Sharma v Air New Zealand Limited
[2020] NZHC 1646
•9 July 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-1504
[2020] NZHC 1646
BETWEEN ANJELA SHARMA
Applicant
AND
AIR NEW ZEALAND LIMITED
Respondent
Hearing: On the papers Counsel:
S J Grey for Applicant
S J P Ladd & B A Keown for Respondent
Judgment:
9 July 2020
JUDGMENT OF PAUL DAVISON J
[Re: Costs]
This judgment was delivered by me on 9 July 2020 at 4:00 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
S Grey Lawyer, Nelson Bell Gully, Auckland
SHARMA v AIR NEW ZEALAND LTD [2020] NZHC 1646 [9 July 2020]
Introduction
[1] By judgment dated 21 February 2020, I dismissed an application by Ms Anjela Sharma (the applicant) for a mandatory interim injunction directing the respondent to provide her with air services, and also dismissed her application for an order transferring the proceeding to the Nelson Registry.1 I found Air New Zealand (the respondent) to be entitled to an award of costs together with reasonable disbursements.2
Submissions
For the respondent
[2] The respondent claims costs of $30,114 and disbursements of $3,657.21 comprised as follows:
[3]Scale 2B costs for:
(a)Filing memorandum for the mentions hearing in Duty Judge list (step 11).
(b)Two appearances in Duty Judge Lists (step 12).
(c)Filing opposition to the two interlocutory applications (step 23).
(d)Preparation of written submissions on the two applications (step 24).
(e)Preparation of the bundle for the hearing (step 25).
(f)Appearance at the hearing of defended application for principal counsel (step 26).
(g)Preparation for the hearing (step 32).
1 Sharma v Air New Zealand Ltd [2020] NZHC 230.
2 At [102].
[4]Scale 2C costs for:
(a)Preparation of six affidavits (step 30). The respondent submits that its actual costs were significantly in excess of 2C scale costs due to the time required to brief the witnesses (located in Auckland, Wellington and Nelson), review a substantial volume of documents and prepare their affidavits. In relation to three of these affidavits, costs were incurred in having to instruct solicitors to attend on the witnesses in Wales and Nelson to swear the affidavits.
[5]Disbursements of:
(a)Filing fee for Notice of opposition to the interlocutory application ($95.65).
(b)Simmons and Simmons, London for witnessing affidavit ($3,228.26).
(c)Pitt & Moore, Nelson for witnessing affidavits ($333.30).
[6] Mr Ladd for the respondent submits that for the purposes of r 14.2(1)(b) and r 14.3 the proceeding should be Category 2, being proceedings of average complexity requiring counsel of skill and experience considered average in the High Court. Counsel explains that the respondent’s claim for costs has all been calculated on a Band B basis other than the attendances relating to the briefing of six witnesses variously located in Auckland, Wellington and Nelson and reviewing a substantial volume of documents in connection with the affidavits, for which the respondent submits costs should be calculated on a 2C basis.
[7] Mr Ladd says that in relation to three affidavits filed by the respondent, costs were incurred in having their affidavits sworn in Wales and Nelson, and it was necessary in each case to instruct solicitors to attend them to swear the affidavits so as to be able to comply with the Court’s timetable order regarding the filing of affidavits in opposition to the application.
For the applicant
[8] The applicant is self-represented for this aspect of the proceeding. She submits that the determination of costs on this interlocutory application should be deferred and undertaken following the substantive trial. She submits, that the Court’s interim findings have not brought the substantive issues to an end. She further submits that a costs finding against her at this point will exacerbate her financial difficulties in accessing justice in respect of the substantive trial which is to be held in Auckland.
[9] The applicant submits that should the Court proceed to determine the costs, they should be scaled on a 2A basis. She submits that the claimed costs have been calculated to reflect the hourly rate of a partner at the respondent’s firm of solicitors Bell Gully, although much of the work is likely to have been undertaken by graduate level solicitors. The applicant requests copies of the Bell Gully timesheets for this matter.
[10]In relation to the specific claimed steps, she submits that:
(a)She has no record of any memorandum filed by the respondent for the mentions hearing in the Duty Judge’s list (step 11).
(b)The claim for preparation of the bundle is unreasonable and punitive (step 25). The applicant submits that her counsel did not prepare a bundle because it was not necessary for such a short hearing, and she describes the respondent’s bundle as being the product of an unstructured and prolific photocopying exercise.
(c)The claim for the attendance of principal counsel at a full day hearing is unreasonable, because the hearing was scheduled for half a day and the applicant’s counsel kept to a time allocation consistent for half a day. The applicant submits that she does not understand why the hearing has “morphed” into a full day (step 26).
(d)The claim for preparation of the affidavits is unreasonable, unjust and a punitive (step 30).
(e)Any costs incurred in preparation for the hearing should lie where they fell (step 32).
(f)The disbursements claimed on account of invoices from Pitt & Moore, Nelson, and Simmonds and Simmons, London, are unreasonable and punitive. She queries the necessity of Pitt & Moore travelling to attend on witnesses at the Nelson airport, and of Mr Carter’s affidavit evidence being sworn in the United Kingdom.
Discussion
[11] The applicant submits that determination of the costs on her interlocutory application for an interim injunction should be deferred until after determination of the substantive trial. However, the High Court Rules stipulate that costs on an opposed interlocutory application must be fixed in accordance with the Rules unless there are special reasons to the contrary. This approach reflects the fact that the merits of particular interlocutory applications and the merits of substantive matters are different, and that costs relating to an opposed interlocutory application are best fixed at the time the application is determined. Costs should also be determined by the Judge or Associate Judge who has heard it.3
Rule 14.8 of the High Court Rules 2016 provides:
14.8 Costs on interlocutory applications
(1)Costs on an opposed interlocutory application, unless there are special reasons to the contrary,—
(a)must be fixed in accordance with these rules when the application is determined; and
(b)become payable when they are fixed.
(2)Despite subclause (1), the court may reverse, discharge, or vary an order for costs on an interlocutory application if satisfied subsequently that the original order should not have been made.
(3)This rule does not apply to an application for summary judgment.
3 Chapman v Badon Limited [2010] NZCA 613, (2010) 20 PRNZ 83 at [12]; Self-Realization Meditation and Healing Centre Charitable Trust (New Zealand) v IAG New Zealand Limited [2018] NZHC 2612 at [23].
[13] In the affidavit sworn by the applicant in which she addresses issues relating to costs, she says that an order for costs made at this stage of the proceedings will greatly impede her financial ability to access justice having regard to her residing in Nelson and the proceedings and trial being heard in the High Court at Auckland. The applicant says that she intends to call at least ten witnesses at the substantive trial. The applicant says that an order for costs against her at this stage of the proceedings will be punitive and result in an unjust outcome. The applicant further says that her work and legal practice has been severely disrupted by her involvement in the proceeding and that she has lost work as a result.
[14] However, the applicant has not provided details of her financial position and has not identified any matters which would, in my view, constitute special reasons why the Court should not proceed to fix costs in relation to the interlocutory injunction application. When the applicant commenced the proceeding and applied for an interim injunction, she must have understood that in the event that her application did not succeed, the respondent would be likely to apply for an order for costs pursuant to
r.14.8. Furthermore, by commencing the proceedings the applicant must also have understood that the time involved in prosecuting her claim would be likely to intrude on time that she would otherwise be able to spend on work relating to her legal practice.
[15] Accordingly, pursuant to r 14.8 (1) the Court must now fix costs in relation to the respondent’s successful opposition to the applicant’s interlocutory application.
Other matters raised by the applicant
[16] In her affidavit the applicant also challenges the disbursement costs claimed by the respondent in connection with the agency attendances for the swearing of affidavits by three of the respondent’s witnesses, which took place in Nelson and in the United Kingdom. The applicant also disputes the respondent’s claim for a full-day hearing of the interlocutory application. She correctly says that the hearing was set down and scheduled for a half-day hearing. She says that for reasons which were not explained at the time, the hearing extended beyond the estimated half-day and
occupied a full day. The applicant submits that it is therefore unreasonable for the respondent to claim costs for a full day for the hearing of the interlocutory application.
[17] The applicant also disputes the respondent’s claim of $1434 for preparation of the “bundle” of documents for the hearing. She says that the respondent’s counsel did not engage in correspondence with her counsel regarding the necessity of preparing the bundle and that having regard to the short hearing time anticipated, she did not consider that it was necessary for such a bundle to be prepared. The applicant accordingly submits that the sum claimed by the respondent for preparation of the bundle is unreasonable.
[18] Finally, the applicant says that it appears from her review of emailed correspondence passing to and from the respondent’s solicitors that there were “about five lawyers” working on the matter some of whom were at “graduate level”. She says she is “left with the strong impression” that the respondent’s costs have been calculated on the basis of Mr Ladd’s hourly rate and that such an approach is unfair and unreasonable.
[19] In my view none of the matters raised by the applicant are of any substance. The disbursements claimed by the respondent for the agency fees incurred for attending to the swearing of affidavits to be filed in opposition to the application are not unreasonable. The ultimate duration of the hearing which extended beyond the scheduled half-day and continued beyond the mid-afternoon adjournment was due to the time required by counsel for both parties to present their submissions. The respondent’s preparation of the bundle of documents was a necessary requirement for the hearing and was undertaken to enable the Court and parties to make ready reference to the relevant documents during the course of the hearing. The calculation of the respondent’s claim for costs is made by reference to the scale provided for by the High Court Rules. They are not calculated by reference to the hourly rates customarily charged by individual lawyers who have undertaken the relevant work.
The respondent’s claim for costs on a 2C basis
[20] The respondent’s claims for costs is calculated on a Category 2 band B basis, other than in respect of attendances related to the preparation of affidavits. For these
it seeks costs determined by reference to band C. The respondent says that band C is appropriate by reason of the substantial volume of documents that were required to be reviewed and the significant time involved and required in the briefing of six witnesses who were variously located in Auckland, Wellington and Nelson. The respondent says that its actual costs for the preparation of those affidavits were significantly in excess of the costs as calculated for those attendances on a scale 2C basis.
[21] The affidavits which were prepared and filed by the respondent were reasonably substantial and exhibited a large number of documents. The issues and events covered by the deponents were factually complex. Given the nature of the allegations made by the applicant against the respondent and particular members of the respondent’s staff, it was appropriate that the allegations were responded to in detail and that a detailed description of the respondent’s systems and manner of dealing with issues relating to passenger conduct was addressed in the respondent’s affidavits.
[22] I am satisfied that having regard to the nature of the allegations made in the proceeding and the issues arising from the applicant’s substantive claim against the respondent, that the attendances related to the preparation of the respondent’s affidavits are appropriately to be calculated in accordance with scale 2C.
Result
[23] I accordingly approve the claim for costs set out and detailed in the schedule attached to Mr Ladd’s costs memorandum dated 6 March 2020, and make an order fixing the costs to be paid by the applicant to the respondent in respect of the interlocutory application at $30,114.00 together with disbursements of $3,657.21.
[24]In accordance with r 14.8 (1)(b) the costs become payable when they are fixed.
Paul Davison J
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