Harrison v Auckland District Health Board
[2013] NZHC 1770
•12 July 2013
ORDER PROHIBITING PUBLICATION OF NAME(S), ADDRESS(ES) OR IDENTIFYING PARTICULARS OF SECOND, THIRD AND FOURTH DEFENDANTS
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2011-404-006634 [2013] NZHC 1770
BETWEEN P J HARRISON First Plaintiff
A J HARRISON Second Plaintiff
ANDAUCKLAND DISTRICT HEALTH BOARD
First Defendant
Hearing: By Memoranda
Appearances: P J and A J Harrison (in person) A M Adams for first defendant
A H Waalkens QC for second and third defendants
N A Craig for fourth defendant A L Martin for fifth defendant P J Gunn for sixth defendant
Judgment: 12 July 2013
JUDGMENT OF ASSOCIATE JUDGE ABBOTT
This judgment was delivered by me on 12 July 2013 at 5.30pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Meredith Connell, Auckland
Fisher Lamberg, Auckland
Date……………
N Craig, New Zealand Nurses Organisation, Auckland
A L Martin, Office of Health and Disability Commissioner, Wellington
Crown Law, Wellington
Counsel:
A H Waalkens QC, Auckland
Also to:
P J Harrison/A J Harrison, Christchurch
HARRISON v AUCKLAND DISTRICT HEALTH BOARD [2013] NZHC 1770 [12 July 2013]
AND F
Second Defendant
AND G
Third Defendant
AND H
Fourth Defendant
ANDHEALTH AND DISABILITY COMMISSIONER
Fifth Defendant
ANDCORONIAL SERVICES UNIT Sixth Defendant
[1] On 15 October 2012, this Court struck out the plaintiffs’ claims in this proceeding against all defendants.1 In a further finding, the Court ruled that the defendants were entitled to costs, but reserved the quantum of costs to allow the parties opportunity to seek agreement, or alternatively to make submissions.
[2] The parties were unable to reach agreement. They have filed memoranda setting out their respective cases. This judgment determines the quantum of costs to which each defendant is entitled.
Background
[3] The plaintiffs issued this proceeding in October 2011, claiming that the defendants had a liability to account, in a number of different ways, for actions contributing to or following the death in hospital in October 2007 of Malcolm Armstrong Harrison (brother of the first plaintiff and uncle of the second plaintiff).
[4] The hospital in which the deceased died was administered by the first defendant. The second, third and fourth defendants were medical professionals employed by the first defendant, who took part in the treatment and care given to the deceased whilst in hospital. The fifth and sixth defendants undertook investigations into Mr Harrison’s death (a coroner conducted an inquest and released findings in respect of the death in 2008, and the fifth defendant considered and determined a complaint in 2009).
[5] The plaintiffs, acting for themselves, filed a statement of claim making serious allegations of error and malpractice against the first to fourth defendants in relation to the treatment of the deceased whilst in hospital. They also made allegations of bias and breach of statutory duties by the fifth and sixth defendants, in relation to the enquiries into the death that they subsequently undertook. These allegations were made in a lengthy, discursive, claim that traversed events leading up to the admission of the deceased to hospital, the treatment he received whilst in hospital, and the plaintiffs’ challenges to the conduct of all defendants following the
deceased’s death. The allegations included contentions of breaches of criminal law and conspiracy to defeat justice.
[6] The response of each defendant, upon being served with the claim, was to file an application to strike out on several grounds, including that reasonably arguable causes of action could not be discerned from the wide ranging and discursive statement of claim and that it was an abuse of process.
[7] The plaintiffs were given opportunity to re-plead the claim (and were encouraged to take legal advice). They did not do so. The claims were struck out on several grounds. First, the facts pleaded did not give rise to any recognisable cause of action, save for a conceptually possible but unpleaded and factually unlikely claim for judicial review, and did not justify the relief that the plaintiffs’ sought. Secondly the claim was unnecessarily prolix, contained scandalous allegations and irrelevant material, and was largely unintelligible in terms of advancing causes of action. This made it impossible for the defendants to plead sensibly to it. Thirdly, the claim was found to be vexatious and an abuse of process given an extensive history of complaint and investigation, including the coronial inquiry and later consideration by the fifth defendant. The prospect of the claim being amended to one for judicial review of the earlier investigations was rejected on the twin grounds that any such claim faced insuperable obstacles and the plaintiffs had made it clear that they were unwilling to amend.
The costs being sought
[8] All defendants have filed memoranda in which all but the fifth defendant2 seek either increased or indemnity costs, or costs at the top of the scale in Schedule 3 to the High Court Rules (being category 3 time band C):
(a) The first defendant health board seeks an award of $41,454, based on a calculation of costs on a scale 3C basis, uplifted by 50 per cent
(b)The second and third defendants seek indemnity costs of $33,189 plus disbursements of $1,260.88.
(c) The fourth defendant seeks an award on a scale 3C basis, without providing a breakdown of the specific costs.
(d)The fifth defendant seeks costs of $18,308 together with disbursements of $1,366.79. The costs sought are on the basis of cost category 2, but with a C time allocation.
(e) The sixth defendant seeks indemnity costs of $12,105.31 together with disbursements of $1,225.94.
Applicable principles
[9] The starting point for a determination of costs is that a successful party should receive a reasonable contribution towards its costs.3 This underlying principle of reasonableness flows through to considerations of conduct which has affected the time and expense that the party seeking costs has had to incur.
[10] The Court approaches its determination by reference to principles and criteria set out in the High Court Rules, the objective of which is to provide parties with a reasonable amount of predictability and certainty by establishing a scale for the determination of costs. However, the Court has an overriding discretion in relation to costs4 and will not hesitate to depart from scale if satisfied that it is appropriate to
do so.5
[11] In the determination of costs the principles applied are set out in r 14.2:
14.2 Principles applying to determination of costs
The following general principles apply to the determination of costs:
(a) the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:
3 Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA).
4 Recognised in r 14.1.
5 Glaister v Amalgamated Dairies Ltd, above n 3, at [28].
(b) an award of costs should reflect the complexity and significance of the proceeding:
(c) costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application:
(d) an appropriate daily recovery rate should normally be two-thirds of the daily rate considered reasonable in relation to the proceeding or interlocutory application:
(e) what is an appropriate daily recovery rate and what is a reasonable time should not depend on the skill or experience of the solicitor or counsel involved or on the time actually spent by the solicitor or counsel involved or on the costs actually incurred by the party claiming costs:
(f) an award of costs should not exceed the costs incurred by the party claiming costs:
(g) so far as possible the determination of costs should be predictable and expeditious.
[12] The High Court Rules also provide criteria for the application of these principles, first by classifying proceedings into one of three categories6 according to complexity and significance, and secondly by prescribing daily recovery rates applicable to each category,7 and thirdly by setting a reasonable period of time for the various steps in a proceeding.8 These vary according to what is considered reasonable having regard to the particular case.
[13] The High Court Rules also make provision for the award of increased or indemnity costs, if required in the circumstances of the case:
(a) Criteria for an award of increased costs are set out in r 14.6(3):
(3) The court may order a party to pay increased costs if—
(a) the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or
6 High Court Rules, r14.3.
7 Rule 14.4 and Schedule 2.
8 Rule 14.5(2).
(b) the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
(i) failing to comply with these rules or with a direction of the court; or
(ii) taking or pursuing an unnecessary step or an argument that lacks merit; or
(iii) failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or
(iv) failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or
(v) failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or
(c) the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or
(d) some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.
(b)Criteria for an award of indemnity costs are set out in r 14.6(4). The relevant parts of that rule for the present application are:
(4) The court may order a party to pay indemnity costs if—
(a) the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or
(b) the party has ignored or disobeyed an order or direction of the court or breached an undertaking given to the court or another party; or
....
(f) some other reason exists which justifies the court making an order for indemnity costs despite the
principle that the determination of costs should be predictable and expeditious.
[14] One of the circumstances which will justify an award of increased costs is where there is a failure by a party to act reasonably9 and that failure has contributed to the time or expense of the proceeding.10
[15] The Court of Appeal set out the approach to be taken in determining increased costs in Holdfast NZ Ltd v Selleys Pty Ltd.11 This is to first fix the appropriate award according to scale, and then to consider an uplift from that, in the following steps:
(a) a cost category is to be assigned to the proceeding;
(b)a determination is made as to a reasonable time for each step in the proceeding, in terms of the time allocations in the rules; and
(c) a party who feels that a step required more time than permitted under the appropriate time allocation can argue for an increase if it is warranted by the nature of the proceeding (or the particular step)12 or because the paying party has contributed unnecessarily to the time needed by any one of the reasons set out in r 14.6(3)(b).13
[16] The threshold for indemnity costs is a high one: it has been said to require the
Court to come to the view that a party has behaved “exceptionally badly”14, and that their conduct was flagrant.15
9 Bradbury v Westpac Banking Corp [2009] 3 NZLR 400 (CA) at [27] (Bradbury Court of Appeal decision).
10 See Commissioner of Inland Revenue v Chesterfields Pre Schools Ltd [2010] NZCA 400 at
[165].
11 Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [43]-[44].
12 High Court Rules, r 14.6(3)(a).
13 Where the appropriate time allocation is band A (a comparatively small amount of time is considered reasonable) or band B (a normal amount of time is considered reasonable) it is
unlikely that any increase will exceed 50 per centgiven that the daily recovery rate is set to
reflect two thirds of the daily rate considered reasonable for the particular proceeding. Andrew
Beck and Others McGechan on Procedure (online looseleaf ed, Brookers) at [HRPt 14.6.02].
14 Bradbury Court of Appeal decision, above n 9, at [27] – [28]; Prebble v Huata [2005] NZSC 18,
2005 2 NZLR 467 at [6].
15 Prebble v Huata, [2005] BCL 406 (SC) at [6].
[17] The following categories of behaviour have been found to cross that threshold:16
(a) Allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud.
(b)Particular misconduct causing loss of time to the Court and to other parties.
(c) Commencing or continuing a proceeding for some ulterior motive.
(d) Doing so in wilful disregard of known facts or clearly established law. (e) Making allegations which ought never to have been made, or unduly
prolonging a case by groundless contentions – essentially “the hopeless case” situation.
[18] The quantum of indemnity costs is determined by reference to actual costs reasonably incurred. Costs are reasonably incurred if the categories of legal expenditure are foreseeable, and of a magnitude that an objective observer would have expected for the litigation, irrespective of how egregious the other parties may
have been.17 Whether the actual costs were reasonably incurred is to be assessed by
determining whether a particular step was reasonably taken, whether the time taken was appropriate for the significance and complexity of that work, and whether an applicable and reasonable median hourly rate was used.18 Ultimately, however, the object of the exercise is to make an assessment as to what is reasonable, in keeping
with the purpose and spirit of a rule which provides a right to recover actual costs:19
16 These categories were first identified in the decision of the Federal Court of Australia in Colgate Parmolive Co v Kussons Pty Ltd (1993) 118 ALR 248; they were adopted by this Court in Hedley v Kiwi Cooperative Dairies Ltd (2002) 16 PRNZ 694 (HC) at [11], and were endorsed by the Court of Appeal in Bradbury Court of Appeal decision, above n 9, at [29].
17 Bradbury v Westpac Banking Corporation (2008) 18 PRNZ 859 (HC) at [204] – [205] (Bradbury High Court decision).
18 At [209].
[19] As stated by Harrison J:20
Care must be taken not to apply an unduly rigorous measure when acting with the benefit of hindsight, or to subject items of expenditure to an unnecessarily exacting examination. The resulting figure will reflect an overall evaluation of what costs are reasonably incurred.
The defendants’ arguments
The first defendant
[20] The first defendant health board contends that an award on a scale 3 C basis recognises first the complexity of the claim as presented and the seriousness of the allegations made against it, and the comparatively large amount of time needed to analyse and address the voluminous and verbose documents filed by the plaintiffs. It contends that the scale costs should be increased to recognise the unreasonable conduct by the plaintiffs in bringing incomprehensible and untenable claims and continuing to pursue unmeritorious complaints; and in failing to observe requirements of the High Court Rules as to the appropriate manner of pleading a claim, and by endeavouring to circumvent Court directions with which they did not agree. It also justifies the costs being sought on the basis that its actual costs were more than double the amount sought.
The second and third defendants
[21] The second and third defendants seek indemnity costs on the ground that the plaintiffs acted vexatiously, frivolously, improperly, or unnecessarily in commencing and pursuing the proceeding, particularly in that the plaintiffs’ allegations ought never to have been made and that their case was always hopeless. They say that the plaintiffs must have known that their claim was seriously flawed (they persisted with it despite having been informed of the problems). Additionally they say that the plaintiffs were pursuing a “crusade”, and making scandalous allegations against them designed to cause maximum upset and harm, and had been warned against that behaviour in previous litigation where the plaintiff, P J Harrison, had been found to have abused Court process in a similar crusade. They also said that indemnity costs were warranted by their conduct (insisting on serving the second defendant in an
aggressive and intimidating manner notwithstanding that the second defendant had accepted service), and in their behaviour generally in the first case management conference for the proceeding, and towards counsel at the hearing.
[22] In the alternative, they seek an award of costs on the same basis as the first defendant, namely on a scale 3C basis together with an increase, but otherwise on a straight 3C basis. They say that the proceeding was sufficiently complex, and of a great significance (in light of the potentially serious consequences for them as health professionals, and the threats made against them) as to require counsel of higher than normal skill and experience for a High Court proceeding, and required a comparatively large amount of time.
The fourth defendant
[23] The fourth defendant seeks an award at the top of the scale on the grounds that the claims were complex, and the nature of the plaintiffs’ pleadings required a large amount of time to analyse properly.
The fifth defendant
[24] The fifth defendant did not contend that the claim against it was sufficiently complex, or of sufficient concern, to justify counsel of any greater skill and experience than would be normal for a High Court proceeding, but argued that a greater amount of time than normal was required having regard to the voluminous nature of the pleading and other documents filed by the plaintiffs, the large number of potential heads of claim, and the need to address the possibility of any amendment. The fifth defendant also said that the higher time allocation should be given to reflect the plaintiffs’ conduct at judicial telephone conferences. The fifth defendant points out that its claim does not include allowance for the second counsel who appeared at the hearing, and were still less than actual costs for the fifth defendant’s principal counsel.
The sixth defendant
[25] The sixth defendant seeks indemnity costs on the ground that the claim was improperly and unnecessarily commenced and pursued, and relies on the finding that the claim was fundamentally flawed, vexatious and an abuse of process. The sixth defendant also said that indemnity costs should be used to condemn the bringing of what was a sensational and unsubstantiated claim against it, and also relied on the plaintiffs’ inappropriate conduct at the first case management conference, in which the plaintiffs refused to countenance any amendment to their claim, and were generally abusive.
[26] In the alternative, the sixth defendant seeks an award on a scale 2B basis, uplifted by 50%. The uplift was sought on the basis that the plaintiffs had failed to act reasonably in bringing their wide ranging and meritless claim.
The plaintiffs’ response
[27] The plaintiffs have filed a memorandum opposing any award of costs. They have appealed the judgment, and say that costs should not be awarded because the decision to strike out their claims was wrong. They also contend that a costs order would discriminate against them as self-represented litigants, and would be in appropriate as it would deter others from bringing genuine malpractice complaints to the Court.21
The claims for indemnity costs
[28] The first question to determine is whether the defendants have satisfied the criteria for awarding indemnity costs. If so, the Court must then assess whether the costs claimed are reasonable.
[29] The claims for indemnity costs22 are advanced broadly on two grounds. First,
the lack of merits and secondly the plaintiffs’ conduct.
21 The plaintiffs’ submission was that this would be a calculated effect of any order. The submission has been rephrased to capture an acceptable proposition: the insinuation that the Court is acting deliberately to deter litigants from bringing meritorious claims is without foundation, and a contempt of Court.
22 By the first and second defendants, and by the sixth defendant.
[30] The lack of merits in the claims against these parties comes within the criterion in r 14.6(4)(a) of acting frivolously or unnecessarily in commencing and continuing this proceeding.
[31] The plaintiffs made very serious allegations against these defendants (in respect of the second and third defendants, culpable homicide and other criminal breaches as well as conspiracy of legal duties, in respect of the sixth defendant predetermination, bias in the conduct of the inquest, conflict of interest and conspiracy to conceal the malpractice) without establishing an arguable basis in law for personal civil liability23 or an appropriate factual basis for the allegations against these individuals.
[32] Even if it could be argued that the plaintiffs should be given some latitude as litigants in person, they chose to ignore warnings by the solicitors for the second and third defendants that the claims were without merit, and either failed to take up a suggestion by the Court at the first case management conference that they take legal advice or, if they did take it, to follow that advice (given that they have steadfastly refused to address any of the deficiencies in the statement of claim that were raised prior to or at that conference.
[33] This lack of merit is exemplified by the absence of a pleading of any appropriate relief against these parties:24 no specific relief was sought against the second or third defendants and the claim for removal of the Coroner was clearly beyond the power of the Court in this proceeding. Even if there was some merit to the plaintiffs’ claims that these defendants breached appropriate standards of conduct (allegations which were not given proper support in the proceeding) that did not give the plaintiffs any basis for bringing this claim against them.
[34] The hopelessness of the case against these defendants ought to have been apparent to the plaintiffs before they commenced the proceeding but, in any event,
when their attention was drawn to the deficiencies by the solicitors for the second
23 Apart, perhaps from a possible claim for judicial review in respect of the Coroner’s inquest, but
even that was found to face insuperable difficulties.
24 Assuming for these purposes that the coroner herself rather than the statutory entity that administers the Coroners Act was named as the defendant.
and third defendants and on receipt of the applications to strike out. Regrettably, the plaintiffs did not heed these warnings. This takes me to the second ground for the claim for indemnity costs, namely, the plaintiffs’ conduct.
[35] The manner in which the plaintiffs pursued their claims against these defendants undoubtedly amounts to vexatious and improper conduct (the criterion for indemnity costs in r 14.6(4)(a)). I refer, by way of examples, to their insistence upon serving the second and third defendants personally (despite their solicitors having accepted service), the serious but unsupported allegations about their professional performance, intemperate remarks made orally in conferences and hearings and in their written material including personal attacks on individuals, and their refusal to remove inappropriate material or moderate their comments when given opportunity. Comparisons to the behaviour of persons convicted of serious crimes, in unrelated cases both in New Zealand and overseas, are appropriately regarded by the defendants as scandalous, and when taken together with the plaintiffs’ unwillingness to accept any view of the facts that does not accord with their own, justifies the conclusion that their pursuit of these defendants was a personal crusade rather than a reasonable pursuit of legal rights.
[36] It is significant that this is not the first time that the first plaintiff has brought wide ranging and serious allegations against persons without establishing a proper basis for them. In another case before this Court, in which the first plaintiff appeared in person, the Court commented (after giving her leave to be heard notwithstanding an apparent notice of discontinuance):25
She has abused the occasion to make wide-ranging and serious allegations against a group of individuals including the executors, the solicitors for the estate, and counsel. She alleges criminal misconduct and conspiracy. This Court is not a forum for personal crusades or attacks. In the event that Ms Harrison alleges criminality by other parties she has a right to make complaints to the appropriate authorities. I should add, though, that there is no evidence whatsoever on the file to support her allegations.
[37] These comments are echoed in this proceeding in the conduct of the first plaintiff, and to a lesser extent that of the second plaintiff, where they have been
aggressive and threatening towards individual defendants when serving them,
25 Harrison v Harrison HC Auckland CIV 2006-404-002003, 6 August 2008, Harrison J at [8].
shouted over the Court and counsel for the defendants in a case management conference (leading to abandonment of the conference), made inappropriate and highly discourteous statements about counsel, and have included the Court in allegations of perverting the course of justice when a decision adverse to them has been given.26
[38] There can be no question that the plaintiffs were entitled to raise their concerns about the circumstances of Mr Harrison’s death and to seek proper answers. They have had the opportunity to do so by approaches directly to the first defendant (they have sent in the order of 250 emails and been given a substantial amount of information), by participation in the coronial enquiry, and in the course of complaints to the police, professional disciplinary bodies and the fifth defendant. Their view that the true circumstances of Mr Harrison’s death have not emerged from those processes, even if genuinely held, cannot be used to justify the bringing of a claim that has no legal or appropriate factual basis.
[39] I find that this is an appropriate case for an award of indemnity costs in favour of the second and third defendants and the sixth defendant.
[40] The next matter to consider is whether the costs claimed by these defendants are reasonable. I will deal with them separately as counsel have approached this aspect in different ways:
(a) The second and third defendants have produced copies of the invoices rendered by counsel. (There is no claim by the instructing solicitor.) Counsel’s invoices identify the work undertaken, without providing a breakdown of time engaged nor an hourly rate applied.
(b)The sixth defendant has also produced copies of invoices rendered to it by the Crown Law Office but those invoices identify the total time
expended (36.47 hours) and the hourly rates applied.
26 The groundless and inappropriate allegations have continued in the plaintiffs’ responses on costs.
In addition to the remark mentioned in footnote 21, the plaintiffs have accused counsel for the second and third defendants of uttering falsehoods, stated that other lawyers have acted dishonestly, and have made broad allegations of perversion of justice without providing any verifiable particulars.
(c) Both parties have listed the disbursements they have incurred.
[41] Dealing first with the sixth defendant, I accept that the work that has been identified was required, and that the time engaged is appropriate for that work. In coming to that view, I note that the indemnity costs sought are just over a third more than could be claimed on a standard scale 2B basis (which are said to provide recovery for approximately two-thirds of estimated actual costs) and, as I will address shortly, I consider that an increase of standard costs is appropriate. I find that the sixth defendant’s actual costs as claimed are reasonable.
[42] It is not as easy to determine the claim for the second and third defendants, because they have provided no detail of actual time engaged. One of the essential planks to their claim is that it was reasonable for them to engage senior counsel, given the seriousness of the allegations and potential impact on their professional reputations. The other factor to consider is the time that would be needed to analyse and respond to what I have already found was an unnecessarily lengthy and confused statement of claim.
[43] I understand the defendants wish to engage senior counsel, but the question for the Court is whether it was reasonable to do so having regard to the issues in the case. The defendants have said from the outset that the claim against them is hopeless. Whilst I accept that they may have taken comfort from the fact that they had senior counsel conducting the case, their own contention that the case was hopeless means that their case did not need to be presented by senior counsel. That was certainly the position taken by the other defendants. I do not ignore the importance to the clients, but I also take into account that this was an interlocutory application rather than a substantive determination where findings would have been made on the allegations that were of particular concern to the defendant.
[44] The time that was required for analysis and preparation of submissions is obviously a factor in the quantum of the actual costs, and must take into account the number and nature of the allegations. In assessing a reasonable time for the work undertaken on behalf of these defendants, I take into account that if I had been
awarding costs on a scale basis, I would have considered it reasonable to have allocated time on a band C basis for a number of the scheduled items of work.
[45] In the absence of information as to actual time engaged, I must make an assessment. I have already accepted that the time incurred on behalf of the sixth defendant was reasonable, and I consider that the claims against these defendants were wider ranging and would have taken more time. The second and third defendants also brought a successful application for suppression of their names,
which added to their costs. Lastly, I take into account the comment in Bradbury27
that the object of the exercise is to make an assessment in terms of a rule that is directed at recovery of actual costs.
[46] Weighing all of these factors, I find that a reasonable amount for the actual costs is $22,000 plus GST, plus the disbursements claimed of $1,269.88 (a total sum of $26,569.88).
The claims for increased costs
[47] Before addressing the facts that might justify an order for increased costs, the appropriate cost category for the proceeding must be determined. All defendants, other than the fifth defendant, contend that the complexity of the claim (with its multiple causes of action), coupled with the seriousness of the allegations and hence the importance to the parties, warrants the highest (category 3) classification.
[48] As I have already commented, I accept that these are serious allegations but do not see that they necessarily required counsel having a higher than usual (for the High Court) standard of skill or experience, particularly at an interlocutory stage. The case of all defendants was that these claims had no prospect of success. That argument was capable of being presented by counsel having the skill and experience to run normal cases in the High Court. The complexity that arose from the multiple causes of action and nature of the statement of claim gave rise to a need for further time to analyse and answer it rather than calling for a higher level of skills or
expertise. For example, it was not a case of the plaintiffs advancing a novel cause of
27 Bradbury, High Court decision, above n 17.
action which had to be assessed, but rather whether the facts fitted within any existing cause of action.
[49] I accept that the significance of the case can be a factor in deciding to allocate a case to the top category. However, that must be considered in tandem with the causes of action and issues being advanced. I accept that the plaintiffs’ challenge to the integrity and professional standing of all parties warranted a careful and fulsome response, but this case was not so much about the complexity of the causes of action or issues as the need for time to analyse what the plaintiffs were saying and establish whether or not there was any arguable basis for claim. The other primary plank for the applications to strike out (the plaintiffs’ conduct) was well within the competence of counsel of normal skill and experience for a High Court proceeding.
[50] For these reasons, I find that the appropriate cost category is category 2.
[51] This takes me to the appropriate time banding. I am satisfied that the nature and content of the statement of claim required a greater than normal amount of time to analyse and answer. The statement of claim was 60 pages long, containing 330 paragraphs, pleaded multiple causes of action and alleged breaches of duty under 11 statutes. It was unnecessarily repetitive. It included a significant amount of material that was irrelevant and/or unnecessary in a pleading (including evidence, opinion and argument). It was framed in a way that made it impossible to plead to and, contrary to the requirements of the High Court Rules.
[52] As I have already said, it raised serious allegations (for example, saying that defendants “actively killed”, and alleged criminal acts, malpractice, and conspiracy). It was appropriate that all defendants provide a significant and detailed response in support of their applications to strike out.
[53] I accept that a time allocation on the top band (C) was appropriate for all steps that the defendants took in analysing the claim and preparing submissions. I also consider that an increase of 50 per cent on scale costs is appropriate to recognise that the plaintiffs’ refusal to re-frame their statement of claim to eliminate inappropriate, irrelevant and repetitive material, to remove unsustainable claims and
to present clear, comprehensible causes of action against the various defendants (conforming reasonably with the requirements of the High Court Rules) was unreasonable, and has contributed to a significant increase in the defendants’ costs.
Quantum of claims for increased costs
First defendant
[54] I have already ruled that a band C time allocation is initially appropriate for the analysis of the claim and preparation of submissions. In addition, the first defendant prepared a very comprehensive memorandum for the first case management conference, for which band C is also appropriate. The costs awarded on that basis are then to be increased by 50 per cent.
[55] The first defendant has provided a schedule of steps provided for in Schedule 3 of the High Court Rules for which costs are sought. I fix the quantum of its claim accordingly, by reference to the steps in the first defendant’s schedule, as follows:
(a) Items 10 and 13 are given a band B time allocation.
(b) The remaining items (11, 22, 24 and 26) are given a band C
allocation.
[56] This results in a total allocation of eight days, which on a cost category 2 rate of $1,990 is $15,920. This sum is to be increased by 50 per cent, giving an overall cost entitlement of $23,880. The first defendant is also entitled to its disbursements as fixed by the Registrar (no details having been provided).
Fourth defendant
[57] The fourth defendant has not provided a schedule of the specific items of work claimed. I regard the steps claimed by the first defendant as appropriate also for the fourth defendant. Similarly, I consider that the time band allocation should be the same with two exceptions:
(a) The fourth defendant did not provide a comprehensive memorandum for the first case management conference, so there is no need for a band C allocation for that step; and
(b)The fourth defendant did have to present a case for suppression of name at the case management conference on 23 February 201, which would have required additional work, and a band C allocation is allowed for that.
[58] The fourth defendant has not sought an increase in these scale costs. I consider that appropriate given the lesser role taken by counsel in the hearing: although a substantial amount of time was needed to address the fourth defendant’s concerns, that is sufficiently recognised by the C time banding. I fix the quantum of the fourth defendant’s claim, accordingly, by reference to the following steps in Schedule 3 to the High Court Rules:
(a) Items 10, 11 and 13 (in respect of item 13, the case management conference on 26 January 2012 only) are allowed on time band B, resulting in an allowance of 1.1 day;
(b) Items 13 (the case management conference on 23 February 2012), 22,
24 and 26 are allowed on time band C, resulting in an allowance of
6.7 days.
[59] The total allocation of 7.8 days, at a cost category 2 rate of $1,990, gives an entitlement of $15,522. The fourth defendant is also entitled to disbursements as fixed by the Registrar.
Fifth defendant
[60] The fifth defendant has provided an itemised schedule of work claimed (in accordance with Schedule 3 of the High Court Rule). I accept all items of work claimed, save for an item described as “obtaining judgment without appearance”. I also accept, for reasons similar to the other defendants, that a band B time allocation is appropriate for items 10, 11 and 13 (in respect of the conference on 26 January
2012 only as the fifth defendant did not appear at the conference on 23 February
2012). On that basis, I fix the following time allocations:
(a) Time band B for items 10, 11 and 13 (one conference only), resulting in an allowance of 1.1 days.
(b)Time band C basis in respect of items 22, 24 and 26, resulting in an allocation of 6 days.
[61] I fix costs accordingly on the basis of a total time allowance of 7.1 days at cost category 2 rate of $1,990, being the sum of $14,129. The fifth defendant is also entitled to disbursements of $1,366.79 as set out in counsel’s memorandum.
Decision
[62] I make an order that the plaintiffs pay costs to the defendants as follows:
(a) To the first defendant - $23,880 together with disbursements as fixed by the Registrar.
(b)To the second and third defendants - $25,300 together with disbursements of $1,269.88.
(c) To the fourth defendant - $15,522 together with disbursements as fixed by the Registrar.
(d) To the fifth defendant - $14,129 together with disbursements of
$1,366.79.
(e) To the sixth defendant - $12,105.31 together with disbursements of
$1,225.94.
Associate Judge Abbott
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