DONNA MARIE TAI TOKERAU HALL V TUMU TE HEU HEU AND ORS HC WN CIV 2009-463-777

DONNA MARIE TAI TOKERAU HALL V TUMU TE HEU HEU AND ORS HC WN CIV 2009-463-777 16 April 2010IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV 2009-463-777BETWEEN DONNA MARIE TAI TOKERAU HALL Appellant AND TUMU TE HEU HEU PROFESSOR WHATARANGI WINIATA HAMILTON PIHOPA KINGI PIRIHIRA FENWICK ANNE CLARK RANGIUIRA BRIGGS GRAHAM UDALL FRANCE NEPIA WILLIAMS Respondents Hearing: 29 March 2010 Counsel: H M Aikman QC and M Taylor for Appellant C D Batt for Te Heu Heu, Briggs and Williams T A Roberts for France Judgment: 16 April 2010JUDGMENT OF SIMON FRANCE JIntroduction[1] This is an appeal against a costs award. [2] Ms Hall is a lawyer. She was instructed to act for a group which was pursuing a large Treaty of Waitangi claim. In order to assist the claim Ms Hall instructed a Queen's Counsel. The present proceedings concern a dispute between Ms Hall and her client over the client's liability to pay the Queen's Counsel's fee.[3] The rules concerning the instruction of a barrister are that the instructing solicitor is directly liable for the barrister's fee, but may in turn look to the client for reimbursement. That is what happened here in relation to a fee of $19,500 covering three months' work. [4] The client to whom Ms Hall turned was the governance body responsible for advancing the Treaty of Waitangi claim. The present eight respondents (plus one more) were the members of the governance board at the relevant time. The board members were representatives of the different interests that made up the claim, and included representatives of the Crown Forestry Rental Trust which was the body providing funding for the claim. The client refused to pay the fee on the basis that since Ms Hall no longer had instructions to act at the time the Queen's Counsel did the work, the client was not liable for the fee. [5] Ms Hall sued for the fee. The sole issue was whether at the relevant time her instructions to act had or had not been terminated. This in turn would be determined by whether the person who had purported to end her contract was authorised to do so. It was the head of the claimant's administrative secretariat who had terminated Ms Hall's services, but Ms Hall argued that only the Board as a whole could do that. She accepted that Dr Te Heu Heu had validly done so in June 2003, but argued that the earlier purported termination in late March was invalid. [6] Ms Hall's case was heard in the District Court. The hearing had been scheduled for three days; it lasted seven. The reason for this expansion of time is that the case went well beyond the pleadings. The parties involved saw it as raising issues of mana, and of proper governance of the claim. This expanded focus also traversed Ms Hall's performance as solicitor. Ms Hall was unsuccessful in recovering the fee. [7] Ms Hall appealed on two separate bases. First she argued unsuccessfully that the core decision was wrong. Second, she argued successfully that the judgment wrongly commented on her performance as solicitor. The High Court held on appeal that these matters were not raised by the pleadings and could have been the subject of other evidence if properly raised. It was accepted that the District Court hadpragmatically allowed the parties to air their issues, but that did not provide a basis for the judgment to comment on what were extraneous issues nor to make findings about them. The Court ordered that parts of the judgment were to be deleted. [8] Following the High Court ruling, some of the successful defendants sought costs in the District Court. At the District Court, the parties had been variously represented: three by one counsel, three by another counsel, one by his own counsel and two acting for themselves. Those seeking costs were one of the groups of three (the group that was represented by Ms Batt) and Mr France who was the defendant who had his own counsel. [9] The District Court awarded costs and disbursements against Ms Hall totalling approximately $91,000. The key decisions that produce this total are the application of the scale without reduction, and the granting of separate costs awards to two defendants. Ms Hall appeals the decision challenging both these aspects. She also disputes the Court's decision to allow a claim for expert witness fees, and to grant above scale costs on the pre-hearing steps.Principles governing appeals[10] In Shirley v Wairarapa District Health Board [2006] 3 NZLR 523 the Supreme Court made these observations about the role of an appellate court in a costs matter:[15] The traditional view that costs orders involve the exercise of a discretion is confirmed by r 46(1) and reflected in s 51G of the Judicature Act 1908. Therefore an appellate court should not interfere unless satisfied that the Judge who made the order acted on a wrong principle, or failed to take into account some relevant matter, or took account of some irrelevant matter, or was plainly wrong. [16] But although the costs jurisdiction is discretionary, it is not unprincipled, or else it would be unacceptably arbitrary. As Lord Halsbury LC pointed out in Sharp v Wakefield: when it is said that something is to be done within the discretion of the authorities ...that something is to be done according to the rules of reason and justice, not according to private opinion ...according to law, and not humour. It is to be, not arbitrary, vague, and fanciful, but legal and regular.[17] The discretion in respect of costs is no exception. The Court of Appeal has held on several occasions that the discretion is to be exercised generally in accordance with rr 47-48G.Should costs be awarded for full hearing?[11] It is necessary to comment first on the context. The reality is that this was, at least as pleaded, a claim for $19,500 yet it required a seven day hearing. That is obviously quite disproportionate to the size of the claim. [12] At the moment costs have been awarded on the basis of a seven day hearing. This has the effect of placing the costs responsibility for the expanded hearing on the losing party. That consequence is not adverted to in the costs ruling. This may well be because of how the parties framed their submissions, but it is something I consider needs addressing. [13] The effect of the decision of the High Court on the substantive appeal is to confirm that the case went beyond the issues that were raised by the pleadings. In my view that is something that either needs to be attributed to one of the parties, or from a costs view point should be borne equally. [14] The respondents point to Ms Hall's reply brief of evidence as being the document that opened things up. I note, however, that no objection was formally made to its contents at the time. Having read the original decision, the appeal decision, and the costs decision under appeal, I do not consider I am in a position to attribute responsibility to any particular party, so an adjustment is necessary to reflect this situation. [15] Any adjustment to reflect the excessive length of the proceedings will necessarily be somewhat arbitrary as to quantum, but I remain of the view a conservative change is appropriate. I rule that costs are to be calculated as if it was a five day hearing.Two sets of costs?[16] Rule 49 of the District Court Rules 1992 provided that:49 Where defendants defend separatelyWhere several defendants defend a proceeding separately and it appears to the Court that they, or some of them, might have joined in their defence, the Court shall not allow more than one set of costs to the defendants who might have so joined unless it appears to the Court that there is good reason for allowing more than one set of costs to those defendants.[17] Originally the sole defendant was Dr Te Heu Heu. On his application the other members of the governance body were joined. The District Court noted in its costs ruling that originally pleading the case against only Dr Te Heu Heu had"significant political, cultural and social ramifications."Dr Te Heu Heu is the paramount Chief of Ngati Tuwharetoa and I infer from the Court's comment that the pleadings were seen as singling him out from other Board members. [18] The costs ruling then focussed on whether there was a basis for Mr France to have been separately represented. It was noted he was on the Board as the representative of the Crown Forestry Rental Trust, which was funder of the claim and which would be responsible for payment of the fee if Ms Hall's claim succeeded. The Judge noted a link between these proceedings and other expenditure the Trust might face in respect of claims by Ms Hall for her own fees and concluded there was a distinction in positions between the defendants"consequent upon the different nature of the interests they represented."[19] Mr Roberts elaborated on this before me. He explained that Ms Hall's own fees were the subject of a challenge by the Trust, and had been placed with the Law Society. An issue with Ms Hall's fees, as here, was when her contract had been terminated. He described these proceedings as tactical. [20] I did not find this convincing. Mr Roberts advised me that the Law Society was not addressing the issue of when services ended. Further, even if Ms Hallsucceeded, it would not mean that her fees, or all of them, were payable. The challenge to the quantum would still proceed. [21] No one suggested that any board members had a different defence. It was a single issue claim met by one statement of defence. Further, it seems as if the Trust was a single funder who would meet liabilities. Whether within themselves the various respondents saw a need to be separately represented is a matter for them, but I was not pointed to any factor that would support more than one set of costs being payable. [22] Mindful of the discretionary aspect of costs, I nevertheless conclude that the Court erred in awarding more than one set. It was a case where the defendants might have joined in a single defence. I make no criticism of anyone for not doing so but do not see it as a situation where a court should allow more than one set of costs.Above scale costs[23] The pre-hearing costs were governed by the previous costs regime which prescribed set amounts for each step. The relevant total in this case, if the appropriate scale was applied, was $1,390. [24] The Court concluded that this amount was inappropriate because the case involved more than a claim for $19,500. However, rather than increasing the applicable scale costs, the Court ruled instead that the costs that would be payable today under the new regime should apply. Neither counsel for the respondents could point me to any authority to support such an approach. [25] In my view the District Court's approach on this cannot stand. It was not open to the Court to ignore the applicable rules and apply a wholly different costs regime. Although the Court of Appeal was dealing with the new High Court costs regime, its observations in Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 are applicable. Departures from the relevant scheme are only to be done in a principled and particularised way. Applying a different scheme altogether does not satisfy that requirement.[26] The point is emphasised when one looks at the scheme that was in force. Step 9 of the existing applicable schedule provided:Amount not Exceeding $4,500 Amount Exceeding $4,500 but not Exceeding $20,000 Amount Exceeding $20,000 9 Preparing for hearing to either party in addition to costs under Nos 1 to 8 (Costs of preparing for hearing, or a portion of them, may be allowed in addition to Nos 3, 4, 5, and 6, if necessarily incurred): 225 690 1,150 Provided that extra costs may be allowed, if certified for, having regard to the importance of the case and time reasonably spent in preparation, but so that the total fee for preparation shall not exceed 3 times the amount in the appropriate scale[27] It is clear from this that the Schedule provided its own mechanism for increasing costs, with a limit of three times the applicable fee ($690). In my view that was the available route for an increase. [28] Turning to that issue, there was nothing about the particular case, as pleaded, that was out of the ordinary. The importance of the case, such as it existed, came from the unnecessary wide compass of the evidence, responsibility for which I have held cannot be attributed to one party. Reflecting the Judge's approach that some increase is appropriate, but operating within the then Schedule, I allocate costs for Step 9 of twice the base allowable costs. [29] That means the original figure of $1,390 is restored, but is increased by $690, to a figure of $2,080.Expert witness[30] An expert was briefed to explain the rules about engaging a barrister. It should not have been necessary. However, the pleadings hint at a proposition that the barrister's fee might still be properly payable by the client even if the instructing solicitor was no longer instructed. Ms Hall originally said as much in evidence, but later accepted that was incorrect. [31] I see no reason to differ from the District Court assessment of the need to brief the expert, nor his assessment of the quantum.Conclusion[32] The appeal succeeds. Costs are to be calculated as per the District Court decision but with the following adjustments: a) costs are payable for only one defendant; b) the pre 31 January 2005 costs (paragraph [19] of the costs ruling) are changed to a fixed sum of $2,080; c) costs are to be calculated as if it were a five day hearing. [33] For the avoidance of doubt, the sum of $5,000 is confirmed for Mr Connor's fee, and Mr France's reasonable disbursements are payable in addition to the disbursements of the first respondent as already claimed.[34] Each party has had success on this appeal, and costs are to lie where they fall. __________________________ Simon France JSolicitors: H M Aikman QC, Thorndon Chambers, PO Box 1530, Wellington 6140 email: helen.aikman@chambers.co.nz M Taylor, Barrister, Wellington, email: martin.taylor@cubachambers.com C D Batt, Tripe Matthews & Feist, PO Box 5003, Wellington 6145, email: Christine@tmf.co.nz T A Roberts, Kiely Thompson Caisley, PO Box 3, Wellington email: trevor.roberts@kielywgtn.co.nz