Cooper and Jones v Peach Cornwall & Partners HC Wanganui CIV-2009-483-325

IN THE HIGH COURT OF NEW ZEALAND WANGANUI REGISTRY

CIV-2009-483-325

BETWEEN JOHN COUTTS COOPER AND SHIRLEY ALMA JONES AS TRUSTEES OF THE JOHN COUTTS COOPER TRUST
Plaintiff

ANDPEACH CORNWALL & PARTNERS Defendant

ANDACE INSURANCE LIMITED Third Party

Counsel: C. Light - Counsel for Plaintiff
V.M. Heward - Counsel for the Third Party

Judgment: 3 August 2011 at 3:00 PM

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by Associate Judge Gendall on 3 August 2011 at 3.00 pm under r 11.5 of the High Court Rules.

Solicitors: Stace Hammond, Solicitors, PO Box 19101, Hamilton
Anderson Lloyd, Solicitors, Private Bag 1959, Dunedin

JC COOPER AND SA JONES AS TRUSTEES OF THE JOHN COUTTS COOPER TRUST V PEACH CORNWALL & PARTNERS HC WANG CIV-2009-483-325 3 August 2011

Introduction

[1] By judgment delivered by me on 24 May 2011 I found in favour of the plaintiffs on a strike out application brought by the third party to these proceedings, ACE Insurance Limited. At [36] of that decision I awarded costs and disbursements to the plaintiffs which were to be fixed by the Registrar. The third party has now objected to certain disbursements claimed by the plaintiffs for travel and accommodation expenses of out of town counsel. The issue is whether those disbursements were reasonably necessary for the conduct of the proceeding as required by rule 14.12(2)(c).

Counsels’ Submissions and My Decision

[2] In recent times, beginning with the decision of Clifford J in Commerce Commission v Bay of Plenty Electricity Ltd HC Wellington CIV-2001-485-917, 4 December 2008, the High Court has adopted a broader approach to situations where it was thought to be reasonably necessary for out of town counsel to be engaged. While I note the statement of Rodney Hansen J in Buis v Accident Compensation Corporation (2010) 19 PRNZ 585 at [25] that it is not possible to lay down any hard and fast rules, it is perhaps helpful to distil some principles from those cases:

(a) Whether the engagement of out of town counsel is reasonably necessary will depend on the circumstances of the particular case: Turners & Growers Ltd v Zespri Group Ltd HC Auckland CIV-2009-404-4392, 29 October 2010 at [21]; Buis v Accident Compensation Corporation (2010) 19 PRNZ 585 at [25].

(b) Where a case is complex, for example in the area of competition law, the market is a national one and the concept of out of town counsel is outdated: Commerce Commission v Bay of Plenty Electricity Ltd HC Wellington CIV-
2001-485-917, 4 December 2008 at [50].

(c) In the context of relatively routine matters, such as an application to set aside a statutory demand, which do not require the resolution of complex legal issues out of town counsel will not be necessary: Ainsworth & Collinson v Edmunds (2009) 19 PRNZ 565 at [9]; Domus Redux Ltd v Davidson Armstrong & Campbell Solicitors Nominee Company Ltd HC Auckland CIV-
2009-404-5984, 2 December 2009 at [28].

(d) Merely because a matter is interlocutory, however, does not mean that out of town counsel will not be reasonably necessary: Radioworks Ltd v Commissioner of Inland Revenue HC Auckland CIV-2007-404-5853, 9
February 2011.

(e) For a case with wide practical and public interest, implications arise that out of town counsel are reasonably necessary: Turners & Growers Ltd v Zespri Group Ltd HC Auckland CIV-2009-404-4392, 29 October 2010 at [22].

(f) Where it is otherwise appropriate for out of town counsel to be instructed, for example where the client’s head office and all deponents of affidavits are in a certain locality, it is reasonable for out of town counsel to continue through to hearing: Buis v Accident Compensation Corporation (2010) 19 PRNZ 585 at [26].

[3] In this case, counsel for the third party submits that there are no particular circumstances here which render a claim for costs for out of town counsel reasonably necessary. Counsel argues that the application to strike out concerned a single question of law. Counsel further submits that even if out of town counsel was reasonably necessary, the definition of “travel and accommodation expenses” does not include meal disbursements.

[4] I accept that the legal issues here were narrow in scope. That does not mean, however, that the matter was not complex. Indeed, in my judgment I noted that the matter is finely balanced. In those circumstances, I am satisfied that this was not a routine matter and that a decision in favour of strike out could have disposed of that aspect of the case. Accordingly, in my view, employment of out-of-town counsel was reasonable in the present case.

[5] As for meal disbursements, I do not consider that to be a claimable disbursement. Rule 14.12 provides:

disbursement, in relation to a proceeding,—

(a) means an expense paid or incurred for the purposes of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor's bill of costs; and

…

(2) A disbursement must, if claimed and verified, be included in the costs awarded for a proceeding to the extent that it is—

(a) of a class that is either—

(i) approved by the court for the purposes of the proceeding; or

(ii) specified in paragraph (b) of subclause (1); and

(b) specific to the conduct of the proceeding; and

(c) reasonably necessary for the conduct of the proceeding; and

(d) reasonable in amount.

[6] A meal disbursement cannot be reasonably necessary for the conduct of the proceeding. Local counsel would not be entitled to claim for such a cost and so neither may out of town counsel. Merely because counsel may be staying in paid accommodation does not necessarily mean that meals ought to be paid for by the other side.

Conclusion

[7] I consider that the third party is liable for counsel’s reasonable accommodation and

transportation expenses but not meal costs for the present proceedings.

‘Associate Judge D.I. Gendall’

The case involves John Coutis Cooper and Shirley Alma Jones, as trustees of the John Coutis Cooper Trust, suing Peach Cornwall & Partners. The third party in the proceedings is ACE Insurance Limited. The dispute centres around the plaintiffs' claim for travel and accommodation expenses of out-of-town counsel, which the third party has contested. Associate Judge D.I. Gendall was tasked with determining whether these disbursements were reasonably necessary for the conduct of the proceedings, as required by rule 14.12(2)(c) of the High Court Rules.

The primary legal issue before the court was whether the travel and accommodation expenses claimed by the plaintiffs for their out-of-town counsel were reasonably necessary. This assessment involved examining the nature of the legal issues at hand and whether they warranted the engagement of out-of-town counsel. The third party argued that the matter was straightforward and did not require such engagement, while the plaintiffs contended that the complexity of the case justified the need for out-of-town counsel. Additionally, the court had to determine whether meal expenses could be considered as part of the claimable disbursements.

The court adopted a broad approach to the necessity of engaging out-of-town counsel, as seen in recent High Court decisions. The court found that the matter at hand, although legally narrow, was not routine and had significant implications, which justified the engagement of out-of-town counsel. However, the court ruled that meal disbursements were not reasonably necessary for the conduct of the proceedings, as they were not typically claimable costs even for local counsel.

In conclusion, Associate Judge D.I. Gendall ruled that the third party, ACE Insurance Limited, was liable for the reasonable accommodation and transportation expenses of the plaintiffs' out-of-town counsel but not for their meal costs. This decision reflects a nuanced understanding of the circumstances that necessitate out-of-town counsel and the types of expenses that can be claimed as disbursements.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established