KNIGHT V CROWN HEALTH FINANCING AGENCY HC WN CIV-2005-485-2678

KNIGHT V CROWN HEALTH FINANCING AGENCY HC WN CIV-2005-485-2678 13 February 2008IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2005-485-2678BETWEEN PETER GORDON KNIGHT Plaintiff AND CROWN HEALTH FINANCING AGENCY Defendant Hearing: 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 16, 17 October 2007 Appearances: R Chapman & L McKeown for Plaintiff H Hancock & U Jagose for Defendant Judgment: 13 February 2008JUDGMENT OF GENDALL J AS TO COSTS[1] In my reserved judgment delivered on 16 November 2007, I invited Counsel to provide submissions as to any order for costs (and quantum). [2] The plaintiff was legally aided and costs could not be awarded against him except in "exceptional circumstances". Given his financial position, and other factors, that criterion was not met. [3] Under s 40(5) of the Legal Services Act 2000, if costs could not be awarded against a legally aided party, the Court may nevertheless make an Order specifying what costs would have been ordered against the plaintiff, but for the operation of that section. I invited submissions from Counsel in that respect. [4] I am satisfied that the successful party in this case, the Crown Health Financing Agency, is entitled to the benefit of an Order under s 40(5). That is, itmight apply to the Legal Service Agency for redress in terms of the Order for Costs that I make. [5] Of course both the Crown Health Financing Agency and the Legal Services Agency are Crown agencies, but nevertheless if the Crown Health Financing Agency wish to seek redress from the Legal Services Agency, in my view, it is entitled to do so. It was required to defend, and succeeded completely, proceedings of a plaintiff funded by the Legal Services Agency, which involved it in significant expense. These proceedings encompassed 11 days of hearing. I do not know what the legal aid funding of the plaintiff was and that is not material for this cost decision. [6] The actual costs incurred by the Defendant are not precisely known because it is not the usual solicitor/client situation. Nevertheless, the Crown Health Financing Agency, through the Crown Law Office, has been put to very substantial expense in defending these proceedings. It seeks an Order for Costs, not as to its actual expenses but pursuant to Category 2B in Schedule 3 of the High Court Rules. The plaintiff does not dispute that that is an appropriate classification. [7] Pursuant to that categorisation, the Defendant seeks an Order for Costs in the sum of $62,310, based upon its contention as to applicability of that scale, together with disbursements involving Court fees, transport fares, accommodation, witness expenses and the like, totalling $27,090.78. This makes a total claim, pursuant to the scale, of $89,400.78. [8] Counsel for the plaintiff, whilst accepting that the scale 2B is appropriate, challenged certain items of the Defendant's claim as they related to the preparation of Statements of Evidence, Statements of Defence and other preparation items. Counsel also challenges some part of the claim for travel costs of Counsel and Crown Law staff, and for airfares for persons not called as witnesses. [9] I do not propose to adopt a mathematical intricate analysis of each item claimed. But have concluded, in respect of the challenged items:• Statement of defence to third amended statement of claim – claimed $3,200 Allow: $ 960• Preparation of lists, document, common bundle etc – claimed $3,200 Allow: $3,200 [10] I do not accept the argument that is restricted as Mr Chapman says. It is a necessary part of preparation for a Civil trial, above and beyond general preparation for hearing (item 8) concerns. [11] In respect of disbursements, I allow the total amount claimed of $27,090.78. I regard the travel costs of Counsel and other Crown Law staff a necessary incidental to preparation as being appropriately claimed. Mr Chapman argued that disbursements should be reduced because travel costs of Crown Law staff were "over claimed". I do not agree. [12] For the conduct of proceedings involving far distant allegations of events in the 1960s to 1970s, involved complications and rather much more work, investigation and preparation than might normally be expected in similar litigation. The allegations were grave. Costs incurred in staff – in addition to Counsel, investigative evidence were reasonably incurred. They are similar to disbursements claimed by instructing solicitors. [13] In a case such as this, I do not consider it follows that travel expenses of a witness who eventually did not give evidence for the Defence, must be disallowed. If those witnesses had, for example, given evidence, the trial would have been lengthened – with a consequent an increase the scale costs to be awarded. There may be many good reasons why Counsel (especially for the defence) does not call witnesses who may have been interviewed, in the investigative process. But the costs incurred were necessary and reasonable. Again, it was akin to costs an instructing solicitor might incur. [14] From a defendant's point of view (and the Crown Solicitor's function) those were expenses for disbursements reasonably incurred in the defence's litigation.[15] It follows that I fix costs pursuant to s 40(5) in favour of the Crown Health Financing Agency in the sum of $61,070, together with disbursements (including GST) of $27,090.78, making a total of $88,160.78. [16] Within this Order, I certify for second and subsequent Counsel which, in the context of litigation such as this, was entirely justified. [17] The impact of such an Order is the Crown Health Financing Agency may seek, if it wishes, some redress for the expense it incurred from the Legal Services Agency. The Defendant would have had the benefit of such an award of costs, made against the plaintiff but for him being legally aided. [18] There is force in the argument made on behalf of the Crown Health Financing Agency where both plaintiff and defendant are fully funded by the State, and where a plaintiff fails totally, the public interest requires that one branch of the Crown should be entitled to seek redress from another branch of the Crown which has chosen to fund such litigation which, as it did in this case, was doomed to fail. [19] Whilst Counsel for the Crown says that there must be some "accountability" on parties embarking on litigation, I think it is better to express it on the basis that the Legal Services Agency ought to be accountable for funding litigation of dubious merit, either on the facts or by reason of Limitations Act provisions. [20] I have no doubt that if the plaintiff had not been legally aided, he would not have pursued the litigation to the extent that he did. Of course, he was entitled to do so, given the funding provided to him by the Legal Services Agency. But the Defendant is entitled to an award so that it knows what redress it might be able to seek (but not necessarily receive) from the Legal Services agency as a result of the plaintiff failing in his claim. "J W Gendall J"Solicitors: R Chapman, Wellington for Applicant H Hancock, Wellington for Defendant