Bhargav v First Trust Limited
[2023] NZHC 1086
•8 May 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2021-404-001260
[2023] NZHC 1086
BETWEEN AMEET BHARGAV and RENU KHAJURIA
Plaintiffs
AND
FIRST TRUST LIMITED
First Defendant
DAVINDER SINGH RAHAL
Second Defendantcontinued overleaf…
Hearing: On the papers Appearances:
S E Wroe & B M Foster for the Plaintiffs
A R B Barker KC (via VMR) & A Grant for the First & Second Defendant
M R T Colthart & B Sanders for the Third & Fourth Defendants N K Dhaliwal for the Fifth & Sixth Defendants
Judgment:
8 May 2023
JUDGMENT OF TAHANA J
[Costs of applications to set aside formal proof judgment]
This judgment was delivered by me on 8 May 2023 at 4.00pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
BHARGAV v FIRST TRUST LIMITED [Costs of applications to set aside formal proof judgment] [2023] NZHC 1086 [8 May 2023]
continued from previous page… AND
METSONS (NZ) LIMITED
Third Defendant
VINAY MEHTA
Fourth DefendantLOCAL REALTY LIMITED
Fifth Defendant
GURBIR SINGH BAL
Sixth Defendant
Solicitors/Counsel:
Eldon Chambers
Grant & Co, AucklandAndrew Barker KC, Auckland (Shortland Chambers) FortyEight Shortland, Auckland
Darroch Forrest Lawyers, Wellington Kennedys Law, Auckland
Introduction
[1] In my judgment dated 10 February 2023,1 I indicated that my preliminary view was that the first to fourth defendants (the defendants) should pay the plaintiffs’ costs. I directed the parties to file memoranda if they were unable to agree costs. Costs have not been agreed and memoranda have been filed.
[2]The plaintiffs claim costs of:
(a)$10,755.00 plus disbursements of $359.25 against the first and second defendants; and
(b)$11,711.00 plus disbursements of $1,822.55 against the third and fourth defendants.
[3] The first and second defendants do not oppose paying costs but say that costs should be payable on a category 2B basis and costs should be apportioned between the defendants so that they pay costs of $5,616.50 and disbursements of $359.25.
[4] The third and fourth defendants submit that costs should lie where they fall, or in the alternative, should be payable on a 2B basis and apportioned between the defendants so that the third and fourth defendants pay costs of $4,889.50 and disbursements of $1,081.40.
[5]I therefore need to determine:
(a)whether costs should lie where they fall;
(b)whether it is appropriate that some costs be payable on a category 2C basis; and
(c)whether the overall costs claimed are reasonable.
1 Bhargav v First Trust Limited [2023] NZHC 174.
Analysis
Should costs lie where they fall?
[6] I reject the third and fourth defendants’ submission that costs should lie where they fall. The plaintiffs have been put to the task of responding to the application in circumstances where, I held that the third and fourth defendants had no reasonable explanation for the delay in responding to the claim.2 It was appropriate for the plaintiffs to oppose and defend the application.
[7] This is not a case where the plaintiffs are at fault, as was the position in Hansa Limited (in liq) v Hibbs3 where the Court held that costs should lie where they fall. I confirm my position that the defendants should pay the plaintiffs’ costs.
Should costs be awarded on a category 2C basis?
[8] The plaintiffs claim costs on a 2C basis for preparing an opposition to each of the defendants’ respective applications to set aside the formal proof judgment. Band C allocates two days for this, whereas band B allocates 0.6 days. The plaintiffs claim a total of four days (two days for the first and second defendants, and two days for the third and fourth defendants).
[9] An award of costs “should reflect the complexity and significance of the proceeding”4 assessed using the categories of complexity and time bands provided in the High Court Rules 2016. There are three categories and three bands.
[10]Rule 14.5(2) provides:
(2)A determination of what is a reasonable time for a step under subclause (1) must be made by reference—
(a)to band A, if a comparatively small amount of time is considered reasonable; or
(b)to band B, if a normal amount of time is considered reasonable; or
2 At [36].
3 Hansa Ltd (in liq) v Hibbs [2018] NZHC 1832.
4 High Court Rules 2016, r 14.2(1)(b).
(c)to band C, if a comparatively large amount of time for the particular step is considered reasonable.
[11] The factors to be considered in determining whether an uplift from one band to another is appropriate were set out in TSB Bank Ltd v Dollimore, as follows:5
(a)the scope of the facts that are material to the issue;
(b)the degree of difficulty in identifying the relevant law; and
(c)the number and complexity of the arguments by the parties applying the law to the facts.
[12] The plaintiffs have previously accepted that the proceedings should be classified as category 2B for costs purposes. Associate Judge Bell confirmed in a minute dated 13 October 2021 that the proceeding is “category 2 for costs.” I accept that the plaintiffs are not bound by their previous indication and that it is appropriate to consider the factors identified at [11] above.
[13] The first and second defendants filed an affidavit of over 200 pages, including more than 180 pages of exhibits. The third and fourth defendants filed three affidavits. Two further affidavits were filed in reply so are not relevant to preparation of the notice of opposition.
[14] The plaintiff filed one additional affidavit in opposition and relied on the affidavits filed in the formal proof hearing. I accept that counsel for the plaintiffs would have had to review all the affidavits and the exhibits in preparing any opposition. There was a large volume of material to review and consider. The affidavits filed by the defendants also disclosed facts of which the plaintiff would not have previously been aware. Consideration of those facts would have required time.
[15] While the legal issues were not difficult, there were a number of arguments made in support of the applications. While I accept that the steps taken by the plaintiff in the formal proof hearing did assist in the preparation of the opposition to the
5 TSB Bank Ltd v Dollimore [2016] NZHC 253 at [8].
applications, this does not detract from the significant volume of new information that needed to be considered. I therefore consider that band C for the preparation of the opposition to the interlocutory applications is appropriate and that two days should be allocated to respond to each of those applications.
Joint memorandum dated 7 September 2002
[16] The third and fourth defendants submit that the plaintiffs should not be entitled to claim costs for the joint memorandum filed on 7 September 2022. That memorandum was prepared by counsel for the third and fourth defendants and was provided to the plaintiffs’ counsel to review. Only one word was changed by plaintiffs’ counsel.
[17] The plaintiffs are entitled to costs for time spent by their counsel reviewing the memorandum and obtaining instructions in relation to that memorandum. The changes made are not a reflection of the time required to consider the memorandum and obtain instructions. The plaintiffs are entitled to claim these costs.
Preparation of submissions for hearing
[18] The defendants submit that the costs claimed for preparation of submissions (1.5 days per set of submissions) should be shared between the defendants because the plaintiffs prepared one set of submissions (1.5 days instead of 3 days total).
[19] The time allocated for preparation of submissions needs to take account of the time required to review the submissions of each set of defendants and the evidence to which they refer. While one set of submissions was prepared by the plaintiffs to respond to all defendants, this does not remove the need to review each set of defendants’ submissions (and any evidence on which those submissions rely). Against that, I accept that the plaintiffs’ submissions responded to common issues and there was time saved because the applications were heard together. In these circumstances, while it is appropriate to acknowledge the time saved, I do not consider that it justifies reducing the total time by 50 per cent. I consider that an allocation of one day to each set of defendants is reasonable.
Preparation of bundle
[20] The third and fourth defendants also submit that the plaintiffs should not be entitled to claim costs for preparation of a common bundle. I disagree. The original common bundle filed did not have working hyperlinks. The plaintiffs filed a common bundle with hyperlinks that worked. The Court relied on the electronic bundle filed by the plaintiffs to access any hyperlinks. Further, the third and fourth defendants did not wish to file a hard copy of the common bundle so that the electronic bundle was important.
[21] The plaintiffs are therefore entitled to claim costs for common bundle preparation.
Disbursements
[22] The third and fourth defendants also argue that 50 per cent of the plaintiffs’ expert costs should be allocated to the first and second defendants. The expert evidence was relevant to all defendants. It is reasonable that those costs be allocated 50 per cent as between each set of defendants.
Result
[23] I order that the defendants pay the plaintiffs’ costs, calculated in accordance with the tables attached as Appendix A. Accordingly, I award costs in favour of the plaintiffs as follows:
(a)Costs of $9,560.00 plus disbursements of $1,125.40 against the first and second defendants; and
(b)Costs of $10,516.00 plus disbursements of $1,056.40 against the third and fourth defendants.
Tahana J
Appendix A
Costs and disbursements payable by the first and second defendants:
Item Time Total Amount Share Total Payable Preparing opposition to interlocutory application by FTL and Rahal filed on 31.10.22 (Band C) 2.0 $4,780 100% $4,780 Plaintiffs’ memorandum for mention dated 19.10.2022 0.4 $956 50% $478 Preparation of written submissions for FTL/Rahal application 1.0 $2,390 100% $2,390 Bundle preparation (to fix applicants’ bundle) 0.6 $1,434 50% $717 Appearance at hearing on 07.12.22 1.0 $2,390 50% $1,195 Total 5 $11,950 $9,560
Description Amount Share Total Payable Filing fee for Notice of Opposition $110 100% $110 Sealing fee for formal proof judgment $50 50% $25 Service of sealed judgment by FEDS Network (Inv2580 07.08.2022) $224.25 100% $224.25 Arcadia Holdings Ltd – expert witness costs for Biggelaar reply evidence (Inv09385 dated 30.09.2022) $1,532.30 50% $766.15 Total (including GST) $1,916.55 $1,125.40
Costs and disbursements payable by the third and fourth defendants:
Costs Time Total Amount Share Total Payable Preparing opposition to interlocutory application by Mehta and Metsons filed on 15.09.22 (Band C) 2 $4,780 100% $4,780 Memorandum (joint memo with counsel for Mehta/Metsons dated 07.09.2022) 0.4 $956 100% $956 Plaintiffs’ memorandum for mention dated 19.10.2022 0.4 $956 50% $478 Preparation of written submissions for Mehta/Metsons’ application 1.0 $2,390 100% $2,390 Bundle preparation (to fix applicants’ bundle) 0.6 $1,434 50% $717 Appearance at hearing on 07.12.22 1 $2,390 50% $1,195 Total 5.4 $12,906 $10,516
Disbursements - Description Amount Share Total Payable Filing fee for Notice of Opposition $110 100% $110 Sealing fee for formal proof judgment $50 50% $25 Service of sealed judgment by FEDS Network (Inv2697 30.08.2022) $155.25 100% $155.25 Arcadia Holdings Ltd – expert witness costs for Biggelaar reply evidence (Inv09385 dated 30.09.2022) $1,532.30 50% $766.15 Total (including GST) $1,847.55 $1,056.40
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