CHESTERFIELDS PRESCHOOLS LIMITED V COMMISSIONER OF INLAND REVENUE AND OTHERS HC CHCH CIV-2008-409-000722

CHESTERFIELDS PRESCHOOLS LIMITED V COMMISSIONER OF INLAND REVENUE AND OTHERS HC CHCH CIV-2008-409-000722 [30 August 2012]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2008-409-000722[2012] NZHC 2216BETWEEN CHESTERFIELDS PRESCHOOLSLIMITEDFirst PlaintiffAND DAVID JOHN HAMPTONSecond PlaintiffAND CHESTERFIELDS PARTNERSHIPThird PlaintiffAND CHESTERFIELDS PRESCHOOLSPARTNERSHIPFourth PlaintiffAND ANOLBE ENTERPRISES LIMITEDFifth PlaintiffAND COMMISSIONER OF INLANDREVENUE AND OTHERSDefendantsHearing: On the PapersCounsel: D J Hampton (In Person)S M Kinsler and M M Burr for Commissioner of Inland RevenueJudgment: 30 August 2012JUDGMENT ON COSTS (No.2) OF FOGARTY JThis judgment was delivered by Justice Fogarty on30 August 2012 at 11.30 a.m., pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors:Crown Law Office, PO Box 2858, Wellington 6140D J Hampton, Edgeware Law Centre, PO Box 21-319, Christchurch 8143[1] By judgment of 29 June 2012 I reserved leave to either party to apply to correct arithmetical mistakes.[2] By memorandum dated 6 August the Commissioner argued that there is an error in paragraph [38] of the judgment. I had allowed for a 30 percent uplift on all attendances in the first judicial review except instead of confining the uplift to the attendances on discovery.[3] Mr Hampton for the plaintiffs in Appendix A has set out the make-up of the 28 days which was the opening position in my judgment. As is apparent from paragraph 2(4) there was no allowance for initial discovery and inspection at all.[4] Counsel for the Commissioner has pointed out that I had accurately recognised in paragraph [35] of the judgment that the Commissioner now accepted the plaintiffs could claim for Step 4.5 (list of documents) and 4.6 (production of documents) a total of nine days. The remaining dispute was as to inspection of documents 4.7, which was resolved by my allowing another six days, being the band C allowance for Step 4.7.[5] The Commissioner then agreed that because discovery was complex there could be a 30 percent uplift on discovery. The Commissioner never agreed to a 30 percent uplift generically on all the steps in the first judicial review. In the earlier part of my judgment in paragraphs [24] – [30] I considered to what extent I could consider uplifts on band C for complexity and concluded that I could, provided that it was step by step. See paragraph [30]. I have not recorded any submission by the Crown arguing for a general uplift on complexity and indeed, have recorded arguments against uplift on some steps. See for example paragraph [34]. I accept,therefore, the Commissioner's argument that there is a mistake in paragraph [38]. Ishould have allowed an uplift of 30 percent on 15 days, which is additional four and a half days. That should have brought the total to 48 + 4.5 = 52.5 days.[6] The second error contended for by the Commissioner is in paragraph [42]. The Commissioner argues that the ten days is already factored into theCommissioner's starting point of 28 days.[7] The ten days appears as paragraph 2(10) of the schedule of 28 days set out in Appendix A of Mr Hampton's appendix. I agree that I have double counted.Therefore, paragraph [42] is also in error.[8] The two arithmetical errors results in an erroneous increase of 19.5 days (or $31,200) too much being awarded to the plaintiffs. This is comprised of 14 days uplift for discovery rather than 4.5 days; and ten days being awarded for background assistance on top of the ten days already counted for that Step.[9] I agree, therefore, that the correct total for the first judicial review ought to be 52.5 days or $84,000. This figure replaces the figure of $115,200 at paragraph [64](a). The consequences are the sub-total is $143,440 rather than $174,640. Including the costs not in dispute of $44,480 and the undisputed disbursements of $41,969.20 factored in at [55] the overall total to be awarded to the plaintiffs is therefore $229,889.20, putting aside the application for additional disbursements.[10] Turning to that application it is regrettably unresolved. It ought to be capable of being resolved by reconciliation with the actual invoices. The application is for a total claim of $62,597.92 less undisputed disbursements of $41,969 a balance of $20,628.72.[11] Mr Hampton complains in his submission that essentially the Commissioner not responding to his schedule for disbursements. Their submissions of 6 August say in this regard that the Commissioner considers highly improbable that Mr Andrewsfrom Minter Ellison miscalculated the plaintiff's disbursements claim. TheCommissioner suspects that there has been some double counting.[12] I am not going to dispose of the application for additional disbursements yet. It is still reserved. On top of that I reserve leave for further submissions from both the plaintiff and the defendants on this point. What I am looking for essentially is for Mr Hampton to take the application for further disbursements back to Minter Ellison.[13] Hopefully that is not an impractical suggestion, as Mr Hampton has advised Associate Judge Osborne that he intends to use the benefit of this judgment to settle the Minter Ellison fee.[14] The judgment of 20 June also reserved leave to pursue argument on case management conference attendances. This was pursued by Mr Hampton. This application is also going to be left reserved with leave to file further submissions. The position of the Crown is that the various minutes and memoranda attached asAppendix C to the plaintiff's application for additional claims for cost managementcosts do not justify any further award.[15] Anticipating that there will, however, be a productive meeting between Mr Hampton and Mr Andrews or other staff of Minter Ellison, it may be that Minter Ellison may be able to comment in a manner which would assist the plaintiffs. I am putting no time limits on these applications. I still encourage the parties to this litigation who have made considerable progress in resolving the disputes to settle the matter.[16] Costs are reserved.[17] Otherwise judgment can be now entered in favour of the plaintiffs against the Commissioner in the sum of $229,889.20.[18] I note for completeness that the parties still have an unresolved issue of whether or not the Commissioner will provide an allowance for interest on all or part of that judgment based on an award that could have been made by the Court of Appeal when it was seized of the matter before it remitted the remaining issues back to this Court.