REMEDIATION (NZ) LIMITED AND ENVIRO (NZ) LIMITED ENVIRO WASTE SERVICES LIMITED

[2024] NZHC 3188

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1140

[2024] NZHC 3188

BETWEEN

REMEDIATION (NZ) LIMITED

Plaintiff

AND

ENVIRO (NZ) LIMITED

First Defendant

ENVIRO WASTE SERVICES LIMITED

Second Defendant

Hearing:

On the papers

Counsel:

J W Maassen and M A Black for the Plaintiff

G C Williams KC, T J Lindsay and MBE Morrison for the Defendants

Judgment:

31 October 2024

JUDGMENT OF GAULT J

(Costs)

This judgment was delivered by me on 31 October 2024 at 3:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel:

Mr J W Maassen, Barrister, Wellington

Mr J D Cameron and Ms M A Black (plaintiff’s instructing solicitor), Willis Legal, Napier Mr G C Williams KC, Barrister, Auckland

Mr T J Lindsay and Ms MBE Morrison (defendants’ instructing solicitor), Lindsay, Francis & Mangan, Auckland

REMEDIATION (NZ) LTD v ENVIRO (NZ) LTD [2024] NZHC 3188 [31 October 2024]

[1]    In my substantive judgment of 23 May 2024, I urged the parties to take a reasonable and proportionate approach to costs given the history of this dispute, and the result in which Remediation (NZ) Ltd (Revital) succeeded but for a considerably reduced sum.1 I said that, if costs could not be agreed, memoranda (not exceeding five pages) may be filed and I would determine costs on the papers.2

[2]The parties have been unable to agree costs.

[3]    Revital seeks 2B scale costs of $94,811.30 and disbursements of $292,074.57, totalling $386,855.87.

[4]    Enviro (NZ) Ltd (Enviro) does not dispute the calculation of 2B costs but submits the costs should be reduced by 50 per cent to reflect that Revital was only partially successful and for a considerably reduced sum, and that disbursements should be limited to $59,928.14.

Costs

[5]    Applying the general principle that the party who fails should pay costs to the party who succeeds (costs follow the event),3 “success on more limited terms is still success”.4 However, partial failure can be addressed by reducing costs in accordance with r 14.7(d) of the High Court Rules 2016.5

[6]    Revital submits that addressing the unsuccessful causes of action was only a very minor part of the evidence and submissions, and did not significantly increase Enviro’s costs. Accepting that counsel for Revital noted in opening that the contractual claim was its primary claim, Revital pursued the alternative fiduciary and Fair Trading causes of action through trial. They contributed to cost and time. Moreover, Revital’s quantum was substantially overstated as indicated in the judgment – Revital’s pleading claimed damages estimated to be in excess of $24 million; at trial Revital opened on the basis that its quantum expert quantified the loss as $7.595 million but following

1      Remediation (NZ) Ltd v Enviro (NZ) Ltd [2024] NZHC 860 at [214].

2 At [215].

3      High Court Rules 2016, r 14.2(1)(a).

4      Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].

5 At [26].

expert evidence its claim  reduced  to  $3.568  million  in  expectation  damages.  The quantum sought also added to the evidence and submissions as quantum was strongly contested. In the event, I awarded damages of $835,000.

[7]    I consider that Revital’s costs should be reduced to reflect these factors. I do not accept the reduction of 50 per cent sought by Enviro. As is evident from the judgment, both parties contributed to the extent of the evidence and submissions.     I consider a reduction of 25 per cent is appropriate to reflect the extra time and effort addressing unsuccessful arguments.

[8]Accordingly, Revital is entitled to costs of $71,108.47.

Disbursements

[9]    It does not follow that the same reduction should apply to disbursements. Disbursements are provided for in r 14.12 of the High Court Rules 2016, 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.

(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.

…

[10]   As can be seen, and the Court of Appeal said recently,6 a disbursement must be awarded to the extent that it meets the criteria at r 14.12(2)(a)-(d). A disbursement may however be disallowed or reduced if it is disproportionate in the circumstances of the proceeding.7

[11]Turning to the disputed disbursements:

(a)Filing/hearing fees – Enviro seeks a 50 per cent discount for partial success. In terms of unnecessary hearing time (as opposed to unnecessary evidence and submissions more generally), I consider that a 15 per cent reduction of the hearing fees (not filing or scheduling fees) is appropriate.

(b)Outsourced discovery costs – Enviro disputes the need for outsourcing. I accept that outsourcing was considered to be most efficient here. However, a reduction is appropriate for costs relating to the contested discovery application for which costs have already been awarded to Enviro. They should be excluded.

(c)Mr Dobson (Revital’s accounting expert) – Enviro seeks a 50 per cent discount given Mr Dobson’s concessions. Mr Dobson’s approach at the hearing was constructive and my judgment referred positively to the

6      Siemer v Legal Complaints Review Officer [2024] NZCA 220 at [9].

7      High Court Rules, r 14.12(3).

concurrent evidence, but I accept that a reduction of 20 per cent is appropriate given the history of Revital’s quantum claim.

(d)Mr Jones (Revital’s health and safety expert) – Enviro disputes any allowance. The fact that Mr Jones acknowledged that Revital was in breach of its health and safety obligations does not mean that his evidence was entirely unnecessary. I consider that 50 per cent should be allowed.

(e)Mr Lord – Enviro seeks a 50 per cent discount on the basis that his evidence  on  the  Waste  Management  Fund   was   not   accepted. His evidence was not limited to that, and his fees were modest and reasonable. No reduction is appropriate.

(f)Mr Buist – Enviro disputes any allowance. Mr Buist was a fact witness who ceased working for Revital during the proceeding. The invoices from Fabco refer to advisory services  but  I  accept  they  relate  to Mr Buist preparing and giving evidence. Mr Buist’s evidence was important. Given the need for him to be recalled (as explained in earlier judgments), I consider that more of his preparation could have occurred or been arranged before his departure. I consider a reasonable allowance for his evidence is 50 per cent.

(g)Printing – Enviro disputes this allowance on the basis there was an electronic courtroom and scale costs have been allowed for preparation of the common bundle. I expect the hard copy common bundle was directed before provision was made for an electronic courtroom and in any event both parties contributed to its unnecessary volume. I allow 50 per cent.

(h)Yallop (electronic courtroom) – these costs are not disputed. Allowed.

(i)Counsel travel and accommodation – Revital seeks flights and accommodation for its third counsel, who became second counsel after second counsel withdrew. I allow the July costs only.

(j)Witness accommodation – Enviro accepts two nights’ accommodation whereas Revital claims for other periods when Mr O’Neill sat through the hearing to provide comments and instructions. Two nights only are allowed.

[12]I consider these disbursement allowances are reasonable and proportionate.

Result

[13]   Revital is entitled to costs of $71,108.47 plus disbursements as set out in [11] above.

Gault J