SCC (NZ) Limited v Samsung Electronic New Zealand Limited

[2018] NZHC 3028

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-2552

[2018] NZHC 3028

BETWEEN

SCC (NZ) LIMITED

Plaintiff

AND

SAMSUNG ELECTRONIC NEW ZEALAND LIMITED

Defendant

Hearing:	On the papers
Counsel:	R M Dillon and T A Hwang for the plaintiff M Kersey and J Edwards for the defendant
Judgment:	21 November 2018

JUDGMENT OF JAGOSE J

[Costs]

This judgment was delivered by me on 21 November2018 at 2:30 p.m. pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors:

Queen City Law, Auckland Russell McVeagh, Auckland

SCC (NZ) LTD v SAMSUNG ELECTRONIC NEW ZEALAND LTD [2018] NZHC 3028 [21 November 2018]

[1]                  After a three-week trial, my 26 October 2018 judgment dismissed all SCC’s claims, and upheld Samsung’s counterclaims. At [199], I took the preliminary view “as the successful party, Samsung should be entitled to its 2B costs and disbursements from SCC”.

[2]                  Samsung calculates those costs to be $85,186, plus disbursements of $11,865. SCC agrees those are appropriate.

[3]                  But Samsung seeks increased costs in the amount of a global 50 per cent uplift, essentially on grounds of SCC’s unnecessary contribution to the time and expense of the proceeding,1 taking its costs claim to $127,779 (plus disbursements). Samsung says such is justified because SCC’s conduct was in breach of the Second Agreement; SCC’s fourth cause of action was flawed from the outset; some of SCC’s causes of action had no evidential basis or merit; and Samsung incurred substantial time and expense in dealing with SCC’s briefs of evidence. It identifies its actual legal expense over the course of the proceeding was about $1.28m, and says an uplift only to particular steps in the proceeding “would not adequately reflect the actual costs incurred by Samsung”.

[4]                  SCC’s measured response is to say none of those contentions justify any uplift, but are instead in the nature of the proceeding itself, which required the Court’s determination. Further, they are all aspects which were within my apprehension when I took my preliminary view.

[5]                  SCC is right my preliminary view was based on the marginal contributions to the time and expense of the proceeding made by any infelicities in its conduct. The claims and counter-claims arising over the seven-year course of the parties’ relationship overall justified the three-week hearing, which was conducted relatively economically (including two ‘lay days’).

1      HCR 14.6(3)(b). Samsung also relies non-specifically on HCR 14.6(3)(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”.

[6]                  While SCC comprehensively was unsuccessful, that was not because its claims were unarguable. Samsung had every opportunity over the four years of the proceeding to challenge such as it claimed lacked any merit. Notably, SCC’s abandonment of its fourth cause of action arose on my questioning of Mr Dillon in his closing submissions, not in response to any challenge by Samsung. And I noted at [209] of my principal judgment the obligations falling on parties proactively to address contended non-compliant evidence.

[7]                  Samsung’s actual legal expenditure is not a material factor in the calculation of increased costs; rather I was concerned with “the time considered reasonable for each step reasonably required in relation to the proceeding”.2 That assessment “should not depend … on the time actually spent by the solicitor or counsel involved or on the costs actually incurred by the party claiming costs”.3

[8]                  In my view, nothing in the steps in the proceeding taken by Samsung required other than a normal amount of time. Despite the breadth of SCC’s written statements, Samsung’s responses and cross-examination generally were focused on the matters in issue in the proceeding. Although Samsung says its defence and counter-claims required “extensive technical analysis”, that was in review of its own records to elicit the necessary information. More significantly, that was analysis conducted for Samsung’s own purposes in terminating the Second Agreement, which analysis was produced in evidence to the Court. That production did not require other than a normal amount of time.

[9]Increased costs are not justified in this proceeding.

[10]              I order SCC to pay Samsung 2B costs in the amount of $85,186, plus disbursements of $11,865.

—Jagose J

2      HCR 14.2(1)(c).

3      HCR 14.2(1)(e).