Hickman v Turner & Waverley Limited HC Auckland CIV-2008-404-005871

[2011] NZHC 569

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2008-404-005871

BETWEEN  HICKMAN & ORS Plaintiffs

ANDTURNER & WAVERLEY LIMITED & ORS

First Defendant

Counsel:         P Dale and D Grove for Plaintiffs

D Chisholm and G Blanchard for Defendants

Judgment:      15 June 2011 at 3:00 PM (On the papers)

COSTS JUDGMENT OF VENNING J

This judgment was delivered by me on 15 June 2011 at 3.00 pm, pursuant to Rule 11.5 of the High

Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Ellis Law, Auckland

CMS Legal, Auckland

Copy to:            P Dale/D W Grove, Auckland

D Chisholm/G Blanchard, Auckland

HICKMAN & ORS V TURNER & WAVERLEY LIMITED & ORS HC AK CIV-2008-404-005871 15 June

2011

[1]      The judgment of 9 December 2009 refers.  The parties have been unable to resolve the issue of costs.  Memoranda have been exchanged.  I propose to fix costs on the basis of the memoranda.

Categorisation

[2]      The first defendant, (formerly Turn & Wave Limited) submits the proceeding should be classed as category 3.

[3]      The plaintiffs submit it should be classed as category 2.  While accepting that the total value of the property involved was substantial the plaintiffs submit that was because of the number of investors involved in the transactions.  They submit that the number of parties of itself, did not warrant the application of category 3.  It was a matter of convenience to the parties and the Court that the matter proceeded by way of a representative action.    Only a limited  number of witnesses  were  called  in relation to the Turn & Wave proceedings.  The time allocated for the trial itself in preparation was sufficient to address complexities.

[4]      Category 2 applies to proceedings of average complexity.   Category 3 is appropriate where, because of their complexity or significance, the proceedings require counsel to have special skill and experience in the High Court.

[5]      Apart from the importance of the litigation to the representative investors the proceedings were very significant to the developers and their financiers.   The developers  were  significantly  affected  by  the  investors’ refusal  to  settle  on  the contracts.  Further, the legal issues raised were difficult and, in some respects, novel. The proceedings are appropriately classified as category 3.

Time allocations

[6]      The  plaintiffs  argue that  time band  B is  sufficient  given the developers, including the first defendant, were only required to call limited evidence.  Although there were a substantial number of causes of action they were, in essence, identical

between the three sets of proceedings.  Counsel also notes that formal discovery was not required.  The defendants claim on a band C basis for attendances and argue that large amounts of time were spent on the interlocutory processes.

[7]      As r 14.5 confirms, band B is appropriate if a normal amount of time is considered  reasonable  for  the  particular  step  in  the  proceeding.     Band  C  is appropriate if a comparatively large amount of time for that particular step would be reasonable.

[8]      There is no difference between band B and band C in terms of the allowance for preparation for the hearing and presentation of the case, (as they are calculated based on the days actually spent at the hearing), nor in relation to appearances at mentions hearings or call-overs.  For all other steps, however, there is a difference and, in some instances, a significant difference between time band B and time band C.  However, having reviewed the steps taken in the proceeding and bearing in mind the first defendant had to respond to claims by multiple plaintiffs and to prepare for a hearing involving a number of representative plaintiffs I accept that the steps claimed for by the defendants are justified and that in relation to those steps time band C is appropriate.

[9]      I accept that the memoranda filed for the conferences were detailed and would have required significant preparation and consultation amongst counsel.  The application for particulars was justified in the circumstances and would have taken some time to prepare.  The security for costs application would, I accept, have been time consuming.  While a formal list of documents was not prepared I again accept counsel would have taken considerable time to review and collate documents for the exchanges which occurred on an informal basis.   Inspection of the plaintiffs’ and related parties’ documents would also have required a significant amount of time. Apart from the plaintiffs’ documents material from Blue Chip entities and Blue Chip licensees had to be considered.  The pleadings were complicated.  Band C is justified to respond to the amended claim.

[10]     In the circumstances I am satisfied that the costs on a category 3 time band C

basis are appropriate.  I accept the defendants’ calculation of $275,394.00.

[11]     In addition disbursements of $26,436.50 are sought.  The disbursements are accepted except the plaintiffs query the disbursements for Korda Mentha and Jones Lang LaSalle on the basis that the evidence was used by all developers and the plaintiffs understood the costs of those experts were shared.  However, in the reply memorandum counsel for the first defendant has confirmed that the first defendant has paid the amounts on the Korda Mentha and Jones Lang LaSalle invoices directed to it.  In those circumstances I approve the disbursements sought of $26,436.50.

Joint/several liability

[12]     The first defendants seek costs against the representative investors jointly and severally.   Counsel for the plaintiffs submits that the Court should exercise its discretion under r 14.14 and not order costs on a joint and several basis in this case. While the claims were grouped together for convenience it is submitted that was also for the benefit of the defendants.  Several sets of proceedings could have been issued with each plaintiff ’s case taking one or two days rather than each plaintiff being potentially liable for the costs of a 25 day trial.

[13]     However,  it  would  not  be  reasonable  to  cap  each  of  the  representative plaintiffs’ liability and leave the defendants to pursue each and every plaintiff for the capped  amount.     I  would  expect  the  plaintiffs  to  have  made  cost  sharing arrangements and to have agreed between themselves the basis upon which costs would be met in the event the claims were unsuccessful.  I note that when the issue of security was resolved, it was expressly recorded that the plaintiffs were jointly and severally liable and that the limitation agreed to in relation to security did not apply to the representative plaintiffs directly involved in the trial.   I do not consider it necessary or appropriate to depart from the usual order of joint and several liability for the representative plaintiffs whose cases were unsuccessful.

[14]     As noted, when the security for costs application was resolved, the parties agreed to an order that all plaintiffs named in the proceeding were to be jointly and severally liable for an award of costs subject to each plaintiff’s liability being limited to $20,000 (other than the representative plaintiffs directly involved in the trial) and the total amount of security provided by the plaintiffs being limited to $250,000.

[15]     The cap of $250,000 was in relation to the provision of security but there was an express reservation of liability of the representative plaintiffs for the full costs of the proceeding.   There is  therefore no  limitation  of  liability on  the part  of the representative plaintiffs nor any cap in their case of $250,000.  The representative plaintiffs remain responsible for costs to the extent that they exceed the agreed cap for security of $250,000.

Result

[16]     The first defendant is to have an order for costs of $275,394.00 together with disbursements of $26,436.50.

[17]     All plaintiffs named in this proceeding are jointly and severally liable to the first defendant for those costs and disbursements up to $20,000 each to a maximum of $250,000 provided that the representative plaintiffs directly involved in the trial

are jointly and severally liable to the first defendant for the total sum of $301,830.50.

Venning J