BABCOCK (NZ) LIMITED V THE SHIP THE M/V "SOUTHERN PASIFIKA" HC AK CIV-2011-404-1906

BABCOCK (NZ) LIMITED V THE SHIP THE M/V "SOUTHERN PASIFIKA" HC AK CIV-2011-404-1906 [3 October 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYIN ADMIRALTYCIV-2011-404-1906[2012] NZHC 2562BETWEEN BABCOCK (NZ) LIMITED(PREVIOUSLY KNOWN AS BABCOCKFITZROY LIMITED)PlaintiffAND THE SHIP THE M/V "SOUTHERNPASIFIKA"DefendantAND THE MASTER AND CREW OF THE M/VSOUTHERN PASIFIKAFirst IntervenerAND PDL INTERNATIONAL PTY LIMITEDSecond IntervenerAND OLDENBURGISCHE LANDESBANKAGThird IntervenerHearing: On the papersAppearances: A J Sherlock for the PlaintiffF C Monteiro for the Third IntervenerJudgment: 3 October 2012COSTS JUDGMENT OF PRIESTLEY JThis judgment was delivered by me on Wednesday 3 October 2012 at 4.45 pmpursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate:Counsel/Solicitors:A J Sherlock, Hesketh Henry, Auckland. Email: alan.sherlock@heskethhenry.co.nzF C Monteiro, Wilson Harle, Auckland. Email: felicity.monteiro@wilsonharle.com[1] On 14 May 2012 I released a judgment on the plaintiff's interlocutory application to determine priorities in respect of the sale proceeds of the vesselSouthern Pasifika.1[2] I reserved the issue of costs as follows:[72] The plaintiff is entitled to costs on the hearing. I tend to the view that 2B is the appropriate scale but Admiralty lawyers may well, as a matter of practice, have adopted a higher scale.[73] If counsel cannot agree costs I shall need to determine them. If a hearing is necessary it should be requested and timetabled by agreement between counsel.[3] Unfortunately counsel have not been able to agree on costs and require a decision. Although counsel for the plaintiff filed a memorandum on costs four months ago, a combination of administrative oversight and other judicial duties have prevented my issuing this judgment any earlier. The Court apologises to the parties in that regard.[4] The plaintiff seeks $31,580 calculated on the 3B scale. It submits that the interlocutory application was analogous to a separate proceeding. Disbursements of$339.94, being "library fees", were also sought. Initially there were no supporting invoices with these disbursements but they have now been supplied.[5] The third intervener submits that costs should be calculated on the normal interlocutory basis and that the 2B scale is appropriate. The figure contended for (assuming appearance by second counsel is approved) is $12,408.[6] Although I expressed a preliminary view that the 2B scale might be appropriate, that view was hedged with the observation that Admiralty lawyers may have a contrary practice. It appears there is no such practice.[7] I have concluded that an award on the 3B scale is appropriate. The proceeding raised a novel issue of moderate complexity which was competently argued by counsel. So far as the parties were concerned they required assistance1 Babcock Fitzroy Ltd v The M/V Southern Pasifika [2012] 2 NZLR 652.from counsel who had special skill and experience in litigation of this type in the High Court. It is the component of special skill and experience that fits costs into the Category 3 proceeding.[8] I accept Ms Monteiro's submission that the monetary value and importance to the parties of the proceeding is not relevant. But the special skill and experience component is relevant. I note too Ms Monteiro's submission that previous judgments obtained by the parties, including Woolford J's judgment for the plaintiff of 2 May 20112 were awarded on a 2B basis. However, Woolford J's judgment wasmade on the papers on a without notice basis. That is not apposite to a two day defended hearing involving a complex and novel issue.[9] On the issue of whether costs should be awarded on the basis of an interlocutory application or a separate proceeding, although Mr Sherlock accepts that the plaintiff cannot seek double recovery, he nonetheless submits that, the interlocutory hearing was effectively a defended hearing on a substantive issue. Rule 14.8 deals with costs on interlocutory matters and effectively states that theremust be "special reasons" why normal principles relating to interlocutory applications should not be followed. It is thus a discretionary matter.[10] Although there is no authority on "special reasons" as it is used in r 14.8 I am of the view, in general terms, the words point to something that is out of the ordinary or uncommon, which might justify departing from the rules applicable to opposed interlocutory applications.[11] Mr Sherlock points to the need to file substantial supporting affidavits which would not have been required had the third intervener acquiesced on priority. There was also cross-examination of two of the plaintiff's deponents.[12] Finally, submitted Mr Sherlock, the range and complexity of the issues justified the same preparation time that would apply to a two day substantive hearing.2 Babcock Fitzroy Ltd v The Ship "The M/V Southern Pasifika" HC Auckland CIV-2011-404-001906,2 May 2011.[13] I am unconvinced that the third intervener's opposition must lead to thisinterlocutory dispute being regarded as unusual or out of the ordinary, or constituting"special circumstances" for r 14.8 purposes. Contested interlocutory applications of some complexity are commonplace.[14] The final disputed issue, although in fairness Ms Monteiro regards it as a matter for the Court, is the claim for second counsel. I note both parties appeared with two counsel. Although neither second counsel was involved in making submissions or cross-examination, in terms of the complexity of the case and the volume of documentation involved, junior counsel were appropriate for both sides.[15] On these bases, I order that the third intervener is to pay to the plaintiff costs and disbursements in the sum of $18,687.94 calculated as follows:# Step taken Time(Band B)Daily recoveryrate (category 3:$2780.00)1 Preparing and filing interlocutory application and affidavits0.6 $ 1668.002 Appearance at mentions hearing or callover0.2 $ 556.003 Filing memorandum for case management conference or mentions hearing0.4 $ 1112.004 Appearance at mentions hearing or callover0.2 $ 556.005 Preparation for hearing of defended application2 $ 5560.006 Appearance at hearing for principalcounsel2 $ 5560.007 Appearance at hearing for second counsel1 $ 2780.008 Sealing judgment 0.2 $ 556.00SUBTOTAL $18348.00Plus Disbursements $ 339.94TOTAL $18687.94.......................................Priestley J