Senior Trust Capital Limited v Holmes
[2023] NZHC 2356
•18 December 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-952
[2023] NZHC 2356
BETWEEN SENIOR TRUST CAPITAL LIMITED
Plaintiff
AND
CHRISTOPHER ALAN HOLMES
First Defendant
ANTHONY CHARLES RUSSELL HANNON
Second Defendant
Hearing: (On the papers) Appearances:
M D Pascariu for Defendants M J Tingey for Plaintiff
Judgment:
18 December 2023
JUDGMENT OF ASSOCIATE JUDGE LESTER
(costs)
This judgment was delivered by me on 18 December 2023 at 2:30 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
………………………
SENIOR TRUST CAPITAL LIMITED v HOLMES [2023] NZHC 2356 [18 December 2023]
[1] On 24 November 2023, Mr Tingey, counsel for Senior Trust Capital Limited (Senior Trust) filed a memorandum seeking the fixing of costs on an indemnity basis.
[2] Indemnity costs were awarded in my judgment of 3 November 2023,1 pursuant to cl 15.1 of the term loan agreement between Senior Trust and Roys’ Bay Estate Limited (in liquidation) and the defendants as guarantors.
[3] Given Mr Tingey properly advised the Court that the quantum of indemnity costs was disputed, I set a timetable for counsel for Messrs Holmes and Hannon to file a response.
[4] Mr Pascariu, is now instructed for Messrs Holmes and Hannon. Mr Pascariu, in a memorandum dated 7 December 2023, raised three specific concerns, or at least queries, in relation to the breakdown of costs claimed by Senior Trust and a general issue in respect of the detail of material filed in support of quantum.
[5]Mr Tingey has filed a reply.
Costs claimed in respect of separate proceedings
[6] Mr Pascariu has, with reference to the time records produced by Senior Trust, identified claims for time that may have related to a separate proceeding being CIV-2023-404-1144. Some $11,940.00 has been identified. Most of the amount in issue relates to the preparation of an affidavit for a Mr Bedemski filed in the separate proceeding. An affidavit from Mr Bedemski was not filed in this proceeding but one was prepared.
[7] Mr Tingey’s memorandum explains that while an affidavit of Mr Bedemski was prepared for this proceeding, ultimately he declined to swear it. Mr Tingey advises a significant amount of work was put into preparing the affidavit, but as I have said, the deponent declined to swear it. I agree with Mr Tingey’s comment that the Court was advised of that during the hearing. Mr Tingey quantifies the amount of time
1 Senior Trust Capital Ltd v Hannon [2023] NZHC 3108.
that can be attributed to the preparation of that affidavit in this proceeding as being
$8,625.00.
[8] The fact that Mr Bedemski’s affidavit was not sworn and so could not ultimately be used in this proceeding does not render the time incurred in preparing that affidavit unrecoverable. Seeking an affidavit from Mr Bedemski was reasonable given the matters raised by Messrs Holmes and Hannon in relation to the mortgagee sale process undertaken by Senior Trust and the involvement of Mr Bedemski’s companies.
[9]I accept Mr Tingey’s explanation of the $8,625.00 as being reasonable.
[10] That leaves $3,315.00 that arguably relates to the separate proceeding. Mr Tingey, to avoid what he describes as unnecessary conjecture over a relatively small amount, abandons Senior Trust’s claim for this amount.
GST component
[11] The second query raised by Mr Pascariu is whether there is a GST component in the indemnity costs. Mr Tingey confirms that GST is claimed but that as Senior Trust is an investment fund, it cannot claim GST and therefore the claim for GST is appropriate.
[12]That said, it was a reasonable query to raise.
Costs included in judgment sum
[13] The third query raised on behalf of Messrs Holmes and Hannon is whether some costs are already included in the judgment sum.
[14] Mr Pascariu notes that the evidence supporting Senior Trust’s quantification of the principal amount owing includes a solicitor’s invoice dated 3 April 2023.
[15] The invoice dated 3 April 2023 will be for attendances prior to that date. The first invoice claimed is for April 2023 and covers one item for 31 March 2023 through to 1 May 2023.
[16] Accordingly, if a solicitor’s invoice dated 3 April 2023 is included in the principal sum for which judgment has been entered, then there does not appear to be an overlap with the amounts claimed here. The invoice prepared on 3 April 2023, which is not before the Court, presumably does not include the time in the fee breakdown provided for March/April 2023 (Schedule B to Mr Tingey’s memorandum of 24 November 2023) for 31 March 2023 and 3 April 2023, but if it does, the amount is $400.00. I do not propose that counsel address that issue by way of memorandum but no doubt Mr Tingey will advise Mr Pascariu if it is the case that the $400 claim for 31 March 2023 and 3 April 2023 was included in the invoice dated 3 April 2023 included in the principle debt. Memoranda on the issue would cost more than the
$400.00 in issue. Mr Tingey’s memorandum of 12 December 2023 does not directly address this issue.
[17] Accordingly, the deduction from the indemnity costs claimed is $3,315.00 plus GST.
General material – indemnity costs
[18] As to the general point about the extent of the material provided in support of indemnity costs, I am satisfied the material provided was adequate. Costs are claimed in respect of an application for summary judgment on a guarantee. The steps involved in that proceeding will be well known to counsel. Mr Pascariu does not suggest the total amount claimed for solicitor’s costs is unreasonable or that counsel’s fee is unreasonable. Ultimately, that is the core test for the Court in fixing indemnity costs, that is, to ensure that the costs are reasonable. That Mr Pascariu does not in his memorandum assert the claim is unreasonable, is significant. I accept Mr Pascariu’s memorandum submits there is insufficient information for a proper determination of the indemnity costs but, in my view, the steps that had to be taken in this proceeding are clear and easily understood (now with the benefit of the explanation of the unsworn affidavit of Mr Bedemski).
[19] Accordingly, I am satisfied that a total award of costs including GST be made in sum of $112,763.13 plus disbursements of $3,449.76. No issue was taken with the disbursements claim.
[20]There is no order as to costs in respect of the fixing of costs.
Associate Judge Lester
Solicitors:
Couch Harlowe Kovacevich, Auckland (for Plaintiff) Lee Salmon Long (formerly for Defendants)
Copy to counsel:
M J Tingey, Barrister, Auckland (for Plaintiff)