Wagner v Gill

[2014] NZHC 207

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-003509 [2014] NZHC 207

BETWEEN  NICOLA JOANNE WAGNER Plaintiff

ANDROBERT GILL First Defendant

DIGITAL PARTNERS LIMITED (IN RECEIVERSHIP)

Second Defendant (Discontinued)

DIGITAL PARTNERS (NZ) LIMITED Third Defendant

Continued on page 2

Hearing:                   On the papers

Counsel:                  PAC Maw for the Plaintiff

A Gilchrist for the First, Third, Fifth, Sixth and Ninth
Defendants

Judgment:                19 February 2014

COSTS JUDGMENT OF ELLIS J

This judgment was delivered by me on Wednesday 19 February at 12 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:…………………………

Counsel:

PAC Maw, Wynn Williams, Christchurch

A Gilchrist, Barrister, Auckland

WAGNER v GILL [2014] NZHC 207 [19 February 2014]

BA PARTNERS LIMITED (IN RECEIVERSHIP)

Fourth Defendant  (Discontinued)

BRAND ADVANTAGE MEASUREMENT AND CONSULTING LIMITED

Fifth Defendant

CPG YORK LIMITED Sixth Defendant

91991 LIMITED (IN RECEIVERSHIP) Seventh Defendant  (Discontinued)

11260 LIMITED (IN RECEIVERSHIP) Eighth Defendant  (Discontinued)

BRAND ADVANTAGE LIMITED Ninth Defendant

[1]      This judgment needs to be read in conjunction with the substantive judgment in which I found for the first, third, fifth, sixth and ninth defendants and indicated my view that 2B costs should be payable to them by Mrs Wagner.1   I do not propose to set out the complex factual and legal background to the case here.

[2]      Suffice it to say that, further to my judgment, the parties have been able to agree about the quantum of 2B costs ($47,585) payable by Mrs Wagner to the first, third, fifth, sixth and ninth defendants.   Disbursements of $21,377.27, $530 and

$217.60 are also agreed.

[3]      But  the  defendants  also  say  that  Mrs  Wagner  should  be  liable  for  the increased costs of $60,000.  The basis upon which increased costs are claimed is a so-called  Calderbank  letter  written  on  their  behalf  to  Mrs  Wagner  dated  20

December 2011.

[4]      In the letter, Dyer Whitechurch referred specifically to two factual matters

underlying Mrs Wagner’s claim which (the lawyers said) were incorrect, namely:

(a)      The allegation that “the Netball contract was transferred” (rather than terminated); and

(b)The allegation that Mrs Wagner’s previous businesses that had been sold by receivers appointed by Mr Gill’s interests were profitable prior to the sale.

[5]      Nothing was said in the letter about the relationship between these allegations and the causes of action in the statement of claim or the legal merits of the claims Mrs Wagner was advancing.  Rather, the letter simply detailed some reasons for the defendants’ contention that these factual allegations were wrong and warned against Mrs Wagner relying on information from Messrs Regan and Beattie (as to whom, see

my substantive judgment).  Dyer Whitechurch then invited Mrs Wagner to:

1      Wagner v Gill [2013] NZHC 1304.

(a)       Withdraw the proceedings; and

(b)      Agree to pay scale costs.

[6]      Mrs Wagner was given over the Christmas period to consider this invitation which, it was said, was to be regarded as a Calderbank offer.  She was advised that if she did not accept the offer, indemnity costs would later be sought.

[7]      The application for increased costs is opposed on the basis that an offer of the kind summarised above “does not fit the intention behind” rule 14.6(b)(v).   The decisions in Phoenix Organics Ltd v RD2 International Ltd (No 2) and Perkins v Purea are cited in support.2     I tend to agree with that submission, and the views expressed in those cases.

[8]      That  conclusion,  however,  does  not  wholly  dispose  of  the  matter.    In particular, I might have been inclined to accede to the application for increased costs if the matters referred to by the defendants in their 20 December 2011 letter were so obvious and compelling that only an unreasonable litigant would have continued with the claim.

[9]      But in light of the findings made in my substantive judgment, it seems to me that the position is not so clear-cut.  In particular, although I did, in one sense (and contrary to the allegations in the statement of claim) find that:

(a)       the Netball contract was terminated (rather than transferred for no value); or

(b)the Fashion and Garden businesses were unprofitable prior to their sale by the Receivers –

those findings were far from determinative.

2      Phoenix Organics Ltd v RD2 International Ltd (No 2) HC Auckland CIV-2005-404-5070, 21

December 2005 at [25]; Perkins v Purea HC Auckland CIV-2007-404-375, 29 October 2008 at
[10].

[10]     Rather, the critical issues were (or became):

(a)       whether the termination of the netball contract -

(i)       was  contrived  by certain  of  the  Gill  interests  as  part  of  a

conspiracy to injure Mrs Wagner’s interests; or

(ii)resulted from or involved any unlawful acts on the part of the Gill interests formed capable of amounting to an unlawful means conspiracy;

(b)whether the unprofitability of the Fashion and Garden businesses and their sale by the receivers -

(i)       was  contrived  by certain  of  the  Gill  interests  as  part  of  a

conspiracy to injure Mrs Wagner’s interests; or

(ii)resulted from or involved any unlawful acts on the part of the Gill interests formed capable of amounting to an unlawful means conspiracy.

[11]     None of those issues was canvassed in the letter.  Moreover the underlying legal principles were (as noted in my judgment) both difficult and novel.  While, in an ideal world, Mrs Wagner would have been more alert to the very considerable obstacles she faced in pursuing her claims, I do not consider that the defendants’ letter of 20 December did much to advance her awareness.  It may well have had the contrary effect.  In my view the letter forms no basis for an award of increased costs here.

[12]   Accordingly I simply direct that Mrs Wagner is to pay the defendants disbursements and costs on a 2B basis, in the sum that has been already agreed.

Rebecca Ellis J