Body Corporate 392619 v Yee Good Fortune Investments Limited

[2018] NZHC 657

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE

CIV-2016-485-823

[2018] NZHC 657

BETWEEN

BODY CORPORATE 392619

Plaintiff

AND

YEE GOOD FORTUNE INVESTMENTS LIMITED

Defendant

Counsel:	J Samuel for the plaintiff N Dunning for defendant
Judgment:	12 April 2018

COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[On the papers]

[1]                 In a judgment dated 21 February 2018 Associate Judge Smith dismissed the plaintiff’s claim for an order putting the defendant into liquidation.

[2]At the conclusion of a lengthy judgment, his Honour said:

[96] Counsel may file memoranda on costs if they cannot agree. Any memorandum for [the defendant] is to  be filed and served within   20 working days. Any reply memorandum by [the plaintiff] is to be filed within 15 working days of its receipt of [the defendant’s] memorandum.

[3]                 The parties have been unable to agree on costs. The defendant seeks costs. Mr Dunning has filed and served a memorandum dated 8 March 2018 setting out the basis for that claim. Mr Samuel has filed and served a memorandum in response which, although undated, was received by the Registry on 27 March 2018.

BODY CORPORATE 392619 v YEE GOOD FORTUNE INVESTMENTS LIMITED [2018] NZHC 657

[12 April 2018]

[4]                 Mr Dunning’s starting point is that costs follow the event so that the successful defendant is entitled to its costs. On its behalf he has calculated costs on a 2B basis which total $8,474, together with disbursements which total $1,167.50.

[5]                 However, he seeks a 50 per cent  uplift on the  costs component  pursuant to  r 14.6(3)(b)(ii) and (iii), effectively on the basis that the plaintiff took unnecessary and unmeritorious steps or pursued unnecessary and unmeritorious arguments, thereby increasing the costs of the proceeding. In this regard, he refers me to the Court of Appeal’s decision in Bradbury v Wespac Banking Corporation [2009] 3 NZLR 400 as an example of a case in which increased costs were awarded on that basis, and for the principles involved.

[6]                 The balance of Mr Dunning’s memorandum sets out the respects in which he submits that the plaintiff’s actions increased the costs of the litigation. I note that some of these examples are based on factual assertions in respect of which there is no evidence. I do not propose to canvass all of them. In the context of a costs decision  it is sufficient for me to say that even if they could be substantiated, I do not view them as involving anything more than the actions of a committed and resolute litigant.

[7]                 In contrast the actions of the plaintiffs in the Bradbury case were of an entirely different character.

[8]                 In his memorandum in response, Mr Samuel does not challenge Mr Dunning’s calculations of the costs and disbursements as set out above. He submits, in what is almost a perfect mirror image of Mr Dunning’s submissions, that it was the actions of the defendant which involved unnecessary and unmeritorious steps and arguments, and, on that basis, contends that the cost of the proceeding should be left to lie where they have fallen.

[9]I am equally unpersuaded by both arguments.

[10]              I was not the judge who dealt with the substantive case (though I have since dealt with another aspect of it). However, my perception is that it is an example of hard fought litigation in which both parties advanced their cases vigorously, possibly

on occasions over-vigorously, but I have difficulty seeing examples of either party taking unnecessary or unmeritorious steps or making unnecessary or unmeritorious arguments.

[11]              In my judgement, the correct approach in this case is to start — as Mr Dunning started — with the proposition that costs should follow the event, which would mean that the defendant as the successful party in the litigation is prima facie entitled to an award of costs. As to the level of those costs, my view is that they should be awarded on a 2B scale.

[12]That is the order that I propose to make.

[13]              The plaintiff is ordered to pay to the defendant, the sum of $8474 by way of costs together with the sum of $1,167.50 by way of disbursements.

Associate Judge Johnston

Solicitors:

Jennifer G Connell & Associates, Auckland for the plaintiff Nat Dunning Law, Wellington for the defendant