaintiff

D McLellan QC and D Durovich for the Defendants

Judgment:

25 February 2016

JUDGMENT OF WOODHOUSE J

(Costs)

This judgment was delivered by me on 25 February 2016 at 3:30 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

……………………………………

Counsel/Solicitors:

Mr M C Black, Barrister, Auckland

Mr D Dennis (plaintiff’s solicitor), Hammonds, Solicitors, Dargaville Mr D McLellan QC, Barrister, Auckland

BANICEVICH v AMP SERVICES (NZ) LTD [2016] NZHC 274 [25 February 2016]

Mr D A Campbell and Ms D I Durovich (defendants’ solicitors), Kensington Swan, Solicitors, Auckland

[1]                  In the substantive judgment in this proceeding the plaintiff’s several claims were dismissed, judgment was given for the second defendant on a counterclaim, and there was an order that the defendants are entitled to costs without fixing the quantum.1

[2]                  The defendants have sought costs fixed on a 2C basis for all steps, or at least for discovery and trial preparation, rather than costs on a 2B basis as had been fixed at the first case management conference. The defendants also seek an uplift of 50%.

[3]                  The plaintiff opposes the defendants’ application for costs in excess of the 2B scale. The plaintiff also challenges three items in the defendants’ costs schedule and expresses reservations in relation to the quantum of a fee charged for expert accounting services and evidence.2

[4]                  The submissions for both parties are set out in considerable detail in their costs memoranda. The plaintiff takes issue with most contentions of fact advanced by the defendants. The plaintiff also advances one substantial argument of default by the defendants in support of an argument that some costs items for discovery should be disallowed. I do not intend to summarise the range of issues or my conclusions on each point of contention. In general, costs applications should not require what would amount to an expanded judgment with findings of fact on a range of issues. It is sufficient to record that I am satisfied that a number of the arguments for the defendants have merit, and some of the responses for the plaintiff have merit, but the broad assessment substantially favours the defendants.

[5]                  What also favours the defendants, underpins the preceding conclusion, and provides a firm foundation for an award of costs in excess of the basic 2B scale, are conclusions already recorded, with reasons, in the substantive judgment on all of the plaintiff’s claims and arguments and on the counterclaim.

[6]                  Most significantly, the plaintiff’s primary claim that he had suffered trauma covered by the policy was untenable. The plaintiff’s own expert witnesses, whatever

1      Banicevich v AMP Services (NZ) Ltd [2015] NZHC 2273.

2      The plaintiff’s costs memorandum was filed on 17 November 2015, following an extension of time, but it was not forwarded to me.

their views on the suitability of the policy wording (which were not relevant), expressly confirmed that essential elements for cover were not present.

[7]                  In addition, and on another central issue, the plaintiff pleaded, and initially gave evidence on, matters of fact of consequence. But in the end he conceded his contentions were incorrect. I am referring here, in particular, to the plaintiff’s pleadings to the effect that he had not received notices from the defendants, with those contentions asserted in his evidence-in-chief. Much of the plaintiff’s focus, resulting in a great deal of evidence, was on the question whether the policy had been cancelled or, if cancelled, whether AMP had reinstated it. The plaintiff failed in this central argument. That of itself might not be a basis for costs above the 2B scale if success on the issue would have provided a foundation for a tenable primary claim; that is to say, entitlement under the policy. But there was no tenable claim as just noted and dealt with fully in the substantive judgment. In other words, contentions of fact about notices which the plaintiff knew were incorrect were advanced to support a claim which could not succeed.

[8]                  Two of the grounds for an order for increased costs are that a party has pursued an argument that lacks merit and that a party, without reasonable justification, has failed to admit facts or accept a legal argument. Those grounds are made out. In some respects it may be said that one of the grounds for an order for indemnity costs is also made out: indemnity costs may be awarded if a party has acted improperly or unnecessarily in commencing or continuing proceedings. Similar considerations apply to a defence without merit to a counterclaim, which can be said to be the case here. The defendants have not sought indemnity costs, but these observations are relevant to the claim for increased costs and, more broadly, to exercise of the ultimate discretion that remains in the Court under r 14.1(1).

[9]                  On the question whether costs should be on a 2B or 2C basis, or in part on a 2C basis, I am satisfied, having weighed the competing arguments on the matters of detail, that costs for the defendants should in general be on a 2B basis, as set out in schedule A to the defendants’ costs memorandum except that costs for items commencing with the first item numbered 22 (“filing interlocutory application – particular and further discovery, directions”) through to item 33 (“preparation for

hearing”) should be on a 2C basis as set out in schedule B. Those costs, assessed on scale, are to be increased by 50%.

[10]              There is the separate question whether the amount charged for the services provided by Mr Weir of Deloitte, being $42,568.30, plus GST, is reasonable. Mr Weir gave expert evidence. This was preceded by detailed analysis of a range of information required not only to support the defendants’ affirmative defence, but to counter arguments advanced by Mr Banicevich. The total number of hours recorded in the invoice, with these hours applying to three separate categories of work, was

134.5 hours. I am satisfied that that amount of time is reasonable and the fee is in turn reasonable.

Result

[11]The defendants are entitled to costs to be calculated on the basis recorded at

[9] above together with disbursements in a total sum of $57,219.91.

Woodhouse J