Szekely v Muse on Allen Limited

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2013-485-9825 [2017] NZHC 1468

UNDER s 174 of the Companies Act 1993

IN THE MATTER OF

Muse on Allen Restaurant

BETWEEN

JOZSEF GABOR SZEKELY Plaintiff

AND

MUSE ON ALLEN LIMITED First Defendant

SAMUEL RAYMOND NORTH Second Defendant

DEBBIE VIVIAN NORTH Third Defendant

MALCOLM LESLIE NORTH Fourth Defendant

On the papers

Judgment:

29 June 2017

JUDGMENT OF MALLON J (COSTS)

[1] I refer to my judgment delivered on 11 April 2017. The defendants seek costs. Their memorandum has complied with my direction. They seek costs for the period following 29 November 2013 and have provided the relevant invoices. They have also provided details of their disbursements and of settlement offers they made.

[2] The plaintiff submits he should not be ordered to pay costs because the defendants triggered the claim, did not enter into meaningful settlement discussions
and did not disclose material information to the Court. I do not accept this

SZEKELY v MUSE ON ALLEN LIMITED [2017] NZHC 1468 [29 June 2017]

submission. The plaintiff brought this proceeding and failed. The defendants have provided evidence of without prejudice save as to costs offers which were made. I note especially the offer made on 19 June 2015, the terms of which were reasonable. The earlier offer of 7 June 2015 also contained reasonable options for settlement. Whether the information said not to be disclosed is material will be a matter for the Court of Appeal if an appeal is pursued.

[3] The plaintiff also says the legal costs were incurred by Muse on Allen Ltd, which is now in liquidation, and not by the Norths personally. I accept the plaintiff is correct that these costs may not be claimed. Relief had been claimed against the company, but it subsequently went into liquidation. The liquidators did not consent to the litigation and relief was not pursued.

[4] However Samuel North incurred disbursements of $687.53 (inclusive of GST) in the preparation of documents for the hearing. He also incurred disbursements of $7,143.38 (inclusive of GST) in expert fees. The plaintiff is ordered to pay these two sums totalling $7,830.91.

Mallon J

CaseChat Overview and Summary

In the case of Szekely v Muse on Allen Limited, the plaintiff, Jozsef Gabor Szekely, initiated proceedings against the defendants, Muse on Allen Limited and three of its directors, Samuel Raymond North, Debbie Vivian North, and Malcolm Leslie North. The nature of the dispute involves the plaintiff seeking an order for costs incurred by the defendants following the initial judgment in the case on 29 November 2013. The case was heard in the High Court of New Zealand, Wellington Registry.

The primary legal issue before the court was whether the plaintiff, having brought the proceeding and ultimately failed, should be ordered to pay the defendants' costs incurred after the initial judgment. The defendants argued that they were entitled to costs, providing evidence of settlement offers made, while the plaintiff contended that he should not be required to pay costs due to the defendants' failure to engage in meaningful settlement discussions and alleged non-disclosure of material information. Additionally, the plaintiff argued that the legal costs were incurred by Muse on Allen Ltd, which is now in liquidation, and thus should not be personally claimable by the individual defendants.

The court considered the defendants' evidence of without prejudice offers for settlement, noting that the terms of the offers were reasonable. The court rejected the plaintiff's argument that the defendants failed to engage in meaningful settlement discussions or disclose material information, stating that these issues would be for the Court of Appeal if an appeal were pursued. The court also accepted the plaintiff's argument that the legal costs incurred by the company were not personally claimable by the individual defendants. However, it ordered the plaintiff to pay Samuel North's disbursements and expert fees, totaling $7,830.91, as these costs were incurred by him personally in preparation for the hearing.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

UNDER	s 174 of the Companies Act 1993
IN THE MATTER OF	Muse on Allen Restaurant
BETWEEN	JOZSEF GABOR SZEKELY Plaintiff
AND	MUSE ON ALLEN LIMITED First Defendant SAMUEL RAYMOND NORTH Second Defendant DEBBIE VIVIAN NORTH Third Defendant MALCOLM LESLIE NORTH Fourth Defendant