Delegat v Norman

[2014] NZHC 1929

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-004444 [2014] NZHC 1929

BETWEEN

JAKOV NIKOLA DELEGAT as trustee of

the JIM DELEGAT BUSINESS TRUST First Plaintiff

BOAT 93 HOLDINGS LIMITED (in liquidation)

Second Plaintiff

AND

CHRISTOPHER JOHN NORMAN Defendant

AND

JULIE ANNE SALTHOUSE Third Party

On thepapers:	24 June 2014
Appearances:	P Davison QC aqnd CT Patterson for Plaintiffs D Chisholm QC and T Mullins for Defendant E Werry for Third Party
Judgment:	15 August 2014

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Friday, 15 August 2014 at 4.45 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

JAKOV NIKOLA DELEGAT as trustee of the JIM DELEGAT BUSINESS TRUST v CHRISTOPHER JOHN NORMAN [2014] NZHC 1929 [15 August 2014]

Introduction

[1]      On 20 May 2014, I fixed costs to be paid to the defendant following the substantive   proceeding   and   the   subsequent   unsuccessful   recall   application.1

Pursuant  to  that judgment  the third party,  Ms Julie Salthouse,  applies  for costs against the plaintiffs.  The plaintiffs accept that costs follow the event but dispute the amount that should be awarded.

The substantive proceedings2

[2]      Ms Salthouse submits that costs of $36,341.80 should be awarded to her for costs incurred as a third party to the substantive proceedings.  That sum is calculated on a 2B basis and is said to consist of the following amounts:

(a)       $13,348.00 for 7.1 days of preparation at $1880 per day, being the daily rate for the period prior to 14 June 2012;

(b)$22,885.00 for 11.5 days at $1990 per day, being the daily rate for the period after 14 June 2012; and

(c)       $108.80 for filing fees.

[3]      The plaintiffs submit that it would be inappropriate for costs to be awarded of that quantum until and unless Ms Salthouse demonstrates (for example via time records) that her counsel actually undertook the steps set out in the table provided by Ms  Salthouse.     In  any  event,  the  plaintiffs  also  submit  that  Ms  Salthouse unnecessarily contributed to the expense of proceedings by changing her position as to the knowledge of the defendant shortly before the trial begun.3

[4]      Dealing with the second argument first, I do not consider that Ms Salthouse contributed to the expenses incurred in any meaningful way because it is more than

likely that the proceedings would have proceeded despite her testimony.  The third

1      Delegat v Norman [2014] NZHC 1099.

2      Delegat v Norman [2012] NZHC 2358.

3      High Court Rules, r 14.7(f).

party and defendant’s legal costs would therefore have been likely to have accrued in

any event.

[5]      Turning to the first argument, Ms Salthouse points to my order at [30] of the costs  judgment  where  I  directed  that  the  plaintiffs  were  to  pay  the  costs  of Ms Salthouse on a 2B basis.

[6]      She also  notes  r 14.2(e) of the High  Court  Rules  that  provides  that  the appropriate daily recovery rate and what is considered a reasonable time for a step does not depend on the skill or experience of counsel involved, or the time actually spent or costs actually incurred by the party claiming costs.

[7]      I agree with the third party that it would be contrary to r 14.2(e) and the principle that determination of costs should be predictable and expeditious to require the third party to produce time records or copies of emails and correspondence to verify that an amount of time equivalent (or in excess of) the time allocations has actually been spent.   The costs requested by the third party are reasonable in the circumstances having regard to the nature of the substantive proceedings and the fact that if the defendant were found liable it was inevitable that Ms Salthouse would be

joined.4

[8]      However, I note the principle in 14.2(f) that an award of costs should not exceed the actual costs incurred by the party claiming costs.  The third party in her memoranda does not specify the actual total costs incurred in the substantive proceeding.  I therefore make an order awarding costs of $36,341.80 to Ms Salthouse subject to reduction if that cost award were to exceed the actual costs incurred by her in the substantive proceeding.

The recall application5

[9]      Ms Salthouse requests costs of $16,403.10 for the recall application.   That sum  consists  of  $16,790.60  being  the  quantum  allowed  to  the  defendant,  less

$497.50 being costs in relation to second counsel, plus disbursements of $110.00.

4      Delegat v Norman, above n 1, at [30].

5      Delegat v Norman [2013] NZHC 3485.

The sum is not disputed.  I therefore make an order awarding costs of $16,403.10 for the third party for costs incurred in the recall application.

Result

[10]     Costs  are  awarded  to  the  applicant  for  the  substantive  proceeding  of

$36,341.80 and recall application of $16,403.10.

Woolford J