Ye v Deng
[2017] NZHC 2764
•10 November 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2016-404-1022 [2017] NZHC 2764
BETWEEN YE HUIFANG
Applicant
AND
JIE DENG Respondent
Hearing: On the papers Counsel:
R Reed for the Applicant
N Woods for the RespondentJudgment:
10 November 2017
JUDGMENT NO 2 OF PALMER J (Costs)
This judgment is delivered by me on 10 November 2017 at 2.30 pm pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
Counsel/Solicitor:
Prestige Lawyers Limited, Auckland
Rice Craig, Auckland
YE v DENG – NO 2 COSTS [2017] NZHC 2764 [10 November 2017]
Summary
[1] The trial of a proceeding by Ms Jie Deng against Ms Huifang Ye was set down for two weeks from 1 May 2017.1 It was vacated and Ms Ye now seeks an award of wasted and increased costs. I order wasted, but not increased, costs be paid in the amount of $11,596. The fixture was vacated due to Ms Deng not complying with court directions to apply for audio-visual links (AVLs) to China in relation to five witnesses by the deadline required by the Court.
What happened
[2] As outlined in my judgment of 22 February 2017, Ms Deng applied to recall
Ms Ye’s appointment as administrator of the estate of Mr Jun Xie, to whom they were both married at various times.2 In July 2016 the trial was set down for two weeks from
1 May 2017.
Timetabling
[3] Various timetabling directions were issued from July 2016 onwards. On
26 October 2016 I directed “any applications for oral evidence directions, mode of evidence directions are to be made by 17 April 2017”.3 I confirmed that timetable in my judgment of 22 February 2017.4
[4] On 27 March 2017, at a case management teleconference, one of the issues I considered was a notice of general admissibility of hearsay by Ms Deng in relation to a letter by two witnesses Ms Ye sought to cross-examine (Mr Hong Zhang and Mr Zuoping Tong) and a brief of evidence of Ms Wang Liping.5 By memorandum of counsel dated 20 March 2017 counsel for Ms Ye stated “the plaintiff has agreed that Wang Liping shall give evidence via AVL link from China”. I noted in the Minute that
“[a]rrangements are being made for Ms Liping to be cross-examined by AVL”.6 I left
1 In the intituling, Ms Ye uses the Chinese convention of putting her family name first while Ms
Deng does not.
2 Ye v Deng [2017] NZHC 227.
3 Deng v Ye HC Auckland CIV-2016-404-1022, 26 October 2016 (Minute No 3) at [12](c).
4 Ye v Deng, above note 2, at [37].
5 Deng v Ye HC Auckland CIV-2016-404-1022, 27 March 2017 (Minute No 6).
6 At [5].
the question of cross-examination by AVL via an interpreter to be decided by the trial judge in the context of the other evidence. I also noted that “[i]f Ms Deng wishes to adduce the letter in evidence she may need to be prepared to have them available for cross-examination by AVL”.7
[5] On 11 April 2017, counsel for Ms Ye filed and served a memorandum and three formal applications in the prescribed form, “Application for the use of Audio Visual Links (AVL)”, for three witnesses to be heard by AVL from China. Ms Deng opposed one of the witnesses giving evidence by AVL. On 18 April 2017, I granted the application, concluding that Ms Deng’s objections were not really about the witness giving evidence by AVL but were about what he may give evidence about, which can be considered at trial.8
[6] On Monday 24 April 2017, a week before the trial, counsel for Ms Ye filed and served a memorandum of counsel requesting an amended schedule for the trial so that she could make arrangements for the AVL centres in China and provide witnesses with certainty about the times they should make themselves available. On the same day, counsel for Ms Deng consented to the suggested timetable by email and I ordered it accordingly.
[7] On Wednesday 26 April 2017, counsel for Ms Deng filed and served a memorandum of counsel requesting a timetable also be made in advance for the plaintiff’s witnesses, to accommodate evidence by AVL.
[8] On Thursday 27 April 2017, two working days before the trial was due to commence, Downs J as trial judge vacated the fixture. His minute stated:9
[2] On 26 April 2017 the plaintiff filed a memorandum of counsel requesting an AVL link to China in relation to five witnesses. The memorandum identified a timetable by which the first overseas witness would give evidence on Wednesday 3 May, and the last overseas witness on Friday
5 May.
[3] The memorandum assumed an AVL link to China could be quickly and routinely accommodated. That is not so. Applications of this nature
7 At [6].
8 Deng v Ye HC Auckland CIV-2016-404-1022, 18 April 2017 (Minute No 7) at [4](a).
9 Deng v Ye HC Auckland CIV-2016-404-1022, 27 April 2017 (Minute of Downs J).
ordinarily require 10 working days. Considerable logistics are involved–for reasons I now hope are obvious.
[4] The Registry informs me an AVL link for the plaintiff’s witnesses could not be available before Friday 5 May.
[5] There are four witnesses for the defendant. Three are in China, including the defendant. They too require AVL.
[6] Like Mr Woods for the plaintiff, Ms Austin for the defendant wishes the trial to proceed. However, she doubts it could be completed within time if the plaintiff’s foreign witnesses cannot give their testimony before Friday,
5 May. It is likely their evidence will occupy between two and two and a half days.
[7] Mr Woods submits the trial should proceed. He invites attention to a conservative time estimate, the possibility of re-arranging the witness order and the prospect two of the plaintiff’s foreign witnesses promptly fly to New Zealand to testify in person.
[8] As I conveyed to Mr Woods at today’s midday telephone conference, all of this is unsatisfactory. The parties have proceeded under the misapprehension little is required on the Court’s part to hear evidence from witnesses based in China. Changing arrangements in relation to these witnesses is not like moving pieces on a chess board. Time is required. And these arrangements should have been settled long ago. There is every prospect the trial cannot be accommodated within two weeks. It bears repeating a total of eight witnesses are based in China.
[9] Evidence by AVL is a convenient and very sensible measure. But it can attract difficulty. A connection fails, a witness is late, the sound falls away, or the exhibits are not in the room with the witness. Often, the evidence takes longer than if the witness is present. To this mix must be added the need for an interpreter. A time difference. And considerable demands upon the Registry.
[10] I see no choice but to vacate the fixture on the basis there is little if any prospect the trial could be completed within time.
[9] Ms Ye seeks an order for wasted and increased costs against Ms Deng for the vacated hearing.
Law of wasted and increased costs
[10] Awards of costs are at the discretion of the court, under r 14.1 of the High Court
Rules 2016. The Court can order that wasted costs be paid. As Heath J stated in
Burgess v Monk:10
10 Burgess v Monk [2015] NZHC 1881 at [15].
There is no doubt that this Court has jurisdiction to order that wasted costs be paid when, through the fault of one or more parties, a trial has been postponed, to the detriment of others. The concept of “wasted costs” includes those incurred for work undertaken that will not have any further benefit to the case of the claimant party, as well as the value of work that will be duplicated in order to prepare for a trial in the future.
[11] In Jeffreys v Morgenstern, Venning J stated:11
… This Court has jurisdiction to make an order for wasted costs. As this Court has previously observed in the case of Fu Hao Construction Ltd v Landco Albany Ltd12 default that leads to vacation of fixtures leads to inconvenience and costs not only to the other parties to that proceedings but to other parties awaiting fixtures in the Court. Fixtures allocated by this Court are commitments of limited judicial and Court resources. Time is booked for the case. Other parties who might otherwise have had their cases allocated hearing time are disadvantaged by default which leads to late vacation of fixtures.
[32] That is a further reason which supports an award of wasted costs. The Court should apply sanctions to parties who, through their own default, cause fixtures to be vacated.
[12] In relation to increased costs, relevantly, r 14.6 provides:
14.6 Increased costs and indemnity costs
(1) Despite rules 14.2 to 14.5, the court may make an order—
(a) increasing costs otherwise payable under those rules
(increased costs);
…
(2) The court may make the order at any stage of a proceeding and in relation to any step in it.
(3) The court may order a party to pay increased costs if—
…
(b) the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
(i) failing to comply with these rules or with a direction of the court; or
…
11 Jeffreys v Morgenstern [2013] NZHC 1361 at [31]–[32].
12 Fu Hao Construction Ltd v Landco Albany Ltd HC Auckland CIV-2004-404-6608, 23 May 2008.
(d) some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.
[13] The Court of Appeal has said the Court may order increased costs “where there is a failure by the paying party to act reasonably” to the extent that increased the time or expense of a proceeding.13
Should an order for wasted costs be made here?
Submissions
[14] Ms Reed, for Ms Ye, submits the fixture had to be vacated because there was not enough time to hear all witnesses, as a result of Ms Deng’s failure to arrange the AVLs with China. She submits Ms Ye incurred wasted costs of $23,525.75 comprising:
(a) $13,937.50 of trial-focused costs, calculated on a 2B basis, being 50 per cent of some costs and 100 per cent of other costs;
(b)$6,467 of costs incurred after the hearing was vacated, on preparing submissions in relation to this judgment and memoranda for subsequent case management conferences; and
(c) $3,121.25 of trial-focused disbursements, being 50 per cent of the translation of briefs and 75 per cent of an expert brief which she says will have to be updated.
[15] Mr Woods, for Ms Deng, denies she breached any court order and denies any fault causing a loss of the fixture. He submits:
(a) Loss of the fixture was not a blameworthy event because both parties wished to continue with the fixture. But if blame is allocated, it should
be shared between Ms Ye, Mrs Deng and the Ministry of Justice. The
13 Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27]; Commissioner of Inland Revenue v Chesterfields [2010] NZCA 400, (2010) 24 NZTC 24,500 at [165].
vacation of the hearing appears to have been the result of a lack of the Ministry of Justice’s resourcing between 24 April and 4 May 2017 to effect the AVLs.
(b)The primary cause for the reallocation of the fixture was that the Court, on its own motion, took the view that the number of AVL witnesses meant the time estimate of two weeks was not realistic. He submits the single greatest contributing factor was the substantial cross- examination required of Ms Ye and cross-examination of Ms Deng’s witnesses would likely involve less court time.
(c) The costs claimed relate to expected costs of the hearing, not actual costs incurred as a result of reallocation of the fixture. If costs are awarded, they should total only $1,115, relating to the memorandum and appearance on 27 April 2017.
Decision
[16] The court direction of 26 October 2016, confirmed on 22 February 2017, was that the parties must make any mode of evidence applications by 17 April 2017. Ms Ye made three formal applications in the prescribed form by the deadline, on 11 April
2017. The fifth of the six points labelled “Important Information” at the top of the first page of the application form is:
5. Applications should be filed with the court and distributed to all parties well in advance of the hearing date.
[17] The plaintiff, Ms Deng, did not make any application, despite responding to, and actively engaging with, Ms Ye’s application. Even Ms Deng’s memorandum of
26 April 2017 requesting a timetable did not include formal applications. Ms Deng did not comply with the Court’s directions. That failure led directly to the abandonment of the fixture. If AVL arrangements had been made for Ms Deng’s witnesses so they could give evidence in the first week of trial, there would have been no reason for the fixture to be abandoned. If it could not be completed in the allocated time it would have had to have been adjourned part-heard.
[18] Mr Woods is correct that the vacation of the fixture resulted from the lack of the Ministry’s resourcing between 24 April and 4 May 2017 to effect the AVLs. But that is why such applications must be filed well in advance of the hearing date. Compliance with the Court’s deadline of 17 April 2017 would have satisfied that.
[19] The costs that are “wasted” as a result of the vacation of the fixture are those that would have no further benefit to Ms Ye’s case. That does not include work that may be of use in the trial which has been rescheduled. The current application for summary judgment does not affect this calculation. I consider the costs of Ms Ye that have been wasted as a result of vacation of the hearing total $11,596 on a 2B basis, comprising:
(a) preparation for and appearance at the pre-trial conference ($1,115);
(b)50 per cent of the cost of preparing for the hearing, which can reasonably be expected to have to be repeated ($3,345);
(c) arranging AVLs for witnesses in China, which will have to be repeated
($1,115);
(d)the costs of filing three memoranda following the vacated hearing about costs and rescheduling the trial ($2,676); and
(e) the cost of submissions on the issues in this judgment ($3,345).
[20] I do not agree the following costs are wasted because of the vacation of the hearing:
(a) costs associated with preparing briefs or affidavits, because they would still be useful for the postponed hearing unless they are improved upon, which are not wasted costs in either case;
(b)costs associated with preparing lists of issues, authorities and the common bundle because they would still be useful for the hearing unless they are improved upon, which are not wasted costs;
(c) costs associated with case management of the rescheduled trial;
(d)translation of briefs and the common bundle which do not need to be redone other than to improve Ms Ye’s case; and
(e) revision of expert witness briefs which do not need to be redone other than to improve Ms Ye’s case.
Should an order for increased costs be made here?
[21] Ms Reed, for Ms Ye, submits increased costs of 50 per cent should be awarded because Ms Deng has “contributed unnecessarily to the time and expense of the proceeding” by not arranging the AVLs for her witnesses to be heard in the first week of the trial. She submits increased costs would be a sanction for wasting the court’s time, burdening the beneficiaries of the estate and continuing to deny her fault. Mr Woods has not addressed the issue of increased costs in his submissions though it is implicit that he would resist it, since he resists any costs being awarded.
[22] Like Venning J in Secure Financial Services Ltd v Nguy, I am not satisfied an uplift in wasted costs is justified.14 I consider the wasted costs proportionately reflect the need to sanction failure to comply with the court’s directions.
Result
[23] I order the plaintiff, Ms Deng, to pay the defendant, Ms Ye, $11,596 in wasted costs.
..................................................................
Palmer J
14 Secure Financial Services v Nguy [2017] NZHC 682 at [9].
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