LIM v THE COMMISSIONER OF INLAND REVENUE [2013] NZHC 2118

LIM v THE COMMISSIONER OF INLAND REVENUE [2013] NZHC 2118 [20 August 2013]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV-2011-485-002487[2013] NZHC 2118UNDER the Judicature Amendment Act 1972the Tax Administration Act 1994the Contractual Mistakes Act 1977the Contractual Remedies Act 1979BETWEEN CHYE HENG LIMPlaintiffAND THE COMMISSIONER OF INLANDREVENUEDefendantJudgment: 20 August 2013JUDGMENT OF COLLINS J(As to Costs)Introduction[1] In a judgment delivered on 28 May 2013 I answered the question at issue in these proceedings in favour of Mr Lim. I reserved the issue of costs and have since received memoranda from counsel. Both parties accept Mr Lim is entitled to costs on a 2B basis, however they dispute certain components of Mr Lim's claim for costsand disbursements.Disputed items for scale costs[2] Mr Lim claims costs for filing a notice of opposition to an application made by the Commissioner to have certain evidence declared inadmissible. The Commissioner was essentially successful in her application, when in a minute of 5 November 2012 Ronald Young J ruled that no expert evidence could be adduced at the hearing. On this basis the Commissioner claims that she succeeded in her interlocutory application and should not have to pay the costs of Mr Lim in opposingit. Mr Lim does not object to this "effectively won" approach to determining costs,so long as it is applied consistently.[3] Mr Lim claims costs for an application for leave to file a fourth amended statement of claim. The parties agreed at the interlocutory hearing that a different form of amended statement of claim should be filed. The Commissioner disputesthat this amounts to Mr Lim having "effectively won" the application because the agreed statement of claim which was filed was different to the proposed fourth amended statement of claim. Moreover, r 7.77(8) of the High Court Rules provides that:If an amended pleading has been filed under this rule, the party filing the amended pleading must bear all the costs of and occasioned by the original pleading and any application for amendment, unless the court otherwise orders.[4] I consider r 7.77(8) creates a presumption in favour of the Commissioner on this issue and that Mr Lim should bear the costs of this step in the proceeding.[5] Mr Lim also seeks costs for his 29 October 2012 memorandum in response tothe Commissioner's memorandum seeking costs on interlocutory applications.Item 24 is described as preparation of written submissions. The Commissioner sayssubmissions were not necessary and that therefore Mr Lim's claim for costs on thismatter should be disallowed.[6] Mr Lim's memorandum was in response to a memorandum from theCommissioner dated 26 October seeking costs on Mr Lim's application to file a fourth amended statement of claim. No costs were awarded and thus Mr Lim'sopposition was successful. However, the time required for a costs memorandum is significantly less than the time required for written submissions, and so the time allocation should therefore be reduced to 0.4.[7] Mr Lim is also entitled to costs for the application for leave to file Mrs Lim'sreply affidavit out of time, and the application for leave to cross-examine theCommissioner's witnesses. These applications were granted. However, r 7.77(8) prevents recovery for the cost of filing amended pleadings unless the Court ordersotherwise. Mr Lim has only claimed 0.6 days for all three interlocutory applications to which he is entitled.[8] Mr Lim claims costs for the preparation of his chronology and opening submissions, under item 31 Schedule 3. Item 31 relates to plaintiff's preparation of a list of issues, authorities and common bundle, which the Commissioner claims does not include the chronology and opening. For these items the Commissioner states that 1.5 hours should be allocated, which is equal to the time allocated for preparation of written submissions. I agree with the Commissioner. Her approach seems sensible because preparation of the chronology (even a lengthy one) and opening submissions requires less time to prepare than the steps listed in item 31.Disputed disbursements[9] Consistent with my determination in relation to the recoverable costs and r 7.77(8), I consider Mr Lim is not entitled to claim disbursements for filing the amended statement of claim.Conclusion[10] The effect of my decision is to reduce the 2B costs to $39,402 and disbursements to $4,156.90.____________________D B Collins JSolicitors:Dyhrberg Drayton Employment Law, Wellington for ApplicantCrown Law Office, Wellington for Respondent