AIG Insurance New Zealand Limited v Saunders [2019] NZCA 649 (16 December 2019)

Last Updated: 20 December 2019

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA842/2011 [2019] NZCA 649

	BETWEEN	AIG INSURANCE NEW ZEALAND LIMITED First Plaintiff T E C SAUNDERS AND OTHERS Second Plaintiffs
	AND	E M HOUGHTON Defendant

Counsel:	B J Burt for First Plaintiff A E Ferguson and A G Holden for Second Plaintiffs C R Carruthers QC and PAB Mills for Defendant
Judgment: (On the papers)	16 December 2019 at 10.30 am

JUDGMENT OF BROWN J
(Costs)

The plaintiffs must pay the defendant costs of $17,910 and disbursements of $2,993.22.
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REASONS

Introduction

[1] A proceeding, in which the first plaintiff (AIG)^[1] sought a declaration regarding the application of s 9(1) of the Law Reform Act 1936, was transferred to this Court for hearing. In a judgment dated 20 December 2012 this Court ruled against the defendant (Mr Houghton).^[2] However the Supreme Court allowed Mr Houghton’s appeal against that judgment.^[3]
[2] The Supreme Court’s judgment did not address consequential costs issues. However after receiving memoranda from the parties (discussed below), in a judgment of 18 March 2014 the Supreme Court directed that costs and disbursements in the High Court and the Court of Appeal were (absent agreement) to be set by those Courts in light of the Supreme Court’s judgment on appeal.^[4] That judgment recorded that AIG had no objection to the disbursements claimed by Mr Houghton but did object to some of the costs claimed.
[3] Several years elapsed before the issue of costs was raised again, in response to a communication from the Court of Appeal registry concerning the release of security for costs.
[4] The parties have agreed that the issue of costs in this Court should be determined by a single judge on the papers.

Costs

[5] In a memorandum to the Supreme Court dated 11 February 2014 Mr Houghton sought costs in the Court of Appeal of $27,224 comprising:

Step 11 Preparation and attendance at 3 pre hearing conferences	0.9 day @ $1990/day	$1,194.00
Inspection of discovered documents (by analogy with Step 21 Scale 2 Schedule B High Court Rules)	1.5 days @ $1990/day	$3,980.00
Step 12 Preparation for hearing of proceeding/appeal (B and B)	6 days @ $2,940/day	$17,640.00
Step 13 Appearance at hearing of proceeding/appeal (B and B)	1 day @ $2,940/day	$2,940.00
Step 14 Second counsel if allowed by Court (B and B)	50% of senior counsel	$1,470.00

[6] In its memorandum in response of 28 February 2014 AIG took issue with the item relating to pre-hearing conferences and with the calculation on the basis of a complex appeal. It also drew attention to a multiplication error in respect of inspection. However AIG accepted that Mr Houghton was entitled to costs in the sum of $17,910 calculated as follows:

Inspection of discovered documents (by analogy with Step 21 Scale 2 Schedule B High Court Rules)	1.5 days @ $1,990/day	$2,985.00
Step 12 Preparation for hearing of proceeding/appeal (B and B)	6 days @ $1,990/day	$11,940.00
Step 13 Appearance at hearing of proceeding/appeal (B and B)	1 day @ $1,990/day	$1,990.00
Step 14 Second counsel if allowed by Court (B and B)	50% of senior counsel	$995.00

[7] In a memorandum of 27 March 2019 in this Court Mr Houghton sought costs on the same basis as in his earlier memorandum to the Supreme Court. In a memorandum in response dated 17 July 2019 AIG challenged the time allocations for inspection (suggesting 0.5 days instead of 1.5 days) and for preparation (suggesting 2 days instead of 6). It was also suggested that the daily rates adopted by Mr Houghton were incorrect.
[8] In a memorandum of 18 July 2019 counsel for Mr Houghton acknowledged an arithmetical error with reference to the item for inspection of documents but adhered to the time allocations and the computation for preparation and appearance on the basis of a complex appeal.
[9] Counsel for the second plaintiffs filed a memorandum on 29 July 2019 drawing attention to this Court’s direction that Mr Houghton was to pay costs to Mr Saunders for a standard appeal on a band B basis.^[5]
[10] Because this Court previously directed that costs would be for a standard appeal in band B, I consider that the time allocations proposed by Mr Houghton are correct. However the calculation by reference to a complex appeal is not correct. The appropriate daily rate was $1,990 being category 2 in sch 2 of the High Court Amendment Rules 2012, not $2,940.
[11] Consequently Mr Houghton is entitled to costs in the sum of $17,910, which is the amount proposed in AIG’s memorandum filed in the Supreme Court in 2014.

Disbursements

[12] Mr Houghton’s memorandum filed in the Supreme Court sought disbursements in the sum of $4,423.19. AIG’s memorandum in the Supreme Court stated that AIG did not object to those disbursements.
[13] However the amount sought in this Court for disbursements in 2019 was only $2,993.22. AIG then sought to reopen the quantum of disbursements in its memorandum of 18 July 2019. Counsel for Mr Houghton objected. Counsel for the second plaintiffs then submitted that the Supreme Court had expressly left costs and disbursements to be set by this Court. They rejected the suggestion that the parties or the Court was somehow bound by the costs memoranda filed in the Supreme Court.
[14] Given the sequence of events, including the advice given to and recorded by the Supreme Court that there was no objection to the disbursements sought, I do not consider that it is appropriate to revisit the issue of disbursements. Accordingly Mr Houghton is entitled to disbursements in the amount claimed of $2,993.22.

Result

[15] The plaintiffs must pay the defendant costs of $17,910 and disbursements of $2,993.22.

Solicitors:
Chapman Tripp, Auckland for First Plaintiff
Wilson Harle, Auckland for Second Plaintiffs
Wilson McKay, Auckland for Defendant

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^[1] Formerly Chartis Insurance New Zealand Ltd.

^[2] Steigrad v BFSL 2007 Ltd [2012] NZCA 604, [2013] 2 NZLR 100.

^[3] BFSL 2007 Ltd v Steigrad [2013] NZSC 156, [2014] 1 NZLR 304.

^[4] Houghton v AIG Insurance New Zealand Ltd [2014] NZSC 20.

^[5] Steigrad v BFSL 2007 Ltd, above n 2, at [58].