Commissioner of Inland Revenue v Livingspace Properties Limited (in liquidation and receivership)

[2019] NZHC 3332

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2010-409-2323

[2019] NZHC 3332

BETWEEN

COMMISSIONER OF INLAND REVENUE

Plaintiff

AND

LIVINGSPACE PROPERTIES LIMITED

(in liquidation and receivership) Defendant

Appearances:	A Ho for the liquidator of Livingspace Properties Ltd J Moss and H Weston for Kristina Buxton
Judgment:	17 December 2019

COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[On the papers]

[1]                 At the conclusion of my judgment in this matter dated 6 September 2019 I reserved costs and invited counsel to resolve these.1 Regrettably, counsel have not been able to do so.

[2]My judgment dealt with four interlocutory matters:

(a)Ms Buxton’s application for an order joining five additional defendants;

(b)Ms Buxton’s application for a stay of the liquidator’s application for an order for further and better discovery pending resolution of her application for the removal of the liquidator;

1      Commissioner of Inland Revenue v Livingspace Properties Ltd (in liq and in rec) [2019] NZHC 2213.

COMMISSIONER OF INLAND REVENUE v LIVINGSPACE PROPERTIES LIMITED (in liquidation and

receivership) [2019] NZHC 3332 [17 December 2019]

(c)FTG Securities’ application for  leave  to  apply  for  an  order  under s 284(1) of the Companies Act 1993; and

(d)The question of whether the Court has inherent jurisdiction to grant leave to a party to apply for an order removing a liquidator even if that person does not fall within the categories of persons  referred to in     s 284(1) of the Companies Act.

[3]                 For Ms Buxton, Mr Moss submits that she was successful on the first, second and fourth of those matters and unsuccessful on the third. He proposes that the Court award Ms Buxton costs on a 2B basis but discounted so as to reflect the fact that the liquidator was successful on one matter.

[4]                 Mr Ho on the other hand submits that Ms Buxton was not successful on any of the four applications. He says that the liquidator’s position prevailed on the first and third while the second and fourth resulted in neutral outcomes.

[5]                 Costs in a case such as this should be viewed from a broad perspective and not subjected to minute analysis of comparative wins and losses on aspects of issues.

[6]                 As to the first matter, whilst it is true that I declined to make a formal order joining the proposed additional defendants, I directed that they be entitled to a right of audience in relation to the liquidator’s application for further discovery, which was the purpose for the application. As to the second, I would have made the order for a stay had the liquidator not agreed to refrain from pursuing his application pending the resolution of Ms Buxton’s application for an order removing him. As to the fourth, the position advanced on Ms Buxton’s behalf certainly prevailed. It is true that I did not make an order granting leave to make applications under the inherent jurisdiction. But that was because that was not the issue before the Court.

[7]                 As I see it, Ms Buxton was substantially successful on three of the four issues before the Court, as Mr Moss submits.

[8]                 In my view, in such circumstances, Ms Buxton ought to be entitled to a discounted award of costs on a 2B basis.

[9]                 Having said that, I accept Mr Ho’s submission that Ms Buxton ought not to be allowed costs for two counsel as the case did not merit that. After all it was a preliminary interlocutory argument of only modest complexity.

[10]              I take Mr Moss’ schedule of costs as my starting point but this appears to me to contain some arithmetical errors. My own arithmetic indicates that if items 10, 11, 13, 25 and 26 are taken at the 25 per cent discounted rate, items 22 and 24 are taken at the full rate but reduced by the amount of the costs allowed to reflect the liquidator’s success on the third application, and item 27 (second counsel) is deducted, the costs to which Ms Buxton is entitled total $15,136.13. I award Ms Buxton costs of that amount, plus  disbursements of $2,374.31 (which figure is also discounted by 25   per cent).

Associate Judge Johnston

Solicitors:

Canterbury Legal, Christchurch for the applicants

Norling Law, Auckland for the liquidator of Livingspace Properties Ltd