MOORHOUSE COMMERCIAL PARK LIMITED v VERO INSURANCE NEW ZEALAND LIMITED [2023] NZHC 2377

MOORHOUSE COMMERCIAL PARK LIMITED v VERO INSURANCE NEW ZEALAND LIMITED [2023]NZHC 2377 [29 August 2023]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2017-409-997[2023] NZHC 2377BETWEEN MOORHOUSE COMMERCIAL PARKLIMITEDPlaintiffAND VERO INSURANCE NEW ZEALANDLIMITEDDefendantHearing: On the papersAppearances: S P Rennie and J E Bayley for PlaintiffC M Brick for DefendantJudgment: 29 August 2023JUDGMENT OF DUNNINGHAM JRE: COSTSThis judgment was delivered by me on 29 August 2023 at 3 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Introduction[1] Moorhouse Commercial Park Ltd (Moorhouse) is the owner oftwo commercial buildings situated on Moorhouse Avenue in Christchurch. Thesebuildings were insured by Vero Insurance New Zealand Ltd (Vero). The buildingswere damaged in the Canterbury Earthquake Sequence, and Vero acceptedMoorhouse's insurance claims to repair the damage. However, the parties could notagree on what repair strategy was required to reinstate the buildings to the policystandard and therefore what Moorhouse should be paid under the insurance policy.Vero maintained a repair strategy based on the use of epoxy resin to fill concrete crackswould suffice. Moorhouse disagreed.[2] This dispute was the subject of a decision of this Court dated6 December 2022.1 Vero was successful in its defence of Moorhouse's claim. I foundthe proposed repair strategy using epoxy resin was appropriate,2 and I declined tomake any other declaration interpreting the insurance policy as I considered thedeclarations sought either mirrored the wording of the policy or sought to put a glosson the policy wording which was not warranted.3 I reserved the issue of costs,although signalling that, in the usual course, 2B costs would apply.4[3] The parties have not been able to agree on costs. Vero seeks costs generallyon a 2B basis, with uplifts in the form of an extra five days' costs for the additionaltime required to prepare witnesses' briefs of evidence, and it seeks a 35 per cent upliftto reflect the fact that Moorhouse pursued unmeritorious arguments and rejected asettlement offer without reasonable justification. This totals $211,245.10. It alsoclaims disbursements of $438,731.87.[4] Moorhouse does not dispute that Vero is entitled to costs but does dispute thequantum of costs. It says an award of $118,264 for scale costs with items variouslycategorised at band A and band B and disbursements of $190,517.45 would beappropriate.1 Moorhouse Commercial Park Ltd v Vero Insurance New Zealand Ltd [2022] NZHC 3260.2 At [126]–[143].3 At [239]–[244].4 At [253]–[254].SubmissionsVero's submissions[5] Vero calculates scale costs for these proceedings as $147,626. This calculationis done mostly on a standard 2B basis, but includes:(a) the following items recorded at band A:(i) eight of the additional 11 occasions of inspections of documentslisted at (c) below;(ii) filing a memorandum for a judicial conference; and(iii) filing a memorandum as to the plaintiff's application foradjournment;(b) certification for second counsel;(c) 11 additional occasions for inspection of documents;(d) time allowances for preparation of briefs and preparation for hearingcalculated for 12 days, instead of the 10 days the trial took; and(e) costs on costs.[6] Vero claims the items outlined at (a) above at band A to reflect the fact the timetaken for them was less than calculated under band B.[7] It claims certification for second counsel on the basis it was necessary due tothe number of witnesses Vero called, the large volume of documents including the useof an electronic casebook, and the fact the trial took place in Christchurch while Vero'ssolicitors are Auckland based. Vero notes Moorhouse had three counsel for most ofthe trial. Travel and accommodation disbursements are also sought for secondcounsel.[8] The additional items for inspection of documents are claimed because Verosays the initial discovery by Moorhouse was inadequate and it had to make numerousrequests to obtain discovery and inspection of relevant documents. These 11 furtherattendances are calculated variously as band A or band B depending on the volume ofdocuments discovered which were relevant to the buildings which were in issue attrial.[9] Vero claims additional days for preparing briefs and for the hearing on the basisthat 13 days were originally allocated for the trial, and counsel prepared for a trial ofthat length. The trial duration was reduced by agreement just prior to trial becausesome of the evidence was agreed to be taken as read. Vero says that although thisagreement made the trial more efficient, it prepared for a longer trial and that shouldbe reflected in the costs award.[10] Vero then claims increased costs in the form of a five-day uplift for thepreparation of briefs of evidence which it says substantially exceeded the amountallocated for that step under band C. Vero called evidence from nine witnesses,eight of those being expert witnesses. Four of the experts provided more than onebrief, which Vero says is largely because of the late briefs filed by Moorhouse orbecause of Moorhouse's failure to disclose relevant matters to Vero before Vero filedits original evidence.[11] Vero also claims a 35 per cent uplift because of Moorhouse's allegedunnecessary contribution to the time and expense of the proceedings. Vero alleges thisis the case because Moorhouse:(a) pursued a repair strategy that was unjustified by the minor damagesuffered to the buildings;(b) unreasonably persisted with its argument that crack repair by epoxy wasan inappropriate method under the insurance policy, including anunreasonably late concession that epoxy repair was suitable for thepanels of the building at 43 Moorhouse Avenue;(c) unreasonably persisted with its argument that deep pile foundationswere required to be installed as part of the repair schemes for thebuildings, which was conceded late into the proceedings;(d) unreasonably pursued claims that Vero was responsible for delay inassessing Moorhouse's policy entitlements and was attempting to avoidMoorhouse's policy entitlements; and(e) unreasonably rejected a settlement offer made by Vero on 22 June 2021including the full cost of repairs and accepted claims preparation costswithout any deduction for depreciation regardless of whether therepairs were undertaken, which Vero says is worth more thanMoorhouse now stands to recover under the judgment.[12] Including increased costs, the costs claimed total $211,245.10.[13] Vero originally claimed $442,132.92 in disbursements, including $421,745.97in expert fees. It says these expert fees were specific to the conduct of the proceedings,reasonably necessary for the conduct of the proceedings and reasonable in amount. Italso claims costs incurred for litigation support services which were used to facilitateelectronic discovery for the large volume of documents it was obliged to discover fromits files, but the cost of data storage was not included.[14] Vero adjusted its disbursements to $438,731.87 in response to Moorhouse'ssubmissions. This adjustment removes disbursements for alcohol incorrectly charged,miscalculations of GST, misstatements of some amounts, and experts' costs associatedwith a judicial settlement conference.Moorhouse's submissions[15] Moorhouse does not dispute that costs should be awarded, but it does disputethe quantum that should be awarded.[16] Moorhouse challenges various aspects of Vero's calculation of scale costs andcalculates the appropriate costs award at $118,264. It submits:(a) some steps are not properly allocated: for example, item 9 is describedas appearance at a case management conference (step 13) but shouldhave been claimed as an appearance at a mentions hearing (step 12);(b) it was appropriate for Vero to apply band A to some steps, but moresteps should be calculated on a band A rather than band B basis,including some memoranda which only ran to a few pages and somebrief teleconference appearances;(c) certification for second counsel is appropriate;(d) the additional items for inspection of documents do not accord with theprinciple that reasonable time for inspection should be allocated as awhole rather than the number of occasions discovery was provided,5 soit submits an appropriate allocation would be three days (two tranchesof band B);(e) the allowance for preparation of briefs and for hearings is calculatedusing a formula based on the actual length of the trial, which ensuresthe determination of costs is predictable and expeditious; and(f) costs on costs should not be awarded.[17] Moorhouse submits increased costs should not be awarded. For the claimedextra days for preparing briefs of evidence, it says this extra time is subsumed into thecalculation for costs in relation to the trial length as the briefs were read and addressedat trial. Moorhouse also denies its arguments lacked merit or were not justified. Itsposition was underpinned by the opinion of well-qualified experts and was a bona fidedispute requiring resolution. This also meant its decision not to accept an offer ofsettlement was reasonably justified.5 ABB Ltd v New Zealand Insulators (Costs) HC Auckland CIV-2004-404-4829, 18 December 2006at [13] and [15].The issues[18] There is no dispute that the starting point is 2B costs. There is also no disputethat second counsel should be certified.[19] However, the following issues are disputed:(a) whether some steps have been incorrectly allocated;(b) whether more steps should have costs calculated on a band A rather thanband B basis;(c) how costs should be claimed for multiple inspections of documents;(d) what time allowance there should be for the preparation of briefs andfor hearing and whether there should be an award of increased costs;(e) whether there should be an uplift on costs for unreasonably pursuingcertain arguments and rejecting a settlement offer made on22 June 2021;(f) whether some of the disbursements are properly claimed; and(g) whether there should be costs on this costs application.Allocations at the wrong step[20] Moorhouse challenges Vero's classifications of four items as being at step 13,being an appearance at the first or subsequent case management conference, ratherthan being at step 12, being an appearance at a mentions hearing or callover. Step 13allows for 0.3 day's costs at bands A and B whereas step 12 allows for 0.2 day's costsat bands A and B.6 Moorhouse says this is justified because the appearances were briefand it is consistent with Vero's claim for costs from the telephone conference on22 July 2022 for an appearance analogous to a mentions hearing or callover.6 High Court Rules 2016, sch 3.[21] The challenged items are:(a) item 9 for the appearance on 1 August 2018;(b) item 13 for the appearance on 19 September 2018;(c) item 17 for the appearance on 11 December 2018; and(d) item 45 for the appearance on 13 July 2022.[22] For item 9 for the appearance on 1 August 2018, Vero says this conference waslengthy, and Moorhouse's counsel filed two memoranda totalling 14 pages and soughta hearing time of two hours. Whata J's minute from the conference was six pageslong. I note that in Moorhouse's memorandum seeking this appearance before a judge,counsel referred to the hearing as an "urgent case management conference" where itsought unless orders in respect of Vero's non-compliance with an earlier minute fromWhata J. I consider that Vero properly considered this step as a case managementconference. That was how it was treated by all the parties at the time. The conferencedealt with substantive issues about whether Vero had complied with timetabling ordersby Whata J which included an assessment as to whether Vero's calculations wereproperly considered to be for "indemnity value" and whether the engineering reportsprovided were sufficient.[23] Item 13 relates to an appearance on 19 September 2018. This appearanceconcerned aspects of the agenda for the engineers experts' conferral. Vero saysdetailed memoranda were filed on this issue and the issues for the conference were notstraightforward. Courtney J issued a very brief minute where she described thehearing as a "telephone conference" and said the parties had produced agreement asto the final terms of the agenda after a "helpful discussion". She said counsel were tofile a joint memoranda covering the agreed terms. Both parties filed draft agendas andVero filed a five-page memorandum explaining the disagreements the parties had. Iam satisfied that having regard to the issues covered at this appearance, it isappropriately considered akin to a case management conference.[24] The next appearance challenged is from 11 December 2018. This appearancewas the subject of a minute from Gendall J where he noted that counsel filed detailedmemoranda, including initial and reply memoranda for both parties, for this "casemanagement conference". This appearance covered the delay in completing theexperts' joint report, whether the case should be set down for trial, the time allocatedfor trial, whether a judicial settlement conference should be set down and timetablingdirections. I note both parties also referred to this appearance as a "case managementconference" in their memoranda. I consider this is properly considered an appearanceat a case management conference, as claimed by Vero.[25] The final appearance challenged is from 13 July 2022. Vero made nosubmissions in reply in relation to this challenge from Moorhouse. This appearancewas before me where counsel requested an adjournment for the start of the trialbecause two of Moorhouse's counsel were unwell. I issued a minute which consideredwhether 10 days would be sufficient to complete the hearing and if a site visit wasrequired, and if it was, when it was to occur. This was a straightforward callover andappears analogous with the hearing on 22 July 2022, also to do with counsel's illness,which Vero calculated in its costs application as analogous with a mentions hearing orcallover. Given that similarity, I agree it is appropriate to treat these appearances asalike and account for this item, being item 45, under step 12, with an allowance of0.2 days.Allocations for band A or band B[26] The second challenge from Moorhouse is that the costs claimed for filingmemoranda for case management conferences (or analogous to that step) dated5 December 2018, 14 February 2019, 9 June 2020, 7 October 2020, 21 April 2021,21 September 2021 and 11 July 2022 (items 16, 21, 33, 36, 37, 40 and 43) should becalculated on a band A basis rather than a band B basis because the memoranda filedwere brief. This would result in 0.2 days' costs rather and 0.4 days. It says the briefmemoranda cannot justify a costs award of almost half a day.[27] I note that Moorhouse has left a note in its schedule calculating costs to theeffect that item 44, being a memorandum dated 12 July 2022, also should be calculatedon a band A basis, however Vero already has calculated this item on a band A basis, sothis comment appears to be in error.[28] I accept the time bands can differ at each step, and under r 14.5 of the HighCourt Rules 2016, a step will be in band A if "a comparatively small amount of timeis considered reasonable" and in band B if "a normal amount of time is consideredreasonable". I note that the length of a memorandum does not necessarily indicate thetime required to prepare it, but rather the Court's focus in determining an appropriatetime band should be on the complexity of the issues and the time taken to formulatearguments.7 Furthermore, in my view, parties are to be discouraged from disputingthe length of time that each step is assumed to have taken which, in the absence ofagreement, requires the Court to deal with contested views about how long these stepsmight have taken. That is the very antithesis of achieving a "predictable andexpeditious" determination of costs.8 In any event, I am not persuaded the filing ofthe memoranda did obviously warrant a lesser time band than B.[29] By way of example, I deal with the first two of the challenged items.[30] The first item challenged was for the memoranda filed on 5 December 2018prior to the case management conference on 11 December 2018, discussed above at[24]. Vero filed a four-page memorandum for this conference which provided anupdate on how the case was progressing and what was causing delays, comments aboutthe orders sought by Moorhouse to set the case down for a trial date and about ajudicial settlement conference, and it sought directions for interrogatories. Thismemorandum also attached Vero's draft agenda for the experts' conferral and askeleton document for the experts' report. I note that a reply memorandum was alsofiled responding to a letter filed by Moorhouse regarding the reasons for delay inproviding the experts' report. It seems to me that these memoranda would take anormal amount of time to prepare, especially when the attachments are considered,and therefore an allocation under band B is appropriate.7 See Minister of Education v James Hardie New Zealand [2018] NZHC 2960 at [16].8 High Court Rules, r 14.2(1)(g).[31] The next item challenged is the claim for band B costs in relation to thememorandum prepared for 14 February 2019. This memorandum was filed jointly byVero and Moorhouse and provided an update for the Court as to how the parties wereprogressing with the orders given by Gendall J on 11 December 2018. Thememorandum informed the Court that Vero wished to file an interlocutory applicationthat the interrogatories be answered and Moorhouse was in turn going to file anamended statement of claim. The parties agreed that Moorhouse should file theamended statement of claim before Vero filed its application, so the parties agreed thatthe close of pleadings date should be extended and sought a timetabling direction assuch. Vero submits this memorandum required a normal amount of time to prepare,including time liaising with Moorhouse's counsel and the time drafting thememorandum. I agree that on its face, this is the type of memorandum that would takean average amount of time to prepare.[32] It may well be that some of the memoranda identified did involve less timethan allocated under band B, but on the other hand, there are likely to be memorandawhich took more. The usual approach, which is to settle on a band for the entireproceeding, generally achieves justice on the basis that, while sometimes steps mayhave taken less time, on other occasions they will have taken more time. However,overall, it is expected that the band allocated is a fair, if rough and ready, tool fordetermining costs.[33] Here, Vero has taken time to identify steps which it reasonably considersshould be categorised as band A, for which it is to be commended. I have insufficientevidence to warrant allocating more steps at band A, and to do so would only inviteparties in all cases to waste time identifying those steps which they consider took lessor more than a band B allocation, resulting in a drawn-out costs determination process.[34] Accordingly, I decline to allocate any further steps at band A.Inspection of documents[35] Vero has claimed 12 tranches of inspection of discovery documents on a bandA or band B basis. Moorhouse submits this overstates the allocation of time spent anddoes not reflect the appropriate approach, which is to assess the reasonable time forinspection as a whole rather than the number of occasions on which discovery wasprovided. Moorhouse also says that a number of these documents related to claimsfor other buildings which had settled. It submits two claims of step 21 for"[i]nspection of documents" at band B is appropriate, which would total three days'costs, rather than the 10 days claimed by Vero.[36] Moorhouse cites ABB Ltd v New Zealand Insulators in support of its positionthat separate claims should not be made for each occasion on which documents wereprovided for inspection.9 Courtney J in that case considered that a party could notclaim costs for additional instances of inspection of documents and the correctapproach is to determine the whole of the time required for inspection.10[37] Vero cites a case where multiple items were costed for inspection ofdocuments.11 In that case, the parties agreed that a series of claims for inspection wasappropriate as one party's discovery was provided in tranches.12 Equally, there arecases where it is combined into one item.13 It therefore appears that there is no generalprinciple that inspection of documents is costed under a single step.[38] Vero says that its multiple claims are justified because initial discovery fromMoorhouse was inadequate and Vero was obliged to make numerous requests in orderto obtain discovery and inspection of relevant documents. An interlocutoryapplication for further and better discovery was filed by Vero on 28 February 2019and orders were consented to by Moorhouse and made by Associate Judge Lester on20 May 2019. This resulted in further lists of documents being provided byMoorhouse. It says that the piecemeal approach to discovery increased the amount oftime it took for Vero to inspect the documents.[39] Moorhouse does not contest that there were relevant documents for discoveryat each of the stages in which Vero claims inspection of those documents. It is clear itdid provide documents in multiple tranches and at one point required an application9 ABB Ltd v New Zealand Insulators, above n 5.10 At [15].11 Prattley Enterprises Ltd v Vero Insurance New Zealand Ltd [2017] NZHC 1599, (2017) 23 PRNZ484.12 At [15].13 See Edubase Ltd v Minister of Education [2022] NZHC 2427 at [29].to this Court to provide those documents. The fact the documents were discovered intranches would increase the cost to Vero. The cost of that should not have to be borneby Vero given it is entitled to costs and the increased time spent on inspection ofdocuments was due to Moorhouse's actions.[40] The issue is how the increased costs of inspection should be met in light of theprinciple that costs should be recovered on the basis of a reasonable time for each stepin the proceeding and that should normally be determined by reference to the bands.In my view, the most appropriate way to apply the cost recovery rules in this case isto say that because inspection was drawn out and occurred in tranches, it took "acomparatively large amount of time" and so should be claimed at band C.14 If thedefendant recovers on a band A or band B basis for each tranche of inspection, thereis a risk of recovering more than the High Court Rules intended. If all the relevantdocuments had been discovered at once it would be debatable whether costs couldhave been recovered on a Band C basis, but given the additional costs the defendantwould have incurred inspecting the documents supplied on multiple occasions, I amsatisfied a single claim at Band C appropriately reflects the increased costs ofcompleting this step.Time allocation for preparation of briefs and for preparation for the hearing[41] Vero seeks costs for the preparation of briefs (step 33) and preparation forhearing (step 33B) for 12 days, despite the fact that the trial ran for 10 days and thosetwo steps provide for costs to be calculated based on the number of days of the hearing.Vero suggests this is justified because the trial was scheduled to run for 13 days and itprepared for that period of time. The trial was shortened because the parties agreed anumber of witnesses could have their evidence taken as read.[42] Vero cites Young v Attorney-General and Auckland Waterfront DevelopmentAgency Ltd v Mobil Oil New Zealand Ltd as authority for where costs have beenawarded for preparation for briefs and trials for more days than the hearing took.1514 High Court Rules, r 14.5(2)(b).15 Young v Attorney-General [2021] NZHC 1359 at [16]; and Auckland Waterfront DevelopmentAgency Ltd v Mobil Oil New Zealand Ltd [2015] NZHC 470, (2015) 23 PRNZ 200 at [28].[43] However, Young v Attorney-General is not authority for this position, as in thatcase the parties agreed it was appropriate for the Crown to be awarded costs forfive days of preparation, and in any event in that case the hearing did go into a fifthday.16 In Auckland Waterfront Development Agency Ltd v Mobil Oil New Zealand Ltd,Katz J awarded increased costs under r 14.6(3)(a) of the High Court Rules where thetrial took six days but the parties prepared for a four-week trial.17 Katz J awardedcosts for 15 days' preparation. I do not consider this case supports Vero's argumentseither, as it was an award of increased costs, and not an award of scale costs departingfrom the calculations in the High Court Rules.[44] Vero separately claims for increased costs under r 14.6 based on the timerequired to prepare the briefs of evidence, and I will consider that claim shortly. Thatis the more principled way, in my view, to assess whether scale costs should bedeparted from. There is no reason, in my view, to justify a departure from the clearcalculations in the High Court Rules which ensure certainty and expeditiousnessaround costs orders. Accordingly, scale costs are to be calculated on the 10 days thatthe trial ran and not for the time it was scheduled to run.Increased costs[45] Vero makes two claims for increased costs. The first is for an additionalfive days for the preparation of briefs, and the second is for Moorhouse's allegedunnecessary contribution to the time and expense of the proceedings.[46] Increased costs can be ordered under r 14.6 of the High Court Rules:14.6 Increased costs and indemnity costs(1) Despite rules 14.2 to 14.5, the court may make an order—(a) increasing costs otherwise payable under those rules(increased costs); or(b) that the costs payable are the actual costs, disbursements, andwitness expenses reasonably incurred by a party (indemnitycosts).16 Young v Attorney-General, above n 15, at [14] and [16].17 Auckland Waterfront Development Agency Ltd v Mobil Oil New Zealand Ltd, above n 15, at [28].(2) The court may make the order at any stage of a proceeding and inrelation to any step in it.(3) The court may order a party to pay increased costs if—(a) the nature of the proceeding or the step in it is such that thetime required by the party claiming costs would substantiallyexceed the time allocated under band C; or(b) the party opposing costs has contributed unnecessarily to thetime or expense of the proceeding or step in it by—(i) failing to comply with these rules or with a directionof the court; or(ii) taking or pursuing an unnecessary step or anargument that lacks merit; or(iii) failing, without reasonable justification, to admitfacts, evidence, documents, or accept a legalargument; or(iv) failing, without reasonable justification, to complywith an order for discovery, a notice for furtherparticulars, a notice for interrogatories, or othersimilar requirement under these rules; or(v) failing, without reasonable justification, to accept anoffer of settlement whether in the form of an offerunder rule 14.10 or some other offer to settle ordispose of the proceeding; or(c) the proceeding is of general importance to persons other thanjust the parties and it was reasonably necessary for the partyclaiming costs to bring it or participate in it in the interests ofthose affected; or(d) some other reason exists which justifies the court making anorder for increased costs despite the principle that thedetermination of costs should be predictable and expeditious.Additional time for the preparation of briefs[47] This claim is based on r 14.6(3)(a), with Vero asserting that the time requiredto prepare the briefs substantially exceeded the time allocated under band C. Therelevant step under sch 3 of the High Court Rules is step 33 which allocates, for allbands, one day for the first to fifth hearing days, 0.75 per day from sixth totenth hearing days, and 0.5 of a day from then on. Vero is claiming an additionalfive days, which would be equivalent to an additional 10 days of hearing time.[48] Vero called evidence from nine witnesses, eight of these being experts. Four ofthe experts provided more than one brief. It says, to a large extent, the need forsubsequent briefs arose because of the late evidence served by Moorhouse. Inparticular, Vero says the evidence contained in Moorhouse's original briefs wasconfined and the bulk of its evidence was contained in reply or supplementary briefs,which necessitated Vero filing further briefs. One issue it cites as having to addressafter the date of filing for Moorhouse's evidence was the appropriate method of crackrepair for the damage to the blockwork at 41 Moorhouse Avenue. It says that lateevidence was filed that changed its understanding that the wall was single wythe tothe wall being double wythe. It also points to the brief of evidence filed by Moorhousefor Mr Walker the week before trial, which also required Vero to respond.[49] Overall, Vero says that the time spent by counsel was well in excess of theadditional five days it claims as increased costs.[50] Moorhouse says that Vero's approach is flawed because the additional briefswere considered at trial and therefore contributed to the trial length, which in turn isused to calculate the appropriate scale costs.[51] I do not consider that Vero's approach is flawed, as the test for increased costsis whether the time taken for a particular step "substantially exceed[s] the timeallocated under band C".18 The number of briefs does contribute to the length of thetrial, which in turn affects the calculation of scale costs. However, it is still possiblefor Vero to say that it took substantially longer than the time allocated under scalecosts and so justifying an award of increased costs.[52] I start by noting that Vero has not informed the Court of how long it spent onpreparing briefs, only to say that it was substantially longer than the amount of timecalculated for scale costs. As it is an objective assessment of the step taken in thecontext of the proceeding (to avoid counsel claiming increased costs for inefficient18 High Court Rules, r 14.6(3)(a).work),19 the Court often has regard to the actual time taken in assessing the award ofincreased costs.20[53] I accept, though, that there are inefficiencies inherent in a party providingsubstantive new evidence in reply briefs or supplementary briefs which has to beresponded to compared with the situation where the plaintiff's case is fully disclosedin its primary briefs of evidence. That is because time can be wasted by thedefendant's witnesses responding to evidence that is ultimately discarded orsignificantly altered. Thus, I do consider there are grounds for increasing costs, but Ihave to be sure I am not duplicating that increase between the different heads of claimfor increased costs under r 14.6. Accordingly, I go on to consider the second claim forincreased costs before deciding how best this is addressed.Unnecessary contribution to the time and expense of the proceedings[54] Vero seeks a 35 per cent uplift on schedule costs claimed on the basis ofr 14.6(3)(b)(ii), (iii) and (v), being taking or pursuing an unnecessary step or anargument that lacks merit, failing without reasonable justification to admit facts,evidence, documents or accept a legal argument, and failing without reasonablejustification to accept an offer of settlement.[55] Vero's primary argument is that Moorhouse unreasonably:(a) pursued a repair strategy that was unjustified by the minor damagesuffered to the buildings;(b) persisted with its argument that crack repair by epoxy was not anappropriate repair method under the insurance policy, including anunreasonably late concession that epoxy repair was suitable for thepanels of the building at 43 Moorhouse Avenue;19 David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2022)at 67.20 See Trustpower Ltd v Commissioner of Inland Revenue [2014] NZHC 3072; Sovereign AssuranceCo Ltd v Commissioner of Inland Revenue [2012] NZHC 3573; and Strathboss Kiwifruit Ltd vAttorney-General [2019] NZHC 62.(c) persisted with its argument that deep pile foundations were required tobe installed as part of the repair schemes for the buildings, which wasconceded late into the proceedings; and(d) pursued claims that Vero was responsible for delay in assessingMoorhouse's policy entitlements and was attempting to avoidMoorhouse's policy entitlements.[56] In response to these claims, Moorhouse says its arguments did not lack meritand were justified. It says the critical issue at trial was whether epoxy repair wassuitable. Its position that it was not suitable was underpinned by the opinions ofwell-qualified and respected expert witnesses. This was a bona fide dispute betweenexperts.[57] For what Vero describes as "late concessions", Moorhouse says that its expertsresponsibly agreed that epoxy repair to the accessible walls at 43 Moorhouse Avenuewas acceptable when a suitable aesthetic finish was proposed by Vero. The removalof the pile issue was also a responsible concession and did not obviate the need for thegeotechnical reporting and evidence which informed how the foundations would bereplaced if required.[58] Moorhouse says that it was not unreasonable to pursue claims that Vero wasresponsible for the delay in resolving the insurance claim because this was inextricablylinked to the key dispute as to whether epoxy was an appropriate repair strategy. If itwas not, then the delay would have been caused by Vero insisting on using it in theirrepair strategy.[59] Vero's second argument is that Moorhouse unreasonably rejected a settlementoffer. This settlement offer was made on 22 June 2021, with the trial due to start inOctober 2021, where Vero offered a settlement of $750,000 plus GST. In addition tothe $935,835.21 plus GST already paid to Moorhouse, this would total $1,685,835.21plus GST. This price included: the full cost of repairs with an allowance forconstruction cost escalation to mid-2021; the full cost of compliance upgrades tostrengthen the buildings and undertake fire upgrades; a generous additional allowancefor engineering supervision of repairs (in addition to that included in thescopes/costing); and accepted claims preparation costs. This offer was for full andfinal settlement and was made on the basis that the funds did not have to be applied tothe repair works, unlike what is required in the insurance policy.[60] In Vero's letter offering that settlement, Vero's lawyers explain at a high-levelthe evidence that would be presented at trial as to the suitability of an epoxy repairstrategy and say that Moorhouse's arguments are unlikely to succeed. Vero says thesearguments were wholly upheld by the Court in the judgment. It says that followingthe trial, Moorhouse is entitled to recover far less under the policy (indemnity costsbeing $404,744 plus GST on Vero's evidence) than was offered by Vero andMoorhouse has incurred costs and disbursements at the conclusion of the trial.[61] In its letter in response, Moorhouse noted that the issue for determination attrial was whether an epoxy repair strategy would meet the policy standard of repairingthe buildings to the standard "when new". It provided reasons as to why it consideredan epoxy repair strategy would not meet that standard. It noted that if the buildingsneed to be replaced, it would cost $3.349 million for 33–39 Moorhouse Avenue and$1.479 million for 41–43 Moorhouse Avenue. It ended the letter by saying it was opento further settlement discussions between the parties.[62] Moorhouse says it did not refuse the settlement offer "without reasonablejustification" as this has to be assessed as at the time of the offer and not after thesubsequent result.21 It essentially argues the issue of whether an epoxy repair strategywas appropriate was properly pursued into trial, and it was not unreasonable for it toreject a settlement offer based on the main issue to be heard at the trial. In response,Vero says that Moorhouse was able to assess Vero's offer at this stage because whileVero had not yet served evidence in response to Moorhouse's reply evidence, the basisof Vero's case was set out in the offer letter and Moorhouse had ample understandingof those claims.21 RA Osborne and others McGechan on Procedure (online ed, Thomson Reuters) at[HR14.6.02(3)(a)(iii)].Discussion[63] In determining whether a rejection of a settlement offer is reasonable, thefollowing factors (without limitation) may be relevant:22(a) the size of the offer relative to the actual costs of counsel;(b) the amount of the claim;(c) the reasonable expectations of the party that refuses the offer;(d) the amount of preparation for trial already undertaken;(e) whether the proceeding concerns an uncertain area of law;(f) whether the parties were in a position to assess the merits when theoffer was received;(g) the information available to the party who receives the offer and theextent to which they can assess the offer;(h) the timing of the offer;(i) the conduct of the offeror.[64] Considering these factors (with the same lettering) in relation to theCalderbank offer made in 2021, I find as follows:(a) The offer was for a settlement of an additional $750,000 plus GST,whereas scale costs and disbursements claimed by Vero were$586,357.87 and accepted by Moorhouse were $308,781.45. Actualcosts were therefore higher.(b) The claim was for declarations as to how the insurance policy shouldrespond to the identified damage in the buildings, but if successful inall its claims, and if it proceeded with its engineers' repair strategy(albeit in my view that was unlikely), Moorhouse would be entitled tothe replacement value of the buildings (assessed in their reply letter as$3.349 million and $1.479 million) less depreciation.22 Weaver v HML Nominees Ltd [2016] NZHC 473, at [30] (footnotes omitted).(c) As noted by Moorhouse, its expectations were that if it succeeded inproving that epoxy was not a sufficient repair strategy, the offer wouldnot come near Moorhouse's policy entitlement.(d) At the point the offer was sent, most of the preparation for trial hadoccurred as all the briefs of evidence had been served except for Vero'sreply evidence, which were due to be filed shortly afterwards.(e) The proceedings did not consider an uncertain area of law but involveda factual and technical dispute over the appropriateness of crack repairwith epoxy resin.(f) The parties were largely in a position to assess the merits of thearguments when the offer was received given the amount of preparationthat was completed when the offer was received.(g) As for (f) above.(h) The offer was received around four months before the trial wasscheduled to start, although that date was eventually delayed.(i) There is nothing to impugn Vero's conduct.[65] Overall, the settlement offer was based on a much lower figure than Moorhousewas claiming and was based on Vero's repair strategy, which Moorhouse consideredinsufficient. The key question is whether, at the point in time when the offer wasmade, Moorhouse had enough information to determine that it was unlikely to besuccessful at the hearing and therefore ought to have accepted the offer.[66] While I accept that both parties had well-qualified experts, each advocatingthat their proposed repair scope complied with the policy, Moorhouse's approachoverlooks the fact that unless it actually undertook the repairs proposed, it would onlybe entitled to indemnity value. There was no evidence which unequivocally assertedthat Moorhouse would implement its repair proposal and, indeed, it would have, in myview, been uneconomic to do so. Its cost vastly exceeded the maximum sum insured,and there was no evidence Moorhouse would have funded the shortfall to implementthe repairs. This means the difference between what was being offered by Vero andwhat Moorhouse could realistically expect to obtain was not as marked as it might firstappear.[67] In my view, the Calderbank offer was made at an appropriate stage in theproceedings, where the expert evidence had been largely identified. The factorsdiscussed at [64] generally support Vero's offer as being a generous and pragmaticoffer to settle. Moorhouse took the risk of proceeding with its claim and should meetan increased costs from this point forward. An uplift of 35 per cent on scale costs iswarranted, both to reflect the additional time involved in preparation of briefs, alongwith Moorhouse's refusal to accept what proved to be a generous settlement offer fromVero.[68] Accordingly, the costs for all steps following the presentation of theCalderbank offer should be uplifted by 35 per cent. There is no need, in addition tothis uplift, to increase the amounts claimable for preparation of briefs.Disbursements[69] Moorhouse suggests there were the following errors in Vero's calculations fordisbursements, resulting in a recalculation of $15,449.22 of disbursements and$175,068.23 of expert fees:(a) Vero claims concurrent disbursements for three counsel wherecertification is only sought for two counsel;(b) some incorrect calculations for GST;(c) fees totalling $89,519.03 from an expert from Batchelar McDougallConsulting (BMC) were listed as a disbursement, but no witness fromthat firm was called in the proceedings nor was a brief of evidence filed;and(d) many of the invoices cover attendances or costs associated with claimsfor other buildings which have been settled without being adequatelyproportioned (being done on a percentage basis in lieu of objectivesubstantiation) or relating to events where costs cannot be claimed for,such as judicial settlement conferences23 and tasks required for theusual claims adjustment process.[70] As explained above at [14], Vero has conceded some of Moorhouse's claimsas to its claimed disbursements. However, for the most part, the disbursements remaincontested.[71] Rule 14.12 of the High Court Rules covers the recovering of disbursementsand relevantly provides:14.12 Disbursements(1) In this rule,—disbursement, in relation to a proceeding,—(a) means an expense paid or incurred for the purposes of theproceeding that would ordinarily be charged for separatelyfrom legal professional services in a solicitor's bill of costs;and(2) A disbursement must, if claimed and verified, be included in the costsawarded for a proceeding to the extent that it is—(a) of a class that is either—(i) approved by the court for the purposes of theproceeding; or(ii) specified in paragraph (b) of subclause (1); and(b) specific to the conduct of the proceeding; and(c) reasonably necessary for the conduct of the proceeding; and(d) reasonable in amount.(3) Despite subclause (2), a disbursement may be disallowed or reducedif it is disproportionate in the circumstances of the proceeding.23 Watts & Hughes Construction Ltd v Biala [2021] NZHC 290 at [8].[72] This rule requires the fees to be an expense that would be charged separatelyfrom legal fees and: (a) approved by the court; (b) specific to the conduct of theproceeding; (c) reasonably necessary for the conduct of the proceeding; and (d)reasonable in amount.Disbursements relating to counsel[73] As I have already noted there is no dispute that second counsel should becertified. However, in this case, Vero had three counsel who rotated through thehearing because senior counsel, Ms Anderson KC, fell ill at the outset of the hearingand junior counsel had to come on board to assist Ms Brick who took over carriage ofthe trial. Moorhouse claims that Vero has claimed disbursements for three counsel insome instances. In its schedule of costs, it points to the following instances:(a) item 17 — travel for Ms Anderson from Auckland to Christchurch on14 July 2022;(b) item 18 — travel from Christchurch to Auckland on 24 July 2022; and(c) item 24 — taxis for Ms Anderson.[74] Vero says across the three counsel acting as principal and second counselacross the course of the trial, four return flights from Auckland to Christchurch areclaimed. (Ms Brick on 17 July 2022 – 3 August 2022 and 2 October 2022 – 4 October2022; Ms Anderson 14 July 2022 – 24 July 2022; and Ms Cornwell 17 July 2022 – 29July 2022 and 31 July 2022 – 2 August 2022). Although there are actually five, Verosubmits this is reasonable given counsel are based in Auckland and the trial spannedacross two weekends.[75] I do not consider there is unreasonable overlap in the claims for flights. WhileMs Cornwell flew up before Ms Anderson flew back, she had to travel anyway toappear as second counsel to support Ms Brick who took over as lead counsel. Theflights are therefore all properly claimed, as are the taxi fares.[76] Relatedly, Moorhouse challenges the production of a second casebook. Verosays this was necessary for second counsel. I agree with Vero that this disbursementshould be allowed.BMC's consulting fees[77] The contested fees are disbursement items 57–84, totalling $89,519.03 forBMC's consulting fees. Moorhouse says BMC ought to be seen as an advisor to Veroand therefore its costs should be paid by Vero rather than claimed as a disbursement.It says this is because there was no expert answerable to the Court as there was noexpert giving evidence or providing a brief. It says that it is therefore not possible forMoorhouse to verify the involvement of BMC as they were entirely in the background.Moorhouse further says BMC's involvement would inevitably cause duplication inwork required to get Dr Brooke from Compusoft Engineering up to speed about theproceedings.[78] Vero says it relied on BMC's work at trial as BMC prepared the July 2018engineering reports on which Vero's repair scoping was based. BMC engineersparticipated in the expert conferral in the proceeding and prepared the joint experts'report. Dr Brooke then relied on this work in providing his evidence. BMC's drawingsand calculations were appended to Dr Brooke's supplementary brief of evidence. Veroalso submits that BMC effectively acted as juniors for Dr Brooke and allowed thework to be costed at a lower rate than if Dr Brooke had done it himself.[79] The question of whether disbursements should be allowed for fees incurredwith experts who are subsequently not called as witnesses has been consideredbefore.24 In Houghton v Saunders, Dobson J considered whether fees of $15,200 couldbe claimed as disbursements for Mr Cameron-Brown, an investment banking expert,who was engaged in case Mr Cameron, another expert, was not able to give evidence.25Dobson J held:[109] There are precedents for allowing, as disbursements, fees incurredwith experts who are subsequently not called as witnesses. Each claim is tobe assessed within the context of preparation for, and presentation of, cases at24 See Houghton v Saunders [2015] NZHC 548; and Day v Official Assignee [2018] NZHC 2610.25 Houghton v Saunders, above n 24 at [107].trial. In this case, given the extent of fees I have approved for Mr Cameron,and the absence of any brief for Mr Cameron-Brown, I consider the plaintiff'sobjection is a reasonable one. I am not prepared to authorise the fee forMr Cameron-Brown as a recoverable disbursement.[80] In Day v Official Assignee, Edwards J allowed the second defendant to recoverthe costs of an external service provider to resurrect an accounting database so theexperts could provide an expert opinion.26[81] BMC consultants and in particular, the senior engineer, Mr Warren Batchelor,had a direct role at the beginning of the proceedings, as can be seen by his involvementin the experts' conferral. There are also charges for writing a brief of evidence, andthese references predate any invoices from Dr Brooke. Mr Batchelor from BMC neverfiled a brief of evidence with the Court but that was as a consequence of personalcircumstances which prompted his retirement and which were beyond Vero's control.An invoice from 30 September 2019 notes there was a meeting with Dr Brooke "todiscuss BMC reporting and change of Expert [witness]". From that point, BMCconsultants were working with Dr Brooke to assist him in providing his expertevidence to the Court. It seems he accepted and adopted the work done by BMC tothat date.[82] The question here is whether these charges are "reasonably necessary for theconduct of the proceeding" and, as seen in Houghton v Saunders, that assessment iscoloured by whether the work is being duplicated by another expert, which in this caseis Dr Brooke. It is clear that BMC consultants were originally engaged to be expertwitnesses in the proceeding but then this changed around September 2019 whenDr Brooke picked up that role in Mr Batchelor's absence. The only issue is whetherthere was duplication involved as Dr Brooke reviewed BMC's work and advisedwhether he could independently support those opinions.[83] I accept that the fees of BMC can be claimed as a disbursement because it isclear that they did do work that was reasonably necessary to support the preparationof Dr Brooke's evidence. The uncertainty over the extent to which there wasduplication does not mean the fees should be not claimed as a disbursement, but could26 Day v Official Assignee, above n 24, at [19](b) and [21].justify a reduction in the amount payable. This was done in Auckland WaterfrontDevelopment Agency Ltd v Mobil Oil New Zealand Ltd where the Judge considered amore detailed analysis and independent evidence of the expert fees would have beenappropriate but adopted a pragmatic approach in order to ensure that justice was donebetween the parties.27 The onus is on Vero to satisfy me on the balance of probabilitiesthat the disbursements were reasonably necessary for the proceeding and reasonablein amount. Here, I am not satisfied that Moorhouse should pay both BMC's fees andDr Brooke's fees in full, given the likelihood of duplication between them. In myview, BMC's fees should be reduced by roughly 30 per cent to reflect this and I holdthat only $60,000 of BMC's fees are claimable.Experts' fees for settled claims[84] The biggest concern Moorhouse has with the disbursement calculations is theinvoices that cover attendances or costs associated with claims for other buildingswhich have been settled. The parties agree that costs associated with the settled claimsshould not be claimed as disbursements. However, the invoices themselves do notapportion the work between the buildings which were the subject of the trial and theones that were settled, so Vero has estimated that apportionment.[85] Moorhouse says this is inappropriate because it is arbitrary, inaccurate and notbefitting of the substantial amount (over $150,000) claimed. It says no enquiry hasbeen made with the relevant experts to arrive at the nominated percentages. Itacknowledges that some of these claims are legitimate but says that "the substantiationis so clearly lacking that the defendant has not discharged its onus to prove its claims".It says that if the Court is prepared to endorse some form of percentage amount in lieuof objective substantiation, then the percentages awarded should be substantially lessthan those currently advanced by Vero because it is appropriate to err on the side ofcaution.[86] Vero agrees that it bears the onus of sufficiently substantiating its claim.However, it says there is sufficient information available to fairly estimate the amount27 Auckland Waterfront Development Agency Ltd v Mobil Oil New Zealand Ltd, above n 15, at [50]–[53].it may properly claim for these invoices. It says the Court should adopt a practicalapproach which does justice between the parties and requesting time sheets or expertstatements will not necessarily provide any more useful information. It says that thework done by experts prior to December 2019 is obvious because, by that time, all ofthe experts had provided reports which were in evidence at trial. Briefs of evidencehad been served for the expert witnesses and some experts had also participated in thejoint expert conferral and preparation of joint experts' reports. Vero also says that thebriefs presented at trial show the extent of the redactions for the evidence relating tothe settled buildings and the redactions are generally a minor proportion of theevidence overall. Many of the experts gave evidence on general issues that wasunchanged as a result of settlement.[87] Vero says that the buildings in respect of which the claims were settled weresmaller and therefore the claims were worth less than the claims for the buildings thatwent to trial. It says therefore that an apportionment of 50 per cent for a number ofthe expert costs where it cannot be apportioned more accurately is generallyfavourable to Moorhouse.[88] Moorhouse challenges a large number of disbursements based on Vero'sapportionment for costs in respect of the settled claims. These include:(a) items 5–10 — streamlined litigation support charges from26 February 2018 to 29 April 2019 where 50 per cent of the overall costis charged as a disbursement, totalling $3,254.93;(b) items 48–51 — invoices from Alexander&Co for inspection ofbuildings, preparatory work and completion of reports where between50 per cent and 85 per cent of costs are claimed, totalling $25,956.09;(c) items 63–71 and 76 — invoices from BMC (discussed above) wherebetween 50 per cent and 75 per cent of costs are claimed, totalling$27,220.75;(d) items 85–87 — invoices from Dr Brooke from Compusoft Engineeringfor report writing and preparing Dr Brooke's brief of evidence with75 per cent of attendance costs claimed, totalling $37,533.58 of whichMoorhouse challenges $36,038.77;(e) item 96 — an invoice from Fire Review Solutions for a fire engineeringassessment with 50 per cent of costs claimed, totalling $1,391.25;(f) items 104–108 — invoices from KGA Geotechnical from30 September 2018 to 31 October 2020 for preparation of a report, asite inspection, participation in a joint expert conferral/ joint expertreport and preparation of Mr Hutchinson's brief of evidence wherebetween 75 per cent and 100 per cent of costs were claimed, totalling$19,153.23 (including the reduction agreed to by Vero for incorrectlyadded GST);(g) items 111–113 — invoices from Maynard Marks for work undertakenon an inspection of all the buildings, preparation of reports andpreparation of Mr Wilson's brief of evidence with 50 per cent of costs(plus 100 per cent of travel disbursements) claimed, totalling$12,626.39;(h) items 116–121 and 124 — invoices from New Zealand BuildingTraining & Compliance Ltd and Maynard Marks for work undertakenin inspecting sites, preparing repair scopes and photobooks andpreparation of Mr Tolley's evidence where 50 per cent of costs (for allbut two items which are claimed in full) are claimed, totalling$36,822.50 (including reductions conceded by Vero for costsapportioned as relating to a judicial settlement conference); and(i) item 135 — an invoice from 31 October 2019 from Telfer Young whichcovers the preparation of valuation reports for all buildings and thepreparation of Mr Stanley's brief of evidence where 75 per cent of costsclaimed, being $21,778.12.[89] Moorhouse alleges that any invoice that has any level of apportionment isinsufficiently substantiated and therefore should not be claimed as a disbursement orshould be claimed at a lower rate.[90] I have reviewed all the disputed invoices, and none of them clearly apportionthe work done for the different sets of buildings. From those invoices alone, it isimpossible to tell what an accurate proportion of the work is. For example, one invoicefrom New Zealand Building Training & Compliance, from 31 July 2019, describedthe job as:Investigate EQ related damage and provide scopes of worksProvide expert witness in high court proceedings8 commercial buildingsThe tasks detailed in that invoice are described as "Consultancy - Reporting" and"Consultancy - Surveying (on-site)", which were both charged out at a rate of $180per hour with 56.25 hours charged for the former and 19 hours charged for the latter.Vero claimed 50 per cent of this invoice.[91] The onus is on Vero to prove on the balance of probabilities, that thedisbursements are claimable under r 14.12 of the High Court Rules.28 As outlinedabove, for disbursements to be claimable, they must be:(a) specific to the conduct of the proceeding; and(b) reasonably necessary for the conduct of the proceeding; and(c) reasonable in amount; but(d) may be disallowed or reduced if the claim is disproportionate in thecircumstances of the proceeding.28 Auckland Waterfront Development Agency Ltd v Mobil Oil New Zealand Ltd, above n 15, at [42].[92] In Auckland Waterfront Development Agency Ltd v Mobil Oil New ZealandLtd, Katz J had to consider the question of the reasonableness of expert witness feeswhere $800,000 had been claimed but where there was a lack of information as to therates of relevant fee earners, their seniority or experience, the breakdown on time takenin relation to various stages of the expert evidence process, no separation betweendisbursements and charges, no indication of the total hours worked, andinconsistencies in the fee earners' costs and for different types of work.29[93] Because of that lack of information, Katz J said that she was not satisfied thatthe entirety of the expert fees claimed were reasonably necessary to the proceedingand reasonable in amount. She said that they may well have been both of these things,but the evidence was not sufficient to prove they were so.30 She determined, however,that a practical approach to costs meant that the party should still be entitled to recoversome of these charged disbursements, so she discounted the claimed amount by30 per cent.31 She said this was "possibly on the high side" but that "[i]t is appropriateto err on the side of caution" given the onus to prove the disbursements werereasonable.32[94] I consider a similar pragmatic approach should be adopted here, albeit the issueis whether the fees relate to the conduct of the proceeding.[95] That is what was done in Torbay Holdings Ltd v Napier, where Woolford Jaccepted it was reasonable and appropriate for the plaintiff to charge 60 per cent ofsome invoices from a private investigator because the plaintiff admitted that some ofthose invoices related to other matters.33 It appears the Judge did not requireparticularised invoices to differentiate between the work that was specific to theproceedings compared to what was done for other matters.[96] In the end, this is an intensely factual enquiry and must be guided by thegeneral principle that costs determinations should be predictable and expeditious.34 I29 At [44]–[46].30 At [51].31 At [53]–[54].32 At [54].33 Torbay Holdings Ltd v Napier [2015] NZHC 3374 at [62]–[66].34 High Court Rules, r 14.2(1)(g).consider that given the information provided to the Court, it is not possible toaccurately differentiate the proportion of each invoice that is specific to theseproceedings. However, it is not disputed, and in my opinion correctly, that much ofthe expert evidence was reasonably necessary for these proceedings and that issupported by the fact that when the claims in respect of the other buildings settled, theredactions to the expert witness briefs were not extensive.[97] The question then becomes whether the percentages used by Vero areappropriate. Vero says that the 50 per cent allocations are generous towardsMoorhouse as the settled buildings represented only 34 per cent of the total suminsured. This is not a perfect comparison as the work required per claim is notnecessarily correlated to the amount each claim is worth, but I think it is a usefulindicator given there is no other reasonable way to assess how the costs for eachinvoice should be apportioned.[98] However, I note that some invoices are charged at 75 per cent or more of theirtotal charge, which is higher than the 66 per cent Vero says the claims that went to trialare worth. Some of these invoices could be said to be justified as being charged at75 per cent because Vero says the redacted portions of the briefs of evidence wereminor and these invoices related to the briefs of evidence. However, I note not all ofthe disbursements charged at 75 per cent obviously relate to the briefs of evidence.For example, item 48 is an invoice from Alexander&Co for:MEASURING AND ESTIMATINGTravel for and inspections at Moorhouse Commercial Park Christchurch(18/7/19), corresponding with Fee Langstone re: inspection and accesslimitation and availability for potential hearing dates.Vero claims 75 per cent of this invoice, but it is not explained as to why that amountwas claimed.[99] In all the circumstances, I consider where Vero claims 75 per cent or more ofan invoice challenged on the basis it includes work for the settled claims, that shouldbe reduced to 66 per cent, with the balance of the invoices being claimed at 50 per centas proposed by Vero. This excludes item 108 which Vero says relates solely to workdone after the settlement.[100] Moorhouse also says that some of the invoices for the experts appear to relateto judicial settlement conferences, which cannot properly be claimed given thelegislature has not provided for costs to be awarded in the High Court for judicialsettlement conferences.35 Moorhouse's concerns appear to be related to items 121 and124, which are invoices from New Zealand Building Training & Compliance Ltd from31 January 2020 and 31 May 2020. Moorhouse says they are related to judicialsettlement conferences because they have taxis to the High Court charged on them.Vero accepts that, because of the taxis, the invoices appear to be partly related tojudicial settlement conferences, and suggests a 50 per cent discount is taken offitem 121 and $1,000 off item 124 to reflect this.[101] It is impossible to tell from the invoices how much work was done for thejudicial settlement conference as the only narration on both invoices is "Consultancy– Reporting [or Surveying]". From the information on the file, it appears that the firstjudicial settlement conference was scheduled for two days and the second one wasscheduled for one day. The Court has not been provided with any information as towhat proportion of these invoices concerns the judicial settlement conferences, but Inote that the first invoice (which presumably relates to the first settlement conference)was a total of 23.5 hours, so if the representative of the NZBTC was at both full daysof the settlement conference, that could amount to more than 50 per cent of the invoice.Based on an abundance of caution, and reflecting the fact that Vero has the onus toprove the reasonableness of these disbursements,36 I reduce Vero's entitlement to claimthese disbursements to 35 per cent, or approximately one third of the amount claimed.[102] Moorhouse also says that some of the invoices related to procuring reportingwhich would have been necessary to obtain as part of Vero's usual claims adjustmentprocess regardless of the existence of the proceeding, and are therefore not specific tothe proceeding. Moorhouse points to the BMC invoices for this point, but no otherspecific invoices.35 Watts & Hughes Construction Ltd v Biala, above n 23, at [8].36 Auckland Waterfront Development Agency Ltd v Mobil Oil New Zealand Ltd, above n 15, at [54].[103] Moorhouse has not specified why it suspects this is the case, or what reports itis referring to, when they were written and who they were written by. Given I havefound the BMC invoices were necessary for preparing evidence in the proceeding(albeit I have reduced the amount claimable to reflect some duplication withDr Brooke's work), I will not disallow this claim.Costs on costs[104] The Court has said it is generally reluctant to awards costs on costs applicationsas they are often dealt with through memoranda.37 However, other cases note that anapplication for costs is to be treated no differently for costs purposes from aninterlocutory application.38 Woodhouse J in Gibson v Official Assignee of NewZealand appropriately noted that costs on costs are ultimately a matter of discretion.39[105] In this case, I consider that neither party has been wholly successful on thecosts arguments. Accordingly, I consider costs should lie where they fall.Orders[106] Vero's claim for costs as set out in the schedule to its memorandum in reply ismodified as follows:(a) Item 45 is reallocated as step 12 from step 13.(b) Items 6, 7, 12, 15, 19, 20, 23, 24, 28, 29, 31, and 34 are to be subsumedunder one claim for step 21 at Band C.(c) Steps 33 and 33B are to be calculated based on the length of the hearing.37 See Neal v Neal [2022] NZHC 2625 at [33]; Jefferys v Morgenstern [2013] NZHC 1361 at [40];Barry Park Investments Ltd v Body Corporate Number 95388 [2016] NZHC 1527 at [25]; EpsomWoods Ltd v Waitakere Farms Ltd [2020] NZHC 3137 at [4]; Norrie v Crown Range Holdings Ltd[2022] NZHC 898 at [28]; DGL Manufacturing Ltd v Simmonds [2022] NZHC 1434 at [18]; andLegler v Formannoij [2022] NZHC 1804 at [12].38 See Body Corporate Administration Ltd v Mehta (No 4) [2013] NZHC 213 at [85].39 Gibson v Official Assignee of New Zealand [2015] NZHC 3200 at [14].(d) An uplift of 35 per cent is awarded for all steps taken after22 June 2021.(e) The claim for BMC's consulting fees is reduced to $60,000.(f) All invoices for costs associated with claims for other buildings thatapportion those costs at 75 per cent or more to the current claim arereduced to an apportionment of 66 per cent.(g) The amount claimable for items 121 and 124 is reduced to 35 per centof the total.[107] I certify for second counsel.[108] Costs on this application are to lie where they fall.[109] I reserve leave to the parties to revert to the Court for clarification of any issuerelating to costs, although I would encourage the parties to reach pragmatic resolutionswherever possible.Solicitors:Rhodes & Co., ChristchurchFee Langstone, Auckland