Carolan v NZ Real Estate Credit Limited

[2017] NZHC 630

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2015-404-000483

[2017] NZHC 630

BETWEEN

MICHAEL JOSEPH CHRISTIAN CAROLAN
Plaintiff

AND

NZ REAL ESTATE CREDIT LIMITED

First Defendant/
First Counterclaim Plaintiff

GEORGE KERR
Second Defendant

Defendants continued over

Hearing:

[On the Papers]

Counsel:

No Appearance of, or for the Plaintiff

J K Goodall and E D R Offner for the Defendants M A Corlett QC for the Non-Party Applicant

Judgment:

4 April 2017

JUDGMENT OF EDWARDS J

[re Costs]

This judgment was delivered by Justice Edwards on 4 April 2017 at 11.30 am, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

CAROLAN v NZ REAL ESTATE CREDIT LTD [2017] NZHC 630 [4 April 2017]

EQUITY PARTNERS CAPITAL MARKETS LIMITED

Third Defendant/
Second Counterclaim Plaintiff

EQUITY PARTNERS LIMITED
Fourth Defendant/
Third Counterclaim Plaintiff

EQUITY PARTNERS ASSET MANAGEMENTS LIMITED

Fifth Defendant/
Fourth Counterclaim Plaintiff

CLAYMORE FINANCIAL SERVICES LIMITED

Sixth Defendant/
Fifth Counterclaim Plaintiff

Introduction

[1]                 The respondents successfully opposed an application by a non-party (Millinium) for access to the Court file.1 They now seek costs in the sum of $12,097 plus disbursements. That sum is calculated on a schedule 2B basis with the exception of costs for the opposition to the application which are calculated on a schedule 2C basis.

[2]                 Millinium accepts that an award of costs on a 2B basis is appropriate, but it disputes the respondents’ calculations and submits that costs in the sum of $2,502.67 should be awarded instead.

Categorisation

[3]                 The parties are agreed that the application was of average complexity and accordingly category 2B is appropriate for most of the steps in the proceeding. However, the respondents seek costs on a 2C basis for preparing the opposition to the application on the grounds that a 2B categorisation does not accurately reflect the time and cost involved for that step.

[4]                 Although the application for access was made informally, I consider it appropriate to calculate scale costs as if the request was an interlocutory application. Treating the respondents’ memorandum dated 30 August 2016 as the respondents’ notice of opposition is a fair reflection of the reasonable costs incurred for that step.

[5]                 However, whilst I accept that preparing the opposition involved considerable time and effort in liaising with overseas counsel and Torchlight representatives, I do not consider that a 2C categorisation for that step is warranted.

[6]                 The second respondent was intimately involved in the Cayman Islands proceedings and was able to provide instructions accordingly. Furthermore, the status of Millinium as a trustee of the Bear Real Opportunities Fund was not an issue of

1      Carolan v NZ Real Estate Credit Ltd [2017] NZHC 156.

central importance to the respondents’ opposition to access, and nor did it feature as a factor in declining the request.

Written submissions

[7]                 The respondents claim for the memorandum of 2 February 2017, and also claim costs for the preparation of written submissions, despite the fact that no written submissions were filed and served.

[8]                 The two memoranda filed by the respondents formed the backbone of the respondents’ submissions. I have already allowed costs for the 30 August 2016 memorandum by way of analogy to a notice of opposition. Only one claim of costs should be allowed for the memorandum of 2 February 2017. The issue is whether to allocate costs by analogy to the allocation for written submissions, or to the filing of a memorandum.

[9]                 In my view, an allowance by way of analogy to the preparation of written submissions accurately reflects the time and effort to prepare submissions (both written and oral) on the key grounds of opposition which were ultimately successful. An allowance for written submissions is appropriate in those circumstances.

Appearance at hearing before Fogarty J

[10]              The respondents’ calculation includes a hearing measured on quarter days before Fogarty J on 3 February 2017. That hearing did not ultimately proceed because Fogarty J recused himself from determining the access request. Millinium submits that the costs of that hearing should simply lie where they fall.

[11]              The claim for that hearing time is appropriately made in my view. The attendance at the hearing would not have been necessary had Millinium not made the access request. Costs follow the event and the appearance before Fogarty J was a step in the proceeding for which costs may be claimed.

Second or subsequent counsel

[12]The respondents claim for a second counsel. Millinium disputes this claim.

[13]              Both parties had second counsel at certain stages in the proceeding. Although the issues raised by the request did not require a 2C categorisation, I accept that the number and nature of the issues raised by the application required the assistance of second counsel. Such an allowance is appropriate.

Costs on costs

[14]              Both parties have had a measure of success in their respective costs arguments. The costs of claiming costs should therefore lie where they fall and no separate allowance is warranted.

Costs calculation

[15]              I accordingly award costs to the respondents in the sum of $7,191. That sum is calculated as follows:

HCR Item	Attendance	Scale	Cost
23	Filing opposition to interlocutory application including memorandum of 30 August 2016 filed by way of notice of opposition	2B	$ 1,338.00
24	Preparation of written submissions	2B	$ 3,345.00
34	Appearance at hearing for principal counsel (the time occupied by the hearing measured in quarter days: 0.25  days before Fogarty J on   3 February 2017 and 0.5 days before Edwards J on 8 February 2017)	2B	$ 1,672.00
35	Second or subsequent counsel (50 per cent of allowance for appearance for principal counsel)	2B	$     836.00
Total	$7,191.00

[16]              I also allow disbursements in the sum of $249.67 as claimed by the respondents.

Result

[17]              The respondents are awarded costs in the sum of $7,191 and disbursements in the sum of $249.67.

Edwards J