Hermann v Martin [2020] NZHC 1082 (21 May 2020)

Last Updated: 3 June 2020

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000896 [2020] NZHC 1082

UNDER	the Weathertight Homes Resolution Services Act 2006
IN THE MATTER	of an appeal from a decision of the Weathertight Homes Tribunal
BETWEEN	DAVID THOMAS HERMANN First Appellant HERMANN ENTERPRISES LIMITED Second Appellant
AND	JULIE MARTIN, BELINDA MARTIN and NOEL CAVE First Respondents GRAEME JOHN EVANS Second Respondent Respondents continued over

Hearing:	On the papers
Judgment:	21 May 2020

JUDGMENT OF WYLIE J

[Costs]

This judgment was delivered by Justice Wylie On 20 May 2020 at 3.00pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:..............................

Solicitors/counsel:

Grimshaw & Co, Auckland Simpson Grierson, Wellington

HERMANN v MARTIN [2020] NZHC 1082 [21 May 2020]

BRUCE POVELL
Third Respondent

RICHARD PALMER
Fourth Respondent

MARK WILLIAM TERRILL
Fifth Respondent

MWT MASONRY LIMITED
Sixth Respondent

FLETCHER CONCRETE AND INFRASTRUCTURE LIMITED
Seventh Respondent

NAGEL CONSULTANTS LIMITED
Eighth Respondent
[1] I refer to my substantive judgment dated 3 April 2020.¹ I allowed the appeal by Mr Hermann and Hermann Enterprises Limited (jointly Hermanns) and directed that both Fletcher Concrete and Infrastructure Ltd (Firth) and Nagel Consultants Ltd (Nagel) be joined as defendants to the claim. I held that Hermanns were entitled to their reasonable costs and disbursements and directed that memoranda be filed.

[2] I have now received those memoranda.

[3] Hermanns seek costs on a 2B basis in the sum of $18,202.50, and disbursements of $1,364 – a total of $19,566.50. They annexed to their memorandum a schedule detailing the various amounts claimed.

[4] Firth responded. It asserted that the costs sought by Hermanns were excessive. It said that the appeal relied on the same arguments as were relied on at first instance, that a blanket band B allocation was inappropriate and that Hermanns were seeking to recover from Firth costs incurred in pursuing the appeal in respect of Nagel. It submitted that an award of $5,986 was appropriate, calculating some items on a band A basis and other items on a band B basis.

[5] Given the amount claimed by Hermanns, I issued a minute requiring Hermanns’ solicitor to file the invoice he sent to his clients. I received two invoices –

(a) an invoice dated 30 September 2019 in the sum of $8,925.26 (GST inclusive), comprising fees of $6,500 (GST exclusive) and disbursements of $1,425.88 (GST exclusive). In an accompanying memorandum, Hermanns’ solicitor advised that a portion of this invoice related to the Weathertight Homes Tribunal proceeding. He did not, however, say how much was attributable to the Tribunal hearing and the invoice did not detail what work was undertaken or the period covered by the invoice;

(b) an invoice dated 30 March 2020 for $7,418.30 (GST inclusive), comprising professional fees of $5,000 (GST exclusive) and

¹ Hermann v Martin [2020] NZHC 688.

disbursements of $1,649.38 (GST exclusive). Again, the invoice was a global invoice, with no breakdown to detail the work undertaken.

Hermanns’ solicitor advised that there is a further $8,505 (excluding GST) shortly to be billed to his clients for work undertaken subsequent to the 30 March 2020 invoice.

[6] It is impossible from the invoices provided to work out exactly how much Hermanns were invoiced in respect of the appeal. The Tribunal’s decision issued on 12 April 2019. The notice of appeal was filed on 10 May 2019. Hermanns appealed the Tribunal’s decision in respect of both Firth and Nagel. The appeal was called at a mentions hearing before Powell J on 4 June 2019, and after a delay occasioned by Hermanns, it came on for hearing before me on 18 March 2020. It took half a day, and my judgment issued on 3 April 2020. The judgment has since been sealed and costs have been sought. Work in relation to the appeal will have fallen into both invoices and the invoice shortly to be rendered.

[7] The High Court Rules 2016 limit the recovery of costs to those incurred by the party claiming costs – r 14.2(1)(f). There is however no requirement that an invoice be issued.² Here, Hermanns’ solicitor has stated that a substantial sum has been written off by him. Be this as it may, r 14.2(1)(f) applies to costs incurred by the party claiming costs. Here, the costs are claimed by Hermanns and the only costs they have incurred are those detailed in the invoices and to be detailed in the invoice still to be sent out. The amount claimed appears to be substantially in excess of the costs incurred. Counsel should have alerted the Court to this when the memorandum seeking costs was filed. It is unfortunate that this did not occur.

[8] Other than in relation to awards of indemnity costs, r 14.2(1)(f) comes into play only once the Court has determined band, category and any reduction or increases in the costs to be awarded. If the resulting calculation is greater than the costs incurred, it is the amount incurred that is awarded.³

² McGuire v Secretary for Justice [2018] NZSC 116, [2019] 1 NZLR 335 at [71]- [92] and [93].

³ Taunoa v Attorney General (2004) 8 HRNZ 53 at [45].

[9] I therefore proceed to consider what the award would have been and then compare what would have been awarded with the costs incurred insofar as I can glean that from the materials provided.

[10] Appeals of this kind are generally considered to be category 2 for costs purposes, and here counsel agreed in a joint memorandum filed in November 2019 that the appeal should be categorised as category 2 for costs purposes. That categorisation seems to me to be appropriate. Moreover, such appeals normally fall into band B. They involve matters of average complexity, requiring skill and experience considered average in this Court, and reasonably taking a normal amount of time. This appeal was no different. In my view, it is appropriate to approach costs on a 2B basis,⁴ and I can see no reason to award some costs on a 2A basis and some costs on a 2B basis as suggested by Firth. The rules relating to costs aim to achieve predictability – r 14.2(1)(g) – and chopping and changing between bands for no good reason would defeat that objective.

[11] Prior to 30 September 2019, Hermanns counsel was required to carefully read the Tribunal’s decision, prepare the notice of appeal by reference to that decision, prepare for the mentions hearing before Powell J, file a memorandum, and then appear at the mentions hearing. Costs for these various steps on a 2B basis amount to $4,460. The appeal however related to both Firth and Nagel, and Firth can only be required to pay 50 per cent of the calculated sum – namely, $2,230.

[12] After 30 September 2019, the matter was next before the Court on 30 October 2019. At that stage the fixture had to be vacated because Hermanns had neglected to serve Firth and Nagel. Hermanns cannot (and do not) claim costs in respect of that appearance. It was occasioned by their own error. Nor can they claim for a further appearance before me on 27 November 2019, when an amended timetable was put in place. That step would not have been necessary had Hermanns properly served Firth and Nagel in the first place.

4. The daily recovery rate changed as from 1 August 2019. Prior to that date it was $2,230. As from 1 August 2019 it was $2,390 per day. See High Court Amendment Rules 2015, r 19 and High Court Amendment Rules 2019, r 11.

[13] Hermanns are however entitled to claim costs incurred on a 2B basis, in preparing for the appeal and in preparing submissions. I do not accept Firth’s claim that the submissions were largely a re-run of arguments before the Tribunal. The submissions no doubt repeated matters which were before the Tribunal, but that is commonplace in most appeal hearings. The submissions had to refer to the Tribunal’s decision, and highlight those aspects of the decision which were said to be in error. In my view, 2B costs are appropriate for the preparatory steps. I do not however consider that Firth should be liable for the total costs calculated under the rules for these preparatory steps. While there was no appearance entered on behalf of Nagel, Hermanns treated the appeal in respect of Nagel as proceeding on a formal proof basis. They had to do so because they had to persuade the Court that the Tribunal’s decision was wrong in regard to Nagel. The submissions dealt with the law; this was relevant to both the Firth and Nagel appeals. There were separate factual submissions relating to each entity. Accordingly, I would allow Hermanns to recover from Firth 50 per cent of the costs involved in preparing for the appeal and in preparing written submissions
– both calculated on a 2B basis – in the sum of $4,780.

[14] Firth applied to adduce further evidence. Hermanns filed a memorandum opposing that application. That was not the appropriate step to take. If Hermanns wished to oppose the application they should have filed a notice of opposition, and not a memorandum. I decline costs to Hermanns in respects of filing the memorandum.

[15] I now turn to the hearing. Two counsel appeared for Hermanns. I decline to allow for second counsel. The matter was of average complexity only, there was no extensive documentation and second counsel was unnecessary. The hearing took half a day. The majority of the time was taken up in dealing with the legal submissions and with Firth’s opposition to joinder. The time spent dealing with Nagel was relatively limited. I allow three quarters of the costs calculated on a 2B basis for the half-day appearance. The appropriate allowance is $896.25.

[16] After 30 March 2020, Hermanns sealed the judgment and filed a memorandum seeking costs. Hermanns are only entitled to 50 per cent of their costs, on a 2B basis, for sealing the judgment because the sealed judgment related to both Firth and Nagel. Hermanns are also entitled to costs, again on a 2B basis, for filing their memorandum
seeking costs. Costs are sought only from Firth and there should be a 100 per cent recovery. The appropriate amounts, on a 2B basis, are $239 and $956 respectively.

[17] It follows that costs, properly calculated on a 2B basis, and attributable to Firth, total $9,101.25.

[18] An award in this sum would seem to exceed the costs actually incurred. It is difficult to be precise because, as I have noted, the invoices are not detailed.

(a) The invoice dated 30 September 2019 involves some costs which related to the appeal but, as Hermanns’ counsel acknowledged, it also related to costs incurred in relation to matters before the Tribunal. The only steps taken in relation to the appeal prior to 30 September 2019 were consideration of the Tribunal’s decision, the preparation and filing of the notice of appeal and the mentions appearance before Powell J. Costs payable by Firth, on a 2B basis, in relation to these steps come to
$2,230 – see [11] above. I allow that sum.

(b) It is likely that the invoice of 30 March 2020 relates only to costs incurred in relation to the appeal. The costs invoiced to Hermanns were
$5,000. A costs award calculated on a 2B basis for the various steps involved in the appeal exceeds that sum – see [12]-[15] above. As I have noted, if an award would be greater than the costs incurred, it is the costs incurred which are awarded. Accordingly, I allow $5,000 for the conduct of the appeal between 30 September 2019 and 30 March 2020.

(c) The only steps required after the 30 March 2020 were the sealing of the judgment and the preparation of the memorandum in relation to costs. I allow the amounts claimed on a 2B basis as set out above at [16] –
$239 and $956.

[19] It follows that the total costs award is $8,425.00.

[20] There is no dispute regarding disbursements. I allow the sum claimed of
$1,364.
[21] Accordingly, I make an award for costs and disbursements in favour of Hermanns, and against Firth, in the sum of $9,789.00.








Wylie J