Hamilton v Kirwan
[2021] NZHC 634
•26 March 2021
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-000322
[2021] NZHC 634
UNDER
AND
the Family Protection Act 1955 and the Law Reform (Testamentary Promises) Act 1949 IN THE MATTER OF
AND
The Estate of DESMOND WAYNE HETHERINGTON
IN THE MATTER OF
the COVE ROAD TRUST
BETWEEN
KEELEY FLEUR HAMILTON
Plaintiff
AND
DESMOND MICHAEL KIRWAN
First Defendant
CRAIG DESMOND HETHERINGTON
Second Defendant
Hearing: On the papers Counsel:
L Kearns and J S Langston for the Plaintiff P Moodley for the First Defendant
G C Jenkin for the Second Defendant
Judgment:
26 March 2021
JUDGMENT OF WOOLFORD J
[As to Costs (No. 2)]
This judgment was delivered by me on Friday, 26 March 2021 at 3:30 pm pursuant to r 11.5 of the High Court Rules.
HAMILTON v KIRWAN [2021] NZHC 634 [26 March 2021]
Introduction
[1] On 24 August 2020, I gave judgment allowing in part the plaintiff Ms Hamilton’s claim against the first defendant Mr Kirwan, the executor of her late father’s estate. I dismissed her claim against her brother, Mr Craig Hetherington, the second defendant, the sole trustee of the Cove Road Trust, to which trust her late father had made a significant inter vivos disposition before his death.1
[2] The background to the proceeding, and the reasons for judgment, are expressed fully in my substantive judgment. They do not need to be repeated here.
[3] At the conclusion of that judgment, observing that costs ordinarily follow the event, I reserved leave to the parties to file memoranda in the event they were unable to agree as to costs. They were not.
[4] So, on 25 January 2021, I issued a judgment as to costs.2 For the reasons given there, and having regard to the fact both the plaintiffs and defendants had a measure of success I ordered that:3
(a)the first and second defendants are to pay Ms Hamilton’s costs in respect of her first through fifth causes of action on a 2B basis, plus disbursements as relate to those causes of action only, provided that she is to be entitled to costs on the basis of a two day hearing only in respect of steps 30, 32, and 34 of sch 3 to the High Court Rules 2016;
(b)Ms Hamilton is to pay the first and second defendants’ costs in respect of their success in respect of the sixth and seventh causes of action on a 2B basis, and their disbursements as relate to those causes of action only.
[5] As I noted, it was envisaged there would be some off-setting of the parties’ costs, once quantum was established with the lesser sum to be off-set against the greater once computed.4
[6] It was not possible, on the information then before the Court, to determine the quantum of costs resulting from these orders. In particular, there was an issue as to
1 Hamilton v Kirwan [2020] NZHC 2149.
2 Hamilton v Kirwan (Costs) [2021] NZHC 19.
3 At [39].
4 At [40], referring to High Court Rules 2016, r 14.17.
Ms Hamilton’s claim for a disbursement in respect of assistance obtained by her from a barrister, Mr Anthony Grant, during the period in which Ms Hamilton was self- represented. I reserved leave to the parties to file further memoranda in the event they were unable to agree as to quantum. Regrettably perhaps, they have not, and have now filed those further memoranda, from which several further issues arise for determination.
[7] These are, in summary, various points taken by the defendants as to Ms Hamilton’s claim for costs, and various points taken by her as to the defendants’ claims for costs. Below, I address first her claim and the defendants’ points in respect of the same, so as to arrive at a proper quantification of the award in her favour, before turning to measure the defendants’ entitlements as to costs. I then net off, in the manner envisaged above, those awards.
Ms Hamilton’s Claim for Costs
Ms Hamilton’s Claim
[8] Ms Hamilton now claims costs on a 2B basis, and disbursements (including full indemnity in respect of the advice obtained from Mr Grant), in the amount of
$109,966.27, as set out in schedule A to Mr Crossland’s memorandum as to costs on her behalf dated 22 February 2021. More particularly, this is comprised of:
(a)a claim for scale costs on a 2B basis in the amount of $26,529 for the period since 2019 during which Ms Hamilton was represented;
(b)a claim for disbursements in the amount of $74,175 for advice obtained from Mr Anthony Grant; and
(c)a further claim for disbursements related to court filing fees and photocopying in the amount of $9,262.27.
[9] Mr Crossland confirms that all of the advice obtained by Ms Crossland from Mr Grant related to the first through fifth causes of action, the causes of action in respect of which I have determined Ms Hamilton is entitled to costs, as the sixth and
seventh causes of action were not introduced until after the last of Mr Grant’s invoices were tendered.
Mr Hetherington’s liability for Ms Hamilton’s costs
[10] As to this claim, Mr Hetherington submits that it would be unjust for him to be liable in respect of the costs payable to Ms Hamilton given my findings in the substantive judgment that he was in no way at fault for his late father’s unconscionable behaviour. This is said to be significant, by his counsel Mr Jenkin, because the Cove Road Trust no longer, as a consequence of my substantive judgment, has any assets of value. As a result, Mr Jenkin submits, Mr Hetherington’s ability to claim an indemnity from the trust assets in respect of any costs order against him has been rendered, practically speaking, worthless.
[11] Mr Jenkin, without referring to supporting authority, contends this Court has a residual discretion, in these circumstances, to order that Mr Hetherington be indemnified fully in respect of any costs award against him out of any residuary funds left in his father’s estate.
[12] It is, as was said by Judge Harvey in the Māori Land Court in Hall v Opepe Farm Trust, to which case Mr Jenkin referred,5 “trite law that a trustee is entitled to indemnity out of the trust funds for expenses properly incurred” by them in acting as trustee “in the proper administration of the trust.”6 What is properly incurred is an evaluative question that will depend on the facts of each case, but as a general proposition, as Salmon J said in Lomas v Lomas (to which case the Judge referred),7 “the costs of litigation for the benefit of a trust are paid out of the trust fund” as an indemnity to the trustees where the action involving the trust is not a result of the trustee’s own misconduct,8 it was necessary and prudent (for the interests of the trust,
5 Hall v Opepe Farm Trust MLCNZ Waiariki A-2014-7362, 5 September 2014.
6 At [49], referring to Re Buckton [1907] 2 Ch 406 (Ch). See also Woodward v Smith [2014] NZHC 407 at [21]-[25].
7 Lomas v Lomas HC Auckland CIV-2003-4054-2591, 28 November 2003.
8 At [26].
as opposed to the trustee)9 to bring or defend the claim,10 and the conduct of the litigation was reasonable.11
[13] On Mr Jenkin’s submission, Mr Hetherington is a trustee in such a position, who would therefore be entitled to an indemnity from the Cove Road Trust funds, if only there were funds available to enable that indemnity to be paid out.
[14] There being no formal application before the Court for an order recognising Mr Hetherington’s entitlement, if any, to an indemnity out of the trust funds, or authorising the same, it would be inappropriate for the Court to express a view as to the aptness of Mr Jenkin’s submission.
[15] Even assuming, however, for the purposes of discussion only, that Mr Hetherington has such an entitlement, that does not establish the existence of a residual discretion of the sort contended for Mr Jenkin to order Mr Hetherington instead be indemnified out of the residuary of his father’s estate. As noted, Mr Jenkin identified no authority for the proposition that such a discretion exists. My own research has located none. While the Court’s overriding discretionary jurisdiction as to the award of costs would appear to extend that far,12 exercising it in that manner would be contrary to established principle and practice, in a manner rendering the award of costs neither predictable nor expeditious.13
[16] In particular, doing so would also be contrary to the position that in fact resulted before Kekewich J in Re Buckton, as was referred to in the case drawn on by Mr Jenkin, which remains the foundational case in this area. There, there was in fact no money in the estate from which the costs were to be paid. There, Kekewich J, while acknowledging the practical difficulty, considered it “sufficient to declare the right and to leave the ways and means to be settled by the parties.”14
9 McDonald v Horn [1995] 1 All ER 961 (EWCA) at 970 per Hoffman LJ.
10 Lomas v Lomas HC Auckland CIV-2003-4054-2591, 28 November 2003 at [26].
11 Re O’Donoghue [1998] 1 NZLR 116 (HC) at 121-122.
12 Senior Courts Act 2016, s 162; High Court Rules 2016, r 14.1.
13 Compare High Court Rules 2016, r 14.2(1)(g).
14 Re Buckton [1907] 2 Ch 406 (Ch) at 417.
[17] The position must be the same here, as inconvenient as it will doubtlessly be to Mr Hetherington to have to bear his costs out of his own means, or from his share of the residuary of his father’s estate. However, there is simply no basis on which to cast the burden of Mr Hetherington’s costs as trustee of the Cove Road Estate on the other residual beneficiaries of his father’s estate, as Mr Jenkins would have the Court do. If Mr Hetherington had properly and prudently, in the above sense, incurred those costs as administrator of the estate, then that would likely be appropriate, the costs being testamentary expenses.15 Quite to the contrary however, assessed as a matter of substance, Mr Hetherington’s position was maintained (ultimately unsuccessfully) at the expense, not for the benefit, of the estate, such that it would be perverse to throw his costs on the other beneficiaries in this manner. As has been recognised in the somewhat different circumstances of family protection proceedings, at least in recent years, throwing the costs of parties disputing their entitlements out of the estate on residuary beneficiaries is unfair to the residual beneficiary or beneficiaries.16
[18] As follows, there is no basis for departing from the ordinary principle that Mr Hetherington will be personally liable, jointly and severally together with Mr Kirwan, for any costs award ultimately made in Ms Hamilton’s favour.17
Quantum of Ms Hamilton’s scale costs
[19] Mr Jenkin also objects, as does Mr Moodley on Mr Kirwan’s behalf, to three aspects of Mr Crossland’s calculation of Ms Hamilton’s entitlement to scale costs.
[20] First, the defendants object to Ms Hamilton’s claim under step 10 of sch 3 to the High Court Rules 2016 for 0.4 days spent preparing for the case management conference held on 22 August 2019, when that was not the first case management conference, and step 10 refers only to preparation for the first case management conference. The first case management conference was held on 8 May 2018, during the period in which Ms Hamilton was not represented.
15 Re Jex-Blake [1949] NZLR 763 at 774 but compare Fry v Fry [2015] NZHC 2716, [2016] NZFLR 713 at [15].
16 See, for example, AB v RT [2016] NZHC 1399 at [13]. Compare Vincent v Lewis HC Auckland CIV-2002-404-2440, 26 April 2002.
17 High Court Rules 2016, r 14.14.
[21] Mr Crossland acknowledges this, but says it is “absurd” that Ms Hamilton should be prevented from recovering anything in respect of the time she spent preparing to appear at the conference in person, with assistance from Mr Grant, because she was self-represented at that time, and then also be unable to claim in respect of the time spent preparing for the second conference because that is not a step listed in sch 3.
[22] There is an argument that the “primary rule” preventing litigants-in-person from receiving an award of costs is invidious in its effects, as Mr Crossland says. However, the continued application of that rule of practice was unambiguously confirmed by the Supreme Court in McGuire v Secretary of Justice,18 which decision binds this Court. As follows, it is clear Ms Hamilton is allowed nothing in respect of her effort and time spent preparing for the first issues conference.
[23] As to the preparations undertaken by her solicitors, once retained, for the second case management conference on 22 August 2019, it is not sufficient to say, as the defendants do, that because no time is allocated to that step in sch 3 no recovery in respect of that time should be possible.19 Rule 14.5, to which sch 3 cross-refers, states that, for the purposes of r 14.2(1)(c) (which establishes the objective schedular approach to the award of costs that prevails under the High Court Rules 2016),20 the reasonable amount of time for a step is either that specified in sch 3, or, where sch 3 does not apply, “a time determined by analogy with that schedule” or “the time assessed as likely to be required for the particular step, if no analogy can usefully be made”.21 That a step is not listed in sch 3 indicates no award should be made in respect of that step only where that can be seen as reflecting an assessment that the reasonable amount of time for that step is nil; that is, it was not necessary work.
[24] I do not consider that is the case here. As is clear from the Minute of Bell AJ issued following the second case management conference on 22 August 2019, dated 23 August 2019, Ms Hamilton’s becoming represented at about that time precipitated a number of additional case management decisions needing to be taken, not least of
18 McGuire v Secretary for Justice [2018] NZSC 116, [2019].
19 See, for example, Tian v Zhang [2018] NZHC 1701 at [31]-[32].
20 See generally Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 at [19].
21 High Court Rules 2016, r 14.5(1)(b)-(c).
which an amended statement of claim was then filed. In those circumstances, it is reasonable for the same amount of work as would normally be required ahead of a first case management conference to have been done preparing for the second case management conference. Step 10 is the appropriate analogy. The time claimed is reasonable.
[25] Secondly, the defendants object to Ms Hamilton’s claiming twice under step 11 of sch 3, for 0.4 days in each instance, in respect of memoranda for the second case management conference filed on both 20 and 21 August 2019 when, so far as they are aware, counsel advises, only one memorandum was filed. In reply, Mr Crossland submits that two memoranda were in fact filed.
[26] Mr Crossland is correct that memoranda were filed by the plaintiff in respect of the second case management conference on both 20 and 21 August 2019, the first setting out the plaintiff’s position for that conference, and the second replying (in four paragraphs totalling 12 lines of text only) to one paragraph in the first defendant’s memorandum of 21 August 2019. While Mr Crossland was doubtlessly concerned to ensure Ms Hamilton’s position was clearly conveyed to the Court, and should not be faulted in that respect, what was said there does not represent, on an objective assessment, work for which an allocation of 0.4 days is reasonable, in addition to the
0.4 days already claimed for the first memorandum. The claim in respect of the memorandum dated 21 August 2019 should be disallowed.
[27] Thirdly, the defendants object to Ms Hamilton’s claim under step 3 of sch 3 for filing, serving, and preparing two replies in response to the separate statements of defence filed by the first and second defendants. The defendants say recovery should be allowed in respect of only one of the two claims under step 3. In reply, Mr Crossland says that it is proper and reasonable to have claimed in respect of both replies, when both were “not straight forward, nor limited to straight admissions or denials”.
[28] On review of the pleadings, it is clear (as follows also from the fact that the defendants enjoyed unequal successes in resisting Ms Hamilton’s claims) that discrete issues arose in relation to each defendant and, as follows, the plaintiff’s reply to each
of their statements of defence was not (as might be the case elsewhere) duplicative of her reply to the other statement. Mr Crossland is correct to say that neither statement of defence is a simple denial nor admission of the matters raised in the statement of defence, though describing either as “not straight forward” might be thought a slight exaggeration. Regardless, I would consider it appropriate to allow recovery in respect of both.
[29] For the above reasons, having no reason to otherwise depart from counsel for the plaintiff’s calculation of Ms Hamilton’s entitlement to scale costs in respect of the first through fifth causes of action, I would fix her entitlement to scale costs at $25,573. Also, no issue being taken by the defendants with her claims for disbursements in respect of court filings fees and photocopying, I would fix her entitlement to disbursements at no less than $9,262.27.
Disbursements in respect of advice obtained from Mr Anthony Grant
[30] That leaves Ms Hamilton’s substantial claim for disbursements in respect of amounts of $74,175 paid by her in respect of advice obtained from Mr Anthony Grant, a barrister, during the period she was self-represented.
[31] As I noted in my previous costs judgment, a self-represented litigant who obtains legal advice in representing themselves is entitled to claim those expenses as a disbursement, subject to the ordinary rules regarding recovery of disbursements.22 This allowance, which can be thought of as generous in some respects, somewhat offsets the inability of a litigant-in-person to obtain an award of costs.
[32] Initially, Ms Hamilton’s claim for costs contained a schedule of claimed costs including claims for steps taken by her before 27 May 2019, at which time she was self-represented, according to scale, as if she had been represented. As I noted in my judgment,23 the proper approach was for her to make a claim for a disbursement in relation to the invoices tendered by Mr Grant under that heading, rather than, as she
22 See, for example, Harrison v Keogh [2015] NZHC 3320. See further Re Collier (A Bankrupt) [1996] 2 NZLR 438 (CA), approved McGuire v Secretary for Justice [2018] NZHC 116, [2019] 1 NZLR 335.
23 Hamilton v Kirwan (Costs) [2021] NZHC 19 at [30]-[31].
had effectively done, including that claim in a schedule of costs and parcelling it out. One of the reasons it was impossible to fix the quantum of costs in the previous judgment was the need to verify Ms Hamilton’s actual expenses in instructing Mr Grant pursuant to a limited retainer and establish the extent to which that advice related solely to the causes of action in respect of which Ms Hamilton is entitled to costs and disbursements.
[33] It now eventuates that all of Mr Grant’s assistance related to those causes of action, having been obtained prior to the amended statement of action in which Ms Hamilton pleaded the causes of action on which she failed being filed. So, applying the approach set out in my previous judgment, she now claims her actual expenses in obtaining advice from Mr Grant of $74,175 by way of a disbursement.
[34] The defendants object, observing that most of the cases dealing with a litigant- in-person’s ability to obtain a disbursement of this type precede the promulgation of the current costs regime in 2000, at which time the current rule governing the award of disbursements, r 14.12 was enacted. Rule 14.12 provides, so far as is relevant:
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.
(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.
(3)Despite subclause (2), a disbursement may be disallowed or reduced if it is disproportionate in the circumstances of the proceeding.
[…]
[35] The defendants submit that, by reason of the definition of disbursement given in r 14.12(1), and in particular because r 14.12(1)(c) expressly excludes from the definition of “disbursements” counsel’s fee, a disbursement in respect of a lay- litigant’s outlay on legal advice is not recoverable as a disbursement.
[36] The defendants are correct that the establishment of the rule of practice allowing the award of such disbursements precedes the promulgation of the current costs regime. However, the enactment of r 14.12 did not appear intended, nor does it appear to have had the unintended consequence of producing, the abrogation of that rule of practice. Awards of disbursements in this nature have been made since 2000, and the Supreme Court in McGuire recognised the availability of such awards (though, strictly, that comment was obiter).24
[37] Moreover, and perhaps more primarily, I agree with Mr Crossland’s submission that it is inapt to describe the amounts charged to Ms Hamilton by Mr Grant pursuant to whatever limited retainer or similar his advice was obtained under as counsel’s fee where Ms Hamilton was not represented at the time. As the definition of disbursements makes clear, r 14.12 is concerned primarily with the
24 See, for example, Working Capital Solutions Holdings Ltd v Pezaro [2014] NZHC 2480 at [15]– [20]; Harrison v Keogh [2015] NZHC 3320; and Hunter v Auckland Council [2018] NZHC 2975, [2020] NZRMA 401. See further Re Collier (A Bankrupt) [1996] 2 NZLR 438 (CA), approved McGuire v Secretary for Justice [2018] NZHC 116, [2019] 1 NZLR 335.
position of represented parties. Looking at the scheme of the costs regime as a whole, such parties’ liability to counsel for their fee is recognised, and partial recovery in respect of that liability made possible, by the provision for the award of costs for attendances at the hearing under steps 34-36 and 42-43 of sch 3.
[38] Finally, as Mr Crossland notes, I have already determined, applying the lengthy line of authority referred to in the Supreme Court in McGuire v Secretary for Justice, that Ms Hamilton is entitled to claim disbursements in respect of the advice obtained from Mr Grant. It is inappropriate for the defendants to now seek to re-litigate that holding in this Court.
[39] That entitlement, however, was expressed as subject to the ordinary principles applicable to the award of disbursements, as set out in r 14.12. These include, materially, that the disbursement must be specific to the conduct of the proceeding, reasonably necessary for the conduct of the proceeding, and reasonable in amount. Also, even if allowable having regard to those requirements, the claim can be disallowed, or the amount of the award reduced, if the disbursement is disproportionate in the circumstances of the proceeding.
[40] While counsel for the defendants are correct to note that Mr Grant’s narration of the professional services to which his invoices relate could be more fulsome, I am satisfied, having regard to the explanation offered by Mr Crossland, that the advice that Ms Hamilton obtained was specific to this proceeding, and reasonably necessary for her conduct of the proceeding as a self-represented litigant. Without Mr Grant’s assistance, it is doubtful that Ms Hamilton could have done as well in preparing her statement of claim and shepherding her case through the initial phases of the litigation as she did. Also, generally speaking, the amount is not unreasonable, having regard to Mr Grant’s acknowledged expertise in the relevant areas of law and the Court’s sense of the prevailing market rate for legal services at that level.
[41] I am less satisfied, however, that the amount of the disbursement is reasonable in the sense that word is employed in the Rules, nor that it is proportionate to the circumstances of the proceeding. In this respect, I note that Fitzgerald J, in Hunter v
Auckland Council,25 having accepted the availability of disbursements in respects of amounts paid to barristers to act “behind the scenes”,26 considered, following the approach adopted by Nation J in another case,27 that:28
[..] I consider regard should be had to what the party seeking costs could have been awarded (by way of scale costs) had they been represented in the proceedings. Awarding the full expense may otherwise result in lay litigants engaging lawyers to act “behind the scenes”, and obtaining what is effectively recovery of legal costs on an indemnity basis, in circumstances where represented litigants would be unable to do so, even for the same type of work or assistance provided. That is particularly so when proceedings conducted by lay litigants are, for understandable reasons, often more drawn out and complicated than they might otherwise be. In those circumstances, I do not consider it appropriate for a lay litigant to obtain what could be seen as a “windfall” from a costs perspective, when assessed against their position had they been legally represented.
[42] It is undoubtedly the case that, had Ms Hamilton been represented throughout the proceeding, she would be entitled, at most, to scale costs in an amount considerably less than the $74,175 now claimed. Mr Crossland has diligently provided an estimation of her total entitlement to scale costs, in that hypothetical, as being
$53,911.29 Subtracting her actual entitlement according to scale of $25,573, this
produces a figure of $26,529; suggesting the amounts paid to Mr Grant are little under three times the amount that would be recoverable according to scale. Given the objective basis on which scale costs are awarded, this discrepancy suggests the disbursement claimed is not reasonable, in the sense that word is used in the Rules (and in particular r 14.5), nor proportionate to the needs of the proceeding. The discrepancy gives rise to the concerns noted by Fitzgerald J in the passage in her judgment reproduced above.
[43] In these circumstances, adopting the same broad-brush approach as did Fitzgerald J in these circumstances,30 which I consider appropriate given the difficulty evaluating what precisely Ms Hamilton’s entitlement according to scale would have been had she been represented in the proceeding, pursuant to r 14.12(3) I reduce
25 Hunter v Auckland Council [2018] NZHC 2975, [2020] NZRMA 401.
26 At [6]-[12].
27 Harrison v Keogh [2015] NZHC 3320 at [7].
28 Hunter v Auckland Council [2018] NZHC 2975, [2020] NZRMA 401 at [15].
29 The figure in Mr Crossland’s memorandum was $54,867. I have subtracted $956 to account for the time in respect of which Ms Hamilton’s claim has been disallowed.
30 Hunter v Auckland Council [2018] NZHC 2975, [2020] NZRMA 401 at [16].
Ms Hamilton’s entitlement to a disbursement to $22,500. I consider this figure reasonable and proportionate, avoiding excessive recovery of the type Fitzgerald J describes by correlating broadly to the likely scale award, while also recognising the litigation could likely have been able more efficiently conducted had Ms Hamilton at that point been represented.
Quantifying Ms Hamilton’s costs award
[44] Taken together with the amounts fixed above, this produces an overall entitlement to disbursements on Ms Hamilton’s part of $31,762.27. Together with her scale costs on a 2B basis of $25,573, this produces an overall entitlement to costs on Ms Hamilton’s part as against the first and second defendants of $57,335.27.
Mr Hetherington’s Costs Claim
[45] Mr Hetherington claims costs on a 2B basis and scale costs in respect of, Mr Jenkin says, the seventh cause of action (that on which he succeeded) only, in the amount of $53,058. Together with his claim for disbursements of $220, his total claim is for $53,278. Ms Hamilton objects to this claim on two bases.
[46] First, more generally, Mr Crossland submits that the amounts claimed do not relate exclusively to Mr Hetherington’s successful defence of the seventh cause of action, but rather to his overall defence of Ms Hetherington’s claim.
[47] Logically, this must be correct. The seventh cause of action was pleaded by Ms Hamilton only on 22 August 2019, while the steps in respect of which Mr Hetherington claims, according to Mr Jenkin’s memorandum, relate to steps taken by him from January 2018 onwards. It must therefore be the case that the costs claimed in respect of steps taken before 22 August 2019 relate to Mr Hetherington’s overall defence of Ms Hamilton’s claim. Also, given Mr Hetherington’s claims for costs in respect of steps taken since 22 August 2019 are for, in each case, the maximum number of days reasonably available in respect of each step, it is clearly to be inferred that his claim for the steps following that date are, again, in respect of all steps taken by him in defence of Ms Hamilton’s claim, rather than being limited to those specific to his defence of the seventh cause of action.
[48] In these circumstances, applying either r 14.7(d) or (more likely) rr 14.7(f)(iii) or (iv), or potentially some analogy to either or both if neither rule strictly applies,31 the appropriate cause of action is to award scale costs reduced by half in respect of the steps taken by Mr Hetherington from 22 August 2019, and by three-quarters the steps taken by him before that date. It is appropriate to allow some recovery in respect of the steps taken even before that date, given that, as a matter of common sense, Mr Hetherington had to defend Ms Hamilton’s claim as a whole, even during a period in which the seventh cause of action was not pleaded, to ultimately succeed in relation to that point.
[49] Secondly, more specifically, counsel notes that Ms Hamilton’s allowance in respect of the hearing has already been reduced from the allowance applicable to a hearing of four days’ duration (the actual length of the hearing) to two to reflect her only partial success, but that Mr Hetherington also claims in respect of a two day hearing under steps 30, 32, and 34 of sch 3 to the High Court Rules 2016. Allowing Mr Hetherington’s claim under these steps, while also reducing Ms Hamilton’s entitlement, counsel submits, would have the effect of neutralising any award in her favour in respect of that portion of the hearing fairly attributable to the issues on which she prevailed, in respect of which it has been held she is entitled to costs.
[50] I agree with Mr Crossland’s reasoning in this respect. Mr Hetherington’s claim under steps 30, 32, and 34 of sch 3 in respect of the preparation of affidavits, lists of issues, and authorities; agreeing the common bundle; preparation for a two day hearing; and appearance at a two day affidavit hearing, is disallowed.
[51] Applying the above reductions and disallowances, I would fix Mr Hetherington’s entitlement to scale costs at $12,817.25.32 Allowing also the whole of the claimed disbursements of $220, potentially erring in favour of generosity in
31 High Court Rules 2016, r 1.6.
32 I note that, in his memorandum, Mr Jenkin claimed at the daily recovery rate of $2,390 applicable to steps taken in a category 2 from 1 August 2019, in respect of steps taken before that date. As noted at [41] of the previous judgment, the daily recovery rate applicable to steps taken before that date was $2,230, not $2,390, the adjustment in daily recovery rates as from that date introduced by the High Court Amendment Rules 2019 having not been retrospective. This figure is calculated applying the figure of $2,230 to steps taken before 1 August 2019 (producing an award in respect of those steps of $3,735.25), and $2,390 to steps taken from 1 August 2019 (producing an award in respect of those steps of $9,082).
doing so, that produces a total award in his favour as against Ms Hamilton of
$13,037.25.
Mr Kirwan’s Costs Claim
[52] Similar considerations apply to Mr Kirwan’s claim for costs on a 2B basis in the amount of $30,592, which includes (comparatively more limited) claims for steps taken by Mr Kirwan before 22 August 2019 when the sixth cause of action (on which he succeeded) was pleaded. It also includes a claim for the maximum number of days reasonably available in respect of each step taken by him after that date, raising the inference that, as with Mr Hetherington, he is claiming in respect of all steps taken by him in defence of Ms Hamilton’s claim, rather than being limited to those specific to his defence of the sixth cause of action.
[53] For the same reasons similar reductions have been made in respect of Mr Hetherington’s claim for scale costs, I would reduce by three-quarters the award of scale costs taken by Mr Kirwan before 22 August 2019, and one-half those steps taken by him from that date.
[54] Turning to address Ms Hamilton’s more specific objections to Mr Kirwan’s costs claim, Mr Crossland first submits that no allowance should be made in respect of the claims under step 13 for attendances at case management conferences on 12 and 25 February 2020 when the conferences on those dates were vacated, with orders being made on the papers. Having reviewed the Court’s file in this matter and confirmed that Mr Crossland is correct in his description of events,33 I agree. No award should be made in respect of attendances at conferences that did not occur.
[55] I also agree with Mr Crossland that, for the same reasons given that Mr Hetherington’s claim in respect of the reduced hearing should be disallowed, no award should be made in respect of Mr Kirwan’s claims in respect of a two day hearing under steps 30, 32, and 34.
33 Hamilton v Kirwan (Minute of Associate Judge Paulsen) HC Auckland CIV-2018-404-322, 11 February 2020; Hamilton v Kirwan (Minute of Associate Judge RM Bell) HC Auckland CIV-2018- 404-322, 25 February 2020.
[56] Finally, Mr Crossland submits that it is inappropriate for Mr Kirwan to claim, as he must be to be claiming a total of 3.5 days in respect of “preparation of affidavits, lists of issues or authorities, and agreeing common bundle” both under steps 30 and
31. That is, his claim includes a claim in respect of having prepared the common bundle when, as Mr Crossland correctly notes, Mr Kirwan did not prepare the bundle. His claim for 0.5 days in respect of that step should be disallowed.
[57] Applying the above reductions and disallowances, I would fix Mr Kirwan’s entitlement to scale costs at $3,561.34 He makes no claim in respect of disbursements.
Result
[58] Off-setting the lesser of these amounts against the greater, and for the reasons given above, I would order that the first and second defendants are to pay Ms Hamilton’s costs on a 2B basis and disbursements in the amount of $40,737.02. As indicated, that liability is, as is ordinarily the case,35 to be joint and several.
Woolford J
Solicitors:Shieff Angland (S Langston/Kalev Crossland), Auckland, for the Plaintiff McElroys (P Moodley), Auckland, for the First Defendant
Keil & Associates (K Stirling), Auckland, for the Second Defendant
Counsel: L J Kearns, Auckland, for the Plaintiff
G C Jenkin, Auckland, for the Second Defendant
34 I note that, in his memorandum, Mr Moodley claimed at the daily recovery rate of $2,390 applicable to steps taken in a category 2 from 1 August 2019, in respect of steps taken before that date. As noted at [41] of the previous judgment, the daily recovery rate applicable to steps taken before that date was $2,230, not $2,390, the adjustment in daily recovery rates as from that date introduced by the High Court Amendment Rules 2019 having not been retrospective. This figure is calculated applying the figure of $2,230 to steps taken before 1 August 2019 (producing an award in respect of those steps of $334.50), and $2,390 to steps taken from 1 August 2019 (producing an award in respect of those steps of $3,226.50).
35 High Court Rules 2016, r 14.14.
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