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Lun v Kong [2023] NZHC 2256 (21 August 2023)
Last Updated: 6 September 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
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BETWEEN
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DAMIN LUN
Plaintiff
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AND
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YONGCING KONG
Defendant
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On the papers:
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18 August 2023
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Appearances:
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J K Goodall KC / LukeSizer / Zar Sinclair for the Plaintiff R E Harrison KC
/ Anna Cherkashina for the Defendant
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Judgment:
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21 August 2023
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COSTS JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
This judgment was delivered by me
on 21 August 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
............................... Registrar/Deputy Registrar
Solicitors:
Buddle Findlay (Luke Sizer / Zar Sinclair), Auckland, for the Plaintiff
Norling Law (Brent Norling / Anna Cherkashina), Auckland, for the
Defendant
Counsel:
Jason K Goodall, Auckland, for the Plaintiff
Rodney E Harrison KC, Auckland, for the Defendant
DAMIN LUN v YONGCING KONG [2023] NZHC 2256 [21 August 2023]
Introduction
- [1] On
1 June 2023 the Court delivered a judgment granting the plaintiff’s
application to set aside the defendant’s protest
to jurisdiction (the
Judgment).1 In the Judgment, the parties were directed to
endeavour to agree costs, and if no agreement was reached, the parties were
directed
to file memoranda on costs for determination on the papers.
- [2] Counsel have
conferred and are not agreed on costs. Counsel for the plaintiff filed a
memorandum as to costs dated 17 July 2023,
and counsel for the defendant filed a
reply memorandum dated 31 July 2023. Having reviewed these memoranda, the Court
issued a minute
dated 15 August 2023 requesting more information from the
plaintiff ‘s counsel in relation to the expert witness fee. On 16
August
2023 the plaintiff ‘s counsel filed a response to the Court’s
minute.
- [3] The areas of
dispute between the parties are:
(a) allowance for a second counsel in the plaintiff’s costs;
(b) a disbursement claim for the expert witness fee.
Submissions
Second counsel
- [4] In relation
to an allowance for a second counsel, the plaintiff’s counsel makes the
following submissions:
(a) An allowance for a second counsel is permitted in category 2 cases provided
the case has some exceptional feature to justify
a second
1 Lun v Kong [2023] NZHC 1370.
counsel allowance. The approach to determining this is always objective, and it
is focused on the nature of the proceeding.2
(b) The Court has accepted that an allowance for a second counsel is permitted
in category 2 cases as part of the proceeding’s
“average”
characterisation.3
(c) 2B costs for a second counsel is appropriate in this case as it involved a
complicated fact matrix, with nuanced issues on the
conflict of laws, and was of
sufficient complexity that both parties engaged King’s Counsel to present
their oral arguments.
- [5] Counsel for
the defendant submits, in relation to this issue:
(a) The interlocutory hearing did not justify the allowance for a second counsel
as, while it was accepted that the hearing involved
a complex set of legal
principles in relation to conflicts of law, the whole argument on behalf of the
plaintiff was presented by
the principal counsel who is a King’s
Counsel;
(b) The hearing was light in evidence and there was no examination of
witnesses.
Conclusion in respect of second counsel
- [6] I am of the
view that in line with the authorities noted at footnote 3, the proceeding
should be characterised as “average”
complexity and second counsel
was justified. The proceeding involved a number of complex legal principles
relating to conflict of
laws and while all the submissions were made by the
King’s Counsel, the work embedded in the submissions justified a second
counsel.
- Prattley
Enterprises Ltd v Vero Insurance New Zealand Ltd [2017] NZHC 1599, citing
Andrew Beck Principles of Civil Procedure (3rd ed, Thomson
Reuters, Wellington, 2012) at [13.3.5].
3 Khan v New
Zealand Muslim Association [2023] NZHC 802 at [27];
Hodder v Creek [2023] NZHC 561 at [37];
CSR Pokeno Ltd v Yes Investment NZ Ltd [2022] NZHC 2378 at [26];
Commissioner of Inland Revenue v Robertson [2018] NZHC 696 at [62];
Northwest Developments Ltd v Zhang [2017] NZHC 1891 at [38].
Expert witness fee
- [7] Counsel for
the plaintiff submits that the fee for an expert witness is recoverable under r
14.12 of the High Court Rules 2016,
providing the expense is reasonably
necessary, reasonable in amount, and specific to the conduct of the
proceeding.4 Counsel for the plaintiff refers to the decision in
Air New Zealand Ltd v Commerce Commission,5 and submits this
decision establishes, as a general principle, the successful party is entitled
to recover actual expenses of its
expert witnesses. Counsel also submits that
the expenses of obtaining expert evidence which is obtained reasonably and in
good faith
is still recoverable even if it is ultimately unhelpful and
irrelevant to determining the issues, and relies on the authorities noted
in her
memorandum.
- [8] The
plaintiff submits that the disbursement for JunHe’s expert witness fee was
reasonably necessary, reasonable in amount
and specific to the conduct of the
proceeding. She submits the nature of the application warranted the plaintiff
obtaining expert
evidence on the laws of the People’s Republic of China to
illustrate the “special reasons” as to why, if the courts
of the
People’s Republic of China were prima facie the more appropriate forum,
the case should nonetheless be tried in New
Zealand. She submits that costs for
the disbursement remains claimable, even though the Court did not find the
points to which the
evidence was adduced of much significance.
- [9] Counsel for
the defendant submits that the expert witness fee is highly unreasonable in
amount. He makes the following submissions:
(a) The body of the affidavit produced by JunHe was only slightly over five
pages long, the affidavit itself does not deal with the
specific facts of this
case but provides a general overview of aspects of a Chinese legal proceedings
relating to discovery of evidence,
the attendance of witnesses in civil
proceedings, and statutory limitation periods.
4 High Court Rules 2016, r 14.12(1).
- Air
New Zealand Ltd v Commissioner of Inland Revenue [2007] NZCA 27; [2007] 2 NZLR 494; (2007)
18 PRNZ 406 (CA) at [47] and [64].
(b) The remainder of the affidavit are exhibits comprised of the expert’s
CV and extracts from Chinese legislation (with unofficial
translations).
(c) The claimed fee ofNZ$7,447.56 is highly excessive in amount for the volume
and the particularity of the evidence that was produced.
- [10] Counsel for
the defendant also raised the issue whether the invoice solely related to the
affidavit filed in the proceeding or
may have partially related to a proceeding
commenced by the plaintiff in a Chinese court (the Chinese Proceeding).
Counsel for the plaintiff has confirmed that no part of the fee related to the
Chinese Proceeding. This is also apparent from the
time and attendance records
supplied by JunHe in response to the Court’s query.
Conclusion in respect of expert witness fee
- [11] I am of the
view that the expert witness fee claimed by the plaintiff should be recoverable.
While the evidence from JunHe was
not particularly significant in the context of
the Judgment,6 it was nevertheless reasonable and relevant to the
proceedings in relation to establishing the plaintiff’s contention that
“special
circumstances” existed as to why the trial should take
place in New Zealand even if the courts of China were a more convenient
forum.
- [12] Having
reviewed the time and attendance records from JunHe, the time does not appear
unreasonable when regard is had to the time
taken to swear the affidavit, being
the last item in the time and attendance record.
Claim for costs incurred by the defendant in China
- [13] At [12] to
[15] of counsel for the defendant’s memorandum of 31 July 2023, counsel
avers that the defendant is seeking
payment of legal fees incurred by him in
relation to the Chinese Proceeding. The defendant is also seeking to set off the
defendant‘s
legal fees in relation to the Chinese Proceeding against any
costs award made against him in favour of the plaintiff in this
proceeding.
6 Judgment at [88].
- [14] My view on
this issue is that the Court has no jurisdiction to deal with costs in respect
of the Chinese Proceeding and these
must be dealt with in the relevant Chinese
court. Similarly the Court in my view, has no jurisdiction to set off these
costs against
the award of costs in this Judgment.
Costs on costs
- [15] Counsel
for the plaintiff is also seeking costs for the preparation of the memorandum as
to costs on the basis that the defendant’s
opposition was unreasonable
given the clear authority that expert witness fees are properly recoverable in
full.
- [16] My view on
this is that costs on the memorandum as to costs should lie where they fall, as
it was not unreasonable for the defendant
to query the amount of the expert
witness fee, given the issues raised by the defendant about the usefulness and
particularity of
the affidavit produced by the expert witness.
Orders
- [17] I
order that the defendant is to pay costs and disbursements to the plaintiff for
the steps taken in this proceeding as follows:
(a) Scale 2B costs: $11,531.75;
(b) Disbursements: $9,597.56.
................................... Associate Judge
Taylor
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