Ainsworth & Collinson Ltd v Edmunds HC Auckland CIV 2009-441-348

[2009] NZHC 2334

IN THE HIGH COURT OF NEW ZEALAND

NAPIER REGISTRY

CIV-2009-441-348

BETWEEN  AINSWORTH & COLLINSON LIMITED

Applicant

ANDGREGORY JOHN EDMUNDS AND LESLEY DENISE EDMUNDS Respondents

Judgment:      22 October 2009 at 2.00 pm

JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by Associate Judge Gendall on 22 October 2009 at

2.00 pm pursuant to r 11.5 of the High Court Rules.

Solicitors:            Hazelton Law, Solicitors, PO Box 5639, Wellington

AINSWORTH & COLLINSON LIMITED V GJ EDMUNDS AND LD EDMUNDS HC NAP CIV-2009-441-

348  22 October 2009

[1]      On  7  October  2009,  I  made  an  order  in  this  proceeding  setting  aside  a statutory demand issued by the respondents against the applicant.  In that judgment I also  made  an  order  for  costs  on  a  category  2B  basis  in  favour  of  the  applicant, together with disbursements as fixed by the Registrar.

[2]      An  issue  has  now  arisen  apparently  regarding  one  of  the  disbursements claimed by the applicant. In particular, the applicant seeks payment of $516.75 for travel  of  counsel,  to  the  hearing  of  the  application  in  Napier  from  Wellington. Counsel for the applicant is based in Wellington.

[3]      The  respondents  request  that  this  travel  disbursement  be  disallowed.  This request is made on the basis that r 14.12 of Schedule 2 of the High Court Rules does not  allow  for  counsel  travel  to  be  claimed  as  a  disbursement,  and  further  that  the applicant  chose  to  instruct  Wellington  counsel  to  appear  rather  than  the  Napier counsel who had previously acted for them.

[4]      In  response,  the  applicant  says  that  the  case  was  complex  and  warranted instructing counsel from a firm which specializes in the field, and he alleges that no such firm was available locally in Napier.

[5]      From the authorities it is clear that the Courts in the past have ordinarily been reluctant to grant disbursements for travel by counsel unless instructing out of town counsel  proved  to  be  somehow  necessary.  In  Russell  v  Taxation  Review  Authority (2002) 14 PRNZ 515, Fisher J expressed the view that:

“[25]  ...  it  would  be  hard  to  argue  necessity  where  there  is  an  adequate choice  of  suitable  counsel  in  the  High  Court  centre  involved  and  no  other special  justification  for  instructing  out  of  town  counsel.  Of  course  that  is only the starting point. Available and expertise is one obvious dimension ... Another  could  be  the  location  of  the  client.  If  the  client  comes  from  a different region the cost of transporting counsel from that region might well be  outweighed  by efficiencies gained  during the  preparatory stage.  A third could be disqualifying associations between local counsel and the parties or issues at stake, eg proceedings against a local lawyer.”

[6]      In that case, Fisher J then went on to allow disbursements for travel and accommodation expenses incurred by counsel because  the  proceedings  involved serious allegations of impropriety against the Commissioner of Inland Revenue and

Auckland counsel previously acting for him. On that basis, he held it was necessary

to instruct counsel from a distance.

[7]      This  principle  enunciated  by  Fisher  J  was  then  affirmed  in  Taylor  v  Taite M13/00 30 July 2002, where Chambers J stated (at [8]) that travel expenses of out of town counsel could not generally be recovered, unless there were particular circumstances justifying instructing counsel from a distance. In that case, there were

no  such  circumstances,  and  Chambers  J  was  satisfied  that  Rotorua  counsel  could have conducted the litigation.

[8]      Some doubt was cast on the continued relevance of the principle by Clifford J

in Commerce Commission v Bay of Plenty Electricity Ltd HC WN CIV-2001-485-

917  4  December  2008,  where  the  defendant  sought  disbursements  associated  with counsel’s travel to, and accommodation in, Wellington. The Commerce Commission argued that costs of out of town counsel were not recoverable because there were a number of Wellington-based counsel who could have been retained by the defendant. Clifford   J   was   reluctant   to   accept   that   argument   and   made   the   following observations:

“[49] I acknowledge the authority of Russell. I nevertheless consider, in this instance, that given the seriousness of the Commission’s case against BOPE and  its  inevitable  complexity,  BOPE  acted  reasonably  in  securing  the services of Mr Farmer. Mr Farmer is recognised as having considerable skill and experience in cases of this  nature. I  therefore consider  a claim  for the disbursements associated with that appointment to be appropriate.

[50] I must also comment that in a very small country such as New Zealand,

I   find   the   concept   of   “out   of   town”   counsel   —   particularly   in   this commercial area — as being somewhat outdated. Without wishing to raise further  market definition issues, I  would have thought the  market for legal services at this level was a national one. On that basis, the costs of travel and accommodation are disbursements reasonably incurred and payable as such, unless for some very unusual reason the decision to retain counsel of choice could  be  seen  as  being  particularly  unreasonable. An  example of such unreasonableness might arise where that decision was itself properly seen as a cost raising exercise.”

[9]      The present case is  of   course   wholly  distinguishable   from   Commerce

Commission v Bay of Plenty Electricity Ltd. I do not consider that the concept of “out

of  town” counsel has lost its relevance in the context of relatively routine matters such  as  the  present  application  to  set  aside  a  statutory  demand that does not necessarily require resolution of complex legal issues. I therefore do not accept the

applicant’s argument that the case was so complex as to warrant instructing counsel from Wellington. On the contrary, I am satisfied that there are counsel in Napier who would have been sufficiently capable to run the case for the applicant.

[10]     It follows that the travel disbursement of $516.75 must be disallowed.  I rule accordingly.

[11]     Category 2B costs of $5,120.00 and other disbursements totalling $597.50 are sought and are not opposed by the respondents.

[12]     Costs  of  $5,120.00  and  disbursements  of  $597.50  are  awarded  here  to  the applicant against the respondents.

‘Associate Judge D.I. Gendall’