Krishnayya v Forest Owner Marketing Services Limited

[2013] NZHC 1192

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2011-441-000017 [2013] NZHC 1192

BETWEEN  GORNOORI RAMA KRISHNAYYA Plaintiff

ANDFOREST OWNER MARKETING SERVICES LIMITED

Defendant

Judgment (on the papers):      23 May 2013

JUDGMENT OF COLLINS J [Costs]

[1]      On 18 March 2013 I delivered my judgment dismissing Dr Krishnayya’s

claims against FOMS in which he had sought damages for: (1)           misrepresentation;

(2)       breach of contract;  and

(3)       breach of the Fair Trading Act 1986.

At the same time I upheld FOMS’ counterclaim for damages for breach of contract.

[2]      When delivering my judgment I ruled that FOMS was entitled to costs.  I said that I was not minded to award costs on an indemnity basis but that I would consider whether or not I should order an uplift of costs based on scale 2B.

[3]      I now have received three sets of submissions from Mr Castle on behalf of FOMS that are dated 10 April 2013, 30 April 2013 and 17 May 2013.   Mr Krebs filed submissions in response to Mr Castle’s substantive submissions on 29 April

2013.

KRISHNAYYA V FOREST OWNER MARKETING SERVICES LIMITED HC NAP CIV-2011-441-000017 [23

May 2013]

Uplift/indemnity

[4]      Notwithstanding  the  indication  in  my  judgment,  Mr  Castle  has  sought indemnity costs.  Understandably that application is strongly resisted by Mr Krebs.

[5]      I do have a number of concerns about the way Dr Krishnayya has conducted his litigation.  My concerns are directed at Dr Krishnayya and not Mr Krebs, who discharged   his   professional   responsibilities   as   best   he   could   in   difficult circumstances.

[6]      My   concerns   about   Dr   Krishnayya’s   conduct,   which   unreasonably contributed to the expense of the proceedings[1] for FOMS, can be succinctly summarised.

Pre-trial issues

[1] Bradbury v Westpac Banking Corporation [2009] 3 NZLR 400 (CA) and Commissioner of

Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400.

[7]      Dr Krishnayya did not prosecute his claim diligently before trial.  While it was  necessary  and  understandable  for  the  case  to  be  adjourned  because  of Dr Krishnayya’s poor health, no explanation has been provided for the inadequate briefing of Dr Krishnayya’s expert witness and the failure to arrange for Mr Makam to be properly briefed and called as a witness.

Trial issues

[8]      A number of issues arose during the course of the trial which caused me considerable concern about Dr Krishnayya’s attitude to this litigation.  In particular, I was very concerned by:

(1)       Dr  Krishnayya’s  extraordinary  belated  efforts  to  try  and  have

Mr Makam’s so-called “evidence” admitted (refer footnote 33 of my

judgment).

(2)       Dr Krishnayya’s last minute changes to the quantum he was seeking

(refer paragraphs [3], [6](1) and [9] of my judgment).

(3)Dr Krishnayya’s fundamental misunderstanding about how damages for   breach   of   contract/misrepresentation   are   calculated   (refer footnote 6 of my judgment).

(4)       Dr Krishnayya’s baseless and totally unmeritorious attacks upon the

integrity of Mr Bartells and Mr Van Der Voort.

Assessment

[9]      Notwithstanding   my   concerns   about   Dr   Krishnayya’s   conduct   which necessarily added to the costs incurred by FOMS in conducting this litigation, I believe that my concerns are most appropriately addressed by way of an uplift in scale 2B costs rather than by awarding indemnity costs.

[10]     In my assessment, when I weigh up all relevant factors, I believe this is a case in which an uplift of 20 per cent on scale 2B costs is appropriate.

Second counsel

[11]     Mr Castle has sought costs on behalf of his junior.  I believe this was a case which  justified the  appearance  of  a second  counsel  for  the period  of  time that Mr Castle junior attended the hearing.  My reasons for reaching this conclusion are:

(1)There were a number of witnesses who needed to be managed and liaised with during the course of the trial.

(2)The   case   involved   sifting   through   several   hundred   pages   of documents.

[12]     Mr Castle junior conducted cross-examination of one of Dr Krishnayya’s

witnesses.

[13]     Given the level of experience of Mr Castle junior, I believe that costs for second counsel should be set on a scale 1B basis.

Disbursements

[14]     FOMS  are  entitled  to  fair  and  reasonable  disbursements  as  set  by  the

Registrar.    Those disbursements include the fees from and expenses incurred by

Mr Colley.

D B Collins J

Solicitors:

Langley Twigg, Napier for Plaintiff

Treadwell Gordon, Wanganui for Defendant