Victoria University of Wellington v Alton-Lee [2001] NZCA 313; [2001] ERNZ 305 (30 July 2001)

Last Updated: 12 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 294/00

	BETWEEN	VICTORIA UNIVERSITY OF WELLINGTON
		Appellant

	AND	ADRIENNE GAIL ALTON-LEE
		Respondent

Hearing:	26 June 2001
Coram:	Gault J Anderson J William Young J
Appearances:	J O Upton QC for Appellant
	H B Rennie QC for Respondent
Judgment:	30 July 2001

JUDGMENT OF THE COURT DELIVERED BY WILLIAM YOUNG J

Introduction

[1] Victoria University of Wellington (“the University”) appeals from a judgment of the Employment Court (Goddard CJ) delivered on 5 December 2000 in which the Chief Judge awarded the respondent, Dr Adrienne Alton-Lee, costs and disbursements totalling $181,396.71. This costs judgment was a sequel to an earlier judgment delivered by the Chief Judge on 19 July 2000 in which he awarded Dr Alton-Lee $90,000 by way of damages for breach of contract and declared that the University was required to account to her for $11,735 which it had received from Pub Charity Inc in relation to research carried out by Dr Alton-Lee.
[2] As well as the principal appeal, we were also required to deal with two applications: the first by Dr Alton-Lee, for an order striking out or staying the appeal and the second, by the University, for leave to call further evidence.

The underlying dispute

[3] The underlying dispute arose in this way.
[4] In 1993 Dr Alton-Lee was appointed as professor in the University’s Faculty of Education. Dr Alton-Lee left a tenured position as senior lecturer at the University of Canterbury to take up her new post. The appointment was on what the Chief Judge eventually held to be a 5 year contract. Her employment commenced on 1 December 1993. She was also Dean of the Faculty of Education for a period of approximately two years which started soon after she commenced her employment. Relations between Dr Alton-Lee and other staff at the University became strained. This led to a personal grievance claim by her which was settled in late 1995 on terms which included her resignation as Dean of the Faculty. Relationships continued to be strained and the University did not renew or continue Dr Alton-Lee’s appointment on its expiry in 1998. When her employment ended Dr Alton-Lee was involved in a research programme known by its acronym ERUDITE. She had negotiated funding for this programme from Pub Charity Inc. After she finished up with the University she continued with the programme. There were significant transitional difficulties between her and the University associated with the ERUDITE programme and these difficulties extended to the University withholding funds from her which it had received from Pub Charity Inc and to which she claimed to be entitled.
[5] In the proceedings in the Employment Court, Dr Alton-Lee contended that her employment with the University was not for a five year term but rather was at the outset, or later became, of indefinite duration. She also contended that in various other ways the University had been in breach of her employment contract. It is convenient to refer to the contentions as to alleged entitlement to indefinite employment (as opposed to employment for a five year term) as being “tenure claims”. Her other complaints can be referred to as “general treatment claims”. One of the general treatment claims was based on the House of Lords decision Malik v Bank of Credit and Commerce International SA (In Liquidation) [1997] 3 All ER 1 and involved a complaint that the way in which the University had treated Dr Alton-Lee had significantly damaged her reputation and ability to obtain employment.
[6] The trial started on 14 February 2000 and took no less than 18 days.
[7] It follows from what we have said that the Chief Judge found against Dr Alton-Lee on her tenure claims. In other words, he held that the contract was for a fixed 5 year term. He did, however, find for her on several of her general treatment claims in respect of which he held that the University had acted in breach of what might be (perhaps loosely) described as its duties as a good employer under the contract of employment. The claims in respect of which she was successful (and the damages awarded for each) were as follows:

1. The University prematurely announced the non-renewal of Dr Alton-Lee’s contract in 1998 thereby prejudicing her ability to obtain other employment ($15,000).
   
2. In relation to the ERUDITE research programme, the University questioned Dr Alton-Lee’s motives, failed to pass on to her electronic correspondence and held back the sum of $11,735 which it had received from Pub Charity Inc ($25,000).
   
3. The University failed to carry out performance appraisals as agreed ($10,000).
   
4. As part of the settlement of the personal grievance in 1995 the University agreed to publish an agreed statement but it did not do so until after the appointment of Dr Alton-Lee’s replacement of Dean had been announced ($40,000).
   

The Chief Judge also held that the University must account to Dr Alton-Lee for $11,735 which it had received from Pub Charity Inc in connection with the ERUDITE programme.

[8] Two general treatment claims made by Dr Alton-Lee were dismissed. One was the Malik claim, associated with alleged damage to future employment prospects. That this claim was dismissed is hardly surprising as the dispute between Dr Alton-Lee and the University was well removed from the facts in the Malik case. The other unsuccessful general treatment claim was a complaint that the University, in breach of contract, had interfered with Dr Alton-Lee’s ability to provide academic leadership within her department and faculty.
[9] So the case resulted in a judgment in favour of Dr Alton-Lee for $101,735.
[10] Following the delivery of the principal judgment, both parties agreed not to appeal. But this left the issue of costs to be determined by the Chief Judge.

The judgment as to costs

[11] We have some difficulty identifying with complete precision the costs actually incurred by Dr Alton-Lee.
[12] As we understand it from the material which we have seen, the position is as follows:-

1. Fees paid or payable to her solicitors $174,543.47
2. Disbursements and expenses (most of which were directly

paid by Dr Alton-Lee but some by her solicitors) $25,499.21

3. Counsel’s fee associated with the trial $61,875.00

4. Counsel’s fee associated with earlier attendances $6,300.00
___________

$268,217.68
==========

[13] The Chief Judge acted on the basis that the total costs and expenses of the litigation came to $262,142.68. This was on the basis of a submission put to him by counsel for the plaintiff. The difference between this figure and our figure lies in counsel’s fees which were brought into account in the submissions of counsel for the plaintiff in the sum of $62,100. We cannot, ourselves, recreate this figure from the invoices. Simpson Grierson (the solicitors for Dr Alton-Lee) wrote off approximately $52,000 in time. We note that there was an indication in the submissions made to the Chief Judge that the fees of Dr Alton-Lee’s senior counsel associated with the trial had been reduced by $8,750, a figure which was said to be apparent from the invoices but one which we cannot, ourselves, identify. We do note that the relevant invoice suggested that approximately $8,750 of the $61,875 charged by counsel in relation to the trial could be paid on a deferred basis.
[14] Although we are not satisfied that the information put to the Chief Judge as to the exact quantum of the costs incurred by Dr Alton-Lee was completely accurate, we are left with the view that any difference between the actuality and the position as indicated to the Chief Judge is probably not material.
[15] The University had also incurred substantial costs. In relation to preparation and trial its costs were $255,588.61.
[16] In order to carry on with the ERUDITE programme after she had finished up with the University, Dr Alton-Lee sold her house and cashed in her superannuation. In the end, the ERUDITE programme was discontinued. Dr Alton-Lee was left with no employment and was, for a time, on a benefit. To finance her case against the University she had to take on significant borrowings. When the issue of costs came to be determined her position, as advanced to the Chief Judge, was that if she was to pay off borrowings associated with the litigation, she needed to be paid not only the $101,735 awarded to her in the primary judgment but also another $158,000.
[17] We should mention some aspects of the trial and its preliminaries which are relevant to the arguments as to costs which have been advanced to the Chief Judge and to us:-

1. Dr Alton-Lee’s brief (so-called) of evidence was 468 pages in length. A complete and final copy of it was not made available to the University before trial. Instead it was handed up on a progressive basis while she was giving evidence-in-chief.
   
2. There was no orthodox bundle of documents. The documents discovered by Dr Alton-Lee (amounting to 15,000 pages contained in 34 Eastlight folders) were in court and from that document bank Dr Alton-Lee produced as exhibits the documents to which she referred in the course of her evidence. There were four sets of folders, one each for the Court, the witness and the two parties. This unusual procedure had the approval (albeit reluctant) of the Chief Judge because he accepted that the cost of pre-trial extraction of the documents to be produced “might be prohibitive”, see the Chief Judge’s minute of 9 February 2000.
   
3. The amount claimed by Dr Alton-Lee is difficult to assess with precision but was in the order of $1.3m. On what were the principal issues in the case (at least in economic terms), the University succeeded. Her recovery was less than 10% of what she had sought.
   
4. The University did not make a payment into court or any offer by way of a Calderbank letter. On the other hand, the evidence before the Chief Judge pointed to Dr Alton-Lee having made a number of attempts to reach a settlement with the University which it rebuffed.

[18] Before the Chief Judge, both sides claimed costs. Each claimed to have “won” the case.
[19] In his judgment as to costs, the Chief Judge discussed the background to the issues which he had to address in general terms. He referred to Dr Alton-Lee’s financial situation in terms of which she needed to recover $158,000 by way of costs if there was to be any net financial benefit to her from the case as a whole. He discussed the principles which govern awards of costs in the Employment Court and he mentioned two of the leading authorities (decided by the Labour Court) as to costs, NZALPA v Registrar of Unions [1989] 2 NZILR 550 and NZ Labourers IUOW v Fletcher Challenge Ltd [1990] 1 NZILR 557. He also referred to what he described as a “rule of thumb”:-

[T]hat a factor of 3 applied to the time spent in court will, in the case of a long cause, tend to accurately reflect the time reasonably spent in preparation.

As well, later in his judgment, he made a remark from which we infer that an award of costs representing around 60% of the reasonable actual costs of the successful party is usual.

[20] The approach of the Chief Judge to the conflicting claims for costs was as follows:-

1. The starting point was expressed in this way:-
   

The result of the case was that the plaintiff won. She is entitled to costs. The only question is how much. The defendant lost. It is not entitled to any costs.

2. The claim by Dr Alton-Lee in relation to tenure, although unsuccessful, was not unreasonable. There was obscurity as to the terms of her contract and this was the responsibility of the University. She was successful in relation to claims for breach of contract in terms of her general treatment at the hands of the University.
   
3. Two-thirds of Dr Alton-Lee’s brief and a larger proportion of the briefs of her witnesses were directed to issues on which she had succeeded (and by implication the bulk of the hearing time was similarly devoted to these issues).
   
4. No Calderbank offer had been made (and this was regarded as being surprising by the Chief Judge).
   
5. Both sides had been at fault in terms of the way the trial was conducted: the plaintiff for her “monumental brief” with voluminous references to documentary material; the University for what he saw were “its unnecessary denials of peripheral matters” which provoked “an outpouring of proof” from Dr Alton-Lee. The Chief Judge was of the view that the University had, for instance, wasted three days of trial by putting Dr Alton-Lee to proof as to her international reputation as a scholar. He was also critical of the time taken to cross-examine Dr Alton-Lee (which he calculated to be 15.44 hours).
   
6. Of the expenses which Dr Alton-Lee had directly met, certain claims were disallowed leaving a total which the Chief Judge considered appropriate of $17,403.70. He treated as appropriate all the disbursements incurred by the solicitors totalling $3,993.01. This provided a total for out of pocket expenses of $21,396.71. The Chief Judge was of the view that Dr Alton-Lee should make a full recovery in relation to these out of pocket expenses.
   
7. Of the legal costs incurred (which he treated as being $236,643.47), he held that some $200,000 should be regarded as having been spent reasonably. The primary reason for the discount from actual to reasonable was to allow for the fact that some of Dr Alton-Lee’s claims had failed.
   
8. He took the view that the plaintiff should make a full recovery of half his assessment of the reasonable costs (ie half of $200,000) and a recovery as to 60% of the balance (ie 60% of $100,000). This produced a figure referable to legal costs incurred by Dr Alton-Lee of $160,000.
   
9. The total recovery for Dr Alton-Lee was, therefore, $181,396.71.
   
10. The Chief Judge then tested this by applying “the rule of thumb”. He multiplied the hearing time by three producing a notional figure of 54 days which he treated as being exclusive of issue of proceedings, discovery and trial management for which he allowed a further six days. He thought that an appropriate rate per day for costs purposes would be $3,000. On this basis, the rule of thumb would point to an appropriate award of up to $180,000 plus disbursements.

Events subsequent to the costs judgment

[21] The notice of appeal was filed and served on 21 December 2000.
[22] A stay of the order as to costs was made by the Chief Judge on 24 January 2001 on terms that $90,698.35 be paid to Dr Alton-Lee forthwith and the balance of $90,698.35 be paid to the Registrar of the Court pending the outcome of the appeal. It was a condition of the stay that the University prosecute the appeal diligently. As well, the University was to pay Dr Alton-Lee forthwith $2,500 as costs on the stay application.
[23] The University paid $90,698.35 to Dr Alton-Lee’s solicitors and the same amount to the Registrar of the Employment Court under cover of letters sent on 1 February 2001. A cheque covering the additional costs of $2,500 was sent to Dr Alton-Lee’s solicitors on 19 February.
[24] Attempts were then made to arrange a fixture in this court but there were some difficulties due to conflicting fixtures of counsel. The University’s solicitors advised Dr Alton-Lee’s solicitors of the then current state of play by letter of 8 March and suggested that the parties look towards a fixture in July or August. This produced a slightly irritated response from Dr Alton-Lee’s solicitors of 13 March.
[25] On 4 April, Dr Alton-Lee applied to this Court for an order striking out or staying the appeal.
[26] The appellant’s points on appeal were finalised, filed and served on 20 April.
[27] Because Dr Alton-Lee’s counsel, Mr Rennie QC, was not available to argue the strike out application on 15 May the hearing of that application was held over. In the meantime, the present fixture was arranged.

The application to strike out the appeal

[28] The primary ground upon which the strike out application was advanced is the contention that the appeal is without merit. Given that we simultaneously were hearing the appeal and the strike out, there seemed little point in addressing that argument as a strike out point. Indeed we have no jurisdiction to do so, see Nichols and Camp v Victoria University of Wellington (unreported CA62/01, judgment delivered 23 April 2001).
[29] Although Dr Alton-Lee’s counsel also sought to justify the strike out on the basis of delay, there is no basis upon which we could fairly conclude that there has been such want of prosecution as would warrant a strike out.
[30] So the application to strike out the appeal is dismissed.

The application to call further evidence

[31] The application by the University to admit further evidence was made by application dated 7 June. The proposed further evidence is from Mr Bernard Banks who appeared as counsel for the University at the trial in the Employment Court. His affidavit relates to the course of events associated with the trial. In particular, he seeks to challenge the conclusion of the Chief Judge that the University put at issue Dr Alton-Lee’s international reputation as a scholar by reference to correspondence which is referred to in his affidavit. As well, he refers to the unsatisfactory situation which developed with respect to Dr Alton-Lee's brief of evidence.
[32] The evidence in issue is not new evidence in the usual sense. Rather it is evidence as to what took place at, and immediately before, trial and there is nothing in it which we see as going beyond what might ordinarily be said to us from the bar. The issues referred to by Mr Banks were referred to freely by counsel on both sides in the course of argument and we are content to deal with the appeal on the basis that the affidavit is admissible.

The grounds of appeal

[33] The grounds of appeal are two-fold:-

1. The judgment of the Employment Court in this case as to costs was plainly wrong. It erred in law, in that it failed to address the substantive outcome of the proceedings properly or at all; and
   
2. In any event the court misdirected itself and thereby made errors of law on material issues relating to the appellant’s alleged conduct of the case and its alleged conduct towards the respondent.

[34] We will deal with the arguments addressed to each of these grounds in turn. We note, however, that there is a substantial degree of overlap between the two grounds.

First ground of appeal: the judgment of the Employment Court in this case as to costs was plainly wrong. It erred in law, in that it failed to address the substantive outcome of the proceedings properly or at all

[35] As indicated earlier in this judgment, there were two broad categories of claim advanced by Dr Alton-Lee: the tenure claims and the general treatment claims. These two categories of claim gave rise to seven issues which were identified by the Chief Judge in his judgment. The University succeeded on four of the seven issues. It was completely successful on the tenure claims which undoubtedly were potentially the most significant, in economic terms, of those raised by Dr Alton-Lee. Mr Upton QC, for the University, said that the tenure claims were also of general significance and that the University had succeeded on a point of principle which is of broad applicability. The University was also successful on some of the general treatment claims (including the Malik claim which was itself the most significant in economic terms of the general treatment claims). After referring to all of this, Mr Upton stressed just how modest Dr Alton-Lee’s success was in relation to the amount claimed, a judgment which was for $101,735 as against a claim for sums in excess of $1.3m.
[36] He also noted that the award of costs amounted to almost twice the primary award. Further, he pointed to the unusual mode of calculation in relation to the legal costs component: a full recovery of half the costs assessed as reasonable and a 60% recovery of the balance. It would have been more direct of the Chief Judge to have said that he proposed to award 80% of his assessment of reasonable costs. Yet an award of 80% of reasonable costs would, by New Zealand standards, be atypically high.
[37] He observed that the award made here is the highest award made in the Employment Court.
[38] Finally he challenged the Chief Judge’s rule of thumb check which, he said, did not really allow for the peculiarities of the present case.
[39] Mr Rennie for Dr Alton-Lee noted that the appeal faces the double hurdle of being confined to a point of law and being against the exercise of discretion.
[40] He argued that costs are not, in this country, awarded on an issue by issue basis and that, for costs purposes, Dr Alton-Lee did win the case. Moreover, he said that if the costs incurred were analysed on an issue by issue basis, the bulk of the costs were referable to the claims on which she succeeded. He also contended that the duration of the hearing would not have been significantly different if she had not pursued the claims on which she lost. The issues as to tenure were not of general significance because they turned on issues that were particular to the arrangements between Dr Alton-Lee and the University.
[41] Mr Rennie also contended that there is no requirement for costs to be proportional to the damages recovered and that such a requirement would be inappropriate in a case where non-economic factors are at stake. His contention was that this case was not just about money; it was also significantly about Dr Alton-Lee’s reputation and academic standing.

Second ground of appeal: in any event the court misdirected itself and thereby made errors of law on material issues relating to the appellant's alleged conduct of the case and its alleged conduct towards the respondent

[42] Under this head of the appeal, Mr Upton made five points:-

1. He was critical of the conclusion of the Chief Judge that the University unnecessarily prolonged the case by putting in issue Dr Alton-Lee’s international reputation as a scholar (which the Chief Judge thought resulted in three wasted days of hearing). Mr Upton accepted that the University had put Dr Alton-Lee’s international reputation as a scholar in issue in its pleading. But he said that the University had indicated before trial that the relevant parts of Dr Alton-Lee’s brief (as it then was) could be taken as read and further that the University’s counsel had not cross-examined Dr Alton-Lee or her principal supporting witness on this topic. So he said that the conclusion that the University wasted three days of hearing was simply wrong.
   
2. Mr Upton claimed that the Chief Judge had unfairly criticised the length of the cross-examination of Dr Alton-Lee. He noted that Dr Alton-Lee’s brief was not complete when she started to give evidence and that it continued to be provided on a drip feed basis at adjournments as the hearing progressed. In that context and in light of the extraordinary length of the brief, it was not surprising that cross-examination lasted 15.44 hours. Before trial an estimate of ten hours for cross-examination was given when the anticipated length of the brief was 300 pages. Mr Upton said that the University was entitled to probe Dr Alton-Lee as to the conflicting evidence to be given by the University’s evidence. As well, he claimed that Dr Alton-Lee was not succinct in her answers to questions.
   
3. He complained that the Chief Judge made no allowance for the extraordinary arrangements as to production of documents, a procedure which was adopted very much at the insistence of Dr Alton-Lee.
   
4. He commented adversely on what he claimed was an inconsistency between the principal decision and the costs decision as to the degree of fault if any properly attributable to the University over the confused, or otherwise, nature and recording of the contract. He contrasted the remarks on this topic in the costs judgment to which we have already referred with findings in the principal judgment that “the contract is capable of only one construction” and that it was only later ever “modified in minor respects, none of which impacted on the term of the appointment”.
   
5. He challenged the Chief Judge’s comments on the absence of a Calderbank offer. He said there was never any prospect that Dr Alton-Lee would have been prepared to accept the sort of offer which the University may have been inclined to make.
   
6. Finally he noted that despite all criticisms of the University, the fact remains that the trial was concluded within its time estimate.

[43] Mr Rennie responded in this way:-

1. Although he accepted that advice was given that the relevant portion of Dr Alton-Lee’s brief was not required to be read, this was not followed by express admissions or amendment of the statement of defence. Indeed, he claimed that she was cross-examined on aspects of her evidence on this topic. He was able to point to the memorandum from counsel for the University as to costs which was filed in the Employment Court which appeared to acknowledge such cross-examination and which did not make nearly as much of the agreement that some paragraphs of Dr Alton-Lee’s brief could be treated as read as Mr Upton did in this court.
   
2. He claimed that Mr Upton also made far too much of the way in which Dr Alton-Lee’s brief was finalised. His contention was that the content was well-known in advance and all of the evidence in chief was given before cross-examination commenced. Moreover its length (and the way in which it was finalised in a piecemeal way) were, in a major sense, a result of late amendments to the University’s defence which resulted in the necessity to recast the brief. This led to a reconstruction of the brief but there was nothing in the final version which was not already on the table.
   
3. He argued that the arrangements as to documents were sensible given the nature of the case and the documents and the late amendments to the defence which required the recasting of the brief. Many of the discovered documents were academic papers, minutes or other bulky documents to which occasional reference was required to be made but which did not need to be produced. The arrangements were approved by the Chief Judge.
   
4. He denied that there was any inconsistency between the conclusions of the Chief Judge in the principal judgment and the conclusions expressed in the costs judgment.
   
5. He said it was entirely speculative whether Dr Alton-Lee would have rejected a Calderbank offer. The fundamental fact is that no offer was made. Moreover he said that the Chief Judge was well aware that throughout the plaintiff and her advisers had been looking for a settlement of the case and the underlying dispute and that the University had adamantly refused to pursue this as an option.
   
6. He accepted that the trial was concluded within its estimate but did not accept that this was relevant in the present context.

Discussion

[44] The judgment of the Chief Judge was made pursuant to s 108 of the now repealed Employment Contracts Act which provided:-

The Court in any proceedings may order any party to pay to any other party such costs and expenses (including expenses of witnesses) as it thinks reasonable, and may apportion any such costs between the parties or any of them as it thinks fit, and may at any time vary or alter any such order in such manner as it thinks reasonable.

[45] The right of appeal to this court is confined to questions of law, see s 135 Employment Contracts Act.
[46] In NZ Fire Service Commission v McCullough [1999] 1 ERNZ 426 at para 13 this Court observed that:-

An appeal against an award of costs is always an appeal against the exercise of a discretion by a Judge and carries with it the consequent difficulty for the appellant that it is necessary to show that the Judge erred in principle, took into account an irrelevant consideration, overlooked a relevant consideration or arrived at a result which was clearly wrong.

[47] The issues raised by this case fall to be determined by reference to the appropriate principles for awarding costs in the Employment Court. We recognise that s 108, by reason of its reference to “expenses”, has been construed by the Employment Court as creating a jurisdiction as to costs which differs somewhat from those which apply in other courts. Further, we recognise that the practice of other courts in New Zealand is obviously affected by the relevant rules of court which apply to those courts. But there are general principles as to costs and it is well established that decisions as to costs must be in accordance with those principles.
[48] The primary principle is that costs follow the event. As to quantification, the principle is one of reasonable contribution to costs actually and reasonably incurred. These principles reflect a balance involving a number of factors. We mention only some of them. Access to justice considerations point away from automatic full recovery of costs for the successful party. On the other hand, a monetary judgment will often be of little practical moment to a successful party unless the losing party is required to make a substantial contribution to the costs of obtaining it. Further, litigation is expensive, time-consuming and distracting and the requirement that a losing party not only pays his or her own costs but also makes a subsequent contribution to those of the successful party undoubtedly acts as a disincentive to unmeritorious claims or defences. Special rules as to costs which apply where there have been payments into court or Calderbank letters encourage settlement.
[49] Some of the arguments presented to us illustrate the difficulty of successfully appealing on a point of law against the exercise of a discretion as to costs. A number of the arguments advanced by Mr Upton were, at least when viewed in isolation, little more than attempts to persuade us to re-exercise the discretion which the Employment Contracts Act vested in the Chief Judge. Further, a number of the arguments related to issues that came down to evaluations which the Chief Judge was singularly well placed to make and which we are singularly badly placed to review.
[50] By way of example, we heard a good deal of argument as to whether the University caused the waste of three days of hearing by putting Dr Alton-Lee to proof on her contention that she was a scholar with an international reputation. The material we were shown by Mr Upton included a letter from the University’s solicitors indicating that what we understand to be the relevant portions of Dr Alton-Lee’s brief of evidence need not be read (implying that what she had to say was accepted by the University). On the other hand, Mr Rennie was able to point to the way in which the matter was addressed in the submissions made to the Chief Judge as to costs which suggested that the acknowledgements made by the University were not complete and that there was, indeed, cross-examination of her addressed to her international reputation as a scholar. Mr Upton responded by saying that the cross-examination was not directed to her international reputation as a scholar but rather that, in response to questions unrelated to that reputation, Dr Alton-Lee persistently and unreasonably reverted to that topic. This was challenged by Mr Rennie. The competing contentions on this point involve an issue of evaluation on which it would not be appropriate for us to differ (on an appeal confined to a point of law) from the assessment of the Chief Judge.
[51] Similar problems relate to Mr Upton’s complaints about the length of Dr Alton-Lee’s brief of evidence and the piecemeal way in which it came to be produced at trial and the associated and unusual way in which documents were dealt with. Mr Rennie responded by saying that the length of the brief of evidence and the way in which it came to be produced were contributed to by late amendments to the University’s defence which raised a number of issues which had previously not been anticipated which, in turn, led to Dr Alton-Lee being required to recast her brief of evidence on the eve of trial. A 468 page brief of evidence was obviously inappropriate to the issues raised by this litigation. Indeed, it is difficult to conceive of litigation in which a brief of such length would be appropriate. However, the Chief Judge was plainly of the same view which he expressed in his costs judgment. So the complaints by Mr Upton as to this come down to how the Chief Judge weighted that factor in his costs assessment. Complaints of this nature are not readily susceptible to argument on appeal.
[52] We also record that Mr Upton’s complaint about the Chief Judge’s comment on the failure of the University to make a Calderbank offer was misconceived. It will be recalled that his complaint was that the University was unfairly criticised on this score. Mr Upton said that the criticism was unfair because of what he claimed to be the reality that Dr Alton-Lee would never have accepted a Calderbank offer pitched at a reasonable level. The underlying factual premise may or may not be correct. We do not know what sort of offer Dr Alton-Lee would have accepted because this was never put to the test. But, more importantly, the complaint by Mr Upton misses the point. An offer is made on a Calderbank basis to cover the contingency, and perhaps likelihood, that it will not be accepted. The Calderbank character of an offer is only relevant if it is not accepted. Further, on our appreciation of the case as a whole, it was not only the failure on the part of the University to make a Calderbank offer that was material; it was also the fact that Dr Alton-Lee had, on the evidence, sought to settle the dispute on an amicable basis and had been met by refusals by the University to discuss such settlement.
[53] That said, we are troubled by the judgment.
[54] The way in which the Chief Judge arrived at the quantum of the award of costs is unorthodox to say the least. None of us has seen a case where a costs award has been calculated by reference to a full recovery of half a nominated figure together with a 60% recovery of the balance. It would have been more simple and transparent to have fixed costs at 80% of the nominated sum. We simply do not understand why the Chief Judge did not do so.
[55] As well, we were troubled by the Chief Judge’s analysis of the case which, as already indicated, was in these terms:-

The result of the case was that the plaintiff won. She is entitled to costs. The only question is how much. The defendant lost. It is not entitled to any costs.

We have sympathy with Mr Upton’s complaint that this was too simplistic a summary of a judgment in which the plaintiff recovered less than 10% of what she was seeking (at least when viewed in economic terms) and failed in respect of the causes of action which were of the most significance in monetary terms.

[56] Further, there is substance in Mr Upton’s complaint about a shift in emphasis at least between the Chief Judge’s findings in his primary judgment as to the tenure claim and the criticisms in his costs judgment of the University for what he then described as "confusion”. As we read his primary judgment, the employment contract between the University and Dr Alton-Lee was recorded in an exchange of correspondence in which the limited five year term of employment was spelt out clearly. There does not seem to us to have been any real scope for confusion as to what the contract was. The various arguments deployed on behalf of Dr Alton-Lee in support of her tenure claims were not treated by the Chief Judge in his primary judgment as being referable to anything which he then identified as involving serious administrative defaults on the part of the University.
[57] Whatever might be said about the result of the trial in terms of who “won”, the University undoubtedly lost the costs determination. So it is worthwhile considering the way in which the Chief Judge’s judgment would reasonably have been viewed by the University. The factors which we have just mentioned, coupled with analysis in the judgment as to how much the plaintiff needed to recover if she was to be left with any portion of the damages which were awarded to her, could convey the impression that the driving consideration in assessing the award of costs was a desire to see that Dr Alton-Lee was left with some portion of the damages awarded. The University would understandably see this as resulting in a costs award which was inversely related in quantum to the comparatively meagre award of damages. In other words, if this was the approach to the award of costs adopted by the Chief Judge, it was Dr Alton-Lee’s comparative lack of success in relation to her monetary claims which was one of the fundamental reasons why so substantial an award of costs was made. An approach to costs which compensates for comparative lack of success at trial is likely to result in an award which lies outside what is appropriate and in accordance with principle.
[58] We have no doubt that this is the way that the award of costs has been perceived by the University. We also think that it is understandable that the University would have this perception. So it is with real hesitation that we have decided to dismiss the appeal.
[59] The fundamental reason why we do so is that the result arrived at by the Chief Judge seems to us to be within the range of outcomes which could reasonably be arrived at by an application of orthodox calculations and principle.
[60] It was not seriously suggested that the Chief Judge’s approach to out of pocket expenses was wrong. It is conventional where costs are fixed for the award to include a 100% recovery in relation to disbursements reasonably incurred. There was no specific challenge by Mr Upton as to the Chief Judge’s assessment as to which of the out of pocket expenses were reasonable or as to his decision to allow a 100% recovery as to them.
[61] Legal costs incurred by Dr Alton-Lee (in terms of costs billed for by her legal advisers) were dealt with in the costs judgment on the basis that they totalled $236,643.47. For ease of arithmetic we will round that up to $240,000. The $160,000 awarded by the judge therefore represents approximately two-thirds of the costs he regarded as having been actually incurred. “Successful” plaintiffs are often not completely successful (in the sense of winning on all issues required to be determined by the judge) and an award of costs representing two-thirds of costs actually incurred would not normally be regarded as being unreasonable.
[62] We accept that an assessment of costs on a two-thirds basis might appear to be generous given Dr Alton-Lee’s limited success, in economic terms, at trial. But in evaluating this consideration, there are five significant factors which leave us with the view that the $160,000 award in relation to legal costs should not be regarded as being unreasonable: -

1. Her solicitors had significant unbilled time which was written off. If the unbilled time of $52,000 is added to the costs regarded by the Chief Judge as actually incurred, a figure close to $290,000 is reached. We accept that an assessment of what costs are reasonable in relation to litigation is not controlled by the level of costs actually charged. But in this case the Chief Judge’s assessment of what constituted reasonable costs started with what he took to be the costs actually charged which he then reduced for lack of success on some of the causes of action. Since the decision by Dr Alton-Lee’s solicitors to write off a substantial part of their costs was no doubt associated with her only qualified success in the proceedings and thus reflected her failure on the tenure claims, the approach adopted by the Chief Judge seems to have involved a double discount.
2. The case is not to be looked at or assessed solely in financial terms. As the dispute between her and the University developed, Dr Alton-Lee was faced with allegations of misconduct in relation to equipment and funds associated with the ERUDITE programme. The judgment of the Chief Judge is a vindication of her in respect of those allegations. Further, the University, entirely unnecessarily in the view of the Chief Judge, put in issue Dr Alton-Lee’s standing as a scholar with an international reputation. Her contentions as to that were vindicated.
3. The Chief Judge also had other criticisms of the way in which the University conducted its defence of the claim – criticisms which, in his view, resulted in the trial taking longer than would otherwise have been necessary.
4. The Chief Judge’s assessment appears to have been that most of the time at trial was devoted to issues upon which Dr Alton-Lee succeeded.
5. To the extent to which an 18 day trial might be thought to be disproportionate to the result reached, the apparent absence of a serious attempt on the part of the University to settle the dispute was a material (if not necessarily a decisive) consideration particularly in a context where there was evidence before the Chief Judge indicating that there had been a genuine desire on the part of Dr Alton-Lee to seek an agreed resolution.

[63] If the Chief Judge had arrived at an award on the basis that two-thirds of the costs actually incurred by Dr Alton-Lee (as he understood them to be) was an appropriate basis for an award of costs given the factors referred to in paragraph [62] above, and if he had rounded that figure up to $160,000, we doubt if there would have been an appeal. Further, any such appeal would have failed.
[64] Unorthodox methods of calculation, a perhaps simplistic analysis of who won and who lost the case and a criticism of the University which is not really reflective of the findings made in the primary judgment are not, in themselves, errors of law. We accept that they would be relevant if they were associated with an award of costs which was outside a range which could fairly be regarded as being acceptable. But, the result being within (although right at the top of) the range which we consider to be acceptable, the appeal must be dismissed.
[65] The parties, and those who practise in this field (where this case cannot be regarded as wholly exceptional) might well reflect on the consequences of conducting litigation without proper focus on the issues and without tight control on the escalation of costs.

Disposition

[66] Accordingly the appeal is dismissed. Dr Alton-Lee is entitled to costs (in respect of the appeal and the interlocutory applications) in the sum of $5,000 together with disbursements to be agreed between the parties and in default of agreement to be fixed by the Registrar.

Solicitors:
Kiely Thompson Caisely, Wellington for Appellant
Bartlett Partners, Wellington for Respondent