Liu v Ward HC Palmerston North CIV-2010-454-48
[2011] NZHC 1348
•2 August 2011
IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
CIV-2010-454-48
UNDER the Weathertight Homes Resolution
Services Act 2006 ss 93 and 94
IN THE MATTER OF a decision of the Weathertight Homes
Tribunal dated 16 December 2009
BETWEEN SU-WEN LIN LIU, TIMMY HSIN-YU HOU AND KAI-YU VIVIAN CHUANG Appellants
ANDSTEVEN WARD First Respondent
ANDPALMERSTON NORTH CITY COUNCIL Second Respondent
ANDKIRSTY GILLARD Third Respondent
ANDDARREN GILLARD Fourth Respondent
Judgment: 2 August 2011 at 4:00 PM
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
This judgment is delivered by Associate Judge Gendall on 2 August 2011 at 4.00 pm under r 11.5 of the High Court Rules.
Solicitors: Churton Hart & Divers, Barristers & Solicitors, PO Box 82040, Highland Park, Auckland
Heaney & Co, Solicitors, PO Box 105391, Auckland
SU-WEN LIN LIU, TIMMY HSIN-YU HOU AND KAI-YU VIVIAN CHUANG V STEVEN WARD HC PMN CIV-2010-454-48 2 August 2011
Introduction
[1] The appellants, pursuant to a Minute issued by me on 3 February 2011 seek costs in relation to these proceedings. Costs relate to the appellants’ successful interlocutory application heard by Associate Judge Christiansen and the successful appeal, by consent, of the appellants.
[2] The respondents oppose that application on the grounds that it is made out of time, that the quantification of costs is in error and that this Court should decline to exercise its discretion in favour of an award of costs in respect of the appeal.
Background
[3] These proceedings relate to an appeal from a decision of the Weathertight Homes Tribunal. The appellants took a claim to the Tribunal over a house which was purchased by them in Palmerston North in 2006. On 16 December 2009 the adjudicator made orders removing the respondents to the claim, thereby terminating that claim, on two alternate grounds. First, that a settlement had occurred between the parties and/or second, that the respondents were not liable due to the appellants’ conduct and knowledge at the time of purchase of the property.
[4] The appellants filed an appeal against that decision in this Court on 3
February 2010. On 17 March 2010 the appellants filed an application to adduce further evidence on appeal. That application was opposed by the second respondent only. By judgment released on 26 May 2010 Associate Judge Christiansen concluded at [34]-[35]:
The application to adduce additional evidence is granted…
The appellants are entitled to costs on a 2B basis, together with disbursements,
including counsel’s reasonable travel costs.
[5] Around 14 June 2010 the parties entered settlement discussions with the view to allowing the appeal and rehearing the substantive claim in the Tribunal. On 4
November 2011 a consent memorandum was finally signed and, by way of a Minute dated 5 November 2010, I made the consent orders sought. Between 14 June 2010 and 5 November 2010 the proceedings were called on four occasions. On three
occasions, adjournments were made for the parties to continue settlement discussions.
[6] My final Minute issued in respect of these proceedings was on 3 February
2011. In that Minute I recorded:
Matter gone back to Weather Tight Homes Tribunal – talk of a mediation in
May 2011.
Costs still in issue, directions now made:
1. Appellant to file and serve memorandum on costs within 30 working days of today.
2. Memorandum on costs from respondent within a further 15 working days of that date.
3. In absence of any party wishing to be heard on issue, I will decide question of costs based on material before the Court.
Matter listed for call on 2 June 2011.
[7] The time provided in that Minute for the appellants’ costs memorandum expired on 17 March 2011. A memorandum was not filed until 25 March 2011. The appellants filed a further memorandum issuing a correction to the quantum assessed in that 25 March 2011 memorandum on 14 April 2011 (dated 12 May 2011). According to that Minute, the respondents’ time expired on 15 April 2011. A memorandum was not filed until 12 May 2011. The appellants filed a further memorandum in reply on 12 May 2011.
Counsels’ Submissions and My Decision
[8] The parties are in agreement that costs should be assessed on a 2B basis. I
agree, except as set out in [26] below.
Leave
[9] The appellants’ application is notionally out of time. Mr Coulter, for the appellants, states that it was due to an oversight on his part. The respondents submit that leave should be declined. The respondents say that they have suffered prejudice due to that delay as, since the matter was remitted back to the Tribunal, settlement negotiations have ensued. They say that as a costs memorandum was not filed by 17
March 2011, they considered that costs were not in issue. The respondents say that
if they had thought that costs were in issue they would have approached settlement initiatives differently.
[10] For myself, I consider that hard to believe. The costs memorandum for the appellants was filed just six working days late. While I accept that delay caused by counsel’s error is inexcusable, the respondents have suffered no identifiable prejudice: Shepherd v Pearce HC Auckland CIV-2009-404-8472, 2 August 2010 at [7] There being no real prejudice to the respondents, I see no reason why leave to the late filing of this costs memorandum should not be granted. An order to this effect is now made.
Interlocutory application costs
[11] The appellants assess costs in this application at $3,040.00 and disbursements as $291.49 (by counsel’s memorandum filed 14 April 2011). The disbursements claimed are counsel’s travel costs from Wellington to Palmerston North and costs incurred in preparing and sending documents to a Mr Alan Parlane. In my 4 March
2010 Minute I recorded at [9]-[11]:
The third matter for consideration at the conference related to the position of Mr Alan Parlane. Mr Parlane was apparently not joined to the Tribunal claim although an application for his joinder as a second respondent was made but unresolved when the Tribunal completed its decision.
Mr Parlane was apparently spoken of as a proposed party to a settlement.
The parties agree that Mr Parlane should be kept informed of this appeal, and it is noted that counsel communicate to him regarding this and request him to advise whether he may wish to be a party to the appeal. This is simply noted at this point.
[12] The respondents argue that neither the Tribunal, nor Mr Parlane, were parties and so the appellants were not required to serve either documents for the interlocutory application. As for counsel’s travel expenses, the respondents rely on the following statement of White J in Turners & Growers Ltd v Zespri Group Ltd (No 3) HC Auckland CIV-2009-404-4392, 29 October 2010 at [21]:
As already noted, under rule 14.12(2)(c) of the new High Court Rules the test is whether the disbursement is ―reasonably necessary‖. In cases involving relatively routine matters the engagement of ―out of town‖ counsel is unlikely to meet the test, but, as recognised in Russell, Air New Zealand Limited v Commerce Commission and Commerce Commission v Bay of Plenty Electricity Limited even under the previous
―necessity‖ test, there will be cases where circumstances do justify the engagement of
―out of town‖ counsel and their travel and accommodation expenses will be recoverable as a disbursement. As is often the case, whether engagement of ―out of
town‖ counsel is ―reasonably necessary‖ will depend on the circumstances of the
particular case.
[13] With regard to the items claimed, the respondents argue that the appellants’ claim for an affidavit filed in reply, in addition to the filing of their application, is not appropriate. They claim that any such affidavit is already contemplated as falling within item 4.12 of sch 3 to the High Court Rules.
[14] Item 4.12 of sch 3 provides:
Preparing and filing interlocutory application (excluding summary judgment application) and supporting affidavits.
[15] Given the fact that this item 4.12 expressly provides for supporting affidavits, I am satisfied that it is reasonably arguable this claim is made erroneously.
[16] As to the disbursements claim, r 14.12 defines disbursements as:
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.
[17] Rule 14.12 goes on to provide an inclusive list of categories recognised as disbursements and in r 14.12(2) specifies:
(2) A disbursement must, if claimed and verified, be included in the costs awarded for a proceeding to the extent that it is—
(a) of a class that is either—
(i) approved by the court for the purposes of the proceeding; or
(ii) specified in paragraph (b) of subclause (1); and
(b) specific to the conduct of the proceeding; and
(c) reasonably necessary for the conduct of the proceeding; and
(d) reasonable in amount.
[18] In Russell v Taxation Review Authority (2000) 14 PRNZ 515 Fisher J
observed at [28]:
It must always be open to a party to show that in the circumstances of the particular case an item claimed as a disbursement was specific to the particular litigation, was necessary, would normally be charged to the client as a separate disbursement, and was reasonable in amount…
[19] I am satisfied that counsel’s travel fees, while not usually claimable in
relatively straight forward litigation such as this, are claimable in the present case.
Associate Judge Christiansen has already considered that disbursement should be so ordered. As for the appellants’ claims for DX fees with regard to filing documents in the High Court at Palmerston North and sending documents to the claimants’ counsel in Wellington and couriering of documents to opposition counsel, I am satisfied that these were necessary and specific to the litigation: Mawhinney v Waitakere City Council HC Auckland CIV-1999-404-1850, 26 September 2007 at [12].
[20] As for postage fees to the Tribunal, courier fees and binding file charges, I am satisfied that those claims were not reasonably necessary here for the conduct of the proceeding. While I directed that the parties keep Mr Parlane appraised of the appeal, that did not necessarily mean that files be bound and sent to him. He was not a party to the appeal and so it is unnecessary to serve on him a bundle for every interlocutory application heard. If he was to become a party it might then be expected that materials used for the interlocutory application be supplied to him, but until such time as this was to occur, I do not consider that such service was necessary. As for sending documents to the Tribunal, I am not aware of any custom to file interlocutory documents on a lower judicial body. Indeed, if a lower body was to receive a copy of materials relevant to every interlocutory application on an appeal from a decision of theirs, such lower bodies might well become ―inundated‖. Accordingly, I do not consider that to be necessary.
[21] With regard to the interlocutory application, costs are set at $2,560.00 and disbursements $266.99, a total of $2,826.99.
Costs for the appeal
[22] The appellants quantify their claim for costs for the appeal as $2,944.00 and disbursements at $1,312.42.
[23] The respondents argue that I should not exercise my discretion here to award costs on the appeal. The respondents say that the prospect of allowing the appeal was suggested by them as early as 26 August 2010 in light of the decision of Wylie J in Chee v Stareast Investment Limited HC Auckland CIV-2009-404-5255, 1 April
2010. There, his Honour remitted a similar matter back to the Weathertight Homes
Tribunal for reconsideration. The respondents say that the reason why consent was
so long in coming after that 26 August 2010 letter was because the appellants were insistent on costs.
[24] In Chee Wylie J ordered costs to lie where they fell: at [148]. In that case there were a variety of appeals and cross-appeals. That is the explanation why costs were held to lie where they fell. It was not due to any specific consideration that matters such as this should not be dealt with under the general principle that a winning party ought to receive costs: r 14.2(a).
[25] As for quantum, the respondents take issue with the appellants’ claims for memoranda filed for various case management conferences. The respondents contend that many were joint memoranda, filed mostly for the purpose of adjourning the matter so that the parties could continue to engage in settlement negotiations. The parties disagree on four such memoranda filed on 14 June 2010, 14 July 2010, 5
October 2010 and 4 November 2010. The appellants say that the fact that the memoranda were joint is irrelevant as the appellants still bore costs associated with those memoranda.
[26] I see no reason in principle why the appellants should not receive costs for the preparation of the memoranda which it was responsible for, even though they may have been joint consent memoranda. Time was expended by counsel, and I have no doubt that costs would have been passed on to their clients. In those circumstances, a claim for costs is appropriate. As the appellants did not prepare the
4 November 2010 memorandum, I do not consider a claim for costs is appropriate for that item.
[27] A time band is required for each step in proceedings: Andrew Beck and others McGechan on Procedure (online looseleaf ed, Brookers) at [HR14.5.01]. Given the simplicity in the matter, I consider that a categorisation of band A is appropriate. For the non contentious items, I agree with counsel that a categorisation of 2B is appropriate.
[28] Accordingly, I certify costs in the following form:
Date Item Action Days Rate1 Total 2/2/10 12 Commencement of appeal 0.5 $1,600 $800 2/3/10 13 Filing memorandum for case management conference 0.2 $1,600 $320 4/3/10 14 Appearance at case management conference 0.2 $1,600 $320 14/6/10 13 Filing memorandum for case management conference 0.1 $1,880 $188 14/7/10 13 Filing memorandum for case management conference 0.1 $1,880 $188 5/10/10 13 Filing memorandum for case management conference 0.1 $1,880 $188 Total $2,004
[29] As for disbursements, the respondents take issue with the following claims:
(a) Courier fees, sending documents to the Tribunal; (b) Binding fees for a report sent to counsel;
(c) Courier fees to send the report to counsel;
(d) Binding fees for report sent to counsel in Palmerston North; (e) DX fees to send documents to counsel in Wellington; and
(f) Fees charged by LawBasics for filing and service of appeal in Palmerston
North.
[30] With regard to the first, under r 20.6 Notice of Appeal must be served on the body from which the appeal is brought. Therefore, the claim is necessary for the conduct of the proceeding. Secondly, the claim for binding fees and courier fees to send the report as well as DX fees to send documents to counsel in Wellington was appropriate. In relation to the appeal itself employing counsel from out of town was also reasonable. The appellants it seems had become disillusioned with local
counsel and sought expertise elsewhere in what could have become a relatively
1 Note the change of rate which occurred from 24 May 2010.
complex matter. Therefore, both the courier, DX and binding costs in [29] (b), (c) and (d) above were reasonable and necessary: see Clitherow v Parker HC Auckland CIV-2006-404-46, 8 February 2008. As to the second set of binding charges, however, I agree with the respondents that this disbursement is not claimable. I am unsure why it is charged in addition to the binding recorded in [29](b) above and why the cost is significantly more than that in [29](b) above. I am not satisfied that it is, therefore, reasonably necessary. As for the final fee, that for filing and service of the appeal, the respondents claim that it is unreasonably high ($724.50) in the circumstances of this proceeding. From the invoice received from LawBasics, it appears that the documents were filed ―urgently‖. That might account for the ―high‖ rate. Costs must be predictable. Accordingly, costs which are not reasonable will not be claimable. This includes an inflated cost to file and serve documents. I note that this level was not incurred here in filing any other documents. For that reason, I am not satisfied that the respondents should bear that cost. I therefore certify disbursements at a total of $486.97.
Conclusion
[31] In summary, I order the following costs:
(a) The interlocutory applications against the second respondent solely
($2,826.99)
a. Costs - $2,560.00
b. Disbursements - $266.99
(b) The appeal against all four respondents ($2,490.97)
a. Costs - $2,004.00
b. Disbursements - $486.97
[32] I also note the appellants’ belated application to amend the intituling due to an error in the second named appellant’s name. Rule 4.54 provides the appropriate course for the parties to adopt:
A party's name that is incorrectly stated in pleadings or changed by marriage, civil union, deed poll, or other means, may be amended, without an application to the court, by a notice signed by the party and filed and served on all other parties.
[33] While this memorandum is not signed by Mr Hsin-Yu Hou, it has been served on all other parties. Further, it is a memorandum filed on instructions from that appellant. Accordingly, I treat it as compliant with that rule and an order for amendment is now made.
‘Associate Judge D.I. Gendall’
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