Northwest Developments Ltd v Zhang
[2019] NZHC 2146
•29 August 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-2625
[2019] NZHC 2146
BETWEEN NORTHWEST DEVELOPMENTS LTD
Plaintiff
AND
CHENG ZHANG, JIN KUK JUNG and PILL SOON SO
Defendants
Hearing: (On the papers) Counsel:
M J Fisher and K J Ng for Plaintiff
R M Dillon and T A Hwang for Defendants
Judgment:
29 August 2019
COSTS JUDGMENT OF BREWER J
This judgment was delivered by me on 29 August 2019 at 3:00 pm pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Castle Brown (Auckland) for Plaintiff
Queen City Law (Auckland) for Defendants
NORTHWEST DEVELOPMENTS LTD v ZHANG [2019] NZHC 2146 [29 August 2019]
Introduction
[1]This is a costs judgment.
[2] On 13 July 2018 I entered summary judgment in favour of the plaintiff against the defendants.1 I made orders by way of specific performance requiring the defendants to fulfil obligations they owed under an agreement.
[3] I determined the plaintiff is entitled to costs and invited the parties to submit memoranda by 3 September 2018.
[4] The plaintiff filed a memorandum on 3 September 2018; the defendants filed theirs on 12 September 2018; the plaintiff replied on 13 September 2018; and the defendants further replied on 17 September 2018.
[5] My judgment was appealed to the Court of Appeal. I delayed giving a decision on costs until it had been resolved. The Court of Appeal upheld my judgment.2 I now decide costs.
[6] It is accepted by the parties that costs will go to the plaintiff on at least a 2B basis. There are disagreements on the following points regarding the plaintiff’s proposed schedule of costs:
(a)whether band C classification is appropriate for preparation of the written submissions and bundle;
(b)whether costs should be allowed for further written submissions and reply submissions on whether the proceedings constituted an abuse of process, and for preparation of a memorandum of costs;
(c)whether an allowance for second counsel in the proceeding is appropriate; and
1 Northwest Developments Ltd v Zhang [2018] NZHC 1736.
2 Zhang v Northwest Developments Ltd [2019] NZCA 137.
(d)whether the claimed photocopying disbursements, at a rate of 33 cents per page, are unreasonable.
Written submissions and bundle; abuse of process
[7] The plaintiff seeks 2C classification for the following items in its schedule on the basis that a comparatively large amount of time is considered reasonable for them:
(a)Item 24, the preparation of written submissions in support of the application for summary judgment;
(b)Item 25, the preparation of a bundle for the hearing;
(c)Item 11, which is costs for one day for the preparation of written submissions on the issue of whether summary judgment proceedings were an abuse of process, by analogy to step 11 of sch 3 of the High Court Rules 2016, which provides for filing a memorandum for first or subsequent case management conference or mentions hearing.
The time bands
[8] The three time bands (A, B and C) are governed by r 14.5 and sch 3 of the High Court Rules 2016. They are a central organising feature of this Court’s costs system, applied to reflect the amount of time that may be appropriately required for a particular step for costs purposes.
[9] The bands may differ for each step of the process. A blanket assessment for banding only accords with the Rules where the case is an average one requiring a normal amount of time for each step.3 Band B costs will normally apply where a normal time is considered reasonable. A successful party can seek band C costs for a particular step if they can demonstrate why a normal amount of time under band B may be insufficient. That assessment is an objective one based on what is reasonable, not how much time was actually taken. While a proceeding’s complexity is addressed
3 Paper Reclaim v Aotearoa International Ltd [2007] NZCA 544, (2007) PRNZ 743 at [35]; Commissioner of Inland revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) NZTC 24,500 at [161].
through categorisation under r 14.3 it may still be relevant to the assessment of reasonable time.4
The submissions
[10] Concerning item 24, preparation of written submissions in support of the application for summary judgment, the plaintiff points to the substantial volume of documentary material required to be reviewed and appropriately referenced in the written submissions as making a comparatively large amount of time reasonable for their preparation.
[11] The plaintiff also seeks to recover one day’s worth of costs for the additional written submissions on the issue of abuse of process. It submits the memorandum required extensive legal research and the drafting of relatively comprehensive submissions. As no equivalent step is provided in sch 3 they submit as analogous the allocation of one day for “filing memorandum for first or subsequent case management conference of mentions hearing” at step 11, band C.
[12] The plaintiffs also submit they should be allowed to recover on a 2B basis for each of an additional reply memorandum on the issue of abuse of process and their memorandum on costs, also by analogy to step 11.
[13] Regarding item 24 the defendants dispute that band C classification is appropriate for written submissions. They submit this case was simply insufficiently complex to warrant an increase in the amount of time considered reasonable.
[14] The defendants further submit that “preparation of written submissions” is provided for at step 24 of sch 3, and no further allowance should be made on the abuse of process memoranda or costs.
4 Mary Moodie Family Trust Board v Attorney-General [2016] NZHC 755.
Discussion
[15] My focus is generally to be on the complexity of the issues and time involved in formulating issues, rather than just on the length of the written synopsis.5 With that said, the plaintiff’s synopsis of submissions in support of summary judgment is 23 pages long. The synopsis is explicit about the fact that the issues are simple and the facts narrow, but there is a “volume of documentary material” to be traversed. The submissions then traverse the factual background of events, before framing the issues requiring determination by the Court and making submissions on each of them. Those submissions are primarily factual in focus, rather than advancing complicated legal arguments.
[16] While the submissions are helpful and usefully point to the relevant supporting documents throughout, in my view their preparation would still have required what is an ordinarily reasonable amount of time for a case in the High Court. As such, I consider time for item 24 should be classified by reference to band B.
[17] As to the additional submissions on abuse of process, I note that this was a somewhat unusual situation. Counsel did not prepare to submit on the question of whether the proceedings constituted an abuse of process because the defence did not suggest they were. I raised the issue at the hearing on 23 February 2018. Counsel were not prepared to argue the point and I issued a minute on the same day granting leave for them to file written submissions before I issued my judgment. The plaintiff succeeded on the point. I decided the proceeding was not an abuse of process. In other words, I raised the issue of abuse of process and then, with the benefit of the parties’ submissions, decided the proceedings were not an abuse of process.
[18] In my view both the initial submissions and the reply submissions on abuse of process should be classified as band B by analogy to sch 3.
5 Minister of Education v James Hardie New Zealand [2018] NZHC 2960 at [16]. That case focussed on interlocutory applications, but the point is generally true in proceedings such as this as well.
The bundle
[19] The plaintiff also seeks 2C costs on item 25, preparation of the bundle for the hearing. The plaintiff points to the substantive volume of documentary material to be incorporated into the bundle, and the amount of work required to render that bundle accessible and functional, including organising the exhibits into chronological order, referencing them to particular pages in the exhibit bundle and compiling a separate key documents bundle as justifying a comparatively large allocation of time as reasonable.
[20] The defendants submit that this was not a case of sufficient complexity to warrant an increase in the amount of time considered reasonable.
Discussion
[21] I accept that substantial work was involved in producing the bundle. The key document bundle assembles various documents affixed to the different affidavits into one chronological bundle, with references pointing to each source affidavit. Each of those affidavits was substantial enough to require a bound volume of its own. The key document bundle served to simplify and streamline the process of analysing the submissions against the relevant evidence. This was helpful. However, when considered against the general run of civil cases in this Court it is not out of the ordinary. I classify this item as band B.
Second counsel
[22] The plaintiff seeks allowance for second counsel based on “the very substantial volume of documentary material required to be considered in the preparation of submissions and distilled for ready reference at the hearing.”
[23] The rules do not provide guidance as to when allowance for second counsel ought to be made. The structure of the rules suggests that the norm is only one counsel will be provided for.6 Whether the Court will depart from that norm is influenced by
6 See Brady v Presbyterian Church of Aotearoa New Zealand [2013] NZHC 2300 at [2].
the complexity of the proceedings including the issues involved, the range of evidence, the number of witnesses, and the volume of evidence involved.7
[24] By way of precedent the plaintiff points to the following comments by Fogarty J when granting an allowance for junior counsel in Body Corporate 12108 v Manchester Securities Ltd:8
The advent of word processing, particularly the pre-trial production of evidence in chief to be read by the witness, has changed the tasks of junior counsel. The greater volumes of retrieved correspondence placed before the Court has created a new role for junior counsel before and at the trial. That is to master the discovery and the bundles of documents so that the senior and the Judge can be referred to the bundle and page number promptly.
[25] The defendants oppose granting an allowance for second counsel on the basis that second counsel did not participate in the hearing and no allowance was provided for second counsel.
[26] In my view this is not a case of sufficient complexity to warrant certification for second counsel.
Photocopying disbursement
[27] The plaintiff places its internal photocopying costs at 33 cents per page. It submits this as a reasonable disbursement under r 14.12(2)(d).
[28] The defendants dispute that 33 cents per page is reasonable. They submit that 20 cents is appropriate. By way of evidence they point to the rates listed on the New Zealand Law Society (“NZLS”) website, which are:
·30c per page (by staff for lawyers)
·20c per page (by user)
[29] The plaintiff’s memorandum states that “NZLS apparently considers 30 cents per page to be reasonable when done by a lawyer. If that is the benchmark, it can scarcely be argued with any merit that counsel’s photocopying costs of 33 cents per
7 At [2].
8 Body Corporate 12108 v Manchester Securities Ltd [2017] NZHC 1252 at [73].
page is unreasonable.” The plaintiff appears to have misread the evidence provided. NZLS considers 30 cents appropriate for photocopying done by NZLS staff. For lawyers to photocopy documents themselves – which strikes me as closer to internal photocopying – the fee is 20 cents.
[30] Associate Judge Bell in Zeng v Cai last year accepted 20 cents per page as close to the market rate for photocopying.9 I make the same finding. Photocopying costs are to be calculated at 20 cents per page. I accept the figures of $388.60 and
$80.40 for printing as listed in the defendant’s revised schedule of costs and disbursements for the purpose of my award.
Result
[31]I award costs on a 2B basis in favour of the plaintiff in terms of its schedule.
[32]I do not award costs for second counsel.
[33] I set the recoverable disbursements for photocopying at a rate of 20 cents per page and otherwise as per the schedule.
Brewer J
9 Zeng v Cai [2018] NZHC 2277 at [38].
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