Napier City Council v Local Government Mutual Funds Trustee Limited

[2021] NZHC 2572

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2017-441-070

[2021] NZHC 2572

BETWEEN

NAPIER CITY COUNCIL

Plaintiff

AND

LOCAL GOVERNMENT MUTUAL FUNDS TRUSTEE LIMITED

Defendant

Hearing:

27 July to 12 August 2020 (further submissions received

September 2020)

Counsel:

D H McLellan QC and G Tompkins for the Plaintiff

M G Ring QC, C J Hlavac and K Welsford for the Defendant

Judgment:

29 September 2021

JUDGMENT OF GRICE J

(costs)

Introduction

[1]        This is an application for costs by the defendant, the successful party in the substantive claim.1

[2]        The defendant’s claim for costs and disbursements was challenged on two main points. The first was its claim for costs and disbursements in relation to three counsel and the second was costs in respect of two interlocutory applications filed by the defendant but subsequently not pursued.

1      Napier City Council v Local Government Mutual Funds Trustee Ltd [2021] NZHC 1477.

NAPIER CITY COUNCIL v LOCAL GOVERNMENT MUTUAL FUNDS TRUSTEE LIMITED [2021] NZHC 2572 [29 September 2021]

[3]        The trial ran  for  approximately  seven  days.  It  involved  a  number  of  case management conferences as well as a face-to-face issues  conference held  on 12 November 2019, which had initially been set down for two days. That issues conference resulted in a series of agreements between the parties which largely resolved the interlocutory matters being pursued by the plaintiff.

[4]        Counsel agree the appropriate categorisation in terms of the High Court Rules 2016 is 2B. This appears appropriate in the circumstances. The matter involved a normal amount of time which would be considered reasonable.2 Category 2 is for proceedings of average complexity requiring counsel of skill and experience considered average in the High Court.3

[5]        The case did involve a number of legal and evidential arguments and a number of volumes of documents that required management. To manage the argument and documents a second counsel appeared for both parties. Assistance of second counsel was justified and second counsel for the defendant assisted in the presentation of the case. However, certification for a third counsel would not be appropriate. In fact, the defendant has now proposed deducting costs attributable to third counsel.

[6]As for disbursements relating to third counsel:

(a)all disbursements that can be isolated as relating to the third counsel should be deducted from the costs claim; and

(b)any shared expenses, such as taxis, should be apportioned according to the number of persons in the taxi or sharing the part of the expense, as it appears the defendant has done.

[7]        In relation to the interlocutory applications, the general position is that costs are set at the time of determination of the interlocutory matter and will usually be in favour of the successful party.4 The defendant filed a number of interlocutory

2      High Court Rules 2016, r 14.5(2) indicates a determination of what is a reasonable time to be made by reference to Band B if a normal amount of time is considered reasonable.

3      Rule 14.3(1).

4      Rules 14.2(1)(a) and 14.8(1)(a).

applications. An adjournment application was granted and costs dealt with on that application.

[8]        The further applications, the subject of the costs objection which had not been dealt with by the time of trial, were apparently resolved through the agreements reached at, or following, the issues conference. These related to the identification and refinement of trial issues (including the onus), as well as a challenge to the admissibility of part of the plaintiff’s witness’ brief of evidence.5

[9]        The defendant says the issue concerning identifying and refining trial issues was resolved by agreement as Napier City Council (NCC) agreed to serve the relevant briefs of evidence that it had originally indicated it would not file until reply evidence. The defendant says this outcome was effectively what it had initially sought. Therefore, there was no need to resolve the matter in advance by interlocutory argument.

[10]      The plaintiff points out however that the particular issue relating to the onus was not determined in the defendant’s favour at trial. The plaintiff responds by saying that it was completely successful at trial as to liability, and the finding on the onus did not detract from that outcome.

[11]      In this case it appears that the interlocutory matters which might have required a separate pre-trial interlocutory determination were sorted out between the parties largely as a result of the constructive discussions at the case management/issues conference held on 12 November 2019. Both counsel filed submissions prior to that issues conference, however, those matters were never the subject of a separate hearing and pre-trial determination.

[12]      In the ordinary course the defendant, as the successful party in the substantive action, would be entitled to costs for the preparation, including of memoranda and appearance at the case management/issues conference. The defendant has indicated that it has claimed 0.4 days for preparation for the memorandum, not the 1.5 days that is claimable in the usual course. As the interlocutory matters, which remained extant

5      Napier City Council v Local Government Mutual Funds Trustee Ltd [2019] NZHC 2643.

for the purposes of the trial, were effectively resolved at the issues conference or by agreement, I do not think it appropriate that costs should be awarded in favour of the plaintiff. It would have been different, and costs may well have been appropriate, if the interlocutory applications had been abandoned.

[13]      In those circumstances it is not appropriate costs should be awarded against the defendant on those matters. The fact that on the issue of the onus I found in favour of the plaintiff’s position in the judgment does not mean that costs on that particular issue, because it had been the subject of an interlocutory application but was actually determined at trial, should be awarded in favour of the plaintiff. It was argued as part of the trial and the defendant was the successful party at trial. The costs incurred for that part of the trial should not be separated out.

Conclusion

[14]For the reasons set out above:

(a)Costs are awarded on a 2B basis in favour of the defendant.

(b)A certificate is granted for second counsel for the defendant.

(c)The costs and disbursements in relation to the third counsel for the defendant are not allowed and should be removed from the defendant’s claim.

(d)Where the third counsel’s costs cannot be separated out, such as for taxis and other shared costs, the disbursement should be adjusted by pro rata of the cost between the number of counsel sharing the relevant goods or services and deducting an amount attributable to the third counsel.

(e)The  defendant   is   entitled   to   costs   of   and   relating   to   the case management/issues conference on 12 November 2019 as claimed.

(f)No award of costs is made in relation to the defendant’s interlocutory applications, which were not separately heard before trial.

Grice J

Solicitors:

Wilson Harle, Tāmaki Makaurau | Auckland, for the Plaintiff. Young Hunter Lawyers, Ōtautahi | Christchurch, for the Defendant.