He v Chen - [2024] NZHC 3988

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-3369

[2024] NZHC 3988

BETWEEN
YAO WE HE

Plaintiff

AND

ZHIXIONG CHEN

Defendant

Hearing: On the papers

Counsel:

Self-represented Plaintiff

C Jiang and K Mills for Defendant

Judgment:

20 December 2024

COSTS JUDGMENT OF BECROFT J

This judgment was delivered by me on 20 December 2024 at 2pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

Solicitors:
Tompkins Wake, Auckland Copy to: Y He, Auckland

HE v CHEN [2024] NZHC 3988 [20 December 2024]

Application

[1]This is a civil costs application.

Context

[2] The substantive issues between the parties arose in the context of a breakdown in the business relationship between the plaintiff, Mr He, and the son of the defendant. Together, the pair exported New Zealand infant milk formula to Hong Kong and China.

[3] Mr He issued proceedings against Mr Chen Snr on 23 December 2014 essentially claiming (amongst other things) that their relationship could be characterised as a joint venture. Mr He regarded Mr Chen Jnr as an underling. He maintained his real business relationship was with Mr Chen Snr.

[4] Due to a series of delays and procedural skirmishes, the substantive hearing was only heard in February 2024 in a 12-day hearing before me. I delivered my judgment on 14 June 2024.1

[5] Mr He’s claim failed on each of the five causes of action he alleged. He was unable to satisfy his burden of proof given the lack of documentary evidence and the time that had passed since the relevant events, which made exact memory recall very difficult.

Procedural history as to costs

[6] I was hopeful that the parties would be able to agree costs. That has not been possible.

[7] On 3 July 2024, counsel for the defendant filed a “procedural” costs memorandum. Counsel requested a two-week extension to the 5 July 2024 timetabling direction for Mr Chen Snr to file a costs memorandum. That extension was sought to

1 He v Chen [2024] NZHC 1565.

enable counsel to locate all relevant invoices and receipts. I granted the extension on 5 July 2024.

[8] On 19 July 2024, counsel for Mr Chen Snr filed a full memorandum in relation to costs.

[9] My minute of 5 July 2024 had directed Mr He to file his reply memorandum within 15 working days from receipt of the defendant’s memorandum. Mr He failed to do so. And he did not reply to counsel for Mr Chen Snr’s email of 13 August 2024 enquiring when he would file a reply memorandum.

[10] In light of that default, on 26 August 2024, counsel for Mr Chen Snr filed a memorandum requesting the Court make an order that unless Mr He filed his costs memorandum by 6 September 2023, then the 2B scale costs and the disbursements claimed by Mr Chen Snr would be granted by default.

[11] On 5 September 2024, Mr He sought…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading He v Chen

Details

AGLC: He v Chen [2024] NZHC 3988
Case: [2024] NZHC 3988
Decision Date: 20 December 2024

CaseChat Overview and Summary

The case of He v Chen is a civil costs application that arose out of a protracted business dispute between the plaintiff, Mr He, and the defendant, Mr Chen Snr. The primary issues between the parties stemmed from their business relationship in exporting New Zealand infant milk formula to Hong Kong and China, which eventually deteriorated. Mr He brought proceedings against Mr Chen Snr in 2014, seeking to establish that their relationship constituted a joint venture and claiming various breaches of contract. After a lengthy and complex trial, the court dismissed all of Mr He's claims in June 2024.

The legal issues before the court in this costs application were whether the defendant, Mr Chen Snr, was entitled to costs on a 2B scale and whether specific disbursements claimed were reasonable and necessary. Mr Chen Snr sought costs and disbursements totalling $263,656.80. In contrast, Mr He raised objections to several items claimed by Mr Chen Snr, arguing that some were either unnecessary or duplicated costs already accounted for in the scale costs.

The court held that while the normal principle of costs following the event applied, the costs should be carefully scrutinised to ensure they were reasonable and proportionate to the nature and duration of the proceedings. The court allowed for second counsel, finding their assistance invaluable in managing the complexity and volume of documents. However, the court declined to allow certain disbursements, such as those related to setting up the courtroom for the electronic bundle, as these were either not necessary or not sufficiently particularised. The court also disallowed the cost of filing the defendant’s costs memorandum due to errors in the initial submission. After making these deductions, the court found that the remaining costs claimed were reasonable and appropriate, given the complexity of the case and the lack of documentary evidence from Mr He. The court ultimately ordered costs of $150,067 and disbursements of $109,871.82, bringing the total to $259,938.82.

Orders