LINWOOD FOOD BAR LIMITED v DAVISON AND ORS [2015] NZHC 45

LINWOOD FOOD BAR LIMITED v DAVISON AND ORS [2015] NZHC 45 [30 January 2015]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2014-409-000562[2015] NZHC 45BETWEEN LINWOOD FOOD BAR LIMITEDAppellantAND JENNIFER DAVISONRespondentAND STUART JOYSecond RespondentAND PETER SHAWThird RespondentHearing: 30 January 2015 (On the papers)Appearances: T J Mackenzie and N M McSparron for AppellantH F McKenzie for RespondentsJudgment: 30 January 2015JUDGMENT OF DUNNINGHAM J(RE COSTS DECISION)[1] In my judgment dated 27 November 2014, I rejected an appeal by Linwood Food Bar Limited against a decision of the Alcohol Regulatory and Licensing Authority declining the appellant's application to renew its on-licence and extend its closing hours.[2] Costs were reserved and I have since received memoranda on that issue.[3] The respondents seek $15,000 in costs having regard to:(a) the fact that the respondents were successful in both an application under s 147A of the Sale of Liquor Act 1989 prior to the substantive appeal and in the appeal itself; and(b) taking into account their calculated entitlement of $18,706 in costs if costs were awarded on a 2B basis.[4] The appellant, however, resists an award of costs on the s 147A hearing on the basis that Gendall J considered costs but decided not to award them. The appellant also challenges the appropriateness of the time allocations selected by the respondents for the various steps related to the appeal hearing itself, and suggeststhat a credit should be afforded to the appellant for the respondents' late, and largelyunsuccessful, application to admit further evidence.Relevant legal principles[5] The relevant legal principles governing the award of costs are well understood. They are as follows:(a) Costs are at the discretion of the Court, although any departure from the prescribed costs regime must be considered and particularised exercise of the discretion;(b) The following principles in High Court r 14.2 apply to the determination of costs;(i) costs should follow the event;(ii) an award of costs should reflect the complexity and significance of the proceeding;(iii) costs should be assessed applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding;(iv) an appropriate daily recovery rate should normally be two- thirds of the daily rate considered reasonable in relation to the proceeding;(v) what is an appropriate daily recovery rate and what is a reasonable time should not depend on the skill or experience of the solicitor or counsel involved or in the time actually spent by the solicitor or counsel involved or on the costs actually incurred by the party claiming costs;(vi) an award of costs should not exceed the costs incurred by the party claiming costs;(vii) so far as possible, the determination of costs should be predictable and expeditious.[6] Having regard to those principles, I now consider the respondents' claim forcosts.Section 147A hearing[7] The appellant unsuccessfully applied under s 147A of the Sale of Liquor Act 1989 for an interim order staying the effect of the Alcohol Regulatory and Licensing Authority's decision. Although he declined the application, His Honour Justice Gendall did not reserve costs. Instead, at [26] he stated:No order as to costs on the present application is made.[8] I accept the appellant's submission that Gendall J's statement was a decisionon costs as required by High Court r 14.8(i)(a). It follows that the costs sought by the respondents on the s 147A hearing cannot be awarded.Challenges to the calculation of appeal costs[9] In respect of costs relating to the appeal itself, the appellant departs from therespondents' calculation in the following ways:(a) Step 54 - in respect of step 54 (case management), the respondents claim the time allowances for steps 10, 11 and 12 which apply to general civil proceedings. These total one day, being preparation forfirst case management conference (0.4), filing memorandum for first subsequent case management conference and mentions hearing (0.4) and appearance at mentions hearing or callover (0.2). In contrast, the appellant proposes an allocation of 0.2 of a day for filing a memorandum for the first case management conference and accepts the allocation of 0.2 of a day for attendance at the telephone conference, being a total of 0.4 of a day.(b) Step 57 - the respondents claim for a full day hearing. That is not accepted by the appellant who notes that significant time was taken up with the respondents' further evidence application and submits that an allocation of .75 of a day is more appropriate.(c) Step 28 – the appellant says that Step 28 is wrongly claimed, being a time allocation for obtaining judgment without appearance, and this was not such a case.Discussion[10] I accept the appellant's submission that to claim the time allocation for all three of steps 10, 11 and 12, to reflect the preparation and filing of a standard memorandum and participating in a case management telephone conference for this appeal, is too generous. However, I do not think it is appropriate to depart too far from the standard time allocations. I consider it appropriate for the respondents to claim the time allocation for steps 11 and 12 for case management of the appeal, being a total of 0.6 of a day.[11] I accept the appellant's claim that .75 of a day is a more appropriate time allocation for the hearing given that the substantive appeal occupied approximately that time after deducting the additional time taken up with the further evidence application which I deal with below.[12] I also accept that step 28 is irrelevant to the appeal, and should not be included in the costs calculation.Further evidence application[13] The appellant submits that a credit is appropriate based on High Court r 14.7(f)(i) and (ii), as the respondents increased the appellant's costs through failingto comply with the rules and pursing an argument that lacked merit. The appellant asserts the rules failure occurred because the respondents filed substantial new evidence without leave and without filing the appropriate application in good time, despite having been in possession of the sworn evidence for several weeks prior to filing it.[14] The appellant goes on to say that the argument in support of admitting the evidence lacked merit as the evidence largely failed the well settled test for admission. Substantial tracts of the late evidence were ruled inadmissible by me in a ruling I gave prior to hearing the substantive appeal.[15] The appellant claimed that the approach by the respondents resulted incounsel being diverted to spend significant time "digesting the proposed evidence,reviewing the applicable law, taking instructions on law and fact, preparing argument and arguing the matter". The appellant says that while formal opposition and written submissions were not prepared, that was due to the late filing. In substance however, it was effectively an opposed interlocutory hearing in which the appellant was mostly successful. Based on schedule costs, a total of 2.35 days could be claimed. However, the appellant realistically accepts that that would be too generous given that the matter was heard summarily and that the respondent was able to admit some evidence. In the circumstances the appellant suggests a credit of one day is appropriate.[16] I accept the appellant's submissions on this issue. I also note that, in effect, the respondents were seeking an indulgence by seeking to admit the evidence despite the late filing and normally would meet the costs of such an indulgence, even if successful.1 I am satisfied that a credit of one day to the appellant when calculating its costs liability is appropriate.1 Cunningham v Butterfield [2014] NZCA 213.[17] In summary, I consider that a costs award based on the following time allocations is appropriate:Step 53: Response to appeal 0.50Step 54: Case management (being a total of step 11 and 12) 0.60Step 56: Preparation of submissions 3.00Step 57: Appearance 0.75Total 4.85Less credit to appellant of 1.00Total 3.85[18] At the Schedule 2 daily recovery rate of $1,990 per day, that equates to a cost award of $7,661.50.[19] Accordingly, the respondents are awarded costs in the sum of $7,661.50.Solicitors:Wynn Williams, ChristchurchRaymond Donnelly & Co., Christchurch