IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE	
CIV-2014-404-002012
[2018] NZHC 3054	

BETWEEN	JIANQIANG ZENG
Plaintiff	
AND	OU CAI
First Defendant

FANG LI
Second Defendant

ALEXANDER YUNXIAN CAI by his
litigation guardian PAUL JOHN DALE Third Defendant	

Hearing:	On the papers	
Judgment:	23 November 2018	

JUDGMENT OF DOWNS J

This judgment was delivered by me on Friday, 23 November 2018 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Quinn Law, Auckland.
Neilsons Lawyers Ltd, Auckland. CJR Baird, Auckland.
AV Shinkarenko, Auckland. PJ Dale, Auckland.
EA James, Auckland. Copy to: First Defendant

ZENG v CAI [2018] NZHC 3054 [23 November 2018]

Introduction

[1]	Mr Zeng seeks costs, including increased costs and disbursements, against Ms Cai and Ms Li. Mr Zeng was largely successful against them in a case I decided on 28 September 2018.1 Ms Cai and Ms Li did not appear at the hearing. Nor has either filed a costs submission.

[2]	Mr Zeng’s young son, Dahai, was represented by a litigation guardian: Ms Grant, and then Mr Dale.2 Ms Grant seeks reimbursement of her costs. Mr Dale was instructed on legal aid. Mr Zeng settled with Dahai during trial.

Scale costs

[3]	Mr Zeng’s claim for scale costs is unremarkable, including for second counsel. Scale costs total $86,980.50.

Increased costs?

[4]	Mr Zeng seeks increased costs. First,  he  relies  on  r  14.6(3)(a)  of  the  High Court Rules 2016:

(3)	The court may order a party to pay increased costs if—

(a)	the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or

[5]	Mr Zeng argues this rule is engaged because many documents were in Chinese, and the extensive briefs of evidence had to be in both English and Chinese. However, r 14.6(3)(a) requires the time to substantially exceed that under band C. Mr Zeng has not sought to justify band C; most items are characterised as band B. In any event, Mr Zeng’s translator’s costs will be provided for; see later.

[6]	Second, Mr Zeng relies on r 14.6(3)(b):

(3)	The court may order a party to pay increased costs if—

1	Zeng v Cai [2018] NZHC 2548.
2	See Zeng v Cai [2018] NZHC 579.

...

(a)	the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)	failing to comply with these rules or with a direction of the court; or

(ii)	taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii)	failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

(iv)	failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or

(v)	failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or

[7]	Mr Zeng says Ms Cai and Ms Li unnecessarily contributed to time and expense by filing voluminous pleadings, not complying with the High Court Rules, and by not appearing. These matters are said to justify a 50 per cent increase on all steps, save for those discussed below. Ms Cai’s and Ms Li’s  conduct contributed unnecessarily to time and expense, but this in part, reflects their self-representation. Some forensic fumbles were inevitable. But, Ms Cai’s conduct went beyond that. I award an uplift of 20 per cent on all steps except those claimed on a band C basis.

[8]	Third, Mr Zeng seeks an uplift of 100 per cent for the preparation of briefs of evidence (item 30) and preparation for trial (item 33). This in reliance on r 14.6(3)(d):

(3)	The court may order a party to pay increased costs if—

...

(d) some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.

[9]	Despite classifying preparation of briefs of  evidence  on  a  band  C  basis, Mr Zeng says scale costs do not come “anywhere close to a reasonable contribution” for the preparation of briefs. He relies on the fact the briefs were prepared in both Chinese and English. His counsel confirms 10 days (2C with 100 per cent uplift)

would still be “very significantly less than the actual time spent and legal fees incurred for this task”. But, further detail is not provided.

[10]	An award of scale costs on a band C basis is adequate. This represents a 100 per cent uplift on the time allocated under band B. More importantly, band C recognises what was reasonably necessary in this case. Briefs of evidence are not meant to be creatures of high art or literature; they are no more than a statement of a witness’s evidence, in terms the witness would use rather than lawyers.

[11]	So  too  trial  preparation:  there is  preparation and preparation.	Costs on a band C basis adequately recognise a relatively large amount of time was required.

[12]	Mr Zeng is entitled to costs of $97,686.60.

Disbursements

[13]	Mr Zeng is entitled to disbursements under r 14.12 of the High Court Rules:

14.12 Disbursements

(1)	In this rule,—

disbursement, in relation to a proceeding,—

(a)	means an expense paid or incurred for the purposes of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor’s bill of costs; and

(b)	includes—

(i)	fees of court for the proceeding:

(ii)	expenses of serving documents for the purposes of the proceeding:

(iii)	expenses of photocopying documents required by these rules or by a direction of the court:

(iv)	expenses of conducting a conference by telephone or video link; but

(c)	does not include counsel’s fee.

relevant issue, in relation to a disbursement, means the issue in respect of which the disbursement was paid or incurred.

(2)	A disbursement must, if claimed and verified, be included in the costs awarded for a proceeding to the extent that it is—

(a)	of a class that is either—

(i)	approved by the court for the purposes of the proceeding; or

(ii)	specified in paragraph (b) of subclause (1); and

(b)	specific to the conduct of the proceeding; and

(c)	reasonably necessary for the conduct of the proceeding; and

(d)	reasonable in amount.

...

[14]	Mr Zeng claims for hearing and filing fees, translator and interpreter fees, expert witness fees, and printing and photocopying expenses, a total of $376,186.81. Expert witness fees comprise the largest item.   And of these,  the expert fee for     Mr McKay, an experienced forensic accountant, is by far the largest: $249,971.70. More about this shortly.

[15]	Mr Zeng should be reimbursed for the costs of the court-appointed interpreter.3 As regards his own translator, that expense was specific to and reasonably necessary for the conduct of the proceeding.4 The translator’s work also helped me understand the Chinese documents. The amount claimed is reasonable. Indeed, Mr Zeng has claimed a reduced rate of $85 per hour.

[16]	The case was expert-heavy,  and  necessarily so.  The  associated  fees  for  Mr Jones, Mr Bates and Mr Moses are unremarkable, and accord with r 14.12. I award them.

[17]	As observed, Mr McKay’s fee is just under $250,000 (including GST). I have no doubt Mr McKay performed all claimed work, and no reason to believe Mr Zeng considered any of it unnecessary. However, I am not persuaded the amount is reasonable in terms of the rule. True, Mr McKay’s tracing evidence was central to the case, but the claimed figure is high. This is likely because Mr McKay adopted

3	See Zeng v Cai [2018] NZHC 2277 at [31]–[32].
4	At [33]–[37].

something of a Rolls-Royce approach to his task. That may reflect his instructions, but Ms Cai and Ms Li should not bear all this cost. I consider $175,000 (including GST) reasonable for his forensic accounting services and testimony.

[18]	Mr Zeng also claims for photocopying and printing costs in respect of the common bundle. Some items were re-used from an earlier hearing. The expenses were undoubtedly specific and necessary. The amount claimed is reasonable. The claim is made at 20 cents per page, which is the rate Associate Judge Bell earlier approved.

[19]	This results in disbursements of $301,215.11, not the sum claimed of
$376,186.81.

Litigation guardian

[20]	Fitzgerald J reserved the question of Ms Grant’s costs.5 Ms Grant has filed a memorandum seeking costs of $17,020. Mr Zeng opposes.

[21]	Mr Dale, Dahai’s current litigation guardian, has filed a memorandum. He does not challenge the reasonableness of Ms Grant’s costs. He confirms there are funds available to meet them from a trust established for Dahai (established through settlement).

[22]	Ms Grant’s costs should be paid from the trust. Her services were necessary, and her fee reasonable.

Orders

[23]	I order:

(a)	Ms Cai and Ms Li are to pay costs of $97,686.60 and disbursements of
$301,215.11 to Mr Zeng.

5	Zeng v Cai, above n 2, at [73].

(b)	Ms Grant’s costs of $17,020 are to be paid from the trust.

……………………………..
Downs J