Deliu v Hong
[2013] NZHC 1934
•2 August 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2010-404-006349 [2013] NZHC 1934
BETWEEN FRANCISC CATALIN DELIU Plaintiff AND
BOON GUNN HONG Defendant
Submissions in writing: 30 May 2013 (Plaintiff); 21 June 2013 (Defendant);
24 June 2013 (Plaintiff’s reply).
(Determined on the papers)Appearances:
F C Deliu Plaintiff in Person
B G Hong, Defendant in PersonJudgment:
2 August 2013
JUDGMENT OF ASSOCIATE JUDGE OSBORNE
fixing costs and disbursements
This judgment was delivered by Associate Judge Osborne on 2 August 2013 at , pursuant to
r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
DELIU v HONG [2013] NZHC 1934 [2 August 2013]
Introduction
[1] On 12 April 2013, I delivered two judgments in this proceeding, one in relation to the defendant’s application to strike out the claim and the other in relation to the plaintiff’s application for a strike out order or further particulars.1
[2] The defendant’s strike out application was unsuccessful. The plaintiff’s strike out application was also unsuccessful, but his application for an order as to further and better particulars was successful. Costs were reserved.
[3] On 16 May 2013, following receipt of additional submissions, I gave an interim judgment as to costs.2
[4] By that judgment I ordered:3
(a) The plaintiff was to have the costs of both applications (the plaintiff’s application for strike out and further particulars and the defendant’s application for strike out).
(b) The costs were to be on a 2B basis.
(c) The plaintiff was to have his disbursements under r 14.12 but subject to r 14.12(3) on both applications.
(d)My decision as to the items to be allowed in relation to each application was reserved for further submission by the parties.
[5] I have now received those additional submissions.
1 Deliu v Hong [2013] NZHC 735; Deliu v Hong [2013] NZHC 736.
2 Deliu v Hong [2013] NZHC 1119.
3 At [28].
The big picture
[6] The costs to be determined relate to what were essentially two sets of interlocutory applications. The applications were heard together over one and a half days.
[7] Mr Deliu provides a schedule of items and calculations leading to a submission that Mr Hong should be ordered to pay costs of $48,158 together with disbursements of $2,233.47.
[8] Mr Hong has submitted a calculation which would entitle Mr Deliu to a net costs award of $4,169 plus disbursements of $200. The “net” costs figure is arrived at by a process of deducting items claimed by Mr Hong himself from items which he calculates in Mr Deliu’s favour as follows:
Costs payable to Mr Deliu $8,358
Less sub total set-off of costs for Mr Hong $4,189
Net $4,169
The Court’s approach to costs in this case
[9] The very fact that Mr Deliu considers it appropriate to apply for costs of
$48,158 in relation to two interlocutory applications indicates the extent to which attendances related to these two interlocutory matters have apparently consumed resources. That was already partially apparent to me when I received the bundles for the hearing which could properly be described as massive for the interlocutory matters involved. It was further reinforced when a hearing which, with concise submissions from counsel on both sides, would have occupied at most a full day, stretched into a second day.
[10] This led me to make an observation as to proportionality when I gave my interim judgment as to costs.4 I there said:
4 Deliu v Hong [2013] NZHC 1119 at [27].
I do not view this as an appropriate case in which to leave the Registrar to identify the appropriate items of costs or of disbursements. I have, in a previous judgment, referred to the fact that there will be a need to observe the disciplines of proportionality required by the High Court Rules.5
Proportionality applies to both interlocutory and trial resources. Some attendances and disbursements in relation to these applications may not be allowed as separate items. Some hearing time actually taken will not be allowed. In relation to disbursements, r 14.12(3) will be considered. There will also be decisions to be made in relation to items to be allocated to one application or the other. These decisions are appropriately to be dealt with by me, as the Judge who heard the applications, rather than by the Registrar.
[11] These observations can be related to the second principle applying to the determination of costs under r 14.2(b), namely that an award of costs should reflect the complexity and significance of the proceeding. I would add to that also that it should reflect the complexity and significance of the relevant step in the proceeding, including any interlocutory step.
[12] While many of the other principles and rules relating to costs are intended to minimise the need for a Judge or Registrar the burden of having fix costs,6 the directed relevance of the complexity and significance of interlocutory proceedings indicates that the Rules Committee does not anticipate that there will be slavish adherence to an identification of each step the claiming party in fact took and the application of the appropriate scale to that step.
[13] The first statutory direction in relation to costs is that all costs matters are at the discretion of the Court: r 14.1(1). Whether to allow particular items is such a matter. So, to, is the extent to which to allow the item.
[14] When a claimant entitled to costs seeks costs for two interlocutory matters in a sum of $48,158 plus disbursements it is readily apparent that something has become disproportionate in either the attendances expended or the claimant’s assessment of its entitlement or both.
[15] I do not overlook the unusually extended history of the interlocutory applications in this case – Mr Deliu referring to “the byzantine manner in which this
matter finally made it to be heard before your Honour” – but I consider that it would
5 Deliu v Hong [2013] NZHC 735 at [194]-[199].
6 See McGechan on Procedure HR 14.2.01(6)(b).
be an unjustified disregard of r 14.2(b) to simply add up all the attendances which Mr Deliu claims as items and to award costs on that basis. There will be occasions when the train of litigation goes off its procedural rails to some extent. More attendances may have been involved than would be normal. This may be particularly so where litigants are self-represented. The distance and perspective which is introduced through representation by counsel often serves to reduce issues and attendances to a minimum. The same products of independence do not always arise with self-represented litigants, even legally qualified litigants. Where, as in this case, a self-represented litigant is entitled to costs because he is himself a practising
lawyer (for the reasons given in my 16 May 2013 judgment7), the Court must be
diligent in not awarding costs on a level which would be disproportionate in terms of r 14.2(b). Such costs would themselves constitute an injustice.
[16] In Rutherford v Waikato District Council,8 Baragwanath J was called upon to fix costs after the parties had resolved all issues apart from costs. His Honour referred to the Rules then contained in rr 46 and 47 High Court Rules (now rr 14.1 and 14.2). He then began his discussion on the facts of the case with an observation which I respectfully adopt:9
I am satisfied that the r 46 discretion is to be exercised by treating the later detailed cost provisions as a guide to achieving justice in accordance with their principles, not as a barrier to it by treating them as inflexible rules.
[17] Baragwanath J revisited the subject of costs in A’s Company Ltd v Dagger.10
His Honour adopted what he had previously said in Rutherford.11 He then referred to the nature of the litigation in A’s Company Ltd v Dagger, identifying its difficulty and complexity but noting that it was material that A’s Ltd had conducted the litigation on quite specific issues in a “very comprehensive and indeed meticulous basis”.12
His Honour then made this observation as to proportionality:13
I consider that r 47(b) [now r 14.2(b)] is of particular importance. It and the references to reasonable in (c) and (d), as well as the rejection of relevance
7 Deliu v Hong [2013] NZHC 1119 at [3]-[8].
8 Rutherford v Waikato District Council HC Hamilton CP59/00, 5 November 2002.
9 At [18].
10 A’s Company Ltd v Dagger HC Auckland M1482-SD00.
11 At [14] – [15].
12 At [16].
13 At [17].
of actual costs, require the Court to make an appraisal of what the case is really about and ensure that the costs awarded are proportionate to that.
and later:14
…proportionality is a factor to weigh.
[18] In the consideration of Mr Deliu’s claimed items which I now come to, the disallowing of a substantial number of items will reduce the proposed award drastically through an item by item assessment. I arrive at a costs figure which I consider also to be just on a proportionality basis. I would not have considered any greater figure to be proportionate.
Discussion
Mr Deliu’s overall approach
[19] I will discuss item by item the 28 items which Mr Deliu lists to produce what he says would be a 2B recovery of $58,108. He then concludes:
To try and be fair, the actual amount the Court may instead wish to order is
$48,158.
The difference of $9,950 (deducting $48,158 from $58,108) is arrived at by Mr Deliu by reducing his claim for affidavit preparation from 10 days’ preparation included in his initial $58,108 figure to five days (allowed in the $48,158 figure).
[20] Mr Deliu’s 28 item schedule adopts a daily rate of $1,990 for a 2B calculation of all attendances. As Mr Hong notes, however, the daily rate for a Category 2 proceeding became $1,990 only with effect from 14 June 2012. The daily rate applicable from 24 May 2010 until then was $1,880.15
Mr Deliu’s schedule items
[21] Mr Deliu made claims for 28 items:
14 At [21].
15 See Schedule 2 High Court Rules, as amended from time to time by High Court Amendment
Rules.
1. Item 22 - Application to strike out defendant’s defence/counterclaim
or for further particulars
This item would normally be allowed (albeit at the lower figure of $1,128 rather than the higher figure which later applied and is claimed by Mr Deliu of $1,194). But the same application was considered in part by Courtney J in the meantime. Mr Deliu claimed costs in relation to this item and was awarded them.16
There should not be a second recovery. I disallow this item.
2. Item 30 – affidavit in support of application
Mr Deliu claims 2.5 days for preparation of an affidavit in support of the interlocutory application. I disallow this item on the basis that the costs of the interlocutory application were dealt with in the earlier judgment of Courtney J on the basis presented by Mr Deliu. It is inappropriate to allow him to revisit and supplement that order. In any event, I also find the claim to this item to be misconceived. Item 22 for the filing of an interlocutory application encompasses the evidence in support of that application. Item 30 for which Mr Deliu claims relates to the preparation of briefs or affidavits expressly in relation to “trial preparation and appearance”. I would have disallowed this item on that basis also.
3. Item 12 – mentions appearance 25 November 2010
This item was also claimed by Mr Deliu in his costs application dealt with by Courtney J and was awarded. I disallow this item as an attempted second recovery.
4, 5, 6 and 7. Items 11 and 13 – appearances of case management conferences – February/March 2011
These items were again included in Mr Deliu’s cost claim which was granted in this regard by Courtney J. I disallow these items as they would involve
16 Deliu v Hong [2012] NZHC 679 at [4] – [5] and [9].
double recovery.
8. Item 30 – further affidavit
Although Mr Deliu included this item in his schedule, he had already conceded in his submissions that he did not pursue a second item for affidavit evidence. It is, in any event, a misconceived claim in relation to an interlocutory application. I disallow it on that basis.
9.Item 24 – synopsis of submissions in support of interlocutory application
Mr Deliu claims this item which in the current form of schedule 3 allows (on a B categorisation) 1.5 days for written submissions. The schedule 3 time allocations applicable at the time (styled Item 4.14) provided for the preparation for the hearing (rather than “submissions”). Mr Deliu’s costs application as granted by Courtney J dealt with that item (4.14) on that basis. I disallow the claim for item 24 as attempting a double recovery.
10. and 11. Item 11 – memoranda filed
Mr Deliu claims for memoranda addressed to Associate Judge Bell in relation to his Honour’s judgment. These are not attendances in relation to the matters I determined. If they were to be appropriately recovered that was a matter to be addressed with the Judge or Judges involved with the relevant judgment. I disallow these items. Mr Hong has submitted that the claims are unmeritorious on the facts but I do not in the circumstances need to examine the merits of these items. Mr Hong suggested in his submissions that I should award costs in his favour in relation to these items – that request is not appropriate for the same reason as applies to Mr Deliu’s request. In any event, I have not awarded Mr Hong costs and do not intend to revisit my interim costs decision in that regard.
12. Item 13 – appearance at case management conference 14 May 2012
This conference followed the judgment of Courtney J which had the effect of
reinstating Mr Deliu’s claim against Mr Hong. It was a necessary conference for the purpose of reinstating case management in relation to the interlocutory application. Mr Hong submits that the attendance could have been dealt with through a joint memorandum on timetabling issues rather than at a case management conference, a somewhat ironical submission given that the appearance at a case management conference is allowed 0.3 days whereas a memorandum for a subsequent conference would be allowed 0.4 days. I allow this item as claimed at 0.3 days but, having regard to the then- applicable rate of $1,880 per day, I allow the item at $564.
13. Item 24 – preparation of submissions for strike out/particulars
This is a properly-claimed item, as Mr Hong concedes. On the basis of 1.50 days, I allow it in the sum of $2,985.
14. Item 25 – preparation of bundle of authorities
Mr Deliu seeks item 25 for preparation of the bundle of authorities. Item 25 in fact relates to the set of relevant documents referred to in r 7.39(3)(d)(i). I would allow in relation to a bundle of cases the disbursement costs for photocopying but not 0.6 days by way of costs. I disallow this item.
15. Item 23 – notice of opposition to defendant’s strike out application
Mr Hong is entitled to this item, as Mr Hong concedes. I allow it, on the basis of 0.6 days, at $1,194.
16. Item 30 – affidavit in opposition
I disallow this affidavit filed in an interlocutory proceeding for the same reasons as given above in relation to Mr Deliu’s No. 2 claim for an Item 30 allowance.
17. Item 22 – plaintiff ’s application to compel defendant to re-plead
Mr Deliu is entitled to this item, as Mr Hong concedes. I allow it, on the basis of 0.6 days, at $1,194.
18.Item 24 – synopsis of submissions in support of opposition to strike out
Mr Deliu is entitled to this application, as Mr Hong concedes. I allow it, on the basis of 1.5 days, at $2,985.
19. Item 25 – preparation of bundle of authorities
I disallow this item for the same reason as disallowing Mr Deliu’s No. 14
claim for an Item 25 allowance.
20. Item 25 – further bundle of authorities
I disallow this item for the same reason.
21. Item 30 – plaintiff ’s supporting affidavit
I disallow this item for the same reasons previously stated in relation to the
No. 2 and No. 16 claims.
22. Item 31 – plaintiff ’s list of issues, authorities and common bundle
Mr Deliu’s claim of this item is misconceived as Item 31 relates to trial preparation and appearance. I instead allow the costs of preparation of a bundle under Item 25 which, at 0.6 days, constitutes $1,194.
23. Item 26 – appearance at hearing on 5 and 6 October 2013
Mr Deliu claims 1.5 days as the time actually occupied by the hearing. I consider the appropriate time for the hearing to have been one day. With efficiencies of presentation, the interlocutory applications were capable of disposal at a hearing of one day. I allow this item at one day, meaning an award of $1,990.
24. Item 33 - preparation for hearing
Mr Deliu’s claim of Item 33 for preparation of hearing is misconceived as this was an interlocutory hearing. The costs in that regard are covered by
Item 24 (preparation of written submissions) which I have already allowed. The claim for Item 33 is disallowed.
25, 26 and 27. Item 11 - plaintiff ’s further memoranda to the Court
Mr Deliu claims in relation to three memoranda filed in relation to the proceedings. Mr Hong challenges the claims on the basis that “the plaintiff is not entitled to the above claimed items being unrelated to the adjudication itself”. I am satisfied that the items are appropriately allowed as memoranda relating to the interlocutory proceedings. At 0.4 days each, I allow each item at $796 (meaning thrice).
28. Item 29
Mr Deliu claims Item 29 for sealing the order. Mr Hong submits that the item is not applicable as he will be paying the costs as soon as they are fixed. I am prepared to award this item with a proviso. Based on 0.2 days, I award
$398, but the defendant is to be relieved of liability for this aspect of the costs order if he pays to Mr Deliu in cleared funds within three working days after the delivery of this judgment the total sums fixed by way of costs and disbursements.
Mr Hong’s set-off claims
[22] Mr Hong asserted that he should have a set-off of $4,189 for various costs he incurred. I did not award him costs. This judgment concerns the fixing of Mr Deliu’s costs and disbursements. The claim to a “set-off” is misconceived. So, too, is his suggestion that he should receive some financial recognition for his costs memorandum. I do not intend to award any costs in relation to this present step – had I been fixing an additional sum the likelihood is that it would have been an additional award to Mr Deliu.
Total costs fixed
[23] The costs items I have allowed are:
Item 13 $564.00
Item 24 $2,985.00
Item 23 $1,194.00
Item 22 $1,194.00
Item 24 $2,985.00
Item 31 $1,194.00
Item 26 $1,990.00
Item 11 (thrice) $2,388.00
Item 25 $1,194.00Item 29 $398.00
Total: $14,328.00
Disbursements
[24] Mr Deliu seeks disbursements of $2,233.47 including GST. He sets out the relevant figures thus:
Photocopying, printing, binding, dividers $1,380.02 Filing fees $725.00 Postage $45.00 Service/courier fees $83.45
Total: $2,233.47
[25] Disbursements are recoverable pursuant to r 14.12 which provides:
14.12 Disbursements
(1) In this rule,—
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
(b) includes—
(i) fees of court for the proceeding:
(ii) expenses of serving documents for the purposes of the proceeding:
(iii) expenses of photocopying documents required by these rules or by a direction of the court:
(iv) expenses of conducting a conference by telephone or video link; but
(c) does not include counsel's fee.
relevant issue, in relation to a disbursement, means the issue in respect of which the disbursement was paid or incurred.
[26] Mr Hong submits that Mr Deliu is not entitled to items such as postage, courier, binding fees or printing, as only photocopying costs are expressly allowed. That submission is incorrect as the r 14.12(1)(b) definition of photocopying expenses is expressly “inclusive”. The expenses recoverable under the rule are those which would normally be charged separately for legal professional services. The disbursements sought by Mr Deliu are all in that category. Mr Hong says in relation to the service fee claimed that Mr Deliu did not incur the same as he had the documents faxed or had his law clerks serve them. By his claim for service and courier fees of $83.45, Mr Deliu implicitly undertakes that that cost has been incurred. It will accordingly be allowed.
[27] That leaves to be dealt with only the GST content of the disbursements claim. For the reasons I have set out in my judgment in Dunedin Catering Supplies Ltd v Mr Chips Ltd17 the GST component of disbursements is to be excluded from any costs award where a claimant is GST registered, which I take Mr Deliu to be.
[28] I therefore allow the disbursements claim of $1,942.15.
Order
[29] I order:
(a) The defendant is to pay to the plaintiff interlocutory costs of
$14,328.00;
17 Dunedin Catering Supplies Ltd v Mr Chips Ltd [2013] NZHC 1815.
(b)The defendant is to pay to the plaintiff in relation to interlocutory proceedings disbursements in the sum of $1,942.15.
(c) In the event the said costs and disbursements are paid within three working days of this judgment the sum ordered to be paid by the defendant to the plaintiff under paragraph [21], claim no. 28, is reduced by $398.00, so that the payment to the plaintiff will be
$15,872.15.
Associate Judge Osborne
Solicitors:
F C Deliu, Auckland
B G Hong Law Firm, Auckland
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