SHARMA v AIR NEW ZEALAND LTD [2020] NZHC 1646

SHARMA v AIR NEW ZEALAND LTD [2020] NZHC 1646 [9 July 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-1504[2020] NZHC 1646BETWEEN ANJELA SHARMAApplicantAND AIR NEW ZEALAND LIMITEDRespondentHearing: On the papersCounsel: S J Grey for ApplicantS J P Ladd & B A Keown for RespondentJudgment: 9 July 2020JUDGMENT OF PAUL DAVISON J[Re: Costs]This judgment was delivered by me on 9 July 2020 at 4:00 pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:S Grey Lawyer, NelsonBell Gully, AucklandIntroduction[1] By judgment dated 21 February 2020, I dismissed an application by Ms AnjelaSharma (the applicant) for a mandatory interim injunction directing the respondent toprovide her with air services, and also dismissed her application for an ordertransferring the proceeding to the Nelson Registry.1 I found Air New Zealand (therespondent) to be entitled to an award of costs together with reasonabledisbursements.2SubmissionsFor the respondent[2] The respondent claims costs of $30,114 and disbursements of $3,657.21comprised as follows:[3] Scale 2B costs for:(a) Filing memorandum for the mentions hearing in Duty Judge list(step 11).(b) Two appearances in Duty Judge Lists (step 12).(c) Filing opposition to the two interlocutory applications (step 23).(d) Preparation of written submissions on the two applications (step24).(e) Preparation of the bundle for the hearing (step 25).(f) Appearance at the hearing of defended application for principalcounsel (step 26).(g) Preparation for the hearing (step 32).1 Sharma v Air New Zealand Ltd [2020] NZHC 230.2 At [102].[4] Scale 2C costs for:(a) Preparation of six affidavits (step 30). The respondent submits that itsactual costs were significantly in excess of 2C scale costs due to thetime required to brief the witnesses (located in Auckland, Wellingtonand Nelson), review a substantial volume of documents and preparetheir affidavits. In relation to three of these affidavits, costs wereincurred in having to instruct solicitors to attend on the witnesses inWales and Nelson to swear the affidavits.[5] Disbursements of:(a) Filing fee for Notice of opposition to the interlocutory application($95.65).(b) Simmons and Simmons, London for witnessing affidavit ($3,228.26).(c) Pitt & Moore, Nelson for witnessing affidavits ($333.30).[6] Mr Ladd for the respondent submits that for the purposes of r 14.2(1)(b) andr 14.3 the proceeding should be Category 2, being proceedings of average complexityrequiring counsel of skill and experience considered average in the High Court.Counsel explains that the respondent's claim for costs has all been calculated on aBand B basis other than the attendances relating to the briefing of six witnessesvariously located in Auckland, Wellington and Nelson and reviewing a substantialvolume of documents in connection with the affidavits, for which the respondentsubmits costs should be calculated on a 2C basis.[7] Mr Ladd says that in relation to three affidavits filed by the respondent, costswere incurred in having their affidavits sworn in Wales and Nelson, and it wasnecessary in each case to instruct solicitors to attend them to swear the affidavits so asto be able to comply with the Court's timetable order regarding the filing of affidavitsin opposition to the application.For the applicant[8] The applicant is self-represented for this aspect of the proceeding. She submitsthat the determination of costs on this interlocutory application should be deferred andundertaken following the substantive trial. She submits, that the Court's interimfindings have not brought the substantive issues to an end. She further submits that acosts finding against her at this point will exacerbate her financial difficulties inaccessing justice in respect of the substantive trial which is to be held in Auckland.[9] The applicant submits that should the Court proceed to determine the costs,they should be scaled on a 2A basis. She submits that the claimed costs have beencalculated to reflect the hourly rate of a partner at the respondent's firm of solicitorsBell Gully, although much of the work is likely to have been undertaken by graduatelevel solicitors. The applicant requests copies of the Bell Gully timesheets for thismatter.[10] In relation to the specific claimed steps, she submits that:(a) She has no record of any memorandum filed by the respondent for thementions hearing in the Duty Judge's list (step 11).(b) The claim for preparation of the bundle is unreasonable and punitive(step 25). The applicant submits that her counsel did not prepare abundle because it was not necessary for such a short hearing, and shedescribes the respondent's bundle as being the product of anunstructured and prolific photocopying exercise.(c) The claim for the attendance of principal counsel at a full day hearingis unreasonable, because the hearing was scheduled for half a day andthe applicant's counsel kept to a time allocation consistent for half aday. The applicant submits that she does not understand why thehearing has "morphed" into a full day (step 26).(d) The claim for preparation of the affidavits is unreasonable, unjust anda punitive (step 30).(e) Any costs incurred in preparation for the hearing should lie where theyfell (step 32).(f) The disbursements claimed on account of invoices from Pitt & Moore,Nelson, and Simmonds and Simmons, London, are unreasonable andpunitive. She queries the necessity of Pitt & Moore travelling to attendon witnesses at the Nelson airport, and of Mr Carter's affidavitevidence being sworn in the United Kingdom.Discussion[11] The applicant submits that determination of the costs on her interlocutoryapplication for an interim injunction should be deferred until after determination ofthe substantive trial. However, the High Court Rules stipulate that costs on an opposedinterlocutory application must be fixed in accordance with the Rules unless there arespecial reasons to the contrary. This approach reflects the fact that the merits ofparticular interlocutory applications and the merits of substantive matters are different,and that costs relating to an opposed interlocutory application are best fixed at the timethe application is determined. Costs should also be determined by the Judge orAssociate Judge who has heard it.3[12] Rule 14.8 of the High Court Rules 2016 provides:14.8 Costs on interlocutory applications(1) Costs on an opposed interlocutory application, unless there are specialreasons to the contrary,—(a) must be fixed in accordance with these rules when theapplication is determined; and(b) become payable when they are fixed.(2) Despite subclause (1), the court may reverse, discharge, or vary anorder for costs on an interlocutory application if satisfied subsequentlythat the original order should not have been made.(3) This rule does not apply to an application for summary judgment.3 Chapman v Badon Limited [2010] NZCA 613, (2010) 20 PRNZ 83 at [12]; Self-RealizationMeditation and Healing Centre Charitable Trust (New Zealand) v IAG New Zealand Limited[2018] NZHC 2612 at [23].[13] In the affidavit sworn by the applicant in which she addresses issues relatingto costs, she says that an order for costs made at this stage of the proceedings willgreatly impede her financial ability to access justice having regard to her residing inNelson and the proceedings and trial being heard in the High Court at Auckland. Theapplicant says that she intends to call at least ten witnesses at the substantive trial. Theapplicant says that an order for costs against her at this stage of the proceedings willbe punitive and result in an unjust outcome. The applicant further says that her workand legal practice has been severely disrupted by her involvement in the proceedingand that she has lost work as a result.[14] However, the applicant has not provided details of her financial position andhas not identified any matters which would, in my view, constitute special reasons whythe Court should not proceed to fix costs in relation to the interlocutory injunctionapplication. When the applicant commenced the proceeding and applied for an interiminjunction, she must have understood that in the event that her application did notsucceed, the respondent would be likely to apply for an order for costs pursuant tor.14.8. Furthermore, by commencing the proceedings the applicant must also haveunderstood that the time involved in prosecuting her claim would be likely to intrudeon time that she would otherwise be able to spend on work relating to her legalpractice.[15] Accordingly, pursuant to r 14.8 (1) the Court must now fix costs in relation tothe respondent's successful opposition to the applicant's interlocutory application.Other matters raised by the applicant[16] In her affidavit the applicant also challenges the disbursement costs claimedby the respondent in connection with the agency attendances for the swearing ofaffidavits by three of the respondent's witnesses, which took place in Nelson and inthe United Kingdom. The applicant also disputes the respondent's claim for a full-dayhearing of the interlocutory application. She correctly says that the hearing was setdown and scheduled for a half-day hearing. She says that for reasons which were notexplained at the time, the hearing extended beyond the estimated half-day andoccupied a full day. The applicant submits that it is therefore unreasonable for therespondent to claim costs for a full day for the hearing of the interlocutory application.[17] The applicant also disputes the respondent's claim of $1434 for preparation ofthe "bundle" of documents for the hearing. She says that the respondent's counsel didnot engage in correspondence with her counsel regarding the necessity of preparingthe bundle and that having regard to the short hearing time anticipated, she did notconsider that it was necessary for such a bundle to be prepared. The applicantaccordingly submits that the sum claimed by the respondent for preparation of thebundle is unreasonable.[18] Finally, the applicant says that it appears from her review of emailedcorrespondence passing to and from the respondent's solicitors that there were "aboutfive lawyers" working on the matter some of whom were at "graduate level". She saysshe is "left with the strong impression" that the respondent's costs have beencalculated on the basis of Mr Ladd's hourly rate and that such an approach is unfairand unreasonable.[19] In my view none of the matters raised by the applicant are of any substance.The disbursements claimed by the respondent for the agency fees incurred forattending to the swearing of affidavits to be filed in opposition to the application arenot unreasonable. The ultimate duration of the hearing which extended beyond thescheduled half-day and continued beyond the mid-afternoon adjournment was due tothe time required by counsel for both parties to present their submissions. Therespondent's preparation of the bundle of documents was a necessary requirement forthe hearing and was undertaken to enable the Court and parties to make readyreference to the relevant documents during the course of the hearing. The calculationof the respondent's claim for costs is made by reference to the scale provided for bythe High Court Rules. They are not calculated by reference to the hourly ratescustomarily charged by individual lawyers who have undertaken the relevant work.The respondent's claim for costs on a 2C basis[20] The respondent's claims for costs is calculated on a Category 2 band B basis,other than in respect of attendances related to the preparation of affidavits. For theseit seeks costs determined by reference to band C. The respondent says that band C isappropriate by reason of the substantial volume of documents that were required to bereviewed and the significant time involved and required in the briefing of six witnesseswho were variously located in Auckland, Wellington and Nelson. The respondent saysthat its actual costs for the preparation of those affidavits were significantly in excessof the costs as calculated for those attendances on a scale 2C basis.[21] The affidavits which were prepared and filed by the respondent werereasonably substantial and exhibited a large number of documents. The issues andevents covered by the deponents were factually complex. Given the nature of theallegations made by the applicant against the respondent and particular members ofthe respondent's staff, it was appropriate that the allegations were responded to indetail and that a detailed description of the respondent's systems and manner ofdealing with issues relating to passenger conduct was addressed in the respondent'saffidavits.[22] I am satisfied that having regard to the nature of the allegations made in theproceeding and the issues arising from the applicant's substantive claim against therespondent, that the attendances related to the preparation of the respondent'saffidavits are appropriately to be calculated in accordance with scale 2C.Result[23] I accordingly approve the claim for costs set out and detailed in the scheduleattached to Mr Ladd's costs memorandum dated 6 March 2020, and make an orderfixing the costs to be paid by the applicant to the respondent in respect of theinterlocutory application at $30,114.00 together with disbursements of $3,657.21.[24] In accordance with r 14.8 (1)(b) the costs become payable when they are fixed._____________Paul Davison J