Teece v Veint
[2021] NZHC 1036
•11 May 2021
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CIV-2020-425-000073
[2021] NZHC 1036
UNDER the Land Transfer Act 2017 IN THE MATTER
of an application that a caveat not lapse
BETWEEN
DAVID JOHN TEECE
First Applicant
AND
HERITAGE PTC, LLC
Second Applicant
AND
LLOYD JAMES VEINT
Respondent
Hearing: On the papers Counsel:
S J Mills QC and J Moss for Applicants
P F Whiteside QC and D M Jackson for Respondent
Judgment:
11 May 2021
JUDGMENT OF ASSOCIATE JUDGE PAULSEN ON COSTS
This judgment was delivered by me on 11 May 2021 at 10.30 am pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
TEECE v VEINT Costs Judgment [2021] NZHC 1036 [11 May 2021]
Dr Teece’s claim for costs
[1] The applicant (Dr Teece) applied to sustain a caveat lodged to protect a contractual easement over the respondent’s (Mr Veint) property at Glenorchy. By contract, Mr Veint had granted Dr Teece the right of access to use and, if necessary, extend an airstrip on Mr Veint’s land (Arcadia Station) in the event that after taking advice and researching the viability of an airstrip on his own land (Paradise Block) Dr Teece concluded this was not feasible.
[2] In a judgment of 9 March 2021, I made an order that the caveat shall not lapse pending further order of the Court.1 The facts giving rise to the application are fully set out in my judgment.
[3] As far as costs were concerned, I directed in my judgment that if counsel could not agree on costs they could file memoranda and I would determine the matter. Counsel were able to largely, but not completely, agree on the issue of costs.
[4] Dr Teece has claimed scale costs on a 2B basis. He also claims disbursements. I agree that it is appropriate to award scale 2B costs. I do not need to analyse that matter further as Mr Veint responsibly does not dispute that Dr Teece is entitled to scale 2B costs, nor does he take issue with most of the claimed disbursements.
[5]The areas of disagreement are limited to the following discrete matters:
(a)Dr Teece’s claim for costs of second counsel’s appearance at the hearing; and
(b)Dr Teece’s claim for expert witnesses’ expenses as a disbursement.
[6]I deal with each matter seriatim.
1 Teece v Veint [2021] NZHC 409.
Second counsel
[7] Dr Teece submits the claim for second counsel is justified as there was a considerable amount of evidence filed and second counsel had a significant role in obtaining the evidence and preparing submissions. It is noted also that Mr Veint had second counsel at the hearing.
[8] Parties may choose to have second counsel for a variety of reasons. They may derive considerable benefit from second counsel. That alone does not justify the losing party having to contribute to the winning party’s costs of having second counsel. So, it is not the case that because second counsel was involved in obtaining Dr Teece’s evidence and preparing submissions, that justifies costs being awarded for his attendance at the hearing. The emphasis must be on the nature and complexity of the proceeding.2
[9] It was not reasonably necessary for Dr Teece to be represented by second counsel at the hearing. The case was of average complexity, the evidence was by affidavit, there was an indexed common bundle of documents for counsel to work from and the hearing consisted of counsel speaking to their written submissions filed prior to the hearing. This claim is not allowed.
Experts fees
[10]Rule 14.12 High Court Rules 2016 provides:
…
(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
2 Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155 (HC) at [21].
(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.
…
(5)When considering whether a disbursement paid or payable for an expert witness’s fee or expenses is reasonable for the purposes of subclause (2)(d), a Judge or an Associate Judge may—
(a)call for a report or an assessment from a professional organisation or otherwise; and
(b)make any incidental order considered just, including an order as to the cost of that report or assessment.
[11] The winning party will generally be entitled to recover disbursements, provided they satisfy the criteria in r 14.12(2).3 In Air New Zealand Ltd v Commerce Commission the Court of Appeal said:4
The protection against unreasonable claims for disbursements is set out in subcl (2). But provided those criteria are met, the winning party is prima facie entitled to recover the actual expenses.
[12] The effect of r 14.12(2) and (3), is that Dr Teece may recover expert witnesses’ fees and expenses as disbursements that are:
(a)specific to the conduct of the proceeding; and
(b)reasonably necessary for the conduct of the proceeding; and
(c)reasonable in amount; but
(d)may be disallowed or reduced if the claim is disproportionate in the circumstances of the proceeding.5
3 Air New Zealand Ltd v Commerce Commission [2007] NZCA 27, [2007] 2 NZLR 494 at [47].
4 At [48].
5 Neither party sought to rely on r 14.12(5) to have the experts’ fees independently assessed.
[13] In assessing expert witness fees and expenses the question that often arises is whether they were necessarily incurred and are reasonable.6 The onus is on the claiming party to establish the reasonableness on the balance of probabilities.7 This is an intensely factual inquiry. There is broad judicial discretion in making the assessment.
[14] Where expert evidence is irrelevant to any of the issues on which a party succeeds it will be unreasonable and unfair to expect the losing party to pay those costs.8
[15] In Auckland Waterfront Development Agency Ltd v Mobil Oil New Zealand Ltd Katz J considered the approach to assessing expert costs should be similar to that taken in assessing the reasonableness of solicitor client costs.9 Katz J outlined the following approach:10
(a)Determine whether a particular attendance (or category of attendances) was reasonably necessary for the conduct of the proceeding. This requires a sufficient description of the particular work undertaken. A supporting affidavit from an independent expert practising in the same field may be necessary or appropriate when the quantum claimed is significant.
(b)Consider the amount of time claimed for the relevant attendance (or category of attendances) and whether it is reasonable, allowing for the significance and complexity of the particular work. A table showing the various steps taken and the costs associated with each step may assist.
(c)Consider the hourly rate charged for each author and whether that is reasonable, relative to the experience of that author and the complexity of the work undertaken.
(d)Consider any additional evidence which is relied upon to show that the rate charged is a reasonable one (or that the overall costs are reasonable). Again, in some cases (such as where the quantum claimed is particularly large) it may be necessary to file a supporting affidavit from an independent person practising in the same field as
6 Andrew Beck and others McGechan on Procedure (online ed, Thomson Reuters) at [HR14.12.01(4)].
7 Auckland Waterfront Development Agency Ltd v Mobil Oil New Zealand Ltd [2015] NZHC 470; (2015) 23 PRNZ 200.
8 Haricot Investments Ltd v Maerewhenua District Water Resource Company Ltd [2015] NZHC 518 at [49].
9 Auckland Waterfront Development Agency Ltd v Mobil Oil New Zealand Ltd, above n 7.
10 At [44] (footnotes omitted).
the relevant expert(s), deposing that the hourly rates claimed are appropriate and in accordance with industry standards.
[16] A straight-forward example is Zhang v Yu. A claim for a translator with an hourly rate of $300 was made.11 This was deemed unreasonable because the Deputy Registrar was able to find a translator at $140 per hour and the claimed rate was significantly higher than the hourly rate for Chinese translators in previous cases.
[17] As another general example, in Americhip, Inc v Dean Katz J was required to consider whether expert costs incurred in relation to a stay application were properly recoverable.12 Americhip sought to recover the cost of obtaining an affidavit on Chinese law. In finding that the expert witness was necessary for the proceeding, Katz J’s analysis noted:
(a)the issues required expert evidence in Chinese law;13
(b)the evidence was necessary to three of the key issues;14 and
(c)the evidence was of assistance to her Honour on each of the issues.15
[18] In respect of the reasonableness of the costs, Katz J noted the affidavit was fairly detailed.16 She carefully reviewed the narrative provided in the affidavit to satisfy herself the time spent in preparation of the affidavit was reasonable.17
Analysis of this case
[19] Expert witness costs are claimed by Dr Teece in respect of evidence given by Craig Anderson, Charles Latchford and Sean Dent.
11 Zhang v Yu [2021] NZCA 37.
12 Americhip, Inc v Dean [2015] NZHC 1871.
13 At [9].
14 At [10].
15 At [10].
16 At [15].
17 At [15].
[20] Mr Anderson gave evidence from an avionics perspective as to the feasibility of having a landing strip on the Paradise Block. He also commented on previous reports obtained by Dr Teece in relation to that matter.
[21] Mr Latchford gave surveying evidence relevant to Mr Anderson’s proposed airstrip locations on the Paradise Block.
[22] Mr Dent gave planning evidence concerning the planning issues that apply to the establishment or expansion of an “informal airport” as defined in the Queenstown Lakes Proposed District Plan and the development potential of the Paradise Block.
[23] The kernel of Mr Veint’s argument is the experts’ evidence was relevant only to the subjective assessment that Dr Teece had to undertake in deciding whether it was feasible for his requirements to build an alternative airstrip on the Paradise Block. He submits the costs of making that decision and any advice informing its review in this proceeding are contractual costs, not costs in the proceeding and ought not, therefore, to be visited upon him. I was referred to the narrations on invoices rendered by the experts which it was submitted are “the stuff of viability and feasibility analysis to be borne by [Dr Teece]”.
[24] Further, as far as the evidence of Mr Anderson is concerned, the submission is made that at the hearing before me Mr Mills described the report as irrelevant to the narrow basis upon which Dr Teece’s case was advanced. That basis, it was said, was that Dr Teece had taken advice and concluded the alternative airstrip on Paradise Block was not feasible in 2003.
[25] In my assessment, evidence from the three witnesses was specific to the proceeding and reasonably necessary. It was called in rebuttal to evidence Mr Veint gave in his affidavit of 4 December 2020 which he summarised in the conclusion to his affidavit as follows:
I understand that much of my opposition turns on legal principles and arguments. I will avoid all of that. To me, this is simple. I gave David the opportunity to explore developing the land some 23 years ago for his development purposes. In the intervening years, New Zealand has changed as have environmental laws, health and safety and so on. What might have been possibly feasible 20 odd years ago is simply not so now. David has had advice
that if he wants an airstrip on his land, parts of his land are suitable. Further, his own expert has told David that an airstrip is not feasible on my land at all. I ask that the Court intervene. David has had plenty of chances to sort this and now wants to use my good fortune in selling Arcadia to a good buyer to his advantage. I do not believe that this is about aircraft movement for David; it is all about money.
[26] I do not accept the submission that the expert witness fees and expenses were “contractual costs” of Dr Teece. This overlooks the basis upon which Mr Veint advanced his case. Mr Veint’s primary submission was that the caveat should lapse in the exercise of the Court’s discretion because Dr Teece had no reasonable expectation of obtaining any benefit from its continuance.18 The reasons he advanced included that Dr Teece could build an airstrip on the Paradise Block, that a suitable airstrip on the Arcadia Block was not feasible and, as Dr Teece could not develop the Paradise Block, he had no use for an airstrip. Having framed his case in that way, Mr Veint cannot be surprised that Dr Teece responded with the expert evidence in rebuttal. I accept Dr Teece’s submission that had experts’ evidence not been given there was a real risk I might draw an inference and find the caveat no longer had any utility and should therefore not be sustained for that reason.19
[27] As far as whether the experts’ fees are reasonable in amount, no other submissions were directed towards the amounts charged by Mr Anderson and Mr Latchford. In both cases invoices have been provided with narrations of the work. The hourly rates and time spent appear reasonable. There is, however, a charge of
$172.50 that appears on Mr Latchford’s invoice for having his affidavit witnessed by a solicitor. In my experience it is uncommon that a solicitor would render a fee for that service and I do not think Mr Veint should bear that cost. With that exception, I award the amounts claimed for Mr Anderson’s and Mr Latchford’s fees.
[28] Mr Veint takes issue with the amount charged by Southern Planning Group (SPG) for the work of Mr Dent. The amount claimed is significant at $11,240.10. I understand Mr Veint considers much of the work was unnecessary and not directly related to the preparation of Mr Dent’s evidence. Counsel highlighted narrations on SPG’s invoices with which Mr Veint takes issue.
18 At [2].
19 Philpott v Noble Investments Ltd [2015] NZCA 342 at [26].
[29] Dr Teece bears the onus of establishing that SPG’s charges are reasonable on the balance of probabilities. On the face of the invoices rendered by SPG it appears to me that some work done and charged for does not directly relate to the preparation of Mr Dent’s evidence. For example, it is not clear why Mr Dent needed to review historic advice and reports from 2008.
[30] There has been no attempt by Dr Teece to justify the amount charged. It falls to me to do the best I can and make an assessment of what amount was reasonable for SPG to charge for the work required in the preparation of Mr Dent’s evidence. I have adopted the approach taken by Katz J in Auckland Waterfront Development Agency Ltd v Mobil Oil New Zealand Ltd accepting for that purpose that Mr Dent’s hourly charge-out rate appears reasonable. Inevitably this is a broad brush assessment. I have adopted a conservative approach consistent with the fact that Dr Teece bears the onus of justifying the claim and has not provided anything other than SPG’s invoices to support it. In the result I award Dr Teece $8,280 (incl GST) for the expert witness disbursement claim in respect of Mr Dent’s evidence. This reflects 36 hours work at
$200 plus GST per hour.
An additional matter
[31] There appears to be an error in the daily recovery rate claimed on behalf of Dr Teece. The correct daily recovery rate is $2,390 not $2,230. I apply the correct hourly rate in calculating his scale costs entitlement.
Result
[32] Dr Teece is awarded costs in the proceeding calculated on a scale 2B basis amounting to $14,101 (which excludes any allowance for second counsel) and reasonable disbursements (including counsel’s travel and accommodation costs and expert witnesses’ fees and expenses) of $10,920.04. The total sum is $25,021.04.
O G Paulsen Associate Judge
Solicitors:
MDS Law, Christchurch Berry & Co, Christchurch
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