Charta Packaging Ltd v Denis Howard, Eileen Stewart

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 125/01

BETWEEN	CHARTA PACKAGING LTD
Appellant

AND	DENIS HOWARD, EILEEN STEWART, PHILIP GRAY, DAVID ROSS, CHRISTOPHER ATCHLEY, TRACY POMANA, PETER RAWLINSON AND KEVIN CHAN
Respondents

Hearing:	15 July 2002
Coram:	Gault P Tipping J Anderson J
Appearances:	G L Turkington for Appellant G D Dewar for Respondents
Judgment:	15 July 2002

JUDGMENT OF THE COURT DELIVERED BY ANDERSON J

This is an application for recall of a judgment of this Court, delivered on 22 February 2002 allowing an appeal against a judgment of the Employment Court which had upheld a decision of the Employment Tribunal. The litigation concerned the periods of notice to which the respondents were entitled from their employer, the appellant, upon their becoming redundant, and the compensation each should receive for humiliation, distress and injured feelings in consequence of the process by which their employment was terminated. The appeal succeeded to the extent that this Court reduced the periods of notice and the compensatory awards which had been determined by the Tribunal and upheld in the Employment Court.
In the judgment allowing the appeal to the extent indicated, this Court dealt with costs in the following terms:
The appellant is entitled to an award of costs in that it has achieved a measure of success in the appeal albeit that the reductions in the awards are considerably less than those which it sought. In the circumstances we order that the respondents pay costs of $3000 to the appellant and that the order made in the respondents’ favour in the Employment Court stand.
The appellant seeks recall of that judgment in order to argue the issue of costs both as to the amount awarded by this Court and in respect of the as yet undetermined costs in the Employment Tribunal. The application is opposed.
The actual costs of the appellant in respect of the appeal amount to $18,308.38. Its costs for the hearing by the Employment Tribunal were in excess of $62,000 and before the Employment Court in excess of $21,000. Thus its costs have been substantial but the only order for costs in its favour to date has been that for $3,000 made by this Court.
The respondents’ own costs in respect of the Employment Tribunal hearing are $52,515.76. Counsel for the respondents informed us that his clients have been attempting to have costs fixed by the Employment Tribunal since September 2001 and that submissions have been filed but that matters have been in abeyance pending the disposition of the appeal to this Court. Of particular concern to the respondents is that the appellant has withheld from payment of the judgment to which it is subject, $18,308.38 representing its own costs on the appeal.
Before discussing the arguments on this application we note that the judgment of this Court has not yet been perfected by sealing and accordingly the applicable principles are those elucidated in such cases as Horowhenua County v Nash (No. 2) [1968] NZLR 632 at 633, Gazley v Attorney-General (1996) 10 PRNZ 47 (CA) and Rainbow Corporation Ltd v Ryde Holdings Ltd (1992) 5 PRNZ 493. Relevant to the present case is the recognised discretion to recall where for some very special reason justice so requires.
The appellant’s present application is founded on a written offer of settlement it made to the respondents before the hearing of the appeal without prejudice except as to costs, and the principles discussed in such circumstances in Calderbank v Calderbank [1975] 3 All ER at 333. No reference was made to that offer in the course of argument on the appeal and no indication was given to the Court that there were reasons why counsel wished costs to be reserved rather than fixed, in the usual way, in the course of judgment.
The Calderbank offer in the present case was constituted by two letters, the effect of which was to offer payments calculated by reference to varying degrees of notice together with one-half of the damages awarded and interest at the rate earned on interest-bearing deposit. The question of costs was addressed by the expression “costs to lie where they fall”.
Irrespective of the issue of costs before the Employment Tribunal the offers made in relation to particular respondents were more than the sums calculated by reference to the outcome of the appeal and overall the compendious value of the judgment to the respondents was approximately $9,400 less than the Calderbank offer. Accordingly, whether and to what extent such offer might be brought into account to benefit the appellant in respect of costs must be entirely dependent on the hypothesis that the respondents will be awarded not more than that difference in respect of their costs before the Tribunal. Such an award would constitute less than 20 per cent of costs actually incurred in the four day hearing before the Tribunal. We note that counsel for the respondents has submitted to the Tribunal that a reasonable figure for costs, based on an assumed rate for a senior solicitor of $350 per hour and allowing for preparation on the basis of two days for every one day of hearing would be $33,600 plus GST. The terms of the submission is that such an award would not be inappropriate.
Plainly conscious that any significance in the Calderbank offer is entirely dependent, amongst other things, on the costs before the Tribunal being fixed, the appellant has urged this Court to recall its judgment in respect of costs, then to fix the costs in respect of the Tribunal hearing and award costs on the appeal in light of the factors thereby settled.
The respondents do not wish this Court to fix costs before the Employment Tribunal. Their counsel’s submissions on costs before the Tribunal (which the appellant has itself placed before this Court as an annexure to an affidavit in support of the present application), shows that the respondent has submitted to the Employment Tribunal the relevance, for the purposes of costs, of matters concerning the conduct of the original hearing. He has submitted for example that the present appellant’s statement of defence before the Tribunal was a provocative document and that the respondents’ disclosures leading up to trial were less than sufficient. Counsel points out that included in the factors for consideration are the way a case is conducted, the conduct of the parties at the hearing and the quality of the arguments advanced. His clients wish their costs to be fixed by the Tribunal, in the light of the outcome of the appeal. He submitted that the present application is ill-conceived because the level of costs applicable in this Court are well-known and there was nothing which would have prevented the appellant from indicating the desirability that costs be reserved for argument.

Discussion

We are not satisfied that the justice of the case requires the judgment of this Court to be recalled in respect of costs. In the circumstances of the case this Court could not adequately deal with the question of costs before the Tribunal. The Tribunal itself with its specialist expertise and daily experience is the appropriate arbiter of reasonableness and appropriateness in the conduct of a case before it in so far as such matters bear on the question of reasonable costs. As a generalisation, and without attempting to undertake the type of analysis which the Tribunal is itself best suited to, we would think it unlikely that the costs which should be awarded would be at a level permitting the appellant to invoke Calderbank principles.
Mr Turkington impressed on this Court the desirability of finality and the expediency of achieving it by way of a costs order in respect of the Tribunal hearing, in this Court, whatever the impact that might have on the Calderbank situation. Whilst acknowledging the desirability of finality we are not persuaded that the circumstances amount to a very special reason, in terms of justice, requiring that the judgment be recalled. And in any event we observe that the judgment of this Court was delivered on 22 February 2002 and in the almost five months between then and now finality could no doubt have been achieved if the appellant had argued the issue of costs in the appropriate jurisdiction.

Result

For the above reasons the application for recall is dismissed with costs in favour of the respondents in the sum of $2,500 together with usual disbursements.

Solicitors
Izard Weston, Wellington for Appellant
Thomas Dewar Sziranyi Druce, Lower Hutt for Respondents

[2002] NZCA 164

15 July 2002