Mary Moodie Family Trust Board v Attorney-General

[2016] NZHC 755

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-001630 [2016] NZHC 755

UNDER

The Judicature Amendment Act 1972

and/or High Court Rules, pt 30, and/or

New Zealand Bill of Rights Act 1990, s 27(1)

IN THE MATTER OF

An application for judicial review of a decision to terminate community residency support - Intellectual Disability Agreement No. 340645/00

BETWEEN

MARY MOODIE FAMILY TRUST BOARD

Plaintiff

AND

ATTORNEY-GENERAL Defendant

Hearing:	On the Papers
Appearances:	D Wood for the Applicant E Child and M Clark for the Respondent
Judgment:	21 April 2016

COSTS JUDGMENT OF MANDER J

[1]      The Attorney-General was successful in defending an application for judicial review brought by the Mary Moodie Family Trust Board (the Trust Board).  He seeks an order of costs as the successful party to the litigation.

[2]      The Trust Board accepts that costs should follow the event and in large part does not dispute the Attorney-General’s claim as set out in a schedule attached to counsel’s  memorandum.    However  there  are  three  discrete  areas  which  require

resolution, each of which I deal with in turn.

MARY MOODIE FAMILY TRUST BOARD v ATTORNEY-GENERAL [2016] NZHC 755 [21 April 2016]

Preparation of briefs or affidavits

[3]      The  parties  are  agreed  that  costs  should  be  properly  categorised  as  2B. However, in respect of one item, namely the preparation of evidence, the Attorney- General submits that 2C is the appropriate categorisation due to the time required to carry out that task.  He points to the need to file 23 affidavits and almost 80 exhibits in response to the evidence filed by the Trust Board.

[4]      The Trust Board disputes that Band C is appropriate.   It submits the band should reflect the complexity of the case rather than its size or volume.  Further, that the focus of the case was simply the contractual relationship between itself and the Ministry of Health.  The Trust Board submits that Band B should be applied to the preparation of the evidence.

[5]      The parties are agreed the appropriate daily rate is categorised as 2 under the previous  schedule  2  being  $1,990.    Costs  are  then  required  to  be  assessed  by applying the time considered reasonable for each step based on that recovery rate.1

Rule 14.5 provides for the determination of a reasonable time for a particular step:

14.5      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.

1      High Court Rules, r 14.2(c).

[6]      From a reading of the rule it is apparent that the Trust Board’s submission, that the band adopted refers to “complexity not volume,” is misplaced.   The appropriate daily recovery rate relates to the complexity of the proceeding which as I have already observed, both parties agree is properly pitched as category 2.  Whether a case falls into Band B or C turns on the time the step in the proceeding takes to complete.   While that may include consideration of the complexity of the matter it also correlates with the amount or “volume” of the material or evidence that may need to be prepared.

[7]      Because of the amount of material the respondent was required to assess and analyse and the evidence it was required to brief in reply, I accept the Attorney- General’s submission that this step is properly categorised as Band C.   As such I allow a full five days as claimed at the appropriate daily recovery rate of $1,990.

Second counsel

[8]      The Attorney-General seeks certification of second counsel.  He submits that costs for two counsel is appropriate because of the volume of the evidential material and the range of issues traversed in submissions.  The Trust Board’s rejoinder is that the claim is not appropriate in the absence of any explanation of second counsel’s role and the extent of their involvement in the litigation.   It submits the claim of

$2,487.50 should be declined.

[9]      The claim for second counsel is to be calculated on the basis of a 50 percent allowance for the appearance of principal counsel.  The claim therefore relates to counsel’s appearance at the hearing.  In the absence of any contrary argument by the Attorney-General, the Trust Board’s submission, that the hearing involved no oral evidence and lead Crown counsel required no assistance in briefing or managing witnesses, carries some weight.  In the absence of any detail provided as to second counsel’s role at the two and a half day hearing, I am inclined to disallow the claim for second counsel.

Travel disbursements

[10]     The Attorney-General seeks to recover disbursements including travel related expenses. This is based upon the need for Crown counsel to travel in order to appear on behalf of the Attorney-General in Christchurch.

[11]     The Trust Board submits that the travel disbursements of $2,804.74 plus GST ought  not  be  recoverable.     It  argues  the  Attorney-General  chose  to  instruct Wellington based counsel, and the costs of that choice should not be passed on to the Trust Board.   The Trust Board submits the proceeding was properly filed in Christchurch and local counsel could have been instructed.   The Trust Board also observes that no actual evidence of the costs of the travel disbursements has been provided.

[12]     Disbursements are covered by r 14.12:

14.12     Disbursements

(1)        In this rule,—

disbursement, in relation to a proceeding,—

(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.

(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.

(3)        Despite  subclause  (2),  a  disbursement  may  be  disallowed  or  reduced  if  it  is disproportionate in the circumstances of the proceeding.

[13]     This Court has recognised that counsels’ travel expenses can be recovered under this rule.   In Buis v Accident Compensation Corporation, the Accident Compensation Corporation claimed costs of air travel of counsel who were located in Wellington.2   It was accepted that these costs were a disbursement for the purpose of  r  14.12(1).     The  identified  question  for  the  Court  was  whether  such  a disbursement met the criteria in r 14.12(2), more specifically, whether the expense was necessary for the conduct of the proceeding and reasonable.

[14]     This Court found there was justification for instructing out of town counsel and that counsel’s travel expenses were reasonable.3    However, the Court also observed that it was not possible to lay down any hard and fast rules and that the question to be addressed in each individual case was the reasonableness of the travel disbursements in the particular circumstances.

[15]     In Russell v Taxation Review Authority, Fisher J considered:4

It would be hard to argue necessity where there is an adequate choice of suitable counsel in the High Court centre involved and no other special justification for instructing out of town counsel.  Of course that is only the starting point.  Available experience and expertise is one obvious dimension

… another could be the location of the client.   If the client comes from a different region the cost of transporting counsel from that region might well

be outweighed by efficiencies gained during the preparatory stage.   A third

could be disqualifying associations between local counsel and the parties or issues at stake, eg proceedings against a local lawyer.

[16]     In Air New Zealand Limited v Commerce Commission, Rodney Hansen J agreed with Fisher J that in the absence of special circumstances and “where suitable counsel are available in the city where the hearing takes place, the travel and accommodation   expenses   of   out   of   town   counsel   would   not   normally   be

recoverable.”5   However in that case the Judge found the Commission was justified

2      Buis v Accident Compensation Corporation (2010) 19 PRNZ 585 (HC).

3      At [25] citing Russell v Taxation Review Authority (2002) 14 PRNZ 515 (HC).

4      Russell v Taxation Review Authority (2002) 14 PRNZ 515 (HC) at [25].

5      Air New Zealand Limited v Commerce Commission (2005) 17 PRNZ 786 (HC).

in instructing Wellington counsel, in particular because of the amount of preparation required, it was more efficient and economical to do so.

[17]    The nature of the current case was a judicial review proceeding which challenged decisions made by head office staff in the Ministry of Health.   Crown Law provides legal support to the Attorney-General.  Given the nature and scope of the challenge made by the Trust Board and the type of allegations made, it was reasonable for the Ministry to engage Crown Law to advise, and lead its defence of the proceeding.  It does not follow as a matter of course that because a proceeding involves  the  Crown,  the  client  is  necessarily  to  be  taken  as  being  based  in Wellington.   However, because of the substance and focus of the Trust Board’s challenge it is accurate to describe “the client” as being based outside the High Court centre where the proceeding was filed.   The Ministry was entitled to instruct Wellington based counsel in the preparation of its case where it was no doubt more convenient and efficient for it to do so.

[18]     It  follows  that  the  claim  for  travel  disbursements  may  be  legitimately recovered under r 14.12.    However, because of the approach I have taken to the claim  for second  counsel’s appearance,  the Attorney-General  is  only entitled  to recover half the travel costs and accommodation claimed.

[19]     The travel related disbursements on their face appear reasonable.   The Trust Board however is entitled, if it insists, to seek verification of the costs.  No doubt the appropriate receipts can be provided if that is required by the Trust Board.

Result

[20]     The Attorney-General’s application for costs is successful.  Costs are awarded in accordance with the schedule attached to the memorandum of Crown counsel with the following modifications.  The claim in the sum of $2,487.50 for second counsel is declined  and the award reduced to  one of  $29,850.   There will be an  order accordingly.

[21]     The claim for disbursements as it relates to travel and accommodation costs is allowed but reduced by 50 percent.     There will therefore be an order for the

payment of disbursements (inclusive of GST) in the sum of $1,566.72. This amounts to a total award for costs and disbursements of $31,416.72.

Solicitors:

Desmond Wood, Auckland

Crown Law, Wellington