MH SCOTT V SCOTT TRANSPORT LIMITED AND ANOR HC HAM CIV 2005-419-395

MH SCOTT V SCOTT TRANSPORT LIMITED AND ANOR HC HAM CIV 2005-419-395 25 November 2008IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY CIV 2005-419-395BETWEEN MILTON HUNTER SCOTT Plaintiff AND SCOTT TRANSPORT LIMITED First Defendant AND WILLIAM ROBERT WINCHESTER Second Defendant Hearing: On the papers Counsel: E J Hudson for plaintiff P J Morgan QC for defendant Judgment: 25 November 2008COSTS JUDGMENT OF ALLAN JSolicitors/Counsel: Purnell Jenkison Oliver, PO Box 31, Thames/E J Hudson, elliothudson@xtra.co.nz P J Morgan QC, pjmorgan@clear.net.nz Nielsen Law, PO Box 1108, Hamilton david@nielsenlaw.co.nz[1] These proceedings are brought under s 174 of the Companies Act 1993, the plaintiff alleging oppression. There was an earlier two week fixture, to commence on Monday 14 July 2008, but on 21 May 2008 I granted the plaintiff an adjournment on the ground that his former counsel, Mr R A Houston QC, was obliged to relinquish the brief on health grounds. There is a new two week fixture for 9 February 2009. [2] In the course of the minute in which I set out my reasons for granting the adjournment, I reserved the question of costs, indicating that:Although the plaintiff is personally blameless, there is no doubt that the defendants ought not to bear, themselves, any costs which will inevitably arise as a result of the adjournment now granted.[3] As directed, counsel have filed memoranda as to costs. Regrettably they have reached me only recently. Most aspects of the defendants' claim for costs are in dispute. The one item that is not relates to counsel's appearance at the mentions hearing at which I granted the adjournment. The prescribed allowance for that is 0.2 days, which at the daily rate of $1600 produces a figure of $320. [4] The next point concerns a claim for $6400 under ss 7.3 and 7.4 of the third schedule for two days each for: a) preparation of affidavits or oral statements of evidence to be used at hearing (s 7.3); and b) preparation of lists of issues and authorities, selecting documents for common bundle of documents, and all other preparation (s 7.4). [5] Mr Hudson says that this aspect of the claim ought not to be upheld. At the time of the adjournment the plaintiff's briefs had not been served, and so the work undertaken on the preparation of the defendants' briefs could have been preliminary only. He says that such work will not be lost, although no doubt there will be a need for some refinement once the plaintiff's briefs have been served.[6] In my opinion, s 7 of Schedule 3 is available for guidance only. It is clear that the prescribed allowances apply principally to a case which has been resolved for one reason or another, without a trial. Sections 7.3 and 7.4 represent the whole of the entitlement of a successful party to costs in respect of preparation. That is not however this case. Here there will be a trial. If successful the defendants will be entitled to claim for preparation under s 8 of Schedule 3. It would not be right to permit them also to claim the whole of the costs prescribed in ss 7.3 and 7.4, because to do so would potentially require the plaintiff to pay twice over for preparation, at least in part. [7] But I am satisfied that it is proper to make some allowance to the defendants for preparation at this stage because inevitably some, but not all, of the value of the preparatory work carried out on behalf of the defendants will be lost. [8] The assessment must, of necessity, be somewhat rough and ready. I allow $2400, which represents one and a half days preparation rather than the four days claimed by the defendants. [9] The remaining issue relates to Mr McLean's travel costs. He is apparently a witness for the defendants and resides in Canada. Prior to the grant of the adjournment he had booked an air fare to New Zealand from Canada. Despite the adjournment he continued with the trip to New Zealand, along with his family, for business and personal reasons. [10] Mr Hudson says the defendants are entitled to claim only the cancellation costs totalling CAN$400. Mr Morgan argues that, the defendants having agreed to pay for Mr McLean's air fare (CAN$2420), the plaintiff ought to be required to make good this sum to the defendants. I am not prepared to do that. Mr McLean's decision to proceed with his trip is readily understandable, but given that the adjournment was granted some two months prior to the trial date, the plaintiff could not be expected to have foreseen that he would be responsible for witness's travel costs in circumstances where the decision to proceed was that of the witness alone. The defendants' decision to refund Mr McLean's air fare is a matter between the defendants and the witness. The plaintiff must of course pay a sum equivalent to thenotional cancellation and transfer costs of CAN$400, payable if Mr McLean had in fact cancelled his flight and rebooked a flight in February. [11] In the result, there will be an order for costs in favour of the defendants against the plaintiff for: a) Counsel's appearance at the mentions hearing (0.2 days): $320; b) An allowance towards preparation costs: $2,400 c) Cancellation fees in respect of Mr McLean's proposed travel: CAN$400.C J Allan J