Opus International Consultants Ltd v Colac Bay Vision Ltd

[2015] NZHC 2702

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2014-404-002959 [2015] NZHC 2702

IN THE MATTER

of the Companies Act 1993

BETWEEN

OPUS INTERNATIONAL CONSULTANTS LIMITED Plaintiff

AND

COLAC BAY VISION LIMITED First Defendant

IAN COWAN ANDREWS Second Defendant

Hearing:

2 October 2015

(on papers)

Appearances:

D S Lester for Plaintiff
G A D Neil for Defendants

Judgment:

3 November 2015

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE [on Costs]

This judgment was delivered by me on

03.11.15 at 4 pm, pursuant to

Rule 11.5  of the High Court Rules.

Registrar/Deputy Registrar

Date……………

OPUS INTERNATIONAL CONSULTANTS LIMITED v COLAC BAY VISION LIMITED & ANOR [2015] NZHC 2702 [3 November 2015]

[1]     I thank counsel for their memoranda in this matter. [2]  I will deal briefly with the further disputed items.

[3]    I consider that the first defendant is entitled to a costs award in regard to preparation of submissions.   I do not consider that it is fatal to that claim that the submissions were not actually produced to the court.  The cost head compensates for the preparation, rather than the presentation of the submissions.  Therefore, subject to the concession contained in paragraph 4 of the memorandum of counsel for the first defendant of 1 October 2015 (restricting the costs for preparation to 1.5 days) I approve this item.

[4]    The second point concerns Mr Deeney’s invoice.  The first defendant seeks to justify payment of Mr Deeney’s fee’s under r 14.12 which authorises the recovery of disbursements.   The Court is required to approve disbursements which satisfy the requirements of r 14.12(2).  The term “disbursement” is broadly defined in the Rules as:

An expense paid or incurred for the purpose of the proceeding that would ordinarily be charged for separately from legal professional solicitors in a solicitor’s bill of costs.

[5]      Plainly the costs of an expert witness are not part of the professional fees for which the solicitor’s can claim.   It is an additional cost which I consider must be recoverable in this case.   The expense must be “specific to the conduct of the proceeding”.1   That is the incurring of the expense must be attributable to the case in relation to which it was incurred.  That is not an issue in this case.  Secondly the disbursement must be “reasonably necessary for the conduct of the proceeding”2 and “reasonable in amount”.3

[6]      In the absence of any relevant material establishing the contrary, I consider that the first defendant has provided an explanation as to why it would be necessary

to the proper conduct of the proceedings.  It will not always be necessary for expert

1 HCR 14.12(2)(b).

2 HCR 14.12(2)(c).

3 HCR 14.12(2)(d).

evidence to be obtained where there are questions about the competence of the services provided by the opposing party but it is certainly a common practice to obtain such opinion before formulating the pleadings and generally shaping the case that is brought in answer to a claim.   Overall, I consider that this item, too, is recoverable.

[7]      The next item concerns Meredith Connell’s service fee.  At the outset, I can understand why the firm has elected to adopt a practice of imposing a uniform charge which does not reflect actual disbursements in the case but when recovered over the generality of cases will recompense the firm for disbursements paid on its clients behalf  generally.   The question is though  whether the rules as presently drafted contemplate such an approach.  I am doubtful that they do.  That is because of the requirement that I have already mentioned in r 14.12 that the disbursement be “specific to the conduct of the proceeding”.   In my view imposing a charge that reflects the average amount of disbursements attributable to the cases that the firm handles generally does not satisfy the requirements of the Rule.  If my conclusion were   otherwise,   there   would   also   be   issues   raised   about   establishing   the defenceability of the charge actually imposed.  That is to say the methodology that has been adopted by the first defendant’s solicitors would need to be scrutinised. Before that  could  happen,  there  would  need  to  be some  factual  foundation  put forward as to why the approach of charging a generalised levy and the extent of that levy may be thought to be a not unfair way of quantifying amounts sought to be recovered.  I therefore decline to allow this charge to be recovered as a disbursement.

[8]      The next matter concerns the Landonline search fees of $19.90.  It is not clear how claiming those items would come within r 14.12(2)(c) of the High Court Rules and they are disallowed.

[9]      I understand that it is accepted for the plaintiff that there should be included an additional fee for sealing the order and the sealing fee.

J P Doogue

Associate Judge