Oxygen Air Ltd v LG Electronics Australia Pty Ltd
[2020] NZHC 1863
•7 August 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2015-404-2184
[2020] NZHC 1863
BETWEEN OXYGEN AIR LIMITED
Plaintiff
AND
LG ELECTRONICS AUSTRALIA PTY LIMITED
Defendant
On the papers: At Auckland Appearances:
M C Black and N J M Devery for the Plaintiff
S J Mills QC and T D Mahood for the Defendant
Judgment:
7 August 2020
JUDGMENT OF POWELL J
[Costs]
This judgment was delivered by me on 7 August 2020 at 3.30 pm pursuant to R 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors/Counsel: Craig, Griffen & Lord, Auckland
N J M Devery, Auckland
Hudson Gavin Martin, Auckland T D Mahood, Auckland
OXYGEN AIR LIMITED v LG ELECTRONICS AUSTRALIA PTY LIMITED (Costs) [2020] NZHC 1863 [7
August 2020]
[1] On 6 November 2019 I dismissed claims brought by the plaintiff, Oxygen Air Limited (“Oxygen”) against the defendant, LG Electronics Australia Pty Limited (“LG”).1 The substantive judgment also gave judgment for LG on its counterclaim in the sum of $583,191.65, together with interest,2 and made various declarations in favour of LG.3 Finally, I held that LG was entitled to costs.
[2] Although various applications were filed by Oxygen in the aftermath of the substantive judgment these, together with an appeal filed by Oxygen, were not pursued after, on 23 March 2020, Oxygen was placed into liquidation by its sole director and shareholder, Eddy Rotteveel.
[3] As a result of the liquidation, the only matters still requiring determination are LG’s application for costs and consequential orders relating to the quantification of the interest awarded on its successful counterclaim.
Costs
[4] LG seeks costs and disbursements in a total sum of $954,283.57 against Oxygen, and notes that it intends to also pursue a costs claim against non-parties, namely Mr Rotteveel, and his present trading entity Oxygen New Zealand Ltd. LG’s costs claim is calculated as follows:
(a)Scale costs on a 2B basis (“general costs”) in the sum of
$59,721.00 being:
(i)commencement of defence and counterclaim;
(ii)reply to counterclaim;
(iii)pleading to amended statements of claim;
(iv)filing memoranda and appearances at case management conferences;
(v)attendances in relation to three specific interlocutory applications being:
1 Oxygen Air Ltd v LG Electronics Australia Pty Ltd [2019] NZHC 2786 (“the substantive judgment”).
2 At [222].
3 At [223].
·the plaintiff’s application for directions regarding confidential document and related orders (April- July 2017) (“the confidentiality application”);
·the defendant’s application for further and better particulars (May 2018);
·the plaintiff’s application for further and better particulars (May 2018);
(vi)attendances relating to preparation for adjourned October 2018 trial; and
(vii)a notice to admit facts.
(b)Scale costs on a 2C basis for discovery and inspection including an adjustment for the time allowed on a 2C basis (13 days cf 8 days)(“the discovery and inspection costs”), a total sum of $46,161.00.
(c)Scale costs on a 3B basis for trial preparation and appearances for two counsel (“the trial costs”) in the sum of $198,000.00.
(d)Increased costs of 50 per cent on the scale costs (2B, 2C or 3B) for steps from 1 April 2018 to reflect Oxygen’s failure to accept without prejudice offers made by LG and Oxygen’s conduct of the proceedings generally (“the increased costs”) in the sum of $112,101.25.
(e)
Disbursements in the sum of $196,567.80 made up as follows: External discovery provider agency
and hosting fees $108,163.79 Expert – Shane Hussey $ 69,120.00 Travel costs $ 13,555.14 Filing fees (nine) $2,620.00 Private investigators $1,950.00 Service agents $564.40 Courier charges $374.47 Translation services $220.00
$196,567.80
[5] The total scale, increased costs and disbursements claimed by LG therefore total $612,551.10. LG then seeks that (pursuant to the amended trading terms issued by LG to Oxygen in late 2013 or early 20144 (“2014 ATT”)) it is entitled to indemnity costs on the counterclaim. As the counterclaim was an integral part of the proceedings as a whole, LG submits that a reasonable figure for indemnity costs on the counterclaim is 20 per cent of the actual costs and disbursements incurred by LG (which it calculates as being $2,321,213.40), namely $464,242.69. To avoid obvious double-ups with regard to the costs and disbursements claimed previously, LG proposes deducting 20 per cent from the scale costs and disbursements set out above, resulting in an adjusted claim for scale costs and disbursements of $490,040.88 which when added to the indemnity costs results in the total costs and disbursements claimed by LG of $954,283.57.
Oxygen’s response
[6] Oxygen acknowledges that LG is entitled to costs5 but submits that those costs should be calculated solely on a 2B basis rather than also on a 2C and 3B basis as claimed by LG. On this issue Oxygen claims costs had previously been fixed as 2B during the interlocutory phase of these proceedings, and there is no reason to depart from this to the various categories and bands claimed by LG for different steps. In addition, Oxygen also submits:
(a)In relation to the general costs:
(i)LG should not be entitled to scale costs for filing memoranda and appearances for case management conferences, arguing variously that the memoranda filed by LG were not particularly long, were focussed on excusing LG’s own breaches of timetable orders, or otherwise related to interlocutory steps for which costs have already been fixed.
4 See substantive judgment at [97] – [98].
5 I note that no issue has been taken with the fact that Oxygen is now in liquidation. Even if there had been I am satisfied that s 248(1)(c) of the Companies Act 1993 does not require leave to determine costs if a substantive judgment was issued prior to the liquidation of a party.
(ii)LG should not be entitled to costs on the three specified interlocutory applications either because LG was unsuccessful or costs had not been ordered previously disentitling LG to now claim those costs.
(iii)LG is not entitled to costs on the adjournment of the October 2018 trial because LG did not raise any issues prior to the fixture being adjourned and that the fixture could have proceeded if LG had cooperated with Oxygen in identifying the key documents required for trial.
(b)There is no basis for increased time allocations for discovery and Oxygen in fact alleged that LG “over-discovered” throughout the proceedings.
(c)There is no basis for increased costs of any sort, let alone the 50 per cent claimed for steps after 1 April 2018. While Oxygen acknowledges the offers made by LG in March/April 2018 it notes that the final offer made by LG was not made until the second day of the hearing, and any uplift would in any event be disproportionate to the level of success obtained by LG in the proceedings.
(d)There is no basis for indemnity costs on the counterclaim as the amounts claimed are out of all proportion to the amount of the counterclaim and it is, in any event, difficult to determine how much was in fact spent on the counterclaim or the basis for the amounts claimed.
[7] Oxygen also challenges the majority of the disbursements claimed by LG and submits that these are not recoverable.
Discussion - Costs
[8] There is no dispute about the applicable principles with regard to costs and disbursements. All matters relating to costs remain at the discretion of the Court,6 however, typically, the loser pays the winner’s costs in accordance with the scale set out in the Rules.7 Despite this, the Court may award indemnity costs, for among other reasons, where the party claiming costs is entitled to indemnity costs under a contract. The Court also retains the discretion, in accordance with r 14.6(3), to award increased costs where the party opposing costs has contributed unnecessarily to the time or expense of the proceeding.
[9] A successful party may also claim disbursements. Rule 14.12(2) specifies that a disbursement will be recoverable where it is claimed and verified, and is specific to the conduct of the proceeding; reasonably necessary for the conduct of the proceeding; and reasonable in amount. Where a disbursement satisfies these requirements, the party claiming the disbursement will be entitled to recover the actual fee or expense (not just the deemed two thirds of them, as for costs).8 The recovery of disbursements is to be assessed separately to any claim for costs, whether those costs sought are scale, increased or indemnity costs.
[10] I commence my analysis by noting at the outset that in this case, and contrary to Oxygen’s submissions, although the proceedings were characterised as Category 2 at inception, Associate Judge Bell did not specify any particular band but rather noted in his Minute of 15 March 2016:
No time band allocations are made. I encourage the parties to keep records of time spent on various tasks. It is clear that the time required for some tasks, especially discovery, may take much longer than is allowed under Band C. Adjustments may be required under r 14.6(3)(a) of the High Court Rules.
[11] Turning to the first of the issues raised by Oxygen it is difficult to identify on what basis any of the general costs claimed by LG are inappropriate. In particular:
6 High Court Rules 2016, r 14.1(1).
7 Rule 14.2(1)(a).
8 Air New Zealand Ltd v Commerce Commission [2007] 2 NZLR 494, (2007) 18 PRNZ 406 (CA) at [47]-[48] and [62]; Scandle v Far North District Council HC Whangarei CIV-2008-488-203, 31 March 2011 at [34].
(a)The scale clearly prescribes amounts for the filing of memoranda for case management conferences and attendance at those conferences when they proceeded. In this case it is clear that LG filed memoranda and/or attended conferences as claimed. Having checked the record it is clear that none of the conferences claimed relate to the determination of specific applications for which costs have already been determined. As a result it is appropriate that as the successful party LG is entitled to claim 2B costs on those attendances.
(b)Likewise, and contrary to Oxygen’s submission, none of the three specific interlocutory applications that LG has claimed for previously had costs determined. On the contrary, with the confidentiality application costs were specifically reserved and ultimately never determined, while with regard to the other two applications no costs orders were made. In such circumstances costs should appropriately follow the overall result of the proceedings.
(c)The trial scheduled for October 2018 was adjourned by Gordon J when, after the presentation of Oxygen’s opening submissions, Her Honour concluded it could not be completed within the 13 days available. Similar concerns had been raised days earlier in a joint memorandum. It is quite clear that the trial could not have been completed in the time available given that the trial before me was ultimately only able to be completed in 21 hearing days by sitting extended hours in the fourth and fifth weeks. There is no indication that LG was responsible for the adjournment and as Gordon J did not fix costs it follows that the costs on the adjournment properly follow the overall result in favour of LG.
[12] Likewise, I have no issue with the discovery and inspection costs claimed by LG. As Associate Judge Bell foreshadowed, discovery in this case was extensive. The scale is apparent from the tailored discovery order (“TDO”) approved by the Court on 18 April 2016. As LG noted, the TDO itself took some time to be agreed upon and ultimately some 85,000 documents were identified, retrieved and reviewed against the TDO, resulting in some 13,500 documents being discovered by LG.
[13] The fact that the discovery and inspection process took a considerable time and resulted in documents that Oxygen did not consider particularly helpful does not detract from either the scale or the appropriateness of the exercise, and I note that Associate Judge Bell concluded when the issue was raised by Oxygen earlier in the proceedings, that none of the documents discovered by LG were in fact irrelevant. Having regard to the TDO and scale of the discovery task envisaged, I accept LG’s submissions that the discovery and inspection is appropriately categorised as 2C, with the additional time identified by LG also clearly reasonable in the circumstances.
[14] With the trial costs claimed by LG the situation is slightly different. Rule 14.3(1) of the High Court Rules 2016 differentiates between Category 2 and Category 3 proceedings as follows:
Category 2 proceedings Proceedings of average complexity requiring
counsel of skill and experience considered average in the High Court
Category 3 proceedings Proceedings that because of their complexity or
significance require counsel to have special skill and experience in the High Court
[15] In this case LG has not specified why it considers Category 3 is appropriate. Having considered the issue I do not accept that the proceedings were of a complexity or significance that required counsel to have special skill and experience in the High Court. On the contrary, I am satisfied that these proceedings were of average complexity but the way in which Oxygen proceeded certainly resulted in the trial taking longer than necessary. This included the fact that while Oxygen’s briefs of evidence included numerous document references these were not integrated into the briefs but required oral questioning to establish the relevance of each document. Likewise, in the course of the trial Oxygen sought to revisit at least one earlier procedural direction (a direction of Gordon J) which had to be determined in the trial itself. It was also not clear throughout the trial as to what matters remained in issue and this not only required LG to continue to treat all matters raised by Oxygen as live, but eventually resulted in Oxygen being required to present closing submissions first
to ensure LG clearly understood the case against it. These matters are however more appropriately considered in the next section dealing with increased costs.
[16] Taking these matters together I consider that Category 2 applies (with the relevant band not affecting the calculation), and a total of $133,800 is appropriate as opposed to the $198,000 claimed. There can be no dispute however that scale costs for a second counsel should be certified given the document intensive nature of the proceedings, and I note that both parties were in fact represented by three counsel at the hearing before me.
[17] On the issue of increased costs I reject Oxygen’s opposition to the payment of increased costs and find the 50 per cent increase in costs sought by LG from 1 April 2018 is appropriate. Rule 14.6(1)(a) of the High Court Rules 2016 defines increased costs as “increasing costs otherwise payable under those rules”. Rule 14.6(3) gives a court a discretion to order a party to pay increased costs if:
(a)the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or
(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
(i) failing to comply with these rules or with a direction of the court; or
(ii) taking or pursuing an unnecessary step or an argument that lacks merit; or
(iii) failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or
(iv) failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or
(v) failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or
(c)the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or
(d)some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.
[18]In this case it is clear that at least r 14.6(3)(b)(ii), (iii), (v) are applicable.
[19] First, and in addition to the matters set out in [15] above, it is apparent from the face of my judgment that Oxygen had no prospect of succeeding on either of its principal causes of action; the termination of the Distribution Agreement and the claimed solar distribution contract.9 In particular, it was indeed apparent to Oxygen from the commencement of the proceedings that a termination date of August 2015 was never seriously or genuinely arguable. Not only did Oxygen’s claimed termination letter never refer to termination10 but Oxygen’s subsequent conduct including the pleadings in these proceedings, confirmed the Distribution Agreement remained in force until Oxygen’s sole director, Mr Rotteveel, gave notice in April 2018.11 As noted in the substantive judgment, counsel for Oxygen, Mr Black, had, only five months prior to Mr Rotteveel’s letter of termination, communicated on Oxygen’s behalf that it would not release LG from the Distribution Agreement.12 Mr Black’s understanding at that time and subsequently has been further confirmed for the purposes of costs through “without prejudice save as to costs” correspondence in March/April 2018 when Mr Black offered to assign or surrender the Distribution Agreement back to LG, an offer that was entirely consistent with the continued existence of the Distribution Agreement at that time. An amended statement of claim filed at the same time confirmed Oxygen’s contemporary understanding of the termination date.13 It appears that it was only when Oxygen realised that a 2018 termination could not result in liquidated damages pursuant to clause 6.3 of the Distribution Agreement it then changed its position fundamentally, and thereafter argued against all the contemporary evidence that the Distribution Agreement had in fact been terminated in August 2015.
9 See substantive judgment commencing at [12] and [40] respectively.
10 At [18].
11 See [21]-[26].
12 See [23]-[24].
13 See substantive judgment at [97] – [98].
[20] Similar problems were apparent with regard to the existence of the solar distribution contract. For the reasons set out in the judgment it is clear that solar products did not come within the Distribution Agreement14 nor had any modification to the terms of the Distribution Agreement been agreed,15 and even if there had been no damages could have been payable for the reasons set out above.16 This left Oxygen asserting a stand-alone solar distribution contract for which no contemporary evidence existed, let alone any concrete identification of its terms.17
[21] The remainder of the matters raised by Oxygen as alleged breaches of the Distribution Agreement by LG and which were ultimately considered in my substantive judgment in the context of whether Oxygen had any ability to set off or counterclaim against the amounts claimed by LG were equally lacking in substance, but which nonetheless required a substantial response from LG and occupied a significant proportion of the total time spent in trial. As the judgment makes clear, none of the issues raised involved any breach by LG, let alone a material substantial default in terms of the Distribution Agreement, or even a matter giving rise to any set off or counterclaim against the amounts owed to LG for stock supplied to Oxygen and not paid for.18
[22] Overall, Oxygen’s case was so lacking in merit or otherwise hopeless that it could well have supported an overall application for indemnity costs, had those been sought by LG.19
[23] In addition to the manner of presentation and the pursuit of fundamentally misconceived claims, it is clear that Oxygen also failed to settle when it was given the opportunity to do so on considerably better terms than it obtained in the judgment. This occurred in the course of the without prejudice save as to costs communications in March/April 2018 (over a year before the trial finally proceeded), which as noted was before Oxygen had even purported to terminate the Distribution Agreement. In
14 See [43]-[45].
15 See [46]-[47].
16 See [42].
17 See [25]-[89].
18 See [105]-[220].
19 Although this would have encountered the same issues as LG’s partial claim for indemnity costs detailed at [24] – [31] of this judgment.
the course of that correspondence between counsel LG initially proposed on 29 March 2018 “that the parties settle the dispute and all claims (excluding LG’s claim relating to the outstanding debt) upon the basis of a walkaway, with each party meeting its own costs”. LG went on to note that if Oxygen rejected this offer it reserved the right to rely upon the email in support of an application for increased costs. LG’s offer was rejected by Oxygen on 31 March 2018. The fact that two further offers were subsequently made by LG (including one in the course of the trial before me) on broadly similar terms, does not change the fact it was unreasonable for Oxygen not to accept the initial offer in March 2018. As a result, I conclude that increased costs are appropriately payable for LG’s attendances post 1 April 2018 and given the overall lack of merit in Oxygen’s claims and the way in which it conducted its case generally, a 50 per cent increase above scale is more than appropriate.
[24] LG’s claim for indemnity costs to be payable in respect of its counterclaim raises a number of different issues. Although given my findings in the substantive judgment there can be no dispute that there is a contractual power in the 2014 ATT enabling LG to recover “the costs of collection of any monies due and payable by the customer including legal fees and/or agent commissions” and such provisions are recognised in r 14.6(4)(e) of the High Court Rules as a basis for an order for indemnity costs, there are significant practical issues with this part of LG’s costs application.
[25] First, the way in which r 14.6 is constructed means that any order pursuant to a contractual provision still only enables recovery of the “actual costs, disbursements, and witness expenses reasonably incurred by a party”.20 The leading authority on indemnity costs generally and this issue in particular is the decision of the Court of Appeal in Bradbury v Westpac Banking Corporation.21 The analysis of Harrison J, endorsed by the Court of Appeal, commenced by confirming that indemnity costs does not simply mean all costs incurred, but rather “the phrase ‘reasonably incurred’ envisages a degree of judicial oversight of awards of indemnity costs”.22
20 Rule 14.6(1)(b).
21 Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400.
22 Bradbury v Westpac Banking Corporation (2008) 18 PRNZ 859 (HC) at [205]. Harrison J was dealing with the previous r 48C of the High Court Rules but this was cast in substantially the same terms as the present r 14(6) of the High Court Rules 2016.
[26] This means that notwithstanding LG has only sought 20 per cent of its actual costs and disbursements it still must show that those costs were reasonably incurred. This means an assessment of the overall reasonableness of the costs and disbursements claimed by LG is required. The second issue following on from the first is to determine what proportion of the reasonable costs and disbursements incurred by LG are properly attributable to LG’s counterclaim.
[27] With regard to the first of these issues there are in fact considerable difficulties in determining whether the actual costs and disbursements claimed by LG were reasonable, as no detailed breakdown has been provided. In particular, the total amount claimed by LG for costs and disbursements ($2,321,213.40) cannot be reconciled with LG’s solicitor’s invoices which show total legal costs of
$2,230,871.00 (GST exempt) and disbursements of $281,939.21, with no detailed or overall reconciliation provided for either figure. Likewise, although LG has in its costs memoranda identified relevant bands of charge out rates for both its solicitors and counsel involved in the proceeding, there is in fact no information provided as to the hours actually spent by either individual solicitors or counsel, let alone the actual charge out rates applied, and there is otherwise a fundamental lack of detail provided with regard to the invoices of counsel and the work actually done. This is not to suggest that the amounts were not appropriately invoiced to LG, and quite clearly LG was well represented throughout the proceedings, but the absence of relevant detail or other evidence means there is no obvious basis for me to objectively determine whether the costs claimed by LG are reasonable, even allowing for the length of the trial (21 days) and/or the amounts at stake (Oxygen’s claims totalling approximately
$4 million and LG’s counterclaim of $583,191.65).
[28] It is equally difficult to reach any conclusion as to what proportion of the proceedings were taken up with the prosecution of the counterclaim. Ultimately, Oxygen did not at trial dispute the amounts claimed by LG, other than the applicability of the 2014 ATT (which were more broadly at issue in the proceedings in any event). In addition, as noted, the matters relied on by Oxygen to provide for a set off or counterclaim against the amounts claimed by LG were in fact the same matters that had been raised by Oxygen to support its primary (albeit misconceived) argument that it was entitled to terminate the Distribution Agreement for breaches by LG. Thus,
while I accept LG’s submission that the factual matters that needed to be considered for the purposes of determining whether or not any amounts could be set off or counterclaimed against the amounts claimed by LG precluded a summary judgment application by LG on the counterclaim, the counterclaim nevertheless clearly occupied only a relatively minor part in the overall proceedings.
[29] The disbursements component of the indemnity costs claimed by LG are also difficult to reconcile given no analysis has been provided of the additional disbursements invoiced to LG but not claimed as disbursements and for which again no reconciliation or detail has been provided.
[30] Taking these matters together I am not satisfied that the 20 per cent of the “actual costs and disbursements” claimed by LG, which amount to some 49 per cent23 or 55 per cent24 of the total costs claimed by LG in the proceedings as a whole, appropriately represents the actual costs reasonably incurred by LG with regard to its prosecution of the counterclaim.
[31] In the circumstances and with the information available it is not therefore practical or appropriate to make an order for indemnity costs on the counterclaim. However, given the effect of cl 6 of the 2014 ATT I consider it is appropriate to further increase costs in favor of LG by 10 per cent over the total costs payable.
[32] Taking these matters together I conclude LG is entitled to costs on the proceeding as follows:
General costs (2B) $59,721.00 Discovery and inspection costs (2C with additional days claimed) $46,161.50
Trial costs (2C basis with second counsel)
$133,800.00
Sub total
$239,682.50
50 per cent increase
(failure to settle and conduct of proceedings)
$80,001.25
23 As per LG’s calculation – see [5] above.
24 Using the total legal costs from the LG solicitor’s invoices see [27] above.
Sub total
10 percent uplift
$319,683.75 (clause 6, 2014 amended terms of trade) $31,968.38
Total costs award $351,652.13
Disbursements
[33] With regard to disbursements the only sums formally claimed by LG total, as noted, $196,356.80, notwithstanding that a greater amount of disbursements were billed to LG. Specifically, the disbursements claimed by LG are as follows:
External discovery provider agency and hosting fees $108,163.79 Expert – Shane Hussey
$69,120.00
Travel costs
$13,554.14
Filing fees ( x 9)
$2,400.00
Private investigators
$1,950.00
Service agents
$564.40
Courier charges
$374.47
Translation services
$220.00
$196,346.80
[34] As with the legal costs, it has been extremely difficult to reconcile the amounts claimed as disbursements by LG given that no detailed breakdown of any of the categories listed above has been provided, but simply the production of a large volume of invoices. The result has been an unnecessarily time-consuming process for the Court to attempt to reconcile the amounts claimed.
[35] As noted at the outset, only a small number of the disbursements are not challenged by Oxygen, specifically, the filing fees, courier charges, service agents and translation services. As a result, these unchallenged disbursements are approved.
[36] Turning to the disputed matters, the “external discovery provider agency and hosting fees” relates to invoices provided by Goodwin Yallop who appear to provide specialist electronic discovery services and Streamlined Litigation Support (“SLS”) who appear to provide a complimentary service hosting the resulting discovery. The total amount claimed is $108,163.79 (GST exempt). On the invoices provided by LG the Goodwin Yallop invoices come to $35,197.00 and the SLS invoices to $61,459.81 making a total of $96,656.81. It is clear, with reference back to my comments relating to the legal costs claimed in respect of discovery and inspection, that the type of discovery undertaken in this case would have been impossible without the services provided by Goodwin Yallop and SLS, with little double up apparent. I therefore approve the invoiced amount of $96,656.81 in full.
[37] Likewise, I am satisfied that the invoices relating to LG’s expert Shane Hussey are also appropriate. Mr Hussey has provided details of the hours spent and a reasonably comprehensive description of the attendances provided. Although in the end there was largely no disagreement between the experts for both Oxygen and LG, I am satisfied that Mr Hussey’s costs are recoverable in the sum of $67,745.00, being the total amount of invoices provided as opposed to the $69,120.00 sum claimed.
[38] In principle the travel expenses claimed by LG are also recoverable given the fact that LG itself and a number of its witnesses are based in Australia. However, it is not possible to substantiate the sum claimed of $13,555.14 against what appears to have been $7,823.59 invoiced to LG in the course of the proceeding, and I certify the lesser sum accordingly.
[39] Finally, insufficient detail has been provided with regard to the amounts claimed for private investigators. It is not known exactly what this work entails, and I decline to approve the invoices.
[40] Taking these matters into consideration I therefore approve disbursements in the total sum of $175,784.27.
Interest
[41] The second issue raised by LG that requires consideration following the issue of the judgment relates to the interest applicable on the counterclaim sum of
$583,191.65. As noted, the substantive judgment gave for LG in the sum of
$583,191.65 (together with interest) pursuant to cl 6 of the 2014 ATT from the date the payments fell due.25
[42]The relevant part of cl 6 of the 2014 ATT provides:
In the event of late payment, [LG] may (without prejudice to other remedies available to it) charge interest from the date payment became due to the date of actual payment at a rate of 2 per cent per annum above the business overdraft interest rate of Westpac Banking Corporation.
[43] Since the substantive judgment was issued LG have undertaken enquiries and provided evidence to the effect that Westpac does not have a single business overdraft rate. Instead the closest interest rates appear to be Westpac’s SLR and CLR interest rates. Based on this evidence LG submits that the appropriate interest rate on the counterclaim is Westpac’s CLR rate plus 2 per cent per annum, with the CLR rate being the lower of the two rates identified.
[44] Having considered the evidence provided I agree that the applicable interest rate on the judgment debt is Westpac’s CLR interest rate plus 2 per cent per annum.
Decision
[45] For the reasons set out in this judgment Oxygen is to pay to LG costs in the sum of $351,652.13 and disbursements in the sum of $175,784.27, a total of
$527,436.40.
[46] The security for costs in the sum of $65,000 paid into Court by Oxygen is to be released to LG leaving a balance of $462,436.40 outstanding.
25 Substantive judgment at [222].
[47] The interest rate on the counterclaim is Westpac’s CLR interest rate plus 2 percent per annum.
[48] Leave is reserved for LG to apply for costs orders against non-parties in respect of these proceedings.
Powell J
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