Khurana Trustee Limited v Castle Backpacker K Road Limited

[2021] NZHC 2092

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2020-404-000049

[2021] NZHC 2092

UNDER

Part 16 of the Companies Act 1993

IN THE MATTER OF

the liquidation of CASTLE BACKPACKER K ROAD LIMITED

BETWEEN

KHURANA TRUSTEE LIMITED

Plaintiff

AND

CASTLE BACKPACKER K ROAD LIMITED

Defendant

Hearing:	On the papers
Appearances:	S C I Jeffs for the Plaintiff T J P Bowler the Defendant
Judgment:	12 August 2021

JUDGMENT OF VAN BOHEMEN J

[costs]

This judgment was delivered by me on 12 August 2021 at 3.30pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:

Patel Nand Legal, Auckland

Bankside Chambers, Auckland Neilsons Lawyers, Auckland

KHURANA TRUSTEE LIMITED v CASTLE BACKPACKER K ROAD LIMITED [costs] [2021] NZHC 2092

[12 August 2021]

Introduction

[1]                 By judgment dated 4 June 2021,1 I declined Khurana Trustee Ltd (Khurana) leave to appeal a decision of 4 December 2020.2 I held that Castle Backpacker K Road Limited (Castle) was entitled to costs on a 2B basis and gave leave to counsel to file memoranda if they were unable to agree costs.3

[2]                 Counsel for the parties have filed a joint memorandum regarding costs on the application for leave to appeal.

[3]                 The parties have agreed on costs as claimed by Castle, with the exception of two items:

(a)A memorandum dated and filed on 15 April 2021 from counsel for Castle; and

(b)A memorandum dated 11 May 2021 filed by counsel for Castle in respect of a teleconference on 12 May 2021.

[4]The Court has been asked to determine costs in respect of these two items.

The contested memoranda

Memorandum dated 15 April 2021

[5]                 This memorandum corrected a minute I issued on 13 April 2021. In my minute I said, in error, that Castle had not filed a notice of opposition to Khurana’s application for leave to appeal and directed that any such notice be filed by 23 April 2021.

[6]                 In the memorandum, Mr Bowler, counsel for Castle, advised that Castle had filed its notice of opposition and accompanying affidavit on 10 February 2021 and provided a copy of the notice of opposition and a copy of the receipt for the filing fee

1      Khurana Trustee Ltd v Castle Backpacker K Road Ltd [2021] NZHC 1315.

2      Khurana Trustee Ltd v Castle Backpacker K Road Ltd [2020] NZHC 3192.

3      Khurana Trustee Ltd v Castle Backpacker K Road Ltd, above n 1, at [46].

paid on 11 February 2021. Mr Bowler also advised that counsel for Khurana had confirmed that they had been served with the notice of opposition and affidavit.

[7]                 Mr Bowler submits that Castle were required to file the memorandum and should be able to recover costs in accordance with the allocation in sch 3 of the High Court Rules 2016 for the preparation of memoranda, being $956.00 (0.4 days at the daily rate of $2,390.00).

[8]                 Mr Jeffs, counsel for Khurana, says Khurana should not be responsible for the cost of this memorandum because it was due to a registry error that the defendant’s notice of opposition had not been available to the Court. Mr Jeffs also says that, consistent with the drafting of item 11 of sch 3 of the High Court Rules which is the only item dealing with costs for memoranda, costs can be recovered only for memoranda prepared for case management conferences or mention hearings. Mr Jeffs also says it would be excessive to award costs for a four-paragraph memorandum clarifying that documents had been filed and attaching the same.

Memorandum dated 11 May 2021

[9]                 This memorandum was filed in response to my minute of 3 May 2021, in which I invited counsel to file memoranda in advance of the teleconference on 12 May 2021.4

[10]              Mr Bowler submits that although the document was titled “memorandum,” the form and substance of the document were submissions for what was effectively a hearing of the plaintiff’s application via teleconference. Accordingly, Castle has claimed $3,585.00 in accordance with the allocation in sch 3 for the preparation of submissions (1.5 days at the daily rate of $2,390.00).

[11]              Mr Jeffs submits that Khurana is entitled to only 0.4 days, as this item was only a memorandum. Mr Jeffs says it would be excessive to award Castle costs of

$3,585.00 for what was a brief memorandum filed in advance of a teleconference that lasted no more than half an hour.

4      Khurana Trustee Limited v Castle Backpacker K Road Limited HC Auckland CIV-2019-404- 000049, 3 May 2021 at [4].

Discussion

[12]              Costs remain at the discretion of the Court,5 and the Court may refuse to make an order for costs or reduce the costs otherwise payable under the High Court Rules if a step in a proceeding is such that the time required by the party claiming costs would be substantially less than the time allocated under band A, or if any other reason exists which requires a reduction.6 Consistent with the principle in r 14.2(1)(f), the Court will not award costs where such an award would exceed the costs incurred by the party claiming costs.

[13]              I am satisfied that neither of the costs claimed by Castle is appropriate. In both cases, the costs claimed are likely to exceed the actual costs incurred.

[14]              While the length of a document is not always a reliable measure of the complexity of the issues and the appropriate recovery of costs, 7 I consider the short length, as well as the content of the memorandum of 15 April 2021, are indicative of the likely costs incurred by Castle.

[15]              The memorandum is less than half a page long and does no more than advise the Court that documents already in existence had previously been filed with the Court. While the memorandum was a proper response to my minute of 13 April 2021, the memorandum and accompanying actions should have taken little more than half an hour to complete. It does not warrant a claim for costs for a usual pre-trial memorandum. Accordingly, I dismiss this claim.

[16]              With respect to the memorandum of 11 May 2021, I accept that it effectively functioned as submissions on Khurana’s application for leave to appeal, which was heard at the telephone conference the following day. However, the discussion in the memorandum of the questions at issue was not extensive. The first page recited well- known principles applicable to applications for leave to appeal. The second page identified relevant passages in my earlier decision. The relevant part of the third page contained some general conclusions. The length and detail of the memorandum stands

5      High Court Rules 2016, r 14.1.

6      Rule 14.7.

7      Minister of Education v James Hardie New Zealand [2018] NZHC 2960 at [16].

in some contrast to the length and detail of the relevant sections of the ensuing decision (10 pages containing 46 paragraphs).8

[17]              While the memorandum may have functioned as submissions, its content reflected its title and does not merit a claim for $3,585.00. I consider the appropriate claim is for the costs of a memorandum: $956.00.

Result

[18]              I dismiss Castle’s claim for costs of $956.00 for the memorandum dated     15 April 2021.

[19]              I dismiss Castle’s claim for costs of $3,585.00 for the memorandum dated   11 May 2021 and direct Khurana to pay Castle costs of $956.00 for that memorandum.

[20]              As a consequence, and in accordance with the schedule of costs otherwise agreed between the parties, Castle is entitled to costs of $3,465.50 and disbursements of $226.09.

G J van Bohemen J

8      See Khurana Trustee Ltd v Castle Backpacker K Road Ltd, above n 1.