Dovey Place Developments Limited (in liq) v Rider Hunt Auckland Limited HC Auckland CIV-2004-404-004819

[2007] NZHC 1865

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2004-404-004819

BETWEEN  DOVEY PLACE DEVELOPMENTS LIMITED (IN LIQUIDATION)

Plaintiff

AND  RIDER HUNT AUCKLAND LIMITED Defendant

AND  CABERNET CAPITAL LIMITED, COHASSET CONSUULTANCY & INVESTMENTS LIMITED, CRAIG GRANT SCOTT NISBET AND LANCE HERBERT OLSEN

Third Parties

Judgment:      19 June 2007

In accordance with r540(4) I direct the Registrar to endorse this judgment with the delivery time of 11.20am on the 19th day of June 2007.

JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL

[1]      In a Minute I issued in this matter dated 2 May 2007, at para [9][e] I made the following order:

“[e]      An order is now made that the plaintiff Dovey Place is to pay to the defendant Rider Hunt its costs calculated on an indemnity basis for its preparation for the adjourned hearing of the application on 3 May 2007, and for its attendances and incidental to the directions conference today.”

[2]      The  adjourned  hearing  in  question  was  for  an  interlocutory  application whereby the  defendant  sought  orders against  the  plaintiff  for  further  and  better particulars of a third amended statement of claim, for particular discovery of certain

documents and for security for costs.

DOVEY PLACE DEVELOPMENTS LIMITED (IN LIQUIDATION) V RIDER HUNT AUCKLAND LIMITED AND ANOR HC AK CIV-2004-404-004819  19 June 2007

[3]      The issue before me here relates to what should be a proper calculation of the indemnity costs payable by the plaintiff to the defendant for this adjourned hearing.

[4]      In accordance with other  directions I  made  in that  2  May 2007  Minute, counsel for the defendant has filed memoranda as to this costs question dated 9 May

2007 and 22 May 2007 and counsel for the plaintiff has filed a memorandum dated

17 May 2007.

[5]      These memoranda having just been referred to me now, I give my decision on the quantum of costs to be ordered.  I do so in terms of para [9][i] of the 2 May

2007 Minute.

[6]      From the initial memorandum filed by counsel for the defendant indemnity costs  totalling  $6,840  were  sought  against  the  plaintiff.     This  amount  was apportioned as to $4,300 as costs for the adjourned hearing and $2,540 as costs for the 2 May 2007 directions conference.

[7]      In  response  to  this  initial  memorandum  from  counsel  for  the  defendant counsel for the plaintiff has taken issue with each of these calculations.   On the question of costs for the adjourned hearing counsel for the plaintiff notes that these costs were ordered to allow for the defendant’s time spent  in preparing for that hearing.  The order was with respect to time that was expended and wasted and not for time that will later be utilised in the hearing when it does take place.

[8]      I agree. I am satisfied that the extent of indemnity costs in this area should be for lost preparation time, that is preparing to present submissions, and not time spent on writing submissions that are to be used at the later hearing.

[9]      Counsel for the plaintiff notes that counsel for the defendant has included all time spent on this matter and not only wasted time in his claim for $4,300 costs.

[10]     As to this aspect, counsel for the plaintiff contends that at least 20% of the

16 hours of counsel’s time spent preparing for the adjourned hearing could fairly be attributable to preparation for presenting the ultimate submissions.

[11]     Based upon the total costs claimed by the defendant  of $4,300, the 20%

allowance would amount to $860 of indemnity costs.

[12]     In my view this $860 reduction of costs sought for the adjourned hearing is appropriate.    This  leaves  total  indemnity  costs  for  the  adjourned  hearing  to  be awarded to the defendant of $3,440.  An order to this effect is to follow.

[13]     The  second  aspect  relates  to  a  calculation  of  costs  for  the  directions conference which took place on 2 May 2007.   Counsel for the defendant has calculated these at $2,540 based upon six hours 24 minutes of partner time at $325 per hour and two hours 18 minutes of assistant solicitor time at  $200 per hour. These figures are extracted from counsel for the defendant’s time records and he maintains they cover:

(a)      perusal of memoranda filed by solicitors and counsel acting for the

Dovey defendant;

(b)      correspondence to and from and telephone calls to and from solicitors and counsel acting for the Dovey defendant and the Court;

(c)      file review and legal research into grounds for and costs payable on adjournment;

(d)      preparation for and appearance at lengthy telephone conference on

2 May 2007;  and

(e)      perusal of Minute and preparation of the costs memorandum.

[14]     Counsel for the plaintiff in his costs memorandum takes issue with this figure of $2,540.  He states that some dimension and perspective is required here and the total claim for time expended of eight hours 42 minutes relating to preparation for an application for an adjournment and an appearance at a telephone conference dealing with it is excessive.  This is particularly the case given that the time involved in full preparation for the substantive issue involved less than double this being 16 hours.

[15]     Counsel for the plaintiff has suggested a total of 2.5 (sic) hours of partner time amounting to $650 as adequate here.

[16]     In response counsel for the defendant in his reply memorandum submits that the costs sought under this head are reasonable given that the work involved in receiving, obtaining instructions on and responding to an 11th hour application for an adjournment and the subsequent steps required was not inconsiderable.

[17]     In addition, in this reply memorandum counsel for the defendant submits that a substantial award of costs on an indemnity basis against the Dovey plaintiff is both justified and richly deserved here due to Dovey’s past history of failing to comply with numerous directions of this Court.  In this regard, he refers to earlier awards of costs and disbursements made against the Dovey plaintiff on 28 September 2005 and

29 March 2006 which I understand may still remain unpaid.

[18]     Whilst I accept there is something in these points advanced for the defendant here,  in  my  view  the  indemnity  costs  award  for  the  2  May  2007  directions conference must only reimburse the defendant for actual and reasonable costs incurred.

[19]     That said, and taking all other matters into account, I am of the view that an indemnity costs award for this directions conference of three hours of partner time at

$325 per hour totalling $975 is appropriate.  An order to this effect is to follow.

Order

[20]     An  order  is  now  made  that  the  plaintiff  Dovey  Place  is  to  pay  to  the defendant Rider Hunt indemnity costs for its preparation for the adjourned hearing of the application on 3 May 2007 ($3,440) and for its preparation and attendances at the directions conference on 2 May 2007 ($975) totalling $4,415, together with disbursements (if any) as may be approved by the Registrar.

[21]     The costs of $4,415 and disbursements (if any) referred to in the preceding paragraph of this judgment are to be paid by the plaintiff Dovey Place within 10 working days of the date of this order.

[22]     If these costs (and disbursements) remain outstanding 10 working days after the date of this order then the proceeding between Dovey Place as plaintiff and Rider Hunt as defendant is stayed until such time as these costs (and disbursements) are paid in full.

……………………………………. Associate Judge D.I. Gendall

Solicitors:

Duncan Cotterill, Wellington, for Plaintiff and Third Parties

Kennedys, Auckland for Defendant