Bank of New Zealand v Davey

[2021] NZHC 2122

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-000046

[2021] NZHC 2122

BETWEEN

BANK OF NEW ZEALAND

Plaintiff

AND

MATTHEW ROBERT DAVEY

Defendant

Hearing:	On the papers
Counsel:	K M Paterson and C F Olds for Plaintiff C Lin for Defendant
Judgment:	13 August 2021

COSTS JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 13 August 2021 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

BANK OF NEW ZEALAND v DAVEY Costs Judgment [2021] NZHC 2122 [13 August 2021]

[1]    On 16 July 2021, I entered summary judgment for the plaintiff (the Bank) against the defendant (Mr Davey). I provided my written reasons for doing so in a judgment dated 21 July 2021.1

[2]    I awarded the Bank its solicitor-client costs as claimed by it, pursuant to the terms of the guarantee between it and Mr Davey upon which its claim was based.2 I directed the Bank’s counsel to submit a memorandum setting out the detail and quantum of the solicitor-client costs that were claimed.

[3]On 23 July 2021, I received from the Bank’s solicitors:

(a)a memorandum of costs claimed by the Bank;

(b)an affidavit as to the Bank’s costs attaching copies of the Bank’s solicitors’ invoices (with narrations); and

(c)a draft order for summary judgment for sealing.

[4]    On the same day, I issued a minute to counsel in which I drew counsels’ attention to the principles in Black v ASB Bank Ltd,3 and directed the Bank to file further submissions addressing those principles by 3 August 2021. Mr Davey was given until 10 August 2021 to file any objection to the quantum of the Bank’s claim for costs. On 2 August 2021, the Bank filed its memorandum. Mr Davey has not filed anything in opposition to the Bank’s claim for costs by 10 August 2021.

[5]    The Bank’s entitlement to solicitor-client costs has already been determined in my judgment of 16 July 2021. What is in issue is whether the amount claimed by the Bank is reasonably incurred.4

[6]The amount that has been claimed by the Bank as solicitor-client costs is

$62,500. This is exclusive of Goods and Services Tax. The Bank has also claimed

1      Bank of New Zealand v Davey [2021] NZHC 1854.

2      See also High Court Rules 2016, r 14.6(1) and (4)(e).

3      Black v ASB Bank Ltd [2012] NZCA 384.

4      Rule 14.6(1)(b) and Black v ASB Bank Ltd, above n 3, at [80].

disbursements of $1,680.56. The amount is greater than scale costs but I consider it fair and reasonable. I note the following relevant factors:

(a)The Bank’s claim was large for an amount of more than $4,000,000 including interest.

(b)Factually the case was not straightforward involving a series of bank facilities and a course of dealings spanning a number of years.

(c)The claim was opposed by Mr Davey who made several applications for further time to respond to the claim and for adjournments. He raised matters in defence that required comprehensive responses from the Bank which were without merit but considerably added to the Bank’s costs.

(d)I consider that upon a proper construction of the guarantee all tasks undertaken by the Bank’s solicitors were reasonably necessary and attract a costs indemnity except in one respect which the Bank’s solicitors have drawn to my attention. That has been more than adequately accounted for by the substantial write-off provided by the Bank in its costs claim.

(e)On a time and attendance basis the fees of the Bank’s solicitors would be $89,910, but this has been reduced to $62,500 reflecting the commercial relationship between the solicitors and the Bank and that the Bank is responsible for payment of the fees when there is no certainty they will be recovered from Mr Davey.

(f)The amount claimed reflects a total of 198 hours work by the Bank’s solicitors at an average of $315 per hour. The time engaged and the average hourly charge-out rate is appropriate.

(g)The Bank has put before the Court its solicitors’ fee invoices which are fully narrated setting out the tasks undertaken.

(h)While the hearing itself occupied a shorter period of time, it was set down for a half day and the Bank’s counsel had prepared comprehensive yet focused submissions and was ready to proceed to a fully defended hearing.

(i)The disbursements claimed are for court filing fees, service agents’ and search fees and are reasonable.

Result

[7]    I fix the quantum of the Bank’s costs on a solicitor-client basis in the amount of $62,500 along with disbursements of $1,680.56.

O G Paulsen Associate Judge

Solicitors:

Buddle Findlay, Christchurch Norling Law Limited, Auckland