Latumbo v Pacific Auto Carrier (NZ) Limited

[2018] NZHC 3158

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV 2018-419-000045

[2018] NZHC 3158

UNDER

The Companies Act 1993

IN THE MATTER

Of an application for summary judgment and for leave to bring derivative action

BETWEEN

MELANIE ELEANOR LATUMBO

Applicant

AND

PACIFIC AUTO CARRIER (NZ) LIMITED

First Respondent

AND

RENATA IMMANUEL KAHUROA

Second Respondent

AND

HOHUA WARREN HEMI

Third Respondent

Hearing:

On the papers

Appearances:

M D Branch for Applicant

No appearances for First Respondent
J A MacGillivray for Second and Third Respondents

Judgment:

4 December 2018

JUDGMENT OF VAN BOHEMEN J (ON APPLICATION FOR COSTS)

This judgment was delivered by me on 04 December 2018 at 3pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors:
Harkness Henry, Hamilton

Guernell Harrison Law Ltd, Hamilton Tompkins Wake, Hamilton

LATUMBO v PACIFIC AUTO CARRIER (NZ) LIMITED [2018] NZHC 3158 [4 December 2018]

[1]                 On 25 October 2018, I gave judgment for the second and third respondents, declining Melanie Latumbo’s applications for summary judgment and leave to commence a derivative action, and held that the respondents were entitled to costs on a 2B basis.1

[2]                 In most respects costs have been agreed. However, the parties have been unable to agree on costs in respect of two items claimed by the second and third respondents:

(a)second counsel, a half day at scale costs of $1,115.00

(b)the steps of sealing the judgment, at scale costs of $446.00 and fees of

$50.00.

[3]                 It is regrettable Court intervention should be required to resolve such minor matters.

[4]                 On the costs of counsel, Mr MacGillivray, counsel for the respondents, submits this is an appropriate case for certification of second counsel. The hearing was of a complex interlocutory matter dealing with two applications brought by the plaintiff in the context of a wider dispute between the two ultimate owners of the business partnership to which the applications relate. Mr MacGillivray notes that both sets of parties were represented by lead and junior counsel.

[5]                 Mr Branch, counsel for Ms Latumbo, submits that junior counsel played no part in the hearing and that there is no basis for certifying second counsel in this summary judgment proceeding. Mr Branch cites a passage from McGechan on Procedure2 which states it is unlikely that costs for second counsel will be certified in summary judgment applications. That passage refers to Lawn v Waikato Bay of Plenty District Law Society where Master Anne Gambrill was “not be prepared to certify in summary judgment for second counsel”, but gave no reasons.3

1      Latumbo v Pacific Auto Carrier (NZ) Ltd [2018] NZHC 2773.

2      Rob Osborne and others McGechan on Procedure (online ed, Brookers) at [HR12.12.08].

3      Lawn v Waikato Bay of Plenty District Law Society HC Auckland CP229-IM00, 30 March 2001.

[6]                   In Body Corporate 401803 v Vermillion Wagener Ltd, Muir J held that “it will be a rare occasion in which certification occurs in a summary judgment context and there was certainly nothing about the present case which would indicate it was in the exceptional category”.4 Muir J cited Nomoi Holdings Ltd v Elders Pastoral Holdings where Chambers J held that “It will be a rare category 1 case where the court will certify for second counsel. It will be a rare category 3 case where the court will not certify for second counsel. It is difficult, however, to lay down a general rule for category 2 cases.”5 Chambers J’s reasons were that category 2 spans a wide range of proceedings and it will depend on the specific case.

[7]                 This rationale was picked up on in the summary judgment context in Collins v Mikitasov where Associate Judge Robinson held: 6

“where there was no viva voce evidence, where prior notice was given of the arguments to be advanced in opposition to [the successful party seeking costs’] case, and where the hearing was in the main conducted by only one counsel on behalf of [the successful party seeking costs] I can see no justification for the certification of a second counsel.”

[8]                 As observed by Associate Judge Doogue in Brady v Presbyterian Church of Aotearoa New Zealand (a decision granting the defendants summary judgment) there is no guidance set out in the rules as to the circumstances in which allowance for second counsel ought to be made and the structure of the rules suggests the norm will be that one counsel only will be provided for.7 There are a number of relevant criteria that need to be considered when deciding whether such an allowance should be granted:8

Primarily it will be a question of the complexity of the proceedings including the issues involved; the range of the evidence; and the number of witnesses, depositions and the volume of evidence before the Court. Any particular difficulties peculiar to the case may also be relevant.

[9]                 Associate Judge Doogue held that “in a summary judgment application where the evidence has been produced in affidavit form well in advance of the hearing there may be reduced requirement for second counsel when compared with the situation at

4      Body Corporate 401803 v Vermillion Wagener Ltd [2015] NZHC 693 at [7].

5      Nomoi Holdings Ltd v Elders Pastoral Holdings (2001) 15 PRNZ 155 at [17].

6      Collins v Mikitasov HC Whangarei CIV-2007-488-330, CIV-2007-488-816, 16 July 2008 at [7].

7      Brady v Presbyterian Church of Aotearoa New Zealand [2013] NZHC 2300 at [2].

8      Brady v Presbyterian Church of Aotearoa New Zealand [2013] NZHC 2300 at [2].

trial where changes occur to the evidence and where cross examination has to be undertaken”.9 On balance, the Judge did not consider that it would be fair to require the plaintiffs to meet the cost of second counsel.

[10]              This Court has also held that a “standard summary judgment application” with “submissions exchanged in advance and no call for cross-examination” will, notwithstanding some factual complexity and several legal issues, not warrant an allowance for second counsel, especially where it was essentially the party’s choice to do so.10

[11]              The factual background to this case was both complex and considerable and involved a sizeable amount of affidavit evidence assembed from a number of offshore jurisdictions as well as New Zealand. There was, however, no viva voce evidence and the legal points at issue were relatively confined, notwithstanding the additional issues arising from the application to bring a deriviative action. Submissions had been exchanged in advance and the argument at hearing presented by single counsel. In the circumstances, I do not consider the case was of such complexity as to warrant certification of second counsel.

[12]              On sealing costs, I am satisfied that the respondents’ costs for sealing the judgment are appropriate. Ms Latumbo’s opposition was based on the steps not being taken or the sealed order not being served on the relevant party. The respondents have since advised that they have taken those steps.

[13]              Accordingly, I order costs as set out in paragraph 2 of Mr MacGillivray’s memorandum of 21 November 2018, save for the costs of second counsel. This results in costs of $8,992 being payable by the plaintiffs.

G J van Bohemen J

9 At [2].

10     Robt. Jones Holdings Ltd v Smith HC Auckland CIV-2007-404-5245, 5 July 2010 at [8].