Willcocks v Teat

[2012] NZHC 1147

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV 2008-463-000784 [2012] NZHC 1147

BETWEEN  ARTHUR JOHN WILLCOCKS Plaintiff

ANDJAMES BUNNY TEAT Defendant

Hearing:         (On the papers)

Counsel:         R O Parmenter for the Plaintiff

R B Stewart QC for the Defendant

Judgment:      25 May 2012

[COSTS] JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie

On 25 May 2012 at 4.00 pm

Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Distribution:

R O Parmenter: [email protected]

R B Stewart QC: [email protected]

WILLCOCKS V TEAT HC ROT CIV 2008-463-000784 [25 May 2012]

[1]      The proceedings were filed as long ago as November 2008.

[2]      They were initially heard in Rotorua, commencing on 8 September 2010.  I issued an interim judgment in relation to liability only on 27 September 2010.   I found the defendant liable to the plaintiff.  At that stage, I was relying on advice I had received from counsel that the parties would be able to resolve the quantum of the  resulting  damages.    I invited  counsel  to  file  a  joint  memorandum  advising whether or not they required a further decision from me in relation to the damages claimed.  I also requested that counsel should advise whether or not they required a ruling in relation to costs.

[3]      No joint memorandum was received.

[4]      Rather, there was a dispute between the parties as to whether or not my judgment contained a slip.  It was agreed that I would deal with that matter on the papers and counsel filed written submissions.   In the course of his submissions, Mr Parmenter, on behalf of the plaintiff, submitted that the defendant was being opportunistic.  Mr  Parmenter  sought  indemnity  costs.    I issued  a  supplementary judgment on 15 March 2011.  I gave judgment against the defendant.  I noted that Mr Stewart QC, for the defendant, had not replied to Mr Parmenter’s application for indemnity costs.   I recorded that an order for costs in favour of the plaintiff was appropriate, but I reserved any ruling as to quantum until I had heard from the parties in relation to the issue.

[5]      There was a further hearing on 29 November 2011 in relation to quantum.  In opening the case for the plaintiff, Mr Parmenter sought costs on a 2B basis.   His submissions contained a detailed analysis of the costs claimed.  Mr Stewart accepted that costs could be fixed on a 2B basis and agreed to advise whether or not the costs calculated  by  Mr  Parmenter  on  behalf  of  the  plaintiff  were  accepted.     A memorandum in this regard was filed by Mr Stewart on 8 December 2011.  I issued my judgment in relation to the limited matters I was asked to decide regarding quantum on the same day.   I fixed costs on a 2B basis, but did not deal with the quantum of the resulting cost.

[6]      Notwithstanding my judgment, the parties were not initially able to resolve the quantum of the judgment.  Eventually, they did reach agreement in that regard. Both parties now accept the quantum of the judgment calculated in accordance with my judgment of 8 December 2011 is $690,000.

[7]      Mr Stewart then asked me to recall that part of the judgment where I fixed costs on a 2B basis in relation to, inter alia, the quantum hearing.  I declined to do so in a minute issued on 11 May 2012.

[8]      Against that background, I now turn to deal with the costs claimed by the plaintiff, and the matters raised by the defendant.

[9]      The plaintiff has been the successful party in all aspects of this litigation. The defendant, as the party who has failed with respect to each aspect of the proceedings, should pay costs to the plaintiff.[1]

[1] High Court Rules, r 14.2(a).

[10]     I  have  determined  that  costs  should  be  fixed  on  a  2B  basis.    While Mr Parmenter initially sought costs on an indemnity basis in relation to the slip point dealt with in my judgment of 15 March 2011, he has since resiled from that request. While Mr Stewart contended that he had not agreed to costs being fixed on a 2B basis in relation to the quantum hearing, I have held against him in that regard.

[11]     Daily rates under the Second Schedule for Category 2 proceedings were

$1,600 per day until 24 May 2002.  They have since been increased to $1,880 per day.[2]

[2] High Court Amendment Rules 2010 (SR 2010/88), r 4.

[12]     I have perused the schedule of costs claimed by Mr Parmenter.  There can be no issue with the steps taken in respect of which costs are claimed, and his calculations are correct from an arithmetical perspective.

[13]     Mr Stewart, however, takes issue with a limited number of matters.   I deal with each in turn.

[14]     First,  Mr  Parmenter  claims  three  days  for  the  commencement  of  the proceeding, by reference to item 1 in the Third Schedule.  Mr Stewart asserts that an allowance of three days is excessive.  He points out that the statement of claim was short, that it was dated 13 November 2008, and that it was filed on 14 December

2008.  He reminds me that the plaintiff ’s claim only arose on 11 November 2008, being the date when the plaintiff accepted the defendant’s repudiation of the share purchase agreement.  He submits that a claim for three days for the commencement of the proceedings exceeds the time actually spent by counsel for the plaintiff in commencing the proceedings.  He submits that the time allowed should be two days, which is the actual time that elapsed between the claim arising, and the date that the statement of claim was filed.

[15]     I do not accept Mr Stewart’s submission.

[16]     Costs allowed for the commencement of proceedings by a plaintiff include time allowances for receiving instructions, for researching the facts and the law, and for preparing, filing and serving the statement of claim.  While it is correct that the plaintiff only accepted the repudiation on 11 November 2008, I have no doubt that Mr Parmenter was instructed some time prior to that date.   He was involved in getting the proceedings ready to file without delay.   I am satisfied that given the matters in issue in this case, an allowance of three days for the commencement of the proceeding is perfectly appropriate.

[17]     Secondly, Mr Parmenter has claimed under item 4.14 in the Third Schedule for the cost of preparing submissions in relation to the slip point.  No hearing was required on this issue.   Rather, counsel agreed that they should file written submissions in relation to the matter, and that I should determine the application on the papers.  Mr Parmenter submits that any hearing would have taken half a day, and he has claimed costs calculated on that basis.  Mr Stewart submits that because no hearing was required, there can be no entitlement to preparation costs.   He argues that  the agreement  to  have the issue resolved  on  the papers was  a cooperative approach, designed to save costs for both parties.

[18]     I do not accept Mr Stewart’s argument.   Pursuant to r 14.5, the Court has power to determine a reasonable time for a step, by analogy with Schedule 3, if the Schedule does not apply.  Here, there was no hearing.  The schedule therefore does not apply.   Had there been a hearing, it would have taken half a day.   Extensive submissions were filed by the parties covering what was quite a difficult legal issue. It is appropriate to make an allowance for the costs involved in preparing those submissions.   Item 4.14 of Schedule 3 requires that preparation time be fixed by reference to the time occupied by the hearing, measured in quarter days.   If the hearing would have taken half a day, it is, in my judgment, appropriate to allow by analogy, preparation costs calculated by reference to the half day that would have been required for a hearing if a hearing had been held.

[19]     Thirdly,  Mr  Parmenter  claims  disbursements.    In  particular,  he  seeks  to recover the costs of two experts retained by the plaintiff:  a Mr Appleby, and  a Mr Hagan.  He has made copies of their invoices available.

[20]     There are five invoices from Mr Appleby:

(a)       an invoice dated 31 March 2009 for attendances up to that date; (b)   an invoice dated 31 October 2009 for attendances up to that date;

(c)       an invoice dated 8 September 2010 for attendances up to 7 September

2010;

(d)      an invoice dated 13 October 2010 for attendances up to that date; (e) an invoice dated 30 November 2011 for attendances up to that date.

[21]     Mr Stewart disputes the invoices:

(a)      In  relation  to  the first invoice,  he notes  that  it  was  submitted 18 months prior to the hearing, and that it related to attendances that Mr Willcocks would have required irrespective of the proceedings, in order to quantify the value of his shareholding in GB Teat Limited.

I have read the narration on the invoice.  In my view, it comes within r 14.12(2)(b) and (c).  The work carried out by Mr Appleby seems to have been specific to the conduct of the hearing and reasonably necessary for the conduct of the proceeding.

(b)In relation to the second invoice, I accept that it relates specifically to the settlement conference which was convened in this matter.  Costs are not generally awarded for attendances in relation to judicial settlement  conferences  or  mediation  processes.[3]     Mr  Parmenter accepts that this invoice should not be the subject of a costs award.

[3] Andrew Beck and others McGechan on Procedure (looseleaf ed, Brookers) at [ 7.79.05(a)].

(c)      Mr Appleby’s invoice of 8 September 2010 is related to the court proceedings.   Mr Stewart submits that the defendant should only be entitled to two-thirds of Mr Appleby’s invoice.   He argues that the transaction  was  unusual,  and  that  there  were  significant  matters relating to the agreement for sale and purchase of the shares that were not the subject of express agreement.  He also argues that there were significant and legitimate issues relating to accounts prepared by the plaintiff, and that the parties agreed the value of 50 percent of the shares in the company as at November 2008.

Had the parties been able to reach agreement, I would agree with Mr Stewart’s submissions.  However, the reality is that they were not able to do so.  Mr Appleby had to prepare a brief of evidence, and he had to appear in Court and present that evidence.  I can see no reason for not awarding costs including the amount of his invoice in full.

The narration suggests it was reasonably necessary for the purpose of the proceedings, and there is nothing to suggest the invoice is other than reasonable in amount.  It is usual practice for a successful party to recover the actual amount of these, and expenses of its expert witnesses, as long as the disbursement falls within the provisions of

r 14.12(2).

[22]     There was no challenge to either of the other invoices from Mr Appleby, or to

Mr Hagan’s invoice.

[23]     Finally, in regard to the quantum hearing, Mr Parmenter initially sought a setting down fee of $6,283.60.  As Mr Stewart points out, that sum is incorrect.  The correct figure is $3,141.80 because the hearing only took a day.  Mr Parmenter has acknowledged that in an email which Mr Stewart has copied to me.

[24]     Accordingly, and for the reasons I have set out above, I award costs and disbursements against the defendant and in favour of the plaintiff as follows:

(a)       Costs up to and including liability hearing: $36,000 (b)           Disbursements in relation to liability hearing:

(i)       Mr Appleby’s invoice of 31 March 2009:  $7,126.88;

(ii)      Mr Appleby’s invoice of 8 September 2010:  $9,886.75; (iii)   Mr Appleby’s invoice of 13 October 2010:  $1,661.75; (iv)         filing fee:  $1,100;

(v)      setting down fee:  $2,600; (vi)   hearing fee:  $7,800;

(vii)     photocopying:  $300; (viii)       travel:  $100.

(c)       Costs in relation to the slip point:  $2,632

(d)      Costs in relation to the quantum hearing:  $6,016 (e)           Disbursements in relation to quantum hearing:

(i)       setting down fee:  $3,141.80; (ii)          sealing fee:  $48.30;

(iii)     Mr Appleby’s invoice of 30 November 2011:  $6,259.05;

(iv)     Mr Hagan’s invoice:  $3,450;

Total:  $88,122.53.

Wylie J