Cooper and Jones v Peach Cornwall & Partners HC Wanganui CIV-2009-483-325

[2011] NZHC 1350

IN THE HIGH COURT OF NEW ZEALAND WANGANUI REGISTRY

CIV-2009-483-325

BETWEEN  JOHN COUTTS COOPER AND SHIRLEY ALMA JONES AS TRUSTEES OF THE JOHN COUTTS COOPER TRUST

Plaintiff

ANDPEACH CORNWALL & PARTNERS Defendant

ANDACE INSURANCE LIMITED Third Party

Counsel:         C. Light - Counsel for Plaintiff

V.M. Heward - Counsel for the Third Party

Judgment:      3 August 2011 at 3:00 PM

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by Associate Judge Gendall on 3 August 2011 at 3.00 pm under r 11.5 of the High Court Rules.

Solicitors:           Stace Hammond, Solicitors, PO Box 19101, Hamilton

Anderson Lloyd, Solicitors, Private Bag 1959, Dunedin

JC COOPER AND SA JONES AS TRUSTEES OF THE JOHN COUTTS COOPER TRUST V PEACH CORNWALL & PARTNERS HC WANG CIV-2009-483-325 3 August 2011

Introduction

[1]       By judgment delivered by me on 24 May 2011 I found in favour of the plaintiffs on a strike out application brought by the third party to these proceedings, ACE Insurance Limited.  At [36] of that decision I awarded costs and disbursements to the plaintiffs which were to be fixed by the Registrar.  The third party has now objected to certain disbursements claimed by the plaintiffs for travel and accommodation expenses of out of town counsel. The issue is whether those disbursements were reasonably necessary for the conduct of the proceeding as required by rule 14.12(2)(c).

Counsels’ Submissions and My Decision

[2]       In recent times, beginning with the decision of Clifford J in Commerce Commission v Bay of Plenty Electricity Ltd HC Wellington CIV-2001-485-917, 4 December 2008, the High Court has adopted a broader approach to situations where it was thought to be reasonably necessary for out of town counsel to be engaged.  While I note the statement of Rodney Hansen J in Buis v Accident Compensation Corporation (2010) 19 PRNZ 585 at [25] that it is not possible to lay down any hard and fast rules, it is perhaps helpful to distil some principles from those cases:

(a)     Whether the engagement of out of town counsel is reasonably necessary will depend on the circumstances of the particular case: Turners & Growers Ltd v Zespri Group Ltd HC Auckland CIV-2009-404-4392, 29 October 2010 at [21]; Buis v Accident Compensation Corporation (2010) 19 PRNZ 585 at [25].

(b)     Where a case is complex, for example in the area of competition law, the market is a national one and the concept of out of town counsel is outdated: Commerce Commission v Bay of Plenty Electricity Ltd HC Wellington CIV-

2001-485-917, 4 December 2008 at [50].

(c)     In the context of relatively routine matters, such as an application to set aside a statutory demand, which do not require the resolution of complex legal issues out of town counsel will not be necessary: Ainsworth & Collinson v Edmunds  (2009)  19  PRNZ  565  at  [9];  Domus  Redux  Ltd  v  Davidson Armstrong & Campbell Solicitors Nominee Company Ltd HC Auckland CIV-

2009-404-5984, 2 December 2009 at [28].

(d)       Merely because a matter is interlocutory, however, does not mean that out of town counsel will not be reasonably necessary: Radioworks Ltd v Commissioner  of  Inland  Revenue  HC  Auckland  CIV-2007-404-5853,  9

February 2011.

(e)       For a case with wide practical and public interest, implications arise that out of town counsel are reasonably necessary: Turners & Growers Ltd v Zespri Group Ltd HC Auckland CIV-2009-404-4392, 29 October 2010 at [22].

(f)       Where it is otherwise appropriate for out of town counsel to be instructed, for example where the client’s head office and all deponents of affidavits are in a certain locality, it is reasonable for out of town counsel to continue through to hearing: Buis v Accident Compensation Corporation (2010) 19 PRNZ 585 at [26].

[3]       In  this  case,  counsel  for  the  third  party  submits  that  there  are  no  particular circumstances here which render a claim for costs for out of town counsel reasonably necessary.  Counsel argues that the application to strike out concerned a single question of law.  Counsel further submits that even if out of town counsel was reasonably necessary, the definition of “travel and accommodation expenses” does not include meal disbursements.

[4]       I accept that the legal issues here were narrow in scope.     That does not mean, however, that the matter was not complex.  Indeed, in my judgment I noted that the matter is finely balanced.  In those circumstances, I am satisfied that this was not a routine matter and that a decision in favour of strike out could have disposed of that aspect of the case. Accordingly, in my view, employment of out-of-town counsel was reasonable in the present case.

[5]       As for meal disbursements, I do not consider that to be a claimable disbursement. Rule 14.12 provides:

disbursement, in relation to a proceeding,—

(a)  means an expense paid or incurred for the purposes of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor's bill of costs; and

…

(2)   A  disbursement must,  if  claimed  and  verified, be  included  in  the  costs awarded for a proceeding to the extent that it is—

(a)    of a class that is either—

(i) approved by the court for the purposes of the proceeding; or

(ii) specified in paragraph (b) of subclause (1); and

(b)  specific to the conduct of the proceeding; and

(c)  reasonably necessary for the conduct of the proceeding; and

(d)  reasonable in amount.

[6]       A  meal  disbursement  cannot  be  reasonably  necessary  for  the  conduct  of  the proceeding.  Local counsel would not be entitled to claim for such a cost and so neither may out of town counsel.  Merely because counsel may be staying in paid accommodation does not necessarily mean that meals ought to be paid for by the other side.

Conclusion

[7]       I consider that the third party is liable for counsel’s reasonable accommodation and

transportation expenses but not meal costs for the present proceedings.

‘Associate Judge D.I. Gendall’