Robt. Jones Holdings Limited v Smith HC Auckland CIV 2007-404-5245

[2010] NZHC 1179

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2007-404-005245

BETWEEN  ROBT. JONES HOLDINGS LIMITED Plaintiff

ANDPETER ALAN SMITH & ORS Defendants

Hearing:         by memoranda

Counsel:         M P Reed QC/P A Morten for plaintiff

S J Tee for defendants

Judgment:      5 July 2010 at 5:00pm

COSTS JUDGMENT OF ASSOCIATE JUDGE ABBOTT

This judgment was delivered by me on 5 July 2010 at 5:00pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Gillespie Young Watson, PO Box 30940, Lower Hutt 5040 for plaintiff

Morton Tee & Co, PO Box 33133, Takapuna, North Shore City 0740 for defendants

ROBT. JONES HOLDINGS LIMITED V SMITH & ORS HC AK CIV 2007-404-005245  5 July 2010

[1]      The  plaintiff  seeks  determination  of  the  quantum  of  costs  awarded  to  it following a successful application for summary judgment.

[2]      The plaintiff was awarded costs on a 2B basis.  The parties have been unable to reach agreement on three matters for which the plaintiff is seeking costs.

[3]      The  parties  filed  memoranda,  but  by  that  time  the  defendants  had  also appealed against the judgment.   The appeal has since been determined (it was dismissed).  The plaintiff now seeks a determination on its entitlement to costs in this court.   The court apologises to the parties for the delay since the decision on the appeal was released.

The matters in dispute

[4]      The plaintiff has sought legal costs of $12,480, reimbursement of the fees of two professional chartered accountants (as experts) of $14,950.81, and court filing fees.  With one exception the plaintiff seeks legal costs on a scale 2B basis.

[5]      The defendants accept the scale 2B basis for legal costs, and all of the items claimed except for:

a)       Costs of $800 for second counsel for the half day hearing (item 5.4 of scheduled 3 to the High Court Rules);

b)Costs of $2,400 for preparation of documents: 3 volumes of relevant documents and the plaintiff’s case book of authorities for the hearing (item 11 of  schedule 5, calculated by analogy with item 7.2, but on a

2A basis).

c)       Reimbursement of fees of $3,870 incurred for one of the accountants (there being a dispute as to whether he was giving evidence as an expert or as a witness of fact).

Costs of second counsel

[6]      The plaintiff was represented at the start of the hearing by Mr Reed QC and Mr Morton.  Mr Reed presented what I would describe as an overview submission, before seeking leave to withdraw.   Mr Morton  then presented the detail of the plaintiff’s argument.  The plaintiff contends that an allowance for second counsel is reasonable on the basis that the case was factually complicated, and raised a number of legal issues.

[7]      The  defendants  submit  that  there  were  no  unusual  matters  justifying  an allowance for two counsel.

[8]      I do not accept that there were any aspects to this application which require an allowance for second counsel.   It proceeded as a standard summary judgment application (submissions were exchanged in advance and there was no call for cross- examination).  It had some factual complexity and raised several legal issues, but not enough to set it apart from a category 2 classification.

[9]      The plaintiff chose to have two counsel appear, but there was no need for two.   This is exemplified by the fact that after he had made the introductory submissions, Mr Reed left the conduct of the hearing in Mr Morten’s perfectly capable hands.

[10]     The claim for an allowance of $800 for second counsel is disallowed.

Preparation of case book/bundle of authorities

[11]     The plaintiff seeks a time allocation of 1.5 days for this work.  The difference between the parties on this item is that the plaintiff contends that schedule 3 makes no provision for this work, whereas the defendants contend it is included in preparation for the hearing (item 5.3 of schedule 3).  The plaintiff claims 1.5 days by analogy with

the provision for costs of preparation of the common bundle and authorities for trial (item 7.2 of schedule 3). The claim is made, however, on a band A time allocation rather than band B.

[12]     The requirement to provide a case book of relevant documents (which, on an interlocutory application, has been construed to mean the pleadings) has only recently been introduced.[1]     The provision for costs of preparation of hearing (item 5.3 of schedule 3) was already in place.  There was no change to schedule 3 accompanying the introduction of r 251A, to allow for this additional step.  For that reason it can be seen as a further step for which there is no specific provision in schedule 3 (hence

coming within item 11).  The issue then becomes whether it is appropriate to apply r

7.2 by analogy, or make some other allowance.

[1] It was introduced as rule 251A of the former High Court Rules, introduced by the High Court

Amendment Rules 2006 SR 2006/98; now r7.39 of the High Court Rules which came into force on

1 February 2009.

[13]     Some further allowance, (going beyond the allowance for preparation for hearing in item 5.3) is justified, but not of the order set out in r 7.2.  The preparation of a case book of pleadings, and a bundle of legal authorities, is essentially an administrative exercise.  It does not require counsel’s consideration in the same way as selecting documents from discovery for the common bundle for trial.  The extent of the task will vary from case to case, but it is not a task which requires counsel to exercise judgment other than identifying which of the documents are relevant to the application.   How counsel uses the material (either the bundle of pleadings or the case authorities) falls under item 5.3 of the schedule (preparation for the hearing).

[14]     In this case I allow a time allocation of 0.5 days under item 11 for the preparation of the case book and bundle of authorities pursuant to r 7.39.

Costs for expert witnesses

The plaintiff relied on evidence from two accountants.  The defendants accept that one, Mr A N Frankham, was called as an expert and that the plaintiff is entitled to

claim reasonable costs for him.  They accept the sum of $11,080.81 claimed.  They take issue, however, with the claim  for  costs for a second  accountant,  Mr  B J Walshe.  They say that he was the plaintiff’s accountant in this transaction, and gave evidence as to matters of fact relating to steps taken by him in that capacity.  They point to the fact that in neither of his affidavits did he qualify himself as an expert (which both Mr Frankham and the defendants’ expert accountant did).

[15]     I  have  reviewed  the  affidavits  provided  by  Mr  Walshe.    I  accept  the submission  of  counsel  for  the  defendants  that  he  provided  these  affidavits  as  a witness of fact rather than as an expert.  He was actively involved in the transaction, and his evidence relates to the steps that he took on the plaintiff’s behalf.   He addressed matters of which he had personal knowledge.

[16]     The plaintiff argued that he should be regarded as an expert because he responded to the evidence of the defendants’ expert.  I have reviewed the affidavit in reply.   Where he responds to the evidence of the defendants’ expert, it was to challenge him on matters of fact within Mr Walshe’s knowledge.  I also note that Mr Frankham replied (as an expert) to the opposing expert.   I also accept that if Mr Walshe had been providing evidence as an expert, he would have qualified himself as such.

[17]     I disallow the plaintiff’s claim for Mr Walshe’s fees as an expert witness.

Decision

[18]     The plaintiff is entitled to the following:

a)        Legal costs in respect of items 1, 4.17, 5.1, 5.3 and 5.4 of schedule 3 on a 2B basis, totalling $9,280.

b)An allowance for preparation of the case books for the hearing of 0.5 days at a category 2 rate, being a further $800.

c)        Its expert witness’ costs (Mr Frankham) of $11,080.81.

d)       Court filing fees as paid.

Associate Judge Abbott