MacCormack v Pereira [2012] NZHC 2344 (4 September 2012)

Last Updated: 17 September 2012

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-000262 [2012] NZHC 2344

BETWEEN JOHN CAMPBELL MACCORMACK AND GAIL JACQUELINE PARATA First Plaintiffs

AND MACPAT LIMITED Second Plaintiff

AND JONATHAN PEREIRA AND ROBERT STEVENS

Defendants

Hearing: 3 September 2012

Appearances: P H Bremer for Plaintiffs

B H McCarthy for Defendants

Judgment: 4 September 2012

_{ORDER OF ASSOCIATE JUDGE MATTHEWS}

[1] In this proceeding the plaintiffs sue their former solicitors in relation to advice received over the sale of a residential property which was, at the time, the subject of a claim in the Weathertight Homes Resolution Tribunal. It is said that the transfer of the property from the plaintiffs’ personal names to a company deprived them of the right to continue as part of the claim for compensation brought by all the unit owners in the development, with the result that they have had to pay the cost of remediation work of their unit themselves.

[2] In this application the defendants seek further discovery from the plaintiffs and an order that they answer interrogatories. The application was set down for a fixture before me today. Late last week the defendants’ interrogatories were

_{answered to their satisfaction. In addition, a further affidavit was sworn and served}

JOHN CAMPBELL MACCORMACK AND GAIL JACQUELINE PARATA V JONATHAN PEREIRA AND ROBERT STEVENS HC WN CIV-2011-485-000262 [4 September 2012]

giving formal discovery of further documents which had been provided earlier in the week.

[3] Consequently no further order is required in relation to the application for interrogatories to be answered. However, the defendants still seek an order requiring discovery in terms of the application, because they are not satisfied that the documents provided are in fact all the documents in the plaintiffs’ possession or under their control, and which are discoverable. There apparently remain question marks over a number of categories of documents, particularly documents relating to the quantification of the plaintiffs’ losses, and documents relating to the assessment of the building on behalf of the Body Corporate for the purposes of the WHRS proceeding. It is accepted these are discoverable; difficulties have faced the plaintiffs with locating documents, and with persuading others (notably the advisors to the Body Corporate, and the Body Corporate itself) to actually give the required documents to the plaintiffs.

[4] Counsel for the plaintiffs responsibly accepted that the time has come when an order has to be made. He opposed, however, the making of an unless order as also sought by the defendants. I am satisfied it is appropriate to make that order, but coupled with a reasonably generous period within which the plaintiffs must give their final affidavit of documents, and copies of any further documents discovered.

[5] I order:

(a) The first plaintiffs and the second plaintiff will file a second supplementary affidavit of documents in accordance with the schedule attached to this order.

(b) The defendants’ application for an order directing that interrogatories

be answered is dismissed.

(c) At the same time as the plaintiffs’ further discovery affidavit is filed and served, the plaintiffs are to serve copies of all further documents discovered.

(d) The time within which this affidavit must be filed and served is

25 working days.

(e) The plaintiffs’ proceeding will be stayed until further order of the Court if the affidavit has not been served by 5.00 pm on the 25th working day. If the plaintiffs determine that a non-party discovery order or orders will be required, I reserve leave to them to approach the Court by memorandum for orders.

[6] All the documents of which further discovery is sought appear to relate to the quantum of the plaintiffs’ claim. Briefly, the defendants say that although the plaintiffs have paid for rectification to the building and those aspects of the claim have been quantified, it is unclear whether the plaintiffs have received some benefit from the claim made by other property owners and the Body Corporate through WHRS, which should properly be taken into account. After some debate with counsel they consent to the following order:

(f) Within a further 25 working days after service of the plaintiffs’ further discovery affidavit, the plaintiffs will file and serve a further document (which may be an amended statement of claim or may be a notice of particulars of the plaintiffs’ claim for damages) in which full notification of the plaintiffs’ claim for damages is set out, with calculations to the extent relevant, and cross-referring by number to relevant discovery documents relied on.

The deadline for compliance with this order may be extended if non-party discovery is sought (as above) but that will be at the discretion of the Court if a non-party discovery application is made.

Costs

[7] The defendants seek costs against the plaintiffs on the steps required to obtain discovery orders and orders for the answering of interrogatories, on the basis that the defendants have not complied with their obligations under the High Court Rules, or orders of the Court, and these applications were ultimately necessary. Counsel filed

a memorandum with an attached schedule showing that scale 2B costs of $12,415.50 apply to memoranda and appearances at case management conferences on these topics, the notice to answer interrogatories, the application for discovery and for the interrogatories to be answered, preparing and filing submissions and a bundle of documents and appearing on the application today. A filing fee on the application of

$725 is sought but counsel’s airfare to and from Auckland is not sought as she accepts that the case could possibly have been dealt with by telephone, given the plaintiffs’ last minute compliance with the request to answer interrogatories, and at least partial compliance with the requirement for further discovery.

[8] Counsel also sought up to a 50 per cent uplift in the circumstances, relying on Holdfast NZ Ltd v Selleys Pty Ltd.[1] In support of her application counsel noted failure by the plaintiffs to comply with the provisions and directions set out in the Rules, and failure without reasonable justification to comply with an order for discovery. She pointed out that the defendants have been seeking the information to which these applications relate since June 2011, and all the documents are within the plaintiffs’ power, possession or control. She noted that the plaintiffs have repeatedly asserted that the materials sought will be provided but they have consistently failed

to do so, though she noted that some documents have been provided by way of a supplementary affidavit of documents in October 2011, and more recently on

17 August 2012. She submitted that the approach taken by the plaintiffs to compliance with the obligations on them has been without reasonable justification.

[9] Mr Bremer opposed the order of costs at this stage maintaining they should be reserved to await the outcome of the case, in accordance with usual practice on costs on interlocutories. He submitted that there has not been any flagrant breach of his clients’ obligations or a court order. In his written submissions he pointed out to difficulties which have been incurred with other parties who hold documents, in respect of which they claim privilege, and in physically locating documents which support the plaintiffs’ claim. Efforts have been made to overcome these difficulties; counsel also referred to other difficulties of his own which he submitted should not

_{be brought to bear upon his clients.}

[10] Mr Bremer then took me through the claim for scale costs made by the plaintiffs, and criticised various aspects of it. He said the claim for three memoranda for case management conferences, amounting to $2,388, would significantly exceed the possible cost that could have been incurred in preparing these memoranda and that the claim for three case management conferences of $1,791 was greatly in excess of a fair fee for the amount of time that could possibly have been involved in three conferences, each lasting no more than 15 minutes. He said there was duplicity between the notice requiring further interrogatories and the application, that the bundle of documents for which $1,194 is claimed contains just five cases which could have been prepared administratively in no more than an hour. Overall he submitted that costs are not intended to give a windfall beyond the fees that could reasonably have been incurred for the work in respect of which the costs are claimed.

[11] I approach my decision on this application in two sequential parts. First, I am satisfied that the defendants should have an award of costs on their application for discovery and for an order that interrogatories be answered. The general rule deferring the award of costs until the outcome of the proceeding is soundly based. However, I am satisfied that in this case the defendants have been faced with additional expense beyond that which might have been expected through the discovery and interrogatory process, and that this additional expense should fall to the plaintiffs notwithstanding the outcome of the case, given the length of time it has taken the plaintiffs to even reach the point now reached in the discovery process and in relation to interrogatories, and their non-compliance with timetables and orders on these topics.

[12] Secondly, I am not satisfied that it is appropriate to grant an uplift of costs beyond scale. Although it can fairly be said that the defendants have been forced to incur more expense than should have been incurred in going through the interrogatory and discovery stage, that has at least in part been caused by the reticence, possibly unreasonably based, of the Body Corporate and advisors to the Body Corporate and other unit owners, to provide documents. That is not to say that some fault does not lie at the feet of the plaintiffs but I am satisfied that they should not bear additional responsibility for costs beyond that which the Rules already provide for.

[13] Counsel for the plaintiffs urged me, in the alternative to reserving costs, to apply scale 1A. I do not think that is appropriate. Scale 2 has already been applied to this proceeding and I do not think it is appropriate to change that approach. The assessment of costs is not an exact science, but a matter of judgment. The allocation of a scale gives a clear indication early in a proceeding as to the basis upon which costs will be assessed, a position against which the parties can assess their respective approaches to the litigation, to the extent that issues of costs are material to the way they conduct the case.

[14] The analysis by Mr Bremer of the claims in the plaintiffs’ schedule had a superficial attraction but was ultimately unsupported by any evidence from which I can properly assess the validity of the submissions he made. For example, his criticism of a fee of nearly $2,400 for filing three case management memoranda is supported by the figure appearing, at first sight, to be high but there was no independent evidence as to how long it might reasonably be expected that this preparation would have taken. That has to be balanced against the fact that the scale is calculated to provide recovery for a certain amount of time for each nominated step, based on careful objective assessments about how long each such step might reasonably be expected to take.

[15] The criticism of the preparation of the bundle also has a superficial attraction but as Ms McCarthy pointed out, it is not just the clerical work for which compensation is given; it is the selection of the cases to be referred to in the bundle and, again, objective analysis of an appropriate allocation of time for this step was undertaken when the Rules were put in place.

[16] Therefore I will apply the scale, and I direct the plaintiffs to pay to the defendants $12,415.50 by way of costs on the items referred to in the schedule attached to the submissions of counsel. I allow the filing fee of $725 as a

_{disbursement, in addition.}

J G Matthews

Associate Judge

Solicitors:

Grimshaw & Co, PO Box 2474, Wellington.

Robertsons, PO Box 2068, Shortland Street, Auckland 1140.

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[1] Holdfast NZ Ltd v Selleys Pty Ltd [2005] NZCA 302; 17 PRNZ 897.