Zheng v Deng

[2020] NZHC 959

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002730

[2020] NZHC 959

BETWEEN

LU ZHENG

First Plaintiff

ORIENT CONSTRUCTION LIMITED
Second Plaintiff

AND

DONGLIN DENG

First Defendant

BIN JIANG
Second Defendant

ORIENT HOMES LIMITED

Third Defendant

.../intituling cont over

Hearing:	On the papers
Judgment:	11 May 2020

JUDGMENT OF DOWNS J

(Costs)

This judgment was delivered by me on Monday, 11 May 2020 at 4 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Amicus Law, Auckland.

McVeagh Fleming Lawyers, Auckland.

ZHENG v DENG [2020] NZHC 959 [11 May 2020]

EVERSOLID CONSTRUCTION LIMITED

Fourth Defendant

HONGLAN LIU
Fifth Defendant

D & R HOMES LIMITED
Sixth Defendant

YAN JIN

Seventh Defendant

TONG ZHU
Eighth Defendant

YAOKUN CHEN
Ninth Defendant

[1]                  Lu Zheng brought a claim against Donglin Deng and other defendants. I dismissed the claim after trial.1 Mr Zheng acknowledges Mr Deng is entitled to costs, but the men disagree about how much. Mr Deng seeks $337,913.66 (including disbursements). Mr Zheng contends costs should be $100,512.63.

[2]                  The first difference concerns complexity. Mr Deng argues the claim was complex, so category 3 should apply. Mr Deng says there was a great amount of evidence, the claim was inelegantly pleaded, and a partnership point tricky.

[3]                  I am not persuaded the claim was complex. There was a lot of evidence, but quantity is not synonymous with complexity. The partnership point was not particularly important, or difficult. And, while Mr Zheng’s pleadings were poor— something I commented on more than once in my judgment—the gist of the claim was not complex. It follows category 2 applies.

[4]                  However, the claim did require more preparation than usual. I have already mentioned the amount of evidence. There were no fewer than eight causes of action, some of which overlapped. Mr Zheng adduced some evidence late from his forensic accountant, and many documents had to be translated. Band C is appropriate for preparation for trial, and is applied to the pre-trial conference, statement of agreed admissions and statement of defence.

[5]                  The same analysis applies to the time at trial. Second counsel is appropriate for these reasons, and because second counsel operated the extensive electronic bundle. However, the rules provide the allocation of time for all bands is the same for preparing evidence for the trial, preparation for a witness hearing, and appearances by principal and second counsel. There is otherwise no difference in scale costs between Bands B and C on these items.

[6]                  The second difference concerns increased costs. Mr Deng argues he should have increased costs for some steps.2 Mr Deng notes Mr Zheng amended his claim

1      Zheng v Deng [2019] NZHC 3236.

2      High Court Rules 2016, r 14.6(3)(a).

shortly before trial (and long after the close of pleadings) and was unreasonable in relation to settlement.

[7]                  I am not persuaded increased costs are warranted either. Care must be taken to ensure increased costs are not awarded as a matter of routine. Departures from scale are exceptional. Mr Zheng’s conduct of the claim was at times clumsy, but not unreasonable. And, I have already allowed for additional time through Band C.

[8]                  The third difference concerns discovery. Mr Deng seeks increased costs for seven separate items of discovery. Mr Zheng says Mr Deng was also late in discovering some items. As earlier, I am not persuaded increased costs are warranted. Instead, 2C costs for discovery reflect the additional time required on Mr Deng’s part.

[9]                  The fourth difference concerns interlocutory applications. Associate Judge Sargisson allowed Mr Zheng to amend his claim shortly before trial. The Judge reserved costs. Gwyn J reserved costs after refusing an application by the second, fifth and sixth defendants to file a cross-claim. I consider these interlocutory costs should lie where they fall. Mr Zheng was successful, but he did amend his claim late.

[10]              The final difference concerns disbursements. Mr Zheng resists $122,495.41 in relation to Mr Deng’s forensic accountant. Mr Zheng says the figure is unreasonable. I disagree. Mr Zheng called a forensic accountant. Understandably, Mr Deng called one in response. The competing experts addressed a lot of material and some Byzantine records and transactions. The size of the fee reflects this.

Outcome

[11]Mr Zheng must pay costs of $135,752.00 to Mr Deng and disbursements of

$122,385.41.

……………………………..

Downs J