Burnett v Patterson [2015] NZHC 2847 (16 November 2015)

Last Updated: 17 November 2015

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-000653 [2015] NZHC 2847

BETWEEN	ALEXANDRA JANE BURNETT Plaintiff
AND	SEAN PATTERSON First Defendant JOHN DENHOLM PATTERSON Second Defendant SCIMED LIMITED Third Defendant

Hearing:	(Dealt with on the papers)
Ruling:	16 November 2015

_{RULING OF GENDALL J}

[1] The plaintiff in this matter has put to the Court a draft order to seal judgment as to costs in this proceeding which reads as follows:

This proceeding was heard on the papers before the Honourable Justice Gendall who having heard from Mr Henry, counsel for the plaintiff and Mr Nathan, counsel for the defendants, and having heard the evidence adduced gives judgment that:

(a) The plaintiff is awarded 80% of category 2B scale costs in the sum of $32,795.20 for this matter as per the attached Schedule one;

(b) And the disbursements award is to be 100% of the reasonable disbursements incurred of $87,154.24 by the plaintiff in this proceeding as per the attached schedule two;

TOTAL = $119,949.44

[2] The defendants in a memorandum provided to this Court dated 5 November

2015 have objected to the plaintiff’s endeavour to have judgment as to costs and

_{disbursements here sealed in the form noted above.}

BURNETT v PATTERSON [2015] NZHC 2847 [16 November 2015]

[3] In particular, the defendants complain that the significant item in contention in the costs order sought is a disbursement relating to the “Crowe Horwath fee”. This is a $75,349.77 charge by the expert accountants from Crowe Horwath who gave evidence on behalf of the plaintiff in this matter.

[4] The defendants complain that this figure is substantially in excess of the

$66,242.66 the defendants have incurred in this matter in relation to their own accounting fees.

[5] Further, the defendants contend that the evidence of the Crowe Horwath accountants was such that this trial was extended and this evidence was also to an extent rejected by the Court.

[6] The defendants submit that it is appropriate here for the 20% reduction which has been applied to the scale costs in this matter to also apply equally to the Crowe Horwath fees on the basis that they are not reasonable.

[7] In response, Mr Henry counsel for the plaintiff takes issue with these matters and contends that the Crowe Horwath disbursement of $75,349.77 is reasonable. The difference between the fees charged to the plaintiff and the defendants by their respective accounting experts, Mr Henry contends, is to be expected. He says this is because the plaintiff had to undertake substantial investigative work to uncover the company’s true financial position and this was exacerbated by what he described as the:

...defendant's initial unwillingness to provide documents and, as the matter

progressed, their unwillingness to provide documents in a timely manner...

[8] On all of these issues at [20] of my judgment as to costs in this matter, I ordered specifically that 80% of category 2B scale costs were to be paid to the plaintiff together with a “disbursements award which is to be 100% of the reasonable disbursements incurred by the plaintiff in this proceeding”.

[9] Regarding this aspect, there is no independent evidence before me to justify the complaint from the defendants that the total Crowe Horwath accounting fees of

$75,349.77 are not reasonable here. When it is said they are substantially in excess

of the accounting fees the defendants incurred, in fact this difference is only a little over $9000 which, given the work required for the plaintiff to advance her claim, in my view is not overly significant.

[10] As to the issue of whether the evidence of the Crowe Horwath accountants extended this trial, there is nothing definitive before me to support a contention of this sort. Nor can it be said with conviction that any rejection by the Court of aspects of the Crowe Horwath evidence was critical to the final outcome here.

[11] And, given, as I have noted above, that there is nothing by way of independent evidence to back up the defendants’ assertions that the Crowe Horwath fees are not reasonable in all the circumstances here, I now order that judgment in this proceeding is to be sealed in favour of the plaintiff as sought. This is to include the disbursements award representing 100% of the reasonable disbursements incurred (including the Crowe Horwath accounting fees of $75,349.77) giving a total disbursements figure of $87,154.24 and a costs figure being 80% of category 2B scale costs totalling $32,795.20. The defendants’ objection to this course is dismissed.

...................................................

Gendall J

Solicitors:

Shanahans, Auckland

Duncan Cotterill, Nelson