Napier v Sandspit Bay Holdings Limited
[2016] NZHC 468
•17 March 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2013-404-001406 [2016] NZHC 468
BETWEEN DUNCAN JOHN NAPIER, SARA ANN
NAPIER AND CHRISTOPHER JOHN DAVIS AS TRUSTEES OF THE NAPIER FAMILY TRUST
Plaintiffs
AND
SANDSPIT BAY HOLDINGS LIMITED Defendant
Hearing: On the papers Appearances:
DJ Napier (self-represented) for plaintiffs
DPH Jones QC and AC Krzanich for DefendantJudgment:
17 March 2016
JUDGMENT OF WOOLFORD J
This judgment was delivered by me on Thursday, 17 March 206 at 10.00 am pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors: Sellar Bone & Partners, Auckland, for Plaintiffs
Counsel: DPH Jones QC, Auckland, for Plaintiffs
Copy to: DJ Napier
NAPIER & ORS v SANDSPIT BAY HOLDINGS LIMITED [2016] NZHC 468 [17 March 2016]
Introduction
[1] On 9 October 2015, I issued judgment in favour of the trustees of the Napier Family Trust (the plaintiffs) against Sandspit Bay Holdings Ltd (the defendant).1 In that judgment, I gave directions for filing costs memorandum if costs could not be agreed. They have not been agreed and costs memorandum have now been filed.
Submissions
[2] The plaintiffs say they were represented by counsel, Steven Tee of Morton Tee, until September 2014, but represented themselves at trial through one of the trustees, Mr Napier.
[3] The plaintiffs seek costs on a 2B scale for the commencement of proceedings, a reply to the statement of defence, preparation for the first case management conference and filing memorandum for the first and three subsequent case management conferences, together with appearances at four case management conferences. They also claim disbursements in respect of High Court filing fees and Mr Napier’s travel to and from the High Court on two days. In relation to interest, the plaintiffs also claim interest from 1 May 2012 – a time by which all the
defendants in an associated proceeding, Torbay Holdings Ltd v Napier,2 (the
associated proceeding) had received the money I found to be owed to the plaintiffs in that proceeding. Interest is sought at the prescribed rate of five per cent.
[4] Counsel for the defendant accepts that the plaintiffs were initially represented by Mr Tee. Although the Court and counsel were not informed of the change of representation until September 2014, the Court found, on the application by Torbay Holdings Ltd to strike-out Mr Napier’s defence in the associated proceeding that Mr Tee had effectively ceased acting for the plaintiffs from the end of April 2014.
Mr Napier has subsequently represented the plaintiffs.
1 Napier Family Trust v Sandspit Bay Holdings Ltd [2015] NZHC 2477.
2 Torbay Holdings Ltd v Napier [2015] NZHC 2477.
[5] Counsel for the defendant submits that, although the plaintiffs have been awarded costs, these should be tempered by the normal rule that lay litigants do not receive costs.
[6] As a general comment, counsel for the defendant submits that this proceeding was completely overshadowed by the associated proceeding. Any steps taken in this proceeding were perfunctory and entailed little actual work. He, therefore, submits that any costs should be awarded on a 2A basis only.
[7] Counsel notes that this proceeding commenced as a summary judgment proceeding, which was eventually not pursued. This proceeding was then jointly case managed with the associated proceeding. An initial case management conference for this proceeding was scheduled for 3 September 2013. The plaintiffs’ memorandum in relation to that conference, dated 23 August 2013, was not extensive nor did it deal with complex matters.
[8] Prior to the scheduled first case management conference, the parties agreed that this proceeding overlapped significantly with the associated proceeding and as such, the two cases could be dealt with at the next conference scheduled in the associated proceeding.
[9] At the case management hearing on 23 November 2013 for both proceedings, counsel agreed that no directions were required in relation to this proceeding whilst further steps were being undertaken in the associated proceeding. Both proceedings continued to be case managed together, although the focus of case management conferences continued to be on the associated proceeding to the virtual exclusion of this proceeding.
[10] Both proceedings were then heard together in the same fixture. This proceeding took up approximately 1.25 days of hearing time. The associated proceeding took a number of weeks.
Costs
[11] Rule 14.2 of the High Court Rules set out the principles applying to the determination of costs, including the basic principle that the party who fails must pay the costs of the party who succeeds, and that the determination of costs should be predictable and expeditious. The plaintiffs were successful, so prima facie they are entitled to costs in respect of the claim, as stated in the judgment.
[12] Before going through each step in the proceedings in turn, the first issue is whether costs should be calculated on a 2B basis as submitted by the plaintiffs or on a 2A basis as submitted by the defendant. Band A is appropriate if a comparatively small amount of time is considered reasonable, whereas Band B is appropriate if a normal amount of time is considered reasonable. I am of the view that the correct categorisation is Band A on the basis that the plaintiffs’ claim in this proceeding was straightforward. It was essentially a claim for the current account balance recorded in the defendant’s books of account in favour of the Napier Family Trust. The statement of claim dated 14 March 2013 was spartan. This proceeding was also completely overshadowed by the associated proceeding.
[13] I go through each challenged step in the proceeding in turn.
Step 1
[14] The plaintiffs are entitled to 1.6 days at $1,990 per day totalling $3,184 for the commencement of the proceeding.
Step 3
[15] The plaintiffs seek to recover 0.8 days at $1,990 per day totalling $1,592 for a reply to the statement of defence. This Court has, however, no record of a reply to the statement of defence being filed or served. Accordingly, this claim is disallowed.
Step 10
[16] The plaintiffs are entitled to 0.2 days at $1,990 per day totalling $398 for preparation for the first case management conference.
Step 11
[17] The plaintiffs are entitled to 0.2 days at $1,990 per day totalling $398 for filing a memorandum for the first case management conference. All subsequent case management conferences were joint conferences with the associated proceeding. The filing of memorandum for those case management conferences has been accounted for in the costs decision relating to the associated proceeding and, accordingly, no further accounting for them is required.
Step 13
[18] There was a separate case management conference scheduled for this proceeding, but it did not proceed as the parties agreed that it could be dealt with at the same time as the case management hearings for the associated proceeding. Accordingly, no claim is properly payable for appearances at the case management conferences as they have been accounted for in the costs decision in the associated proceeding.
Disbursements
[19] Disbursements are governed by r 14.12, which states:
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.
(4) A Judge or an Associate Judge may direct a Registrar to exercise the powers of the court under subclause (2) or (3).
(5) When considering whether a disbursement paid or payable for an expert witness’s fee or expenses is reasonable for the purposes of subclause (2)(d), a Judge or an Associate Judge may—
(a) call for a report or an assessment from a professional organisation or otherwise; and
(b) make any incidental order considered just, including an order as to the cost of that report or assessment.
[20] The plaintiffs are entitled to the filing fee for the statement of claim, being
$1,329.20.
[21] The plaintiffs are also entitled to one day’s travel for Mr Napier as there was only one day devoted exclusively to this proceeding. Mr Napier needed to attend Court on all other days for the associated proceeding. Mr Napier is, accordingly, entitled to claim reimbursement for one day’s travel at 0.74 cents per kilometre, being the Public Service rate for mileage. He is, therefore, able to recover $100.64 for travel costs.
[22] In summary, the costs that the plaintiffs are entitled to recover are:
Step Description
Daily recovery rate
Allocated days or part days
Total
1
Commencement of proceedings
$1,990
1.6
$3,184.00
10
Preparation for first case management conference
$1,990
0.2
$398.00
11
Filing memorandum for first case management conference
$1,990
0.2
$398.00
Sub-total
$3,980.00 Disbursements
Filing fee
$1,329.20
Travel costs $100.64
Total
$5,409.84
Costs set-off
[23] As noted above, these proceedings commenced as a summary judgment application. A summary judgment hearing was scheduled to proceed on 17 July
2013 and directions made for the filing of affidavits and submissions. The defendant filed two affidavits in opposition. A memorandum was filed by counsel for the plaintiffs on 9 July 2013, advising the Court that the plaintiffs wished to withdraw their summary judgment application and proceed with a substantive claim in the usual way. Leave was granted to the plaintiffs to withdraw their application for summary judgment on 10 July 2013, with the issue of costs to be dealt with on the papers. A memorandum dated 17 July 2013 reserved the defendant’s position on the issue of costs and confirmed costs on the withdrawal of the summary judgment proceedings would be pursued at the conclusion of the substantive hearing.
[24] It is my view that, given the relationship between the parties, the summary judgment process was inappropriate and the plaintiffs’ application was bound to fail. In those circumstances, the defendant is entitled to costs of defending the summary judgment application, which should be off-set against the costs found to be payable to the plaintiffs. I find that the costs properly payable to the defendant on the withdrawn summary judgment application are as follows:
Step Description
Daily recovery rate
Allocated days or part days
Total
23
Filing opposition to interlocutory application
$1,990
0.3
$597.00
38
Affidavits of Michael Single dated 24 April and 11 June
2013
$1,990
1.5
$2,985.00
11
Filing memorandum for hearing dated 24 April 2013
$1,990
0.2
$398.00
12
Appearance at hearing on 30
April 2013$1,990
0.2
$398.00
High Court filing fee (Notice of opposition to application for summary judgment)
$110.00 Total
$4,488.00
[25] There is no specific provision in Schedule 3 for the filing of affidavits in opposition to an application for summary judgment. However, given the nature of the affidavits, which resulted in the withdrawal of the summary judgment application by the plaintiffs, I am of the view that an allowance for the preparation of affidavits, similar to that for an originating application, is appropriate.
[26] With the defendant’s costs on the unsuccessful application for summary judgment subtracted, the plaintiffs are therefore entitled to $921.84 in costs, being the difference between $5,409.84 and $4,488.00.
Interest
[27] The plaintiffs also claim interest on the judgment sum. Under s 87 of the Judicature Act 1908 the Court has a discretion to award interest, including pre- judgment interest. The plaintiffs have asked for judgment to run from 1 May 2012, but that date has no application. Interest is therefore to be calculated from the date of commencement of these proceedings – 14 March 2013. Interest at five per cent per annum calculated on the sum of $96,479 from 14 March 2013 until 9 October
2015 (the date of judgment), being 940 days @ $13.22 per day totals $12,426.80.
Conclusion
[28] The plaintiffs are entitled to costs and disbursements of $921.84. They are also entitled to interest on the judgment sum as calculated above. The total aggregate judgment sum and interest recoverable is therefore $108,905.80, to which should be added costs and disbursements of $921.84, making a grand total of
$109,827.64.
……………………………….
Woolford J
0