Ward v Virtue HC Auckland CIV-2011-404-002541

[2011] NZHC 1716

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-002541

BETWEEN  ANDREW RICHARD LEE WARD Plaintiff

ANDVICKI LEANNE VIRTUE Defendant

Hearing:         On the papers

Counsel:         J Ussher for Plaintiff

M Keall for Defendant

Judgment:      22 November 2011 at 11:00 AM

COSTS JUDGMENT OF ASSOCIATE JUDGE ABBOTT

This judgment was delivered by me on 22 November 2011 at 11.00 a.m., pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors:           Jeff Ussher, P O Box 44325, Pt Chevalier, Auckland 1246 [email protected]

Fyers Joyce, P O Box 105216, Auckland 1030 [email protected]

WARD V VIRTUE HC AK CIV-2011-404-002541 22 November 2011

[1]      The  defendant  has  applied  for  costs  following  discontinuance  of  this proceeding by the plaintiff.

[2]      The plaintiff accepts that the defendant is entitled to costs pursuant to r 15.23 of the High Court Rules, but takes issue with two aspects of the costs being claimed:

(a)      The claim for costs for preparation of the notice of opposition to the plaintiff’s application for summary judgment and the supporting affidavit: the defendant seeks costs based on a C time banding rather than the standard B banding; and

(b)      The  defendant’s  claim  for  costs  of  preparing  the  memorandum

(following discontinuance) in support of her claim for costs.

[3]      The defendant contends that “a comparatively large amount of time” was reasonably incurred in the preparation of the notice of opposition and affidavit in support, and that the costs sought on a C time allocation are “just shy of half the defendant’s actual costs for those steps”.

[4]      The principles for allocation of costs are clear.  The Rules provide for costs to be awarded according to the nature of the proceeding and the time reasonably required for particular steps, in the circumstances of the case.  It is axiomatic that it is for the party seeking costs to establish the basis for the costs being sought.

[5]      Rule 14.5 of the High Court Rules sets out the way in which time allocations are to be made:

Determination of reasonable time

(1)      For the purposes of rule 14.2(c), a reasonable time for a step is—

(a)      the time specified for it in Schedule 3; or

(b)      a time determined by analogy with that schedule, if Schedule

3 does not apply; or

(c)      the time assessed as likely to be required for the particular step, if no analogy can usefully be made.

(2)      A determination  of  what  is  a  reasonable  time  for  a  step  under subclause (1) must be made by reference—

(a)      to  band  A,  if  a  comparatively  small  amount  of  time  is considered reasonable; or

(b)      to  band  B,  if  a  normal  amount  of  time  is  considered reasonable; or

(c)      to band C, if a comparatively large amount of time for the particular step is considered reasonable.

[6]      There is no dispute that a category 2 classification is appropriate for this proceeding, meaning that it is a proceeding of average complexity requiring counsel of skill and experience considered average in the High Court.  The time allocation needs to be made with that agreed position on the complexity of the proceeding in mind.

[7]      I am not persuaded that this is a case “where a comparatively large amount of

time” was reasonably required for two reasons:

(a)      There is no evidence given by the defendant as to the actual amount of time taken to prepare the notice of opposition and supporting affidavit (counsel’s memorandum refers to costs, but not to time), nor to any factors which have contributed to the “comparatively large amount of time” said to have been taken; and

(b)The   notice   of   opposition   was   comprehensive,   but   does   not demonstrate unusually high complexity in terms of issues raised, and the affidavit in support, although reasonably lengthy (39 paragraphs) does not obviously demonstrate a need for a particularly large amount of time in preparation: the affidavit mainly a narrative explanation of the relationship and dealings between the parties, exemplified by 90 pages of exhibits, comprising correspondence and some agreements and financial statements.

[8]      The key principles underlying the cost regime are to provide certainty, and a reasonable (as distinct from complete) recovery of costs save in exceptional circumstances.  For the reasons given above, I do not consider that the defendant has made out a case for more than “a normal amount of time” for this step.  In coming to this view, I take into account that the defendant is also being reimbursed for the costs of briefing counsel generally (in the allocation for taking instructions for the preparation and filing of a defence).   For these reasons, I decline the defendant’s application for a band C allocation in respect of preparation of the notice of opposition and supporting affidavit. The defendant is entitled to costs on that step on the standard B time banding.

[9]      Similarly, I am not persuaded that the defendant is entitled to costs on her memorandum.  Schedule 3 provides for the costs for filing a memorandum for a case management conference or mention hearing (item 4.10 of the Schedule), but not for a  memorandum  in  support  of  an  application  for  costs.    In  the  absence  of  any provision in the Schedule for this step, the defendant would have to make a case for an award under the Court’s over-riding discretion.  As the memorandum has been prepared principally to support the application for a C time banding, which has been disallowed, it is difficult to see any basis for an exercise of the over-riding discretion. This aspect of the defendant’s claim is also disallowed.

[10]     The Registrar is to seal an order for costs as sought by the defendant in paragraph 7 of her memorandum, excluding the costs sought in subparagraph (c), and allowing for costs under subparagraph (e) on a band B basis (namely 0.6 days), giving a total costs award of 4.3 days on a category 2 basis ($1,180 per day) of

$8,084.  The defendant is also entitled to the disbursements claimed in the sum of

$337.97.

Associate Judge Abbott