Kidd v van Heeren
[2015] NZHC 3191
•14 December 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-725 [2015] NZHC 3191
BETWEEN MICHAEL DAVID KIDD
Plaintiff
AND
ALEXANDER PIETER VAN HEEREN Defendant
Hearing: 2 October 2015 Counsel:
S Mills QC and B O'Callahan for Plaintiff
B Latimour, AJ Wakeman and SFW Learmouth for DefendantJudgment:
14 December 2015
JUDGMENT (5) OF FOGARTY J
This judgment was delivered by me on 14 December 2015 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date: ………………………….
Solicitors: Kirkland Morrison O’Callahan Limited, Auckland
Jones Fee, Auckland
KIDD v VAN HEEREN [2015] NZHC 3191 [14 December 2015]
Introduction
[1] Following the judgment of this Court on 14 April 2015, the plaintiff filed a memorandum, dated 15 May, seeking indemnity costs or alternatively increased costs.
[2] On 7 July 2015, I issued a judgment as to costs.1 That judgment dealt with two of a larger number of issues dividing the parties on costs:
(a) whether the plaintiff is entitled to indemnity costs, to which the answer was “no”; and
(b)whether the order for costs can include the costs of the second amended statement of claim filed on 27 May which preceded the application for an order for account, dated 27 June 2014.
That issue was answered this way:
[28] I consider the filing of the second amended statement of claim after the South African judgment was necessary in order to provide the context for the application for taking of account, as an interlocutory application. Furthermore, I think that there is a significant overlap in the preparation of the pleadings in the second amended statement of claim and in the preparation of the application for taking of account. So significant that the two tasks should not be treated separately, as that could involve some double-counting. It is appropriate that the costs in preparing the second amended statement of claim be taken into account now and allowed.
[3] This judgment addresses the plaintiff’s claim for increased costs plus disbursements. The plaintiff has filed a schedule, applying Schedule 3 of the High Court Rules identifying the task, recording the time allocation for B scale, the time allocation for C scale, the plaintiff’s actual time and the defendant’s competing allowances.
[4] It is common ground that the proceeding should be classified as category 3 in terms of complexity and significance. The overall issue is whether the time sought
by the plaintiff for each of the steps is a reasonable amount of time.
1 Kidd v van Heeren [2015] NZHC 1572, hereafter this will be referred to as judgment (No 3).
[5] I am satisfied that the plaintiff’s schedule complies with the requirement of the Court of Appeal in Commissioner of Inland Revenue v Chesterfield Preschools Ltd,2 that it is not possible for the Judge to make a general classification of 3C but needs to decide line-by-line the appropriate time allocation for a particular step.
[6] I am also satisfied that the plaintiff’s current approach is correct in seeking what he considers to be a reasonable time for each step multiplied by the appropriate daily recovery rate, rather than seeking a percentage of actual costs as he initially had.3
[7] The defendant argues that category 3B is appropriate for some of the steps and that at most the plaintiff should be entitled to a 50 per cent uplift on a 3C allowance for some steps. The defendant opposes any further entitlement to increased costs. As well as this factual argument about the length of time that is reasonable for each of the steps the defendant makes several legal arguments about various constraints on an award of increased costs which it will also be necessary to deal with.
[8] The plaintiff’s solicitors and counsel’s actual time for two steps vastly exceeds the time allocation for C scale. The plaintiff seeks increased costs, arguing that the time reasonably required substantially exceeded the time allocated under 3C banding. To obtain this outcome, the plaintiff relies on r 14.6(1)(a) and (3)(a) as follows:
14.6 Increased costs and indemnity costs
(1) Despite rules 14.2 to 14.5, the court may make an order—
(a) increasing costs otherwise payable under those rules
(increased costs); or
…
(3) The court may order a party to pay increased costs if—
2 Commissioner of Inland Revenue v Chesterfield Preschools Ltd [2010] NZCA 400 at [161] and
[164].
3 Holdfast NZ Ltd v Sellys Pty Ltd (2005) 17 PRNZ 897 at [41].
(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;
…
[9] There are several legal issues which need to be resolved to determine whether the plaintiff is entitled to increased costs in this case:
(a) To what extent is the complexity and significance of the proceeding relevant to the time a party seeking costs can reasonably be expected to spend on a step?
(b)When calculating the time required by a step, is the Court entitled to look at the actual time spent?
(c) Do the scale time allowances create a benchmark which anchors an award of increased costs?
[10] Once those issues are resolved the matter is simply whether the time reasonably required for each step in the proceeding is greater than that allowed under band C and if so by how much. I will first address the legal issues separating the parties and then consider whether an award of increased costs is justified on the facts of this case.
Legal issues separating the parties
Is complexity and significance of the proceeding relevant to increased costs?
[11] The plaintiff emphasises the complexity and significance of this proceeding and submits that this warranted spending more time than is allowed under band C for several of the steps. The defendant submits that to take into account the complexity and significance of a proceeding when determining whether to award increased costs under r 14.6(3)(a) would amount to double counting. This is because the complexity and significance of the proceeding is addressed under the categorisation of the proceeding under r 14.3. The defendant accepts that these proceedings required counsel of special skill and experience and should therefore be classified as category
3 proceedings, but submits that allowing for complexity and significance in the time allocation as well would amount to double counting.
[12] The defendant relies on Hobbs v Gilbert to support this proposition.4 In that case Wild J stated:
the point I was attempting to make in Wellington International Airport (at paragraph [13] of my judgment) was that added complexity and significance is relevant to the categorisation of a proceeding for costs purposes, and should not then be double-counted under rule 48C(3)(b).
[13] I do not doubt that the complexity and significance of a proceeding is usually dealt with by the classification of a proceeding under r 14.3. But complexity comes in different forms. The complexity of a case might mean, in addition to the need to hire experienced counsel, that more time is needed for particular steps in preparation. This is why in Trustpower v Commissioner of Inland Revenue Andrews J stated that “a realistic and pragmatic approach is required as an award of costs without an uplift
would not “reflect the complexity and significance of the proceeding.”5
[14] Therefore my view is that the complexity and significance of the proceeding is relevant to whether increased costs are appropriate as it can mean that a greater time is reasonable for certain steps in the proceeding.
Can the Court take into account the actual time spent?
[15] I consider that I am entitled to look at the actual time spent. There is a distinction between having regard to the actual hours during which counsel and solicitors were engaged and adopting those hours as a reasonable time. There is also an obvious distinction between the actual cost incurred by a party and the number of hours spent by that party’s solicitors.
[16] I propose to follow the method of Andrews J in Trustpower v Commissioner of Inland Revenue.6 By following Trustpower, I follow the decision of the Court of
Appeal in Holdfast NZ Ltd v Selleys Pty Ltd7 to the extent she did.
4 Hobbs v Gilbert HC nelson CIV-1999-442-2, 12 May 2005 at [13].
5 Trustpower v Commissioner of Inland Revenue [2014] NZHC 3072 at [27].
6 Trustpower Ltd v Commissioner of Inland Revenue [2014] NZHC 3072.
[17] In Trustpower Ltd v Commissioner of Inland Revenue judgment had been given in favour of Trustpower.8 Trustpower claimed a total of $1,448,213 (comprising $1,021,631 costs, and disbursements of $426,582). Trustpower relied upon r 14.6(3)(a). It was agreed that these were band C proceedings. The Commissioner accepted liability for costs of $477,290 and disbursements of
$162,677.
[18] Andrews J cited Holdfast as authority for the focus being on determining what is a reasonable time allocation for the particular steps and then applying the appropriate daily rate.9 She also found that the actual time spent on a step in the proceeding was relevant to determining the reasonable time for a step.10
[19] Justice Andrews held that the time actually spent is relevant to determining the reasonable time for a step in the proceeding because the time actually spent can be an indicator of the complexity and significance of the proceeding and thus whether the time required by the party claiming costs would substantially exceed the time allocation under band C. But, in that case, counsel did not claim anything like the total time spent.
[20] The items in dispute were: listing documents on discovery, preparation of agreed statements of facts, preparation of briefs of evidence and preparation for trial. In round terms, that was a recovery of $500,000.
[21] In respect of listing documents for discovery the band C allocation is seven days, leading to a cost award of $20,580.
[22] The Commissioner was prepared to accept that r 14.6(3)(a) applied and to allow for 20 days. Trustpower was seeking 93.8 days. To assess that dispute Andrews J looked at affidavits which examined the scale of the discovery involving
key word searching using forensic IT support of 24 million files. This mechanism
7 Holdfast NZ Ltd v Selleys Pty Ltd [2005] 17 PRNZ 897.
8 Trustpower Ltd v Commissioner of Inland Revenue, above n 13.
9 At [20].
10 At [22].
identified 21,505 files which were then reviewed by the solicitors. Trustpower and
senior solicitors from Trustpower’s law firm reviewed some 70,000 documents.
[23] Andrews J considered the fact that Trustpower was claiming for only half of the actual time spent on discovery, less the seven days allowed under the scale, the result being its claim was nowhere near the “two-thirds recovery” envisaged under r
14.2.
[24] That led to her important reasoning in [27]-[29]:
[27] The nature of the proceeding was such that the 3C scale does not begin to approach being a reasonable time allocation for discovery in this proceeding. A realistic and pragmatic approach is required as an award of costs without an uplift would not “reflect the complexity and significance of the proceeding.” The Commissioner’s suggested allocation of 20 days falls well short of being either a reasonable assessment of the time required for discovery, or a reasonable contribution, particularly in light of the Commissioner’s requirements as to the breadth and time-range of discovery.
[28] I have concluded that the determination of costs payable for discovery must be made on the basis of the following:
(a) the complexity of the discovery exercise in this proceeding (involving four separate generation projects undergoing feasibility analysis);
(b) the breadth and time-range of discovery required;
(c) being careful to guard against the possibility of there being any overlap between discovery work undertaken by Trustpower’s solicitors and that which was outsourced (which will be considered as a disbursement); and
(d) guarding also against the possibility of any double-recovery (for example more than one person undertaking the same work).
[29] Bearing those matters in mind, I have concluded that the reasonable time for completing discovery in this proceeding is 70 days, representing 35 percent of the actual days spent on discovery. Applying the applicable daily rate under category C, that results in an award of $205,800.
[25] A number of points need to be noticed about this reasoning, as they are critical to determining the success or not of the application in this case. In Trustpower the solicitors disclosed all the timekeeping but, in the context of the claim for increased costs, claimed only for half of the actual time spent on discovery. The Judge allowed only 35 per cent of the actual days spent on discovery. Looking
at [29], you will not find any explicit reasons for awarding only 35 per cent. Nor is there any explanation in the case as to why Trustpower did not claim all of the actual time spent and only sought 50 per cent.
[26] The explanation may lie in the fact that some of the work was carried out by junior solicitors. While the proceedings were classified as category 3 overall, the steps for which increased costs were sought encompassed work done by more junior solicitors. This might provide some explanation for why a smaller fraction of the actual time spent was considered reasonable. There also appears to be an allowance to ensure that there is no double counting or double recovery.
[27] The explanation may also lie in the previous case history. There have not been many cases in which increased costs have been awarded under the 3(3)(a) basis of time substantially exceeding the time allocated under band C, as distinct from relying on subpara (b) of 14.6.3.
[28] One of the 3(a) cases is the case of Baxter v RMC Group Plc.11 In that case,
O’Regan J’s conclusion was as follows:
[32] The amount of costs incurred by the defendants in relation to Stage 1 was $435,473.00. The amount to which they would be entitled under scale
3C would be a tiny fraction of that. It is appropriate that increased costs be
awarded in relation to this period under the Rules. In my view, an amount of
$100,000 would be appropriate. This represents approximately 22% of the costs actually incurred.
[29] Unfortunately, it is not possible to know what percentage of the hours actually incurred were being allowed for.
[30] In Holdfast the Court of Appeal cautioned against a percentage of actual approach stating:
[41] There are very good practical reasons why a “percentage of actual” approach should not be sanctioned. Not all Judges have recently been litigation lawyers and thus familiar with the current charging of litigators. Many Judges have been commercial lawyers or academics or lawyers in the public service. Even those who have been litigation lawyers quickly get out of touch with current rates after appointment to the bench. There cannot be one approach to costs if the Judge happens to be a recent appointment from
11 Baxter v RMC Group Plc HC Auckland CP262/01, 9 September 2003, O’Regan J.
the bar and another approach for Judges who happen not to be. The approach must be uniform and cannot be based on a Judge’s own assessment of the reasonableness of fees based on his or her recollection of what prevailed at the bar in his or her time.
[31] However, those observations apply to costs, not to time. As the plaintiff submitted: costs are not universal, time is. The Court of Appeal in Holdfast when recognising the diversity of the High Court bench, were focusing on the fee rate and not on the hours spent. It is not necessary for a Judge to have been an experienced commercial litigator to judge the reasonableness of hours spent. The legal profession operates in a competitive market. In a category 3 case, it is a reliable assumption that the senior and expert counsel engaged do operate in a competitive market and acquire their reputation not only for their skills but for their responsibility and competitive fee structure. Moreover, solicitors and counsel for the other parties are well placed to critique the need for the number of hours. In this dispute the increased costs were opposed principally by citation of authorities. The defendant did submit however, that the hours were excessive.
Do scale costs provide a benchmark for the assessment of increased costs?
[32] In Trustpower the Commissioner sought to defend its lower number by proceeding by way of a line of reasoning assessing the merit of Trustpower’s claim by the degree that it multiplied the standard 3C time allocation. The Commissioner argued that Trustpower’s multiplier was 22.31, whereas the Commissioner’s was more reasonable at 5.7.
[33] Andrews J rejected the concept of using multipliers, stating:12
[20] … However, I do not consider that a comparison of multipliers is a useful tool for assessing costs, or that it is what the High Court Rules require to be assessed. As the Court of Appeal said in Holdfast, the focus is on determining what is a reasonable time allocation for the particular steps in the proceeding, and then applying the appropriate daily rate to that “reasonable time”.
[21] McGechan on Procedure notes in respect of r 14.2 (which sets out the principles applying to the determination of costs) that the aim of referring to “an appropriate daily rate” in r 14.2(d) and (e) “is to allow two- thirds of costs considered reasonable for the proceeding, or the particular step in the proceeding, as opposed to the actual costs incurred.” This is in
12 Trustpower Ltd v Commissioner of Inland Revenue, above n 13 at [21]-[22].
order to balance objectives of access to justice, avoiding the successful party being “seriously out of pocket”, encouraging attempts to resolve litigation, and discouraging inefficiency, overcharging, and ‘overkill’.”
[22] The actual time spent on a step in the proceeding is relevant to determining the reasonable time for a step in a proceeding. The “reasonable time for that step” is calculated according to the times specified in Schedule
3 and with reference to the appropriate band. This does not mean that the actual time spent on a particular step is irrelevant in determining costs. The
time actually spent on a step in the proceeding may be a useful tool for
assessing the complexity and significance of the proceeding, and as a starting point for determining whether the nature of the proceeding, or the step, is such that the time required by the party claiming costs would substantially exceed the time allocated under band C, and increased costs should be granted.
[34] I would respectfully add to [22] the importance of keeping in mind that once a judgment is made, that the time required would substantially exceed the time allocated under band C, then the reasoning proceeds, “Despite rr 4.2 to 4.5”, so that there is no anchoring of the judgment against the upper level of the time allocated in the particular step under band C.
[35] In contrast to the approach in Trustpower the defendant submits that it is wrong to calculate increased costs with reference to actual costs, but that instead they should be calculated with reference to scale costs. Mr van Heeren’s counsel argues that paying increased costs on the grounds of time required substantially exceeding the time allocated under band C is subject to the same policy constraint imposed by the Court of Appeal in the application of r 14.6(3)(b), namely that the increase should not exceed 50 per cent of the scale allowance. He accepted that there was no Court of Appeal authority that mandated a maximum 50 per cent uplift under (a). This submission relies on [46]–[48] of Holdfast, where the Court of Appeal stated:
[46] Where subcl (3)(b) conduct is made out, the Court’s normal response should be to provide an uplift on scale costs to what the rules contemplate a reasonable fee for that step to be. Mr Marriott submitted that logically an uplift under r 48C(3)(b) should not be more than 50 percent. That is because the Rules Committee has determined what, for costs purposes, the appropriate “daily rate” is: it is the “daily recovery rate” in Schedule 2 to the High Court Rules, plus 50 percent. The current daily recovery rate for category 2 proceedings is $1,450 a day. We know, by reason of r 47(d), that that represents “two-thirds of the daily rate considered reasonable in relation to [a category 2] proceeding”. That in turn means that the underlying daily rate was $2,175 ($1,450 plus 50 percent).
[47] An increase of 50 percent on scale costs should therefore grant the costs-claiming party a fair recovery for the step unnecessarily forced on it, assuming that the time allocated to the step has been reasonably calculated under the bands or under r 48C(3)(a). Any greater recovery than that would mean that the party paying costs is contributing to the other party’s choice of special counsel.
[48] We are not to be taken as saying that an uplift of more than 50 percent can never be justified under r 48C(3)(b), as there may be circumstances where the Court considers a higher award to be justified. What we are saying is that the above approach is what is logically required by the scheme of the rules, and in particular by the principles applicable to every determination of costs. Awards of increased costs must comply with the general principles in r
47, except to the extent that the specific requirements of r 48C dictate otherwise. The principles in r 47(c) and (d) are clearly modified by r
48C(3)(b), but r 47(e) is not so modified. Where increased costs (as opposed to indemnity costs) are being considered, the focus remains on the notional
solicitor or counsel appropriate for the category of proceeding, not the actual solicitor or counsel involved or the costs actually incurred by the party claiming costs.
[36] I do not consider that passage mandates reference to scale costs when calculating increased costs under r 14.6(3)(a). In particular I refer to the first sentence of [47]:
An increase of 50 percent on scale costs should therefore grant the costs- claiming party a fair recovery for the step unnecessarily forced on it, assuming that the time allocated to the step has been reasonably calculated under the bands or under r 48C(3)(a).
(emphasis added)
[37] The Court of Appeal’s observations about increasing costs in those passages relate to increasing costs under r 14.6(3)(b) not (a). In fact, the observations assume that there may have already been an increase under (a) to allow for a reasonable time for a step. When the Court of Appeal describes an increase on scale costs it is talking about an increase from the figure reached by applying the appropriate daily recovery rate to the time the Court considers reasonable for a particular step, whether or not that time is calculated based on the scale or under r 14.6(3)(a).
[38] The Court emphasised that after categorising the proceedings (1, 2 or 3), the next step is to work out a reasonable time for each step in the proceeding. Paragraph
[44] of the judgment is important:13
13 Holdfast NZ Ltd v Selleys Pty Ltd, above n 12, at [44].
[44] The next step in the costs formulation is to work out a reasonable time for each step in the proceeding: r 48B. There are three time bands, A, B, and C. Band C is appropriate where a “comparatively large amount of time is considered reasonable” for the particular step. It is possible to get a greater time allocation for the particular step if the costs-claiming party can show that “the step in the proceeding [was] such that the time required by the party claiming costs would substantially exceed the time allocated under band C”: r 48C(3)(a). Where that is shown, the appropriate judicial response is to increase the amount of time allocated for the particular step, and then to apply the appropriate daily recovery rate to the time so fixed. It has not been suggested in this case that any step in the proceeding justified an increase in costs under that head.
[39] Then, going on to make the point that they were increasing costs by reason of the party opposing costs having contributed unnecessarily to the time, the Court said:14
[47] An increase of 50 percent on scale costs should therefore grant the costs-claiming party a fair recovery for the step unnecessarily forced on it, assuming that the time allocated to the step has been reasonably calculated under the bands or under r 48C(3)(a). Any greater recovery than that would mean that the party paying costs is contributing to the other party’s choice of special counsel.
[40] It is important to read the dicta in [40], keeping in mind the agreed context that this was a category 2 proceeding. Second, the Court was discussing uplifts under (b), not (a). The observations about a 50 per cent uplift apply after a reasonable time has been set either under the schedule or by the application of (a).
[41] I further note that Dobson J reached a similar conclusion in Sovereign Assurance Co Ltd v Commissioner of Inland Revenue, when faced with a similar argument about the 50 per cent uplift:15
[9] Sovereign objects, first, that an increase to 60 days is unreasonable, given what it perceives to have been the more confined task of reasonable preparation of the Commissioner's case. Sovereign calculates the increase from 14 to 60 days as being some 429 per cent. It argues that that is substantially beyond any comparable decision, and in particular is grossly in excess of a guideline of 50 per cent increase on scale. Sovereign's initial memorandum cited numerous cases recognising a guideline or “rule of thumb” that increases are likely to be limited to 50 per cent. [1]
[10] It is possible that a process of accretion gives the 50 per cent figure more status as an upper limit than it deserves. In Holdfast NZ Ltd v Selleys
14 At [47].
15 Sovereign Assurance Co Ltd v Commissioner of Inland Revenue [2012] NZHC 3573.
Pty Ltd, the Court of Appeal recognised a 50 per cent uplift as the upper limit where increased costs were being considered on the basis of the criteria that is now in r 14.6(3)(b), namely where a party opposing costs has contributed unnecessarily to the time or expense of the proceeding. In that decision, the Court of Appeal recognised that even on that ground, uplifts of more than 50 per cent might be justified, but did not purport to address any limits on what the Court might consider reasonable as the allowance for time taken in relation to preparation in any particular case.
Conclusion on legal issues
[42] When considering whether the Court should increase costs under r 14.6(3)(a) it is necessary to have regard to the complexity and significance of the proceeding. While this will generally be recognised by the classification of proceedings under r
14.3, some forms of complexity and significance will also mean that the time taken on particular steps will need to be greater than that allowed under category C. Courts do need to be aware of the risk of double counting, but this does not mean that the complexity and significance of the proceeding is irrelevant.
[43] I also consider that when deciding whether costs should be increased under r
14.6(3)(a) the Court is entitled to have regard to the actual time spent on particular steps (but not the actual cost incurred). As Andrews J held, the actual time spent will be an indicator of the complexity and significance of a proceeding. Furthermore, I consider that the competitive market for legal services means that there is a disincentive to be inefficient. This does not mean that the actual time spent is determinative of what a reasonable length of time is, just that it can be useful in assessing that time.
[44] Finally when considering the possibility of increasing costs under r 14.6(3)(a) unlike r 14.6(3)(b) the Court is not anchored by the time allowances in the Rules. This flows from the Court of Appeal’s reasoning in Holdfast mandating a four step approach:
(a) categorise the proceeding in terms of r 14.3;
(b)work out a reasonable time for each step either under the schedule or by the application of r 14.6(3)(a);
(c) then apply the appropriate daily rate from (a) to the time calculated under (b); and finally
(d)If any of the grounds in r 14.6(3)(b) apply the Court can impose an uplift from the point reached under the first three steps. It is this uplift that will generally not exceed 50 percent.
[45] Thus the 50 per cent guideline does not apply to determining the length of time that is reasonable for a particular step, only to the imposition of increased costs for the reasons listed in r 14.6(3)(b).
Are increased costs appropriate in this case?
[46] I now turn to the particular facts of this case.
Complexity and significance
[47] From one perspective, this interlocutory application for an order of taking accounts, and an interim payment of USD25m was straightforward.
[48] The plaintiff was coming to the New Zealand High Court with the proposition that the parties could now move onto the relief stage of the litigation as the defendant was issue estopped by the decision of the South African High Court from denying that there was a partnership and that the partnership assets included those in the South African Court’s list. Accordingly, goes the argument, like all partnerships which terminate, there has to be an accounting of these assets, and possibly other assets, leading to a settled account as between the partners, before the partnership legally comes to an end. Whether or not there is an issue estoppel requires simply an examination of the South African judgment. The task is to identify whether or not the findings of fact and law said to raise the estoppel were a necessary part of the reasoning. If so, there is a binding estoppel.
[49] Put at that level, it is a relatively straightforward banco argument.
[50] That formulation can be supported by an examination of my judgment finding an estoppel:16
[93] It is important to keep in mind that a finding of issue estoppel does not depend upon a critique of Satchwell J’s judgment. It is an analysis of what were the findings of fact, and mixed law and fact, necessary for her judgment. The facts that she positively found: an ongoing partnership; and the presence of valuable worldwide partnership assets; after the supposed execution of the 1990 Genan agreement, are the two critical findings which Mr van Heeren seeks to contradict. Satchwell J made these positive findings, notwithstanding the qualified finding of ‘not proven’ as to the disputed Genan agreement. The relevant fact is that the Judge did not consider the not proven Genan sale to disturb her findings of current worldwide partnership assets in [132].
[51] That said, judgment (No 3), the first on costs, delivered on 7 July also records:17
[22] On the facts of this case, the application of issue estoppel principles was not straightforward. It was accordingly a legitimate defence for Mr van Heeren to raise. That being so, neither (4)(a) or (f) apply.
[52] There was a second ground pleaded before the New Zealand High Court in support of both remedies of account and interim payment:18
To the extent that any findings in the judgment of Satchwell J do not give rise to an issue estoppel, it is likely that the Court will come to the same conclusions.
In respect of that pleaded ground in the judgment of 7 July, I found:19
[14] The New Zealand High Court judgment did not engage this alternative pleading. Rather, it found for the plaintiff on ground that the findings of misrepresentation were necessary to the reasoning of the South African High Court judgment and so gave rise to an issue estoppel in the New Zealand proceedings.
[53] Obviously, the second ground was pleaded because the lawyers for the plaintiff could not be sure that they would establish an issue estoppel.
16 Kidd v van Heeren [2015] NZHC 517 at [93].
17 Kidd v van Heeren, above n 1.
18 Kidd v van Heeren, above n 1 at [13].
19 Kidd v van Heeren, above n 1, at [14]
[54] Alternatively, the second argument can be seen as consistent with an issue estoppel, but the issue estoppel not going so far as to extend to the list of the assets that the Judge found to be part of the partnership.20
[55] Issue estoppel is a common law concept. It is not a set of statutory provisions. There are different statements in the cases of the common law principles. They are not rules. It was rational and responsible given what was at stake, for Mr Kidd’s advocates to advance, alongside the issue estoppel argument, a merit argument, particularly given the remedy being sought of an interim payment of USD25m.
[56] The remedy of account was, and is, not the only option to take advantage of the issue estoppel. The timesheet records of the plaintiff’s legal advisers show that they were exploring proprietary equitable remedies, driving off the finding of partnership. Of course, partners have fiduciary duties to each other and where assets are under control of one partner preparatory equitable remedies might be available.
[57] In his oral submissions, Mr Mills QC emphasised the vital importance to his client of obtaining the issue estoppel and thereby avoiding protracted proceedings and another long trial in New Zealand. His client is 74 and has been pursuing this claim since 1996.
[58] I think I have said enough to indicate that one cannot overstate the significance for Mr Kidd in securing an issue estoppel on the existence of the partnership and a substantial list of assets of the partnership. With so much at stake, it was prudent to have, so far as possible, a belt and braces approach to the application for a summary account and interim payment. So the alternative pleadings were prudent. This case was in both aspects, law and value, of considerable significance to Mr Kidd.
[59] This is litigation that commenced in February 1996. From that date, the claim has been pleading that properties, companies and share investments were part
20 Kidd v van Heeren South Gauten High Court 27973/1998, 21 May 2013, at [126]
of a worldwide 50/50 partnership.21 The claim for issue estoppel came on the back of prolonged litigation from 1996 through to 2003.22 The trial in South Africa took six weeks.23
[60] Mr Kidd is now an elderly man in his seventies. If he could not establish an issue estoppel in New Zealand, he would face more prolonged litigation and likely a trial of more than six weeks. Mr van Heeren and his then expert Mr Greyling elected not to give evidence in South Africa. Mr van Heeren argues that the partnership ended mutually in 1990-91. There were two “agreements”, one accepted, one disputed in 1991. This is explained in the first two paragraphs of the judgment of Satchwell J, which I quote:
1.Having been together involved in the international steel trade over a period of some fifteen years, the plaintiff (‘Kidd’) and the defendant (‘Van Heeren’) had come to the parting of the ways. They concluded two contracts in Randburg, South Africa – one for the sale of shareholdings in certain identified companies by Van Heeren to Kidd and another an indemnity in respect of claims by Kidd against Van Heeren or any company in which Van Heeren had an interest anywhere in the world. There is now a dispute between them as to the meaning, scope and validity of this indemnity document.
2.On 18th January 1991 the parties entered into an agreement for the sale of shares from Van Heeren to Kidd in five South African, and one Hong Kong company(ies) (K2, the ‘sale agreement’). On the same day, Kidd and Van Heeren signed a further document (K1, the
‘indemnity document’), couched in very broad terms, which
included that Kidd indemnified Van Heeren against all claims by Kidd, that the monies paid by Kidd “shall constitute a settlement of all disputes between the parties anywhere in the world” and that that the indemnity is binding in relation to any company, shareholding or other business in which the parties were involved “anywhere in the world”.
[61] It is in that context then that I examine the reasonableness of the actual days for solicitors and counsel shown on the time records of 142.68 days (every 8 hours was treated as a day), including 52.8 days filing the interlocutory application, 65.28 days preparing the written submissions, for the five-day hearing. The plaintiff’s submissions, dated 1 July, contend broadly that the band C time allowances are
substantially inadequate:
21 Kidd v van Heeren, above n 7 at [1].
22 At [3].
23 At [78].
The complexity and breadth of the subject matter, the documents involved and the forensic nature of the expert evidence all led to the time required for each relevant step being substantially more than that provided by band C. Hence the claim for increased costs as the alternative for indemnity costs.
…
The time allowances for interlocutory applications are manifestly inadequate for this case, which involved distilling the evidence, argument and judgment from a six week trial and applying that to the relevant Rules and presenting that in a five-day argument. Substantial preparation was required to bring the application and to prepare for the argument in order to fit it within the hearing time. That does not happen simply by having experienced counsel.
For this reason the test for increased costs under r 14.6(3)(a), namely that the time required substantially exceeds the time provided by band C is made out.
[62] The defendant’s position is that the onus is on the plaintiff to justify any uplift beyond band B. The defendant has submitted that for the steps of filing the interlocutory application and preparing written submissions there should be an allowance on a 3C basis with no more than a 50 per cent uplift. I am of the view that the defendant’s stand-off is unrealistic. For example, in the case of the step in proceeding, filing the application, the allocation under 3B is 0.3, the allocation under
3C is 2 days and the plaintiff’s claim is 52.8 days. Rather, the defendant’s submissions are simply saying the plaintiff’s time is excessive. Similarly, in the preparation of written submissions, 3A is 0.5, 3C is 3 days. The plaintiff is claiming
65.28 days.
[63] The defendant does make the important submission “that much of the content to the plaintiff’s affidavits were irrelevant in the context of an application for issue estoppel”.
[64] The defendant’s overview submissions do argue that the better costs analogy would be for the Court to consider the sort of costs that would be ordered when a complex appeal is run and costs are awarded in either this Court or the Court of Appeal. That is because, as with an appeal, the plaintiff was relying on the findings and reasoning in the judgment of another Court after a full trial. Like an appeal, the plaintiff in this case was not required to challenge or even regurgitate the evidence before the South African Court which was expressly the substratum of that Court’s factual findings and related conclusions of the issues. Any evidence on the
application that was appropriate required, at most, brief clarification if the judgment itself was unclear on the point and a reproduction of the South African record:
If, after say a six week trial of a complex case in the High Court, the judgment was appealed to the Court of Appeal in New Zealand, and the appeal involved five days of argument, the scale costs on a category B (complex) basis under the Court of Appeal (Civil) Rules 2008 would be eight days (equating to $23,520 at category 3 rates. …
Even allowing for a possible uplift of 50 per cent as allowed under the Court of Appeal Rules (r 53C(1)(b)) such a complex appeal prima facie attracts a cost award of $35,280 for these steps.
The defendant also notes that an appropriate application of scale put forward by the defendant in its submissions set out above on 7.5 (including a 50 per cent uplift in category 3C applications) would result in a cost award of
$22,000 for these items.
How was the time engaged spent by plaintiff ’s counsel?
[65] The judgment in South Africa was delivered on 21 May 2013. The Supreme Court declined to hear an appeal but said in their reasons that they agreed with the decision.
[66] The New Zealand Court register shows that the first application by the plaintiff was for orders lifting the stay of the proceedings in New Zealand and directing a timetable on 27 March 2014.
[67] The second amended statement of claim was not filed until 27 May 2014.
[68] The interlocutory application for summary account was filed on 27 June
2014. It was supported by affidavits of Mr Kidd, a South African solicitor, Mr Alp, and the expert for Mr Kidd, Mr Browning – all filed on 30 June.
[69] The notice of opposition filed in August was supported by two affidavits, one by the defendant’s expert, Mr JC Hagen, and two others in support, by Ms Frielink and Mr Pratt. These defendant’s affidavits in reply in support of the notice of opposition generated a further round of affidavits in reply by Messrs Kidd, Alp and Browning in October 2014 which then led to a further round of affidavits by the defendant and memorandum of counsel. The hearing commenced on 9 February
2015.
Commencement of proceeding
[70] The plaintiff claims costs on a 3C basis for this step, which allows 10 days. The Defendant submits that the plaintiff should only be entitled to recover on a 3B basis, which only allows 3 days. The defendant makes this submission on the basis that my earlier judgment of 7 July limited the recovery under this step to the filing of the amended statement of claim and that the plaintiff’s position was that the second amended statement of claim merely simplified the plaintiff’s claim.
[71] The second amended statement of claim in New Zealand particularises the entities said to be jointly operated by the partnership, some of which I have already referred to above. They pleaded the functioning of some of the companies, particularly Prime, Genan and Jocrow. By itself it is not a particularly long pleading (seven pages) and most of it is derived from the South African judgment.
[72] Mr van Heeren did not call Ms Gabrielle Mc’Laughlin, whose signature appears as a witness to the disputed Genan agreement.24 The absence of evidence from Mr van Heeren and the alleged witness meant that Mr van Heeren did not prove the Genan agreement, in the face of a longstanding allegation that it was a forged document.
[73] I consider that the plaintiff has not fully complied with my conclusion in the earlier costs judgment that the preparation of the statement of claim and the preparation of the application for taking account should not be considered separately because to do so could involve double-counting. I therefore consider that it is not appropriate to make an award of costs for this step, it being effectively subsumed within the work required for the filing of the interlocutory applications. Indeed, in the schedules provided by the plaintiff in relation to the attendances he attributes to the filing of the interlocutory application include attendances related to the preparation of the amended statement of claim. For instance there is a three hour attendance with the narration: “Attendance Review changes to SoC suggested by Mills. Discuss with him.” That suggests that in calculating the actual time spent that
step the plaintiff has included attendances relevant to the preparation of pleadings
24 Discussed in Kidd v van Heeren [22].(No 7) [2015] NZHC 2475 at
and to allow a separate allowance for them would be double-counting. Accordingly, the time spent preparing the amended statement of claim should be combined with the preparation of the application for account.
Preparing, filing memoranda for and appearing at case management conferences
[74] The plaintiff claims a total of 4.4 days for these steps, which is the allowance under band C. The defendant submits that the plaintiff is not entitled to recover any of these costs because my earlier judgment on costs only allowed the plaintiff to recover the costs of the second amended statement of claim, not all the costs of the proceeding. In the alternative the defendant submits that the plaintiff should not be able to recover under band C for these steps because the plaintiff has failed to explain why costs above band B are appropriate for these steps. The case management conferences were short telephone conferences in the nature of mentions hearings. The first was unrelated to the application and the second was resolved by a joint memorandum and orders made by consent.
[75] I consider that the plaintiff should be able to recover costs for these case management conferences but I agree with the defendant that the plaintiff has not justified an increase from band B for these matters, the case management conferences were not particularly complicated and would not have required a greater than normal amount of time to prepare for. I consider that the plaintiff is entitled to costs on a 3B basis for these steps.
Filing Interloccutory application
[76] The plaintiff has sought an allowance of 52.8 days for this step, the allowance under band C is 2 days. The plaintiff breaks this claim down 28.8 days spent filing interlocutory applications for summary account and interim payment, researching the grounds for the applications and preparing affidavits in support and 24 days for affidavits in reply. I note however, that there appears to be an arithmetic error in the plaintiff’s calculations. The schedule states “52.8( made up of 48.47 days spent by the plaintiff’s solicitors and 3.625 spent by senior counsel)” The figures of 48.47 and 3.625 are in turn supported by a schedule of attendances. However, the sum of
48.47 and 3.625 is 52.095 not 52.8. I propose to use the figure of 52.095 as my starting point as it is supported by the attendance schedule.
[77] The defendant opposes this award on a number of bases. I have addressed the opposition based on the three legal issues set out at the start of the judgment. To reiterate, I do not consider that the complexity of this proceeding is irrelevant to the question of what a reasonable amount of time to spend on a particular step is and there is no need to determine increased costs under r 14.6(3)(a) with reference to scale costs, the actual time spent is relevant but not determinative.
[78] The defendant then submitted that the amount claimed by the plaintiff was unreasonable. He submitted that even if this had been a trial involving the preparation of briefs of evidence the time allocation under band C would only be 5 days.
[79] There was a further submission made that Mr Browning’s affidavits were to a substantial degree unnecessary. This is because it would have been sufficient to place before the High Court in New Zealand the record of proceedings in the South African Court. That drew the response that given the banco character of the hearing being anticipated in the High Court of New Zealand, it made more sense to make the material more digestible to the New Zealand High Court than trying to convey the nature of the evidence, hearing and issues to the Court by way of the transcript of the trial.
[80] It is clear from the time spent by the solicitors, let alone by Mr Browning and his fees (which I shall discuss shortly) that the decision to file affidavits by Mr Browning was a significant decision in terms of the total hours spent in preparing the case for trial, expert and lawyers.
[81] The purpose of Mr Browning’s first affidavit was to support the application for an interim payment. To that end, having passed beyond the breakup of the relationship in 1991, he goes on to, so far as he can, to trace the subsequent investments. In this regard, it should be noted that Satchwell J does not examine in any way the events post-1991. Some of Mr Browning’s analysis does overlap with
the findings that were made by Satchwell J. For example, Satchwell J places Huka Lodge as an asset of the partnership. Satchwell J does not go into detail as to the cashflows from the steel trading through into the assets.
[82] From about [39] on in his 75-paragraph affidavit, Mr Browning moves onto events post the period examined by Satchwell J.
[83] This case could have been presented with significantly lower preparation costs but at a commensurate increased risk that insufficient material was placed before the Court. It needs to be kept in mind that the High Court in New Zealand does not run a docket system. Counsel do not know who the judge will be. It is not possible, by way of case management, to get specific guidance from the trial Judge as to what the trial Judge needs, or perceives he or she needs.
[84] As the trial Judge, I did not need all the material in Mr Browning’s first affidavit and Mr Alp’s first affidavit. I did find it important to satisfy myself that there had been a proper trial, that the issue of partnership or not was squarely a live issue at the trial and that is reflected in [75] and [76] of the judgment. I did go into the transcript to personally satisfy myself as to the degree of cross-examination of both Mr Kidd and Mr Browning on partnership issues. This is apparent from [77] and [78].
[85] It is possible that another trial Judge might have made more use of the affidavit material than I did.
[86] When dealing with the remedy of account, I had occasion to refer to the affidavit contest between Mr Browning and Mr Hagen.25
[87] An affidavit by Mr JC Hagen, who is an expert retained by the defendant, was filed on 29 August 2014. Mr Hagen critiqued Mr Browning’s opinion as essentially depending on the profits made by Mr van Heeren from investing in the Cromwell/Wellesley transaction, plus ownership of the Huka Lodge venture, held by
Worldwide Leisure, plus interest. Mr Hagen engages in the issue of Genan trading
25 At [122]. See also [136], [139]-[144].
and Galaxy Export trading as Tisco. Mr Hagen ended with the opinion that there is no clear evidence that there is a core of funds held on behalf of any alleged van Heeren/Kidd partnership and thus no basis to support any interim distribution.
[88] Mr Browning replied. His essential critique was that there is no evidence to support Mr Hagen’s thesis that the funds used to invest in Huka Lodge, Cromwell/Wellesley, Dolphin Island and Optech were drawn by Mr van Heeren as his entitlements from the steel trading partnership. I did not particularly rely on this analysis or try to resolve the dispute between Mr Browning and Mr Hagen.
[89] I did not study in any particular respect the reports Mr Browning provided to the South African High Court. I consider it is unlikely, however, to be a significant expense to duplicate these reports. They were not created afresh for these proceedings.
[90] Mr Alp is an attorney of the High Court and was responsible for the conduct of the proceedings in South Africa. Likewise, he filed an affidavit, the great bulk of which were the record of the proceedings in the South African High Court. Excluding exhibits, his affidavit as such was 54 paragraphs. I relied on his affidavit for proof that the experts for Mr Kidd and Mr van Heeren (Mr Browning and Mr Greyling) met in Johannesburg over three days and for his narration of the trial process and rulings as to the relevance of Mr Browning’s evidence, narration as to what was being pursued in cross-examination, particularly as to the existence of partnership or now, as the judgment shows. I was also interested in the history of the proceedings after the judgment, being Mr van Heeren’s application to the Supreme Court, of South Africa for leave to appeal.
[91] My findings in favour of Mr Kidd in my judgment did not drive off and depend significantly upon the analysis by Mr Browning of the investment and profit distribution streams post-1991. Rather, my relevant reasoning drove off the findings of Satchwell J and can be found from [138] – [144] particularly, the last finding being significant: that Mr Hagen’s arguments are in contradiction with the findings of fact of Satchwell J in her [132].
[92] It is quite possible, however, that another High Court Judge might have relied both on Satchwell J’s findings and on a more detailed assessment of Mr Browning’s evidence.
[93] It is not good reasoning, therefore, to conclude that evidence was unnecessary if it was not used in a judgment. This is particular so in complex commercial cases. This is because it is very hard to predict what an unknown judge will be assisted by.
[94] In summary, while I think that there was no particular need for expert evidence to support the issue estoppel argument, it was prudent to prepare expert testimony on events post-1991 in order to shore up the argument for an interim distribution.
[95] I have reviewed the time schedules provided. There are some attendances that the plaintiff has claimed in respect of this item that do not appear to fall within the scope of what is envisaged by the item. There are attendances that appear to relate to settlement conferences and preparations for case management conferences. Preparation for case management conferences has already been awarded and should not be recovered again under this heading. I propose to deduct the time spent on this from the starting point I have already referred to. That is a deduction of one hour 30 minutes and takes the time actually spent to 51.9075 days.
[96] As to the defendant’s argument that the preparation of reply affidavits does not come within the step filing an interlocutory application I consider that this argument is somewhat misguided. The preparation of the reply affidavits was clearly a necessary step, whether it is considered under the heading of filing an interlocutory application or separately is of no real significance.
[97] The interlocutory application for the order for summary account is an 11- page document, drafted off the back of the second amended statement of claim. It has a sophisticated disclosure of the rules being relied upon and the authorities, which number 26.
[98] To summarise on this heading. Most of the time claimed in relation to the filing of the interlocutory application related to the preparation of affidavits. While I did not rely heavily on some of the material, it was prudent and reasonable to include it given the complexity and significance of the hearing. The application itself was a relatively sophisticated document. There are some attendances that the plaintiff has relied on under this heading that I do not consider can be attributed to the filing of the applications, there will therefore be a reduction in the time allowed to account for those items. In addition some of the narrations are somewhat cryptic so I propose to further reduce the amount of time to account for that. However, after making those deductions I do not consider it is necessary to make any further reduction from the actual amount of time spent. I consider that in all other respects the time taken by the plaintiff’s legal advisers was reasonable. I therefore consider that a reasonable amount of time to spend on the filing of the interlocutory applications including the time spent preparing the amended statement of claim was 50 days.
Preparation of written submissions
[99] Again, there appears to be a numerical error in the plaintiff’s calculations. The plaintiff claims “65.28 [days] (made up of 40.73 days spent by the plaintiff’s solicitors and 23.625 spent by senior counsel)”. The sum of 40.73 and 23.625 is
64.36 not 65.28. The figures 40.73 and 23.625 are supported by the plaintiff’s schedule of attendances and therefore I adopt the figure of 64.36 as representing the actual time spent by the plaintiff’s advisors on this step.
[100] The plaintiff submits that an increase from the scale allowance of 3 days to the actual time spent on preparation is justified because:
(a) The submissions were, by direction, three times as long as the usual page limit.
(b)The submissions traversed issue estoppel, summary account and interim payment. The procedural issues have little existing jurisprudence in New Zealand.
(c) The submissions traversed vast documentary material.
(d)The preparation required to be able to present all of this material in an efficient way in a five day hearing was extensive. If that level of preparation had not occurred the hearing would have occupied more days.
(e) More time was required to file additional written submissions in reply.
(f) The preparation included long hours during the hearing outside of sitting hours.
[101] In response the defendant submits:
(a) The most the plaintiff should be allowed is four and a half days which is category 3C costs plus a 50 per cent uplift. That amount is also consistent with what would be allowed for a trial on a 3C basis (5 days) or preparation for a hearing of a complex appeal in the Court of Appeal (6 days). Further this case was simpler than an appeal, where the party has to argue against the lower court decision, or a trial, where witnesses need to be prepared.
(b)The submissions were only longer because the plaintiff requested longer submissions and the defendant consented. Indeed it would have taken more time to prepare shorter submissions.
(c) Finally, the fact that further written submissions in reply were required was entirely of the plaintiff’s doing. The defendant complied with the time allocations agreed at the outset.
[102] I consider that this case reasonably required more time than the three days allowed under a band 3 classification, the question is how much more. The intermediate positions suggested by the defendant of the allowances for a complex appeal or a trial would allow five or six days. On balance I do not consider that the alternatives suggested by the defendant go far enough. As I have already explained, this was a particularly complicated case involving complex legal issues. It was also
of a great deal of significance. The complexity and significance could not simply be addressed by hiring experienced counsel. Apart from the arithmetic errors mentioned earlier I have no basis for questioning the time spent by the plaintiff’s legal advisers. They operate in a competitive legal market, there is no suggestion of waste or inefficiency in their attendances. I therefore consider that a reasonable length of time for preparing submissions would be 50 days. This is slightly less time than claimed by the plaintiff, and allows for some of the arithmetic errors made.
Appearance at the hearing by senior counsel
[103] There is no dispute between the parties that the plaintiff is entitled to 5 days for this item.
Second Counsel
[104] The plaintiff has also claimed five days for the attendance at the hearing by second counsel. The schedule allows for two and a half days. The plaintiff justifies this uplift on the basis that argument was presented by both senior and junior counsel and that active assistance was required throughout from junior counsel.
[105] The defendant submits that the role of junior counsel is already built into the allowance and that the role played by junior counsel in this case does not justify any further increase in costs.
[106] I agree with the defendant that the allowance should only be two and a half days. The complexity of this case was largely reflected in the preparation carried out before the hearing, there is no need to increase the costs above what is allowed under band C.
Sealing of the order
[107] The parties agree that 0.2 days should be allowed for this item.
Disbursements
[108] As to experts’ fees, the defendant has been arguing for some time that Mr Browning’s fees involve an element of double recovery as the work had already been done in South Africa. Further the defendant submits that some of the work done by Mr Browning may be relevant to the ultimate taking of account, but was unnecessary at this stage. In the interests of resolving costs, the defendant submits that these costs of Mr Browning should be reduced by at least 75 per cent, to
$44,961.25.
[109] In the case of Mr Alp, the defendant submits the plaintiff should not be entitled to expert fees for Mr Alp. This is because Mr Alp’s evidence is evidence of fact, not expert evidence. The defendant further submits that there is an element of double recovery because the plaintiff has also claimed legal costs for preparing Mr Alp’s evidence.
[110] As I have already explained, I consider that the affidavits were necessary, while I did not refer in detail to them that does not mean that they were unnecessary. Mr Browning’s affidavit attempted to trace the proceeds of the partnership from
1991 to the present. This task required extensive research. It was necessary to establish a range of potential current values of the partnership assets in order to justify an interim payment. While to an extent this exercise is similar to what will be required on the taking of account, I consider that it was also necessary to present this evidence for the purposes of justifying an interim payment. I therefore consider that the plaintiff should be entitled to recover Mr Browning’s fee as a disbursement.
[111] As to Mr Alp’s fee, the plaintiff submits that it was necessary and reasonable
regardless of whether every aspect of it was expert evidence.
[112] The fees of non-expert witnesses can be recovered in civil proceedings.26
Therefore it does not strictly matter whether Mr Alp is classified as an expert. I am
satisfied that Mr Alp’s evidence was necessary and his disbursement is reasonable
26 Trustpower Ltd v Commissioner of Inland Revenue, above n at [78]–[82].
Conclusion
[113] I have determined the legal matters that separate the parties on costs largely in the plaintiff’s favour, that is, it is appropriate to consider the complexity and significance of the proceeding, there is no anchor in terms of the scale when increasing costs under r 14.6(3)(b) and it is appropriate to have regard to the actual time spent.
[114] As to resolving the reasonableness of the plaintiff’s claim, I have concluded
that they are mostly made out.
Result
(a) The plaintiff should now submit a revised schedule for costs, in accord with this judgment.
(b)The plaintiff is further entitled to costs on a 3C basis for succeeding in this complex costs dispute, with increased costs.
(c) I encourage the solicitors to resolve the outstanding costs claim upon the refusal of a stay, dated 13 October 2015, guided by this judgment.
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