NAPIER CITY COUNCIL v LOCAL GOVERNMENT MUTUAL FUNDS TRUSTEE LIMITED [2021] NZHC 2572

NAPIER CITY COUNCIL v LOCAL GOVERNMENT MUTUAL FUNDS TRUSTEE LIMITED[2021] NZHC 2572 [29 September 2021]IN THE HIGH COURT OF NEW ZEALANDNAPIER REGISTRYI TE KŌTI MATUA O AOTEAROAAHURIRI ROHECIV-2017-441-070[2021] NZHC 2572BETWEEN NAPIER CITY COUNCILPlaintiffAND LOCAL GOVERNMENT MUTUALFUNDS TRUSTEE LIMITEDDefendantHearing: 27 July to 12 August 2020 (further submissions receivedSeptember 2020)Counsel: D H McLellan QC and G Tompkins for the PlaintiffM G Ring QC, C J Hlavac and K Welsford for the DefendantJudgment: 29 September 2021JUDGMENT OF GRICE J(costs)Introduction[1] This is an application for costs by the defendant, the successful party in thesubstantive claim.1[2] The defendant's claim for costs and disbursements was challenged on two mainpoints. The first was its claim for costs and disbursements in relation to three counseland the second was costs in respect of two interlocutory applications filed by thedefendant but subsequently not pursued.1 Napier City Council v Local Government Mutual Funds Trustee Ltd [2021] NZHC 1477.[3] The trial ran for approximately seven days. It involved a number ofcase management conferences as well as a face-to-face issues conference held on12 November 2019, which had initially been set down for two days. That issuesconference resulted in a series of agreements between the parties which largelyresolved the interlocutory matters being pursued by the plaintiff.[4] Counsel agree the appropriate categorisation in terms of the High Court Rules2016 is 2B. This appears appropriate in the circumstances. The matter involved anormal amount of time which would be considered reasonable.2 Category 2 is forproceedings of average complexity requiring counsel of skill and experienceconsidered average in the High Court.3[5] The case did involve a number of legal and evidential arguments and a numberof volumes of documents that required management. To manage the argument anddocuments a second counsel appeared for both parties. Assistance of second counselwas justified and second counsel for the defendant assisted in the presentation of thecase. However, certification for a third counsel would not be appropriate. In fact, thedefendant has now proposed deducting costs attributable to third counsel.[6] As for disbursements relating to third counsel:(a) all disbursements that can be isolated as relating to the third counselshould be deducted from the costs claim; and(b) any shared expenses, such as taxis, should be apportioned according tothe number of persons in the taxi or sharing the part of the expense, asit appears the defendant has done.[7] In relation to the interlocutory applications, the general position is that costsare set at the time of determination of the interlocutory matter and will usually be infavour of the successful party.4 The defendant filed a number of interlocutory2 High Court Rules 2016, r 14.5(2) indicates a determination of what is a reasonable time to be madeby reference to Band B if a normal amount of time is considered reasonable.3 Rule 14.3(1).4 Rules 14.2(1)(a) and 14.8(1)(a).applications. An adjournment application was granted and costs dealt with on thatapplication.[8] The further applications, the subject of the costs objection which had not beendealt with by the time of trial, were apparently resolved through the agreementsreached at, or following, the issues conference. These related to the identification andrefinement of trial issues (including the onus), as well as a challenge to theadmissibility of part of the plaintiff's witness' brief of evidence.5[9] The defendant says the issue concerning identifying and refining trial issueswas resolved by agreement as Napier City Council (NCC) agreed to serve the relevantbriefs of evidence that it had originally indicated it would not file until reply evidence.The defendant says this outcome was effectively what it had initially sought.Therefore, there was no need to resolve the matter in advance by interlocutoryargument.[10] The plaintiff points out however that the particular issue relating to the onuswas not determined in the defendant's favour at trial. The plaintiff responds by sayingthat it was completely successful at trial as to liability, and the finding on the onus didnot detract from that outcome.[11] In this case it appears that the interlocutory matters which might have requireda separate pre-trial interlocutory determination were sorted out between the partieslargely as a result of the constructive discussions at the case management/issuesconference held on 12 November 2019. Both counsel filed submissions prior to thatissues conference, however, those matters were never the subject of a separate hearingand pre-trial determination.[12] In the ordinary course the defendant, as the successful party in the substantiveaction, would be entitled to costs for the preparation, including of memoranda andappearance at the case management/issues conference. The defendant has indicatedthat it has claimed 0.4 days for preparation for the memorandum, not the 1.5 days thatis claimable in the usual course. As the interlocutory matters, which remained extant5 Napier City Council v Local Government Mutual Funds Trustee Ltd [2019] NZHC 2643.for the purposes of the trial, were effectively resolved at the issues conference or byagreement, I do not think it appropriate that costs should be awarded in favour of theplaintiff. It would have been different, and costs may well have been appropriate, ifthe interlocutory applications had been abandoned.[13] In those circumstances it is not appropriate costs should be awarded against thedefendant on those matters. The fact that on the issue of the onus I found in favour ofthe plaintiff's position in the judgment does not mean that costs on that particular issue,because it had been the subject of an interlocutory application but was actuallydetermined at trial, should be awarded in favour of the plaintiff. It was argued as partof the trial and the defendant was the successful party at trial. The costs incurred forthat part of the trial should not be separated out.Conclusion[14] For the reasons set out above:(a) Costs are awarded on a 2B basis in favour of the defendant.(b) A certificate is granted for second counsel for the defendant.(c) The costs and disbursements in relation to the third counsel for thedefendant are not allowed and should be removed from the defendant'sclaim.(d) Where the third counsel's costs cannot be separated out, such as fortaxis and other shared costs, the disbursement should be adjusted bypro rata of the cost between the number of counsel sharing the relevantgoods or services and deducting an amount attributable to the thirdcounsel.(e) The defendant is entitled to costs of and relating to thecase management/issues conference on 12 November 2019 as claimed.(f) No award of costs is made in relation to the defendant's interlocutoryapplications, which were not separately heard before trial._____________________Grice JSolicitors:Wilson Harle, Tāmaki Makaurau | Auckland, for the Plaintiff.Young Hunter Lawyers, Ōtautahi | Christchurch, for the Defendant.