MYERS PARK APARTMENTS LIMITED V SEA HORSE INVESTMENTS LIMITED HC AK CIV 2004-404-007180

MYERS PARK APARTMENTS LIMITED V SEA HORSE INVESTMENTS LIMITED HC AK CIV 2004- 404-007180 24 October 2006IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2004-404-007180UNDER Sections 126F Property Law Act 1952 and Sections 44 and 46 Unit Titles Act 1972 BETWEEN MYERS PARK APARTMENTS LIMITED Plaintiff AND SEA HORSE INVESTMENTS LIMITED First Defendant AND KIWELL ENTERPRISES LIMITED Second Defendant AND CHE KEUNG LO and YIN PING WU LO Third Defendant AND BELAROSE GROUP LIMITED Fourth Defendant AND YUAN LIANG TAI Fifth Defendant AND PUI LING ANNIE TAM and HUNG BIU HO Sixth Defendant AND SUET LING TING, CHI YUNG LI VANESSA and KWAN-WAI LI CALVIN Seventh Defendant AND YANG ZI LIMITED Eighth Defendant AND KYUNG HO PARK and BONG GYO YANG Ninth Defendant AND TOP MODA (NZ) LIMITED Tenth Defendant AND TAK SHU LO and TSE BIK YOK LO Eleventh Defendant2 AND DOUGLAS GRAY PATTINSON and VIOLET PATTINSON Twelfth Defendant AND KYEONG HEE PARK and JONG WON PARK Thirteenth Defendant AND CHI KEUNG YIP and YUET YING NG Fourteenth Defendant AND LONDON PROPERTY INVESTMENTS LIMITED Fifteenth Defendant AND GRACE CHAN WAH CHENG and TSAN LUNG PIERRE CHENG Sixteenth Defendant AND RONALD QUOK LAM LAU, WINNIE WAI LIN LEUNG LAU and AVON WAI FONG LEUNG Seventeenth Defendant AND WAI TIM TSE and KIT CHUN MOK Eighteenth Defendant AND PAUL SAU WING WONG and SUSAN SO SHAN WONG and AKT TRUSTEE COMPANY LIMITED (in liquidation) Nineteenth Defendant AND WONG CHOW HON and NG SOH JOO and JIMMY NG Twentieth Defendant AND HSIEH LANG CHIU Twenty-first Defendant AND MARK PATRICK WONG and PIU YING WONG Twenty-second Defendant AND BEHROOZ KERMANI LIMITED Twenty-third Defendant AND LEE GROUP LIMITED Twenty-fourth Defendant3 AND SUNG HUH Twenty-fifth Defendant AND WILLIAM HUGHES LIMITED Twenty-sixth Defendant AND COLOURS CRYSTAL EXCLUSIVE GIFTWARE LIMITED Twenty-seventh Defendant AND SANG DEOK LEE and HYUN SOOK LEE Twenty-eighth Defendant AND PAK CHI CHUNG and CHOW LAI SEUNG CHUNG Twenty-ninth Defendant AND WAI KWAN NG and AH CHOW JOEL WONG Thirtieth Defendant AND YI LIAN YANG Thirty-first Defendant AND SUN HUI Thirty-second Defendant AND SU-YING WANG and MING-LONG CHEN Thirty-third Defendant AND TONG CHI WAI KAN, CANDACE OI KWAN LEE and WITHERS TSANG & CO TRUSTEES LIMITED Thirty-fourth Defendant AND BODY CORPORATE 162791 Thirty-fifth Defendant AND ANZ NATIONAL BANK LIMITED Thirty-sixth Defendant AND ASB BANK LIMITED Thirty-seventh Defendant AND BANK OF NEW ZEALAND Thirty-eighth Defendant4 AND BRIDGECORP FINANCE LIMITED Thirty-ninth Defendant AND THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED Fortieth Defendant AND THE SOUTHERN CROSS BUILDING SOCIETY Forty-first Defendant AND WESTPAC BANKING CORPORATION LIMITED Forty-second Defendant AND QBE INSURANCE COMPANY LIMITED Forty-third Defendant Hearing: 29 May-1 June 2006 Appearances: A Galbraith QC and T J Allan for Plaintiff G Satherley for 1st to 9th, 11th-12th, 14th, 16th-24th, 26th-27th, 30th- 35th Defendants Judgment: 24 October 2006 at 2.30pmCOSTS JUDGMENT OF VENNING J7KLVMXGJPHQWZDVGHOLYHUHGE\PHRQ2FWREHUDWSPSXUVXDQWWR5XOH  RIWKH +LJK&RXUW5XOHV 5HJLVWUDU'HSXW\5HJLVWUDU 'DWH«««««Solicitors: Grove Darlow & Partners, Auckland Glaister Ennor, Auckland Copy to: A Galbraith QC, AucklandIntroduction[1] Costs were reserved in the judgment delivered on 24 July 2006. Counsel have now exchanged memoranda. It falls to the Court to fix costs.Plaintiff's position[2] The plaintiff seeks costs against the defendants jointly and severally on a category 3 basis with allowance at times for time band C. The plaintiff also seeks recovery for disbursements including witness expenses.Defendants' position[3] The defendants' position is that:• the appropriate costs category is a mixture of 2B and 2C;• the plaintiff's expert costs are not accepted;• the costs awarded to the plaintiff should be reduced as the plaintiff contributed unnecessarily to costs and/or the defendants effectively succeeded with the counterclaim orders they sought; and• the plaintiff significantly increased costs to all parties by including in the proceedings a second cause of action based on the allegations of the body corporate dysfunction which was effectively abandoned at the outset of the hearing. [4] In the event costs were awarded counsel for the defendants submit they should be awarded severally and that they be stayed pending payment of compensation by the plaintiff for common property to be taken in the development.Decision[5] The plaintiff succeeded at trial. It should have costs. [6] As the Court of Appeal have made clear in Glaister v Amalgamated Dairies Limited [2004] 2 NZLR 606 the starting point is to fix the appropriate category for the proceedings having regard to the complexity and significance of the matters at issue. The next step is to apply a time allowance to the various steps taken in the proceeding.Classification[7] The issues involved in the proceedings were complex from a legal basis. They also were of particular significance to the parties to the litigation. The proceedings are to be classed as category 3.Time band[8] I also accept that the time taken to commence these particular proceedings would have required a comparatively large amount of time. Time band C is appropriate for the commencement phase of the proceedings. Thereafter, however, as acknowledged by counsel for the plaintiff, during the interlocutory phase a normal amount of time would be sufficient. That is time band B. I also depart from counsel for the plaintiff in relation to the preparatory and trial phase. I consider again that a normal amount of time is sufficient and time band B can apply to those steps as well.Second counsel[9] Given the nature of these proceedings and Mr Allan's involvement in the proceedings I accept second counsel was appropriate at the hearing and certify for that.Calder bank offer[10] I have considered the exchange of email prior to the hearing. I do not consider it amounts to a formal Calder bank offer or a matter that the Court should take into account in relation to costs at all.Reduction in costs otherwise payable to the plaintiff[11] I accept there is some force in Mr Satherley's submission for the defendants that the preparation of both parties was, to a degree, influenced by the second cause of action based on the dysfunctionality of the body corporate. While counsel for the plaintiff did not actively pursue the matter and formally confirmed it was not pursued at the hearing, nevertheless it was an issue the defendants had to respond to. The plaintiff did not then pursue it at trial. I consider it appropriate to reduce the costs otherwise payable to the plaintiff for the additional costs associated with that. While I am not prepared to say that the plaintiff contributed unnecessarily to the time and expense of the proceeding I do consider that this case falls into the category of "some other reason" which justifies the Court reducing costs to the plaintiff in accordance with r 48D(f). I fix the appropriate adjustment at 15 percent.Joint and several liability[12] I do not accept counsel's submission for the defendants that costs should be fixed severally. The defendants have commonality of interest. They must, or should have some arrangement in relation to costs. The solicitors for the defendants must have some arrangement for costs between them. It should not be for the plaintiff to incur the expense of pursuing each defendant separately for costs.Stay[13] Nor am I prepared to grant an order for stay as part of this costs judgment. If there is to be any application for any stay it should be brought by proper application.I give no indication of whether such application might be appropriate, I simply indicate that it is not appropriate for a stay to be made on this costs application itself.Disbursements[14] Disbursements are covered by r 48H. The disbursements sought by the plaintiff are reasonable disbursements. The photocopying expenses and witness expenses are expenses paid for the purposes of the proceeding. With respect to the decision referred to by counsel for the defendant Progressive Enterprises Limited v North Shore City Council (HC Auckland, CIV 2004-404-7139, 22 December 2005, Baragwanath J) I do not accept that cost principles in the earlier rules require the two-thirds recovery to apply to the costs of professional experts. The costs of professional experts are properly classified as disbursements which are dealt with separately under r 48H. In particular the witness expenses were specific to the conduct of the proceeding, were necessary for the conduct of the proceeding and I find are reasonable in amount: r 48H(2).Defendants' counterclaim[15] This is not a case where the defendants effectively succeeded on the counterclaim as counsel suggest, in fact the Court found formal orders in terms of the counterclaim were unnecessary given the evidence adduced at the hearing.Result[16] The plaintiff is to have costs in the sum of $67,712.70 calculated in accordance with the attached schedule. Note: the appropriate daily recovery rate prior to 1 June 2006 for category 3 was $2,150. It is only the appearance on 1 June 2006 and steps subsequent to judgment that attract the revised rate of $2,370. [17] In addition to the costs of $67,712.70 disbursements of $21,467.67 are approved together with the witness expenses as a disbursement in the sum of$32,669.07 (taking account of the reduction of $4,477.50 in relation to Mr Pratap's costs). In total $121,849.44. [18] The costs award is against the defendants represented by Mr Satherley's firm and is a joint and several order. __________________________ Venning JSCHEDULE OF COSTS Item within High Court Rules Step Band Claimed 3C1 Commencement of proceeding by plaintiff, including:• Preparing and filing and serving statement of claim (68 individuals and or companies in total required to be served).• Ex parte notice of interlocutory application by the plaintiff for directions concerning the issuing of a proceeding• Memorandum of counsel for plaintiff in support of ex parte application for directions/orders concerning issuing this proceeding• Affidavit of A R Farquhar• Sealing• Orders concerning commencement of proceeding• Affidavit of N J MacKenzie re service 23 February 2005• Affidavit of P J Cains re service 1 April 2005• Affidavit of R H Parkes re service x3; 1 April 2005, 1 April 2005, 20 April 2005.• Affidavit of R J Mexted re service 31 March 2005• Affidavit of L M Rogers re service 31 March 2005• Ex parte application for orders for substituted service on 14th , 20th and 28th defendant• Affidavit of A R Farquhar in support of application for substituted service 24 March 2005• Sealing Order for substituted service• Affidavit of service of T J Allan 26 May 2006• Affidavit of service of R S Apanui 25 May 2006 10 x $2,150 $21,150 4.10 Plaintiff's memorandum for first conference 23 March 2005 .4 x $2,150 $860 4.11 Attendance first case management conference before Associate Judge Lang 24 March 2005 .3 x $2,150 $6454.10 Memorandum of counsel for plaintiff's for conference 3 June 2005 .4 x $2,150 $860 4.5 List of documents of plaintiff 1.5 x $2,150 $3,225 4.6 Production of documents for inspection 1 x $2,150 $2,150 4.10 Memorandum of counsel for plaintiff for conference 12 August 2005 .4 x $2,150 $860 4.11 Attendance second case management conference 12 August 2005 .3 x $2,150 $645 4.10 Memorandum of counsel for Plaintiff for conference with Associate Judge Lang 18 August 2005 .4 x $2,150 $860 4.11 Attendance third case management conference 18 August 2005 .3 x $2,150 $645 11/4.10 Plaintiff's notice of discontinuance against the 41st Defendant (arising from 41st defendant refinancing) .4 x $2,150 $860 2 Statement of defence to counterclaim 2 x $2,150 $4,300 7.1 Plaintiffs preparation of written statements of evidence to be used at trial 2.5 x $2,150 $5,375 7.2 Plaintiff's preparation of lists of issues and authorities, selecting documents for common bundle and all other preparation 2.5 x $2,150 $5,375 8 Preparation for hearing where case proceeds to trial 8 x $2,150 $17,200 4.1 Appearance at hearing for principal counsel 3 x $2,150 1 x $2,370 $8,820 Appearance at hearing for second counsel ½ principal $4,410 4.18 Sealing judgment .2 x $2,370 $474 11/4.10 Preparation of memorandum on question of costs .4 x $2,370 $948 $79,662.00Less deduction of 15% as noted at para [11] above Total: $11,949.30 $67,712.70DISBURSEMENTSFiling fees• Filing proceedings – Notice of Proceeding, Statement of Claim and application• Filing Interlocutory Application• Setting Down Fee $1,700.00 $600.00 $2,600.00 Hearing Fees $10,400.00 Service Fees $2,864.95 Photocopying Charges $3,262.72 Sealing Fee $40.00SUB TOTAL $21,467.67 TOTAL: $67,712.70 + $21,467.67 $89,180.37