Linden Estate Limited (in liquidation) v Jans HC Auckland CIV 2007-441-877
[2009] NZHC 2630
•21 September 2009
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2007-441-000877
BETWEEN LINDEN ESTATE LIMITED (IN LIQUIDATION)
Plaintiff
ANDBRUCE WILLIAM JANS, HAWKES BAY NOMINEES LIMITED AND BISHOP NEW ZEALAND LLC
First Defendants
AND SEAFIELD FARM (HB) LTD Second Defendant
Hearing: ON THE PAPERS Appearances: N Gray for Plaintiff
T M Petherick for Defendants
Judgment: 21 September 2009 at 4pm
JUDGMENT OF ASSOCIATE JUDGE ROBINSON AS TO COSTS
This judgment was delivered by me on 21 September 2009 at 4 pm, Pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date…….
Solicitors: Sainsbury Logan & Williams, PO Box 41, Napier
Gresson Grayson, PO Box 1045, Hastings
LINDEN ESTATE LIMITED (IN LIQUIDATION) V BRUCE WILLIAM JANS, HAWKES BAY NOMINEES LIMITED AND BISHOP NEW ZEALAND LLC AND ANOR HC AK CIV 2007-441-000877 21 September
2009
[1] The Plaintiff seeks costs assessed on a 2B basis together with disbursements following its successful application for an order for specific performance by way of summary judgment. The defendants do not oppose the plaintiff’s costs being assessed on a 2B basis. They do however contest liability for payment of the following costs set forth in the plaintiff’s summary of costs claimed:
11.1 Review First Defendant’s Statement of Defence .3
11.2 Review First Defendant’s Statement of Defence .1
11.3 Review Second Defendant’s Statement of Defence .1
11.4 Plaintiff’s memorandum of counsel 10 March 2008 .1
11.5 Court appearance 27 March 2008 .1
11.6 Review Defendant’s opposition papers to summary
judgment application .3
11.7 Plaintiff’s reply affidavits .5
Total: 1.5
[2] The plaintiff sought costs assessed on a total of 7.1 days. After deducting the
1.5 days which the defendants claim cannot be recovered the balance is 5.6 days which at $1,600 per day results in a total claim of $8,960.
[3] The defendants also object to claims for expenses paid to a solicitor
Mr Richard Cross who gave evidence as an expert witness. Those expenses are:
11.2 Expert Fees
a) Richard Cross (account dated 25 February 2007).
This cost relates to Mr Cross’s attendance relating to his first affidavit 30 October 2007
$1,046.25
b) Richard Cross (account dated 19 May 2008).
This cost relates to Mr Cross’s attendance relating to his second affidavit 13 May 2008
$2,137.50.
Plaintiff’s Claim for costs assessed on a 2B basis
[4] The defendant claims the plaintiff is not entitled to costs in perusing the statement of defence because such documents do not form part of the summary judgment application and would only be required if the summary judgment application did not succeed. It is also pointed out that the costs under item 11.1 and item 11.2 relate to the same matter. Counsel for the defendants further submits that costs claimed by the plaintiff under items 11.4 to 11.7 must have been included in preparation for the hearing for any claim under item 5.3 for half a day and item 5.1 referred to as summary judgment application and related papers for which the plaintiff has claimed .6 of a day.
[5] The plaintiff in reply accepts that item 11.1 is an error and should not be included. It is claimed items 11.2 and 11.3 are appropriate to compensate for the time spent in reviewing the statement of defence. Furthermore it is pointed out an appearance was required on 27 March 2008 because the defendants were in default of directions requiring them to file affidavits in support of their defence by
29 February 2008. At the hearing on 27 March 2008 directions were made extending the time for filing of affidavits by the defendants in support of their defence. When those directions were made the plaintiff applied for costs. The Court ordered that such costs be reserved. Counsel for the plaintiff also points out that extensive affidavits were filed by the defendants which increased costs incurred in considering matters raised in those affidavits.
[6] As the parties have agreed on these proceedings being categorised as category 2 and band B for the assessment of time the recovery rate specified in the third schedule for preparing for the hearing of a defended summary judgment application is the time occupied by the hearing measured in quarter days and in arguing a defended summary judgment application is the appearance in Court measured in quarter days.
Rule 14.5 contains the following relating to determination of reasonable time:
Determination of reasonable time
(1) For the purposes of rule 14.2(c), a reasonable time for a step is— (a) the time specified for it in Schedule 3; or
(b) a time determined by analogy with that schedule, if Schedule 3 does not apply; or
(c) the time assessed as likely to be required for the particular step, if no analogy can usefully be made.
(2) A determination of what is a reasonable time for a step under subclause
(1) must be made by reference—
(a) to band A, if a comparatively small amount of time is considered reasonable; or
(b) to band B, if a normal amount of time is considered reasonable; or
(c) to band C, if a comparatively large amount of time for the particular step is considered reasonable.
[7] Rule 14.2(C) provides:
Costs should be assessed by applying the appropriate value recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory applications.
[8] As stated by the learned authors of McGechan on Procedure page 1-1614(6).
The costs rules are designed to be self-calculating, removing from Judges the burden of having to fix costs. Other than resolving questions as to the expenses of expert witnesses etc, all that the Judge should have to do is fix the band(s) under rule 14.5(2) and deal with any application under rule 14.6 or 14.7.
[9] In the present case the time for preparation of a defended summary judgment application is the same whether the proceedings are within category A, B or C. There can therefore be no claim for extra costs involved in preparing for a defended summary judgment application which would include extra costs claimed for perusing the statements of defences because those items are already included in the costs claimed for preparation. Consequently, the claims for costs on reviewing the statements of defences under items 11.2 and 11.3 amounting to a total of .2 of a day will be disallowed as will costs claimed under item 11.6 for reviewing the summary judgment application of .3 of a day. The plaintiff is also not entitled to the extra costs in respect of the reply affidavits under item 11.7 of 0.5 days.
[10] The costs claimed for the appearance on 27 March 2008 at a case management conference together with the preparation of a memorandum for that conference under items 11.4 and 11.5 will be allowed. Those costs can be claimed under the third schedule. Costs at the hearing on 27 March 2008 were reserved. The hearing was required as the defendants were in default of their obligations to file affidavits in support of their defence. The amount claimed is less than the amount set forth in the third schedule for those items and must be considered as being reasonable.
[11] In summary the plaintiff sought costs assessed at 7.1 days at $1,600 per day namely costs of $11,360. From this amount must be deducted the following items I have disallowed because of the reasons set forth in this judgment:
a) 11.1 entered in error .3 b) 11.2 reviewing statement of defence .1 c) 11.3 reviewing statement of defence .1
d) 11.6 reviewing defendants opposition to
summary judgment application
.3
e) 11.7 Plaintiff’s reply affidavit .5 Total: 1.3
[12] The amount to be deducted is therefore $1,600 x 1.3 days namely:
$2,080
Consequently, the plaintiff’s costs are fixed at $11,360 less $2,080 namely:
$9,280
Claim for Mr Cross’s Expenses
[13] The plaintiff’s claim for specific performance sought orders requiring the defendants to complete easements certificates which the plaintiff claims were prepared in accordance with an agreement for sale and purchase between the plaintiff and the first defendants. The agreement required the easement certificate to “provide for the repairs, maintenance and any other contributions to be borne equally but to otherwise include provisions as usually included in well drawn easements.” Prior to issuing these proceedings the plaintiff obtained an opinion from Mr Cross, a solicitor in Napier specialising in subdivisions, easements and a wide range of local government and utility property work. The defendants had refused to complete the easement certificates claiming such easement certificates did not conform with the agreement for sale and purchase. Mr Cross’s opinion was that the easement certificates prepared by the solicitors for the plaintiff did conform with the agreement for sale and purchase.
[14] Included in the easements to be completed were easements relating to right- of-way, right to use water and right to lay electricity and telecommunications services. The easements related to a deposited plan and were rather complicated involving a number of land owners.
[15] The defendants in opposing the claim for Mr Cross’s expenses point out that such expenses relate to a legal opinion and cannot be recovered as a disbursement under Rule 14.12.
[16] Rule 14.12(1) provides:
14.12 Disbursements
(1) In this rule, -
(a) means an expense paid or incurred for the purposes of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor’s bill of costs; and
(b) Includes –
(i) Fees of court for the proceeding;
(ii) Expenses of serving documents for the purposes of the proceeding:
(iii) Expenses of photocopying documents required by these rules or by a direction of the court:
(iv)expenses of conducting a conference by telephone or video link; but
(c) Does not include counsel’s fee
Relevant issue, in relation to a disbursement, means the issue in respect of which the disbursement was paid or incurred.
[17] The question arises as to whether Mr Cross’s expenses are excluded from this rule because they are not an expense paid or incurred for the purpose of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor’s bill of costs.
[18] If the claim for Mr Cross’s expenses relates to legal professional services for the proceeding that would ordinarily be included in the professional services in a solicitor’s bill of costs then pursuant to rule 14.12 his expenses cannot be recovered as a disbursement.
[19] Mr Cross was not retained as the plaintiff’s solicitor. His expenses as an expert witness would ordinarily be charged for separately from the legal professional services rendered for the plaintiff for the purpose of these proceedings. Furthermore, he has not been retained as the plaintiff’s counsel. Had he been retained as counsel he would have been disqualified from giving evidence pursuant to s 72(2) Evidence Act 2006.
[20] In Hoole and Pitfield as receivers of Hillcrest Services Ltd (In receivership) v Darby HC Auckland CIV 2006-404-005235 Venning J, 30 March 2007 orders for costs included a disbursement of $27,000 for the payment of the independent barrister and security consultant who attended the execution of the Anton Pillar orders made in that case. Thus there is precedent for recovery of a barrister’s fee as a disbursement.
[21] I therefore conclude that the expenses of Mr Cross are properly recoverable as a disbursement under rule 14.12. As held by the Court of Appeal in Air New Zealand Ltd v Commerce Commission [2007] 18 PRNZ 406 the plaintiff is entitled to recover under rule 14.12 the actual expenses of the expert witness provided they are reasonable and necessary. As stated by Chambers J at paragraph 62 of the decision in Air New Zealand v Commerce Commission the amount to be recovered is limited to the time spent in giving evidence and in preparing that evidence.
[22] In refusing to complete the documents creating the easements, the defendants put in issue whether the provisions contained in the easements were those that were usually included in well drawn easements. The defendants sought provision requiring the users of the easements to contribute to the maintenance of the easements in accordance with the amounts of their usage, changing the physical location of the water easements, and seeking the right to relocate the easements.
[23] In preparing his evidence Mr Cross had to consider a significant number of documents including the agreement for sale and purchase containing the provision requiring the easements to be created, the deposited plans relating to the easements and correspondence setting forth the reasons the defendants were refusing to complete the easements.
[24] The evidence of the defendants in opposition to the application for summary judgment raised further issues for consideration by Mr Cross which he had to answer in a second affidavit filed in reply to the defendants’ affidavit. Having regard to the number of documents he had to review and the detailed evidence he gave I am satisfied that Mr Cross would have spent considerable time in preparing his evidence. The summary of his attendances referred to in his accounts shows the work
he did related to preparation for the evidence he was to give. Whilst some of the work pre-dated the issue of these proceedings the work certainly related to the evidence he eventually gave.
[25] In the circumstances therefore I am satisfied that Mr Cross’s expenses are limited to preparing his evidence and swearing his affidavits. Counsel for the defendant did not question the amount being claimed by Mr Cross. Counsel put in issue whether Mr Cross’s evidence was completely necessary. I am however satisfied that Mr Cross’s evidence was necessary and this is reflected in the judgment given in favour of the plaintiff.
[26] There being no dispute by the defendant to the amount of the fee payable to Mr Cross as an expert witness I am satisfied that the plaintiff is entitled to recover the total of those fees. Consequently, the plaintiff is entitled to the disbursements
listed in the memorandum in support namely $5,109.41.
Associate Judge Robinson
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