Body Corporate 207650 v Singh

[2019] NZHC 2818

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000116

[2019] NZHC 2818

BETWEEN

BODY CORPORATE 207650

Judgment Creditor

AND

CHERYL SITARA SINGH

Judgment Debtor

On the papers
Judgment:	1 November 2019

JUDGMENT OF HINTON J [COSTS ON ADJUDICATION]

This judgment was delivered me on 1 November 2019 at 10:00 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

BODY CORPORATE 207650 v SINGH [2019] NZHC 2818 [1 November 2019]

[1]        This judgment relates to a disputed application for costs in the proceedings between these parties.

[2]        In a judgment dated 4 July 2019, I refused an application by Ms Singh to halt adjudication and adjudicated her bankrupt. I also held that the Body Corporate, as the successful party in the proceeding, was entitled to costs.

[3]        Section 124(2) of the Unit Titles Act 2010 provides that the amount of any unpaid levy, together with any reasonable costs incurred in collecting that levy, is recoverable as a debt due to the Body Corporate. That is the starting point here. I accept on that basis that solicitor/client costs incurred in the bankruptcy proceeding are recoverable in principle.

[4]        I also accept that the costs and disbursements set out by Mr Allan for the Body Corporate have been incurred in fact.

[5]        I have to take into account, as Mr Bryers submits, that the Court is nonetheless required to determine whether the costs claimed are reasonable.1

[6]        The judgment creditor is claiming a total of $65,132.50. The amount breaks down like this:

Fees	$44,584.00
GST	$6,687.60
Disbursements: Photocopying	$2,526.17
Ministry of Justice	$1,240.00
Bureau Charge	$195.00
Kwanto	$6,483.13	$10,444.30
$61,715.90
Fees (costs memos)	$3,416.60
$65,132.50

[7]        I am conscious that the Body Corporate (namely the other unit owners) should not bear the burden of the significant legal costs incurred in this proceeding and that

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

Ms Singh is to a very large degree the author of her own liability in terms of costs. The Body Corporate has been forced to keep replying to the endless memoranda and affidavits filed by her. But a sum close to $65,000 is a very substantial sum by way of costs and disbursements on an adjudication, even allowing for the application to halt. I agree with Mr Bryers that it seems high relative to the last costs claim and award made by me in this proceeding.2

[8]        Mr Bryers has submitted a detailed analysis of the invoices provided by the Body Corporate. I will not go line by line through the claimed costs and Mr Bryers’ objections. A robust approach is appropriate in circumstances such as this.3

[9]        In terms of disbursements, Mr Bryers objects in particular to the charge made by Kwanto of $6,483.13 for attendances relating to Mr White’s affidavit, on the basis that Mr White’s affidavit was filed out of time and prejudicial to Ms Singh. I agree with Mr Allan, however, that it was reasonable for the Body Corporate to file the affidavit in reply to evidence filed by Ms Singh. I consider that each step taken by the Body Corporate was necessary and that it was Ms Singh who acted unreasonably and who attempted to revisit matters that had already been ruled on, as I commented in my judgment of 4 July 2019.4

[10]      Mr Bryers also raised an issue about the “bureau charge” of $195 that was claimed as a disbursement by the Body Corporate. Mr Allan accepts this may not be a valid disbursement and I agree.

[11]      With the exception of the bureau charge, I do not consider any deduction is warranted  to  the claimed disbursements.  This brings the total disbursements to

$10,249.30.

[12]      Turning to the fees claim, put broadly, Mr Bryers submits that excessive time has been taken on certain steps, there are claims for a second counsel where two counsel were unnecessary, and time has been claimed for preparing costs memoranda,

2      Singh v Body Corporate 207650 [2019] NZHC 168.

3      Black v ASB Bank Ltd [2012] NZCA 384 at [77]-[99]; and Frater Williams & Co Ltd v Australian Guarantee Corp (NZ) Ltd (1994) 2 ConvC 191,873 (CA) at 191,887.

4      Body Corporate 207650 v Singh [2019] NZHC 1547 at [36].

which should be disallowed as Courts do not usually award costs on costs. In addition, Mr Bryers submits, and I agree, that the information initially provided by the Body Corporate was inadequate to allow Mr Bryers or the Court to assess the reasonableness of costs claimed. There was no detailed breakdown by time or by staff member.  In an application for indemnity costs, especially at this level, detailed information should be provided to enable the Court to examine whether the costs are reasonable. That information was only provided in a reply memorandum.

[13]      I do not consider it is appropriate to award any costs in respect of costs memoranda, given much of the work was required because of the inadequacy of the Body Corporate’s first memorandum, and the Courts are reluctant to award costs on costs in any event. I would therefore not allow the $3,416.60 claimed for preparing the costs memoranda.

[14]      In addition, I have  decided,  taking  into  account  the  matters  set  out  in  Mr Bryers’ memorandum, to reduce the balance of the fees claimed, inclusive of GST, down to $43,000. I note this is still a substantial sum for a matter of this nature.

[15]I therefore award costs and disbursements (including GST) of $53,249.30.

[16]      Finally, I observe that it gives no-one any satisfaction to see the amount of money, in particular of Ms Singh’s equity in her unit, that has been eaten up in costs in this proceeding.

Hinton J

Solicitors:

Mr Bryers, Barrister, Auckland Grove Darlow & Partners, Auckland