AIG INSURANCE NEW ZEALAND LIMITED v HOUGHTON [2019] NZCA 649

AIG INSURANCE NEW ZEALAND LIMITED v HOUGHTON [2019] NZCA 649 [16 December 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA842/2011[2019] NZCA 649BETWEEN AIG INSURANCE NEW ZEALANDLIMITEDFirst PlaintiffT E C SAUNDERS AND OTHERSSecond PlaintiffsAND E M HOUGHTONDefendantCounsel: B J Burt for First PlaintiffA E Ferguson and A G Holden for Second PlaintiffsC R Carruthers QC and PAB Mills for DefendantJudgment:(On the papers)16 December 2019 at 10.30 amJUDGMENT OF BROWN J(Costs)The plaintiffs must pay the defendant costs of $17,910 and disbursements of$2,993.22.____________________________________________________________________REASONSIntroduction[1] A proceeding, in which the first plaintiff (AIG)1 sought a declaration regardingthe application of s 9(1) of the Law Reform Act 1936, was transferred to this Court for1 Formerly Chartis Insurance New Zealand Ltd.hearing. In a judgment dated 20 December 2012 this Court ruled against the defendant(Mr Houghton).2 However the Supreme Court allowed Mr Houghton's appeal againstthat judgment.3[2] The Supreme Court's judgment did not address consequential costs issues.However after receiving memoranda from the parties (discussed below), in a judgmentof 18 March 2014 the Supreme Court directed that costs and disbursements in the HighCourt and the Court of Appeal were (absent agreement) to be set by those Courts inlight of the Supreme Court's judgment on appeal.4 That judgment recorded that AIGhad no objection to the disbursements claimed by Mr Houghton but did object to someof the costs claimed.[3] Several years elapsed before the issue of costs was raised again, in response toa communication from the Court of Appeal registry concerning the release of securityfor costs.[4] The parties have agreed that the issue of costs in this Court should bedetermined by a single judge on the papers.Costs[5] In a memorandum to the Supreme Court dated 11 February 2014 Mr Houghtonsought costs in the Court of Appeal of $27,224 comprising:Step 11 Preparation and attendanceat 3 pre hearing conferences0.9 day @ $1990/day $1,194.00Inspection of discovered documents(by analogy with Step 21 Scale 2Schedule B High Court Rules)1.5 days @ $1990/day $3,980.00Step 12 Preparation for hearing ofproceeding/appeal (B and B)6 days @ $2,940/day $17,640.00Step 13 Appearance at hearing ofproceeding/appeal (B and B)1 day @ $2,940/day $2,940.002 Steigrad v BFSL 2007 Ltd [2012] NZCA 604, [2013] 2 NZLR 100.3 BFSL 2007 Ltd v Steigrad [2013] NZSC 156, [2014] 1 NZLR 304.4 Houghton v AIG Insurance New Zealand Ltd [2014] NZSC 20.Step 14 Second counsel if allowedby Court (B and B)50% of senior counsel $1,470.00[6] In its memorandum in response of 28 February 2014 AIG took issue with theitem relating to pre-hearing conferences and with the calculation on the basis ofa complex appeal. It also drew attention to a multiplication error in respect ofinspection. However AIG accepted that Mr Houghton was entitled to costs in the sumof $17,910 calculated as follows:Inspection of discovered documents(by analogy with Step 21 Scale 2Schedule B High Court Rules)1.5 days @ $1,990/day $2,985.00Step 12 Preparation for hearing ofproceeding/appeal (B and B)6 days @ $1,990/day $11,940.00Step 13 Appearance at hearing ofproceeding/appeal (B and B)1 day @ $1,990/day $1,990.00Step 14 Second counsel if allowedby Court (B and B)50% of senior counsel $995.00[7] In a memorandum of 27 March 2019 in this Court Mr Houghton sought costson the same basis as in his earlier memorandum to the Supreme Court.In a memorandum in response dated 17 July 2019 AIG challenged the time allocationsfor inspection (suggesting 0.5 days instead of 1.5 days) and for preparation(suggesting 2 days instead of 6). It was also suggested that the daily rates adopted byMr Houghton were incorrect.[8] In a memorandum of 18 July 2019 counsel for Mr Houghton acknowledgedan arithmetical error with reference to the item for inspection of documents butadhered to the time allocations and the computation for preparation and appearanceon the basis of a complex appeal.[9] Counsel for the second plaintiffs filed a memorandum on 29 July 2019 drawingattention to this Court's direction that Mr Houghton was to pay costs to Mr Saundersfor a standard appeal on a band B basis.55 Steigrad v BFSL 2007 Ltd, above n 2, at [58].[10] Because this Court previously directed that costs would be for a standardappeal in band B, I consider that the time allocations proposed by Mr Houghton arecorrect. However the calculation by reference to a complex appeal is not correct.The appropriate daily rate was $1,990 being category 2 in sch 2 of the High CourtAmendment Rules 2012, not $2,940.[11] Consequently Mr Houghton is entitled to costs in the sum of $17,910, whichis the amount proposed in AIG's memorandum filed in the Supreme Court in 2014.Disbursements[12] Mr Houghton's memorandum filed in the Supreme Court soughtdisbursements in the sum of $4,423.19. AIG's memorandum in the Supreme Courtstated that AIG did not object to those disbursements.[13] However the amount sought in this Court for disbursements in 2019 was only$2,993.22. AIG then sought to reopen the quantum of disbursements in itsmemorandum of 18 July 2019. Counsel for Mr Houghton objected. Counsel for thesecond plaintiffs then submitted that the Supreme Court had expressly left costs anddisbursements to be set by this Court. They rejected the suggestion that the parties orthe Court was somehow bound by the costs memoranda filed in the Supreme Court.[14] Given the sequence of events, including the advice given to and recorded bythe Supreme Court that there was no objection to the disbursements sought, I do notconsider that it is appropriate to revisit the issue of disbursements.Accordingly Mr Houghton is entitled to disbursements in the amount claimed of$2,993.22.Result[15] The plaintiffs must pay the defendant costs of $17,910 and disbursements of$2,993.22.Solicitors:Chapman Tripp, Auckland for First PlaintiffWilson Harle, Auckland for Second PlaintiffsWilson McKay, Auckland for Defendant