100 Investments Ltd v Walker

[2023] NZHC 218

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-001160

[2023] NZHC 218

BETWEEN

100 INVESTMENTS LTD

First Plaintiff

………………Continued overleaf

AND

ROBERT BRUCE WALKER

First Defendant

……………….Continued overleaf

Hearing:	On the papers
Judgment:	17 February 2023

JUDGMENT OF WYLIE J

[Costs]

This judgment was delivered by Justice Wylie On 17 February 2023 at 12.00 noon

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:

Hucker & Associates/A Barker QC, Auckland Wotton Kearney, Wellington

Tompkins Wake, Auckland

MinterEllisonRuddWatts/D Bigio QC, Auckland Shaun Cottrell Law/J Moss, Christchurch

D Cooper, Auckland

100 INVESTMENTS LTD v ROBERT BRUCE WALKER [2023] NZHC 218 [17 February 2023]

CIV-2019-404-001160

FTG SECURITIES LIMITED
Second Plaintiff

RFD FINANCE LIMITED
Third Plaintiff

TOMANOVICH HOLDINGS LIMITED
Fourth Plaintiff

AND  JOHN MARSHALL SCUTTER

Second Defendant

LPF GROUP LIMITED
Third Defendant

SPF NO 10 LIMITED (In Liquidation) Fourth Defendant

KEVIN JOHN WHITLEY as Liquidator of Property Ventures Limited (In

Liquidation)

Fifth Defendant

PROPERTY VENTURES LIMITED (In
Liquidation)
Sixth Defendant

CASHEL VENTURES LIMITED (In

Receivership and Liquidation) Seventh Defendant

TAY VENTURES LIMITED (In

Receivership and Liquidation) Eighth Defendant

LIVINGSPACE PROPERTIES LIMITED

(In Liquidation) Ninth Defendant

TUAM VENTURES LIMITED (In

Liquidation) Tenth Defendant

CASTLE STREET VENTURES

LIMITED (In Liquidation) Eleventh Defendant

LICHFIELD VENTURES LIMITED (In

Liquidation)

Twelfth Defendant

ST ASAPH VENTURES LIMITED (In
Liquidation)
Thirteenth Defendant

BEECHNEST LIMITED (In Receivership and Liquidation)

Fourteenth Defendant

92 LICHFIELD LIMITED (In

Receivership and Liquidation) Fifteenth Defendant

MONTECRISTO CONSTRUCTION
COMPANY LIMITED (In Liquidation) Sixteenth Defendant

FIVE MILE HOLDINGS LIMITED (In

Liquidation) Seventeenth Defendant

CIV-2022-404-000274

KEVIN JOHN WHITLEY
First Plaintiff

PROPERTY VENTURES LIMITED (In

Liquidation) Second Plaintiff

FIVE MILE HOLDINGS LIMITED (In

Liquidation) Third Plaintiff

CASHEL VENTURES LIMITED (In

Liquidation and Receivership) Fourth Plaintiff

TAY VENTURES LIMITED (In

Liquidation and Receivership) Fifth Plaintiff

LIVINGSPACE PROPERTIES LIMITED

(In Liquidation) Sixth Plaintiff

BEECHNEST VENTURES LIMITED (In

Liquidation) Seventh Plaintiff

CASTLE STREET VENTURES

LIMITED (In Liquidation) Eighth Plaintiff

LICHFIELD VENTURES LIMITED (In

Liquidation) Ninth Plaintiff

92 LICHFIELD LIMITED (In

Liquidation) Tenth Plaintiff

ST ASAPH VENTURES LIMITED (In
Liquidation)
Eleventh Plaintiff

MONTECRISTO CONSTRUCTION
COMPANY LIMITED (In Liquidation) Twelfth Plaintiff

TUAM VENTURES LIMITED (In

Liquidation)

Thirteenth Defendant

AND  100 INVESTMENTS LIMITED

First Defendant

FTG SECURITIES LIMITED
Second Defendant

RFD FINANCE LIMITED
Third Defendant

TOMANOVICH HOLDINGS LIMITED

Fourth Defendant

ROBERT BRUCE WALKER
Fifth Defendant

JOHN MARSHALL SCUTTER

Sixth Defendant

LPF GROUP LIMITED
Seventh Defendant

SPF NO 10 LIMITED (In Liquidation) Eighth Defendant

Introduction

[1]I refer to my judgment of 13 June 2022.1 In that judgment I:

(a)declined an application by LPF Group Ltd (LPF), the third defendant in proceeding CIV-2019-404-1160, for an order under r 10.12 of the High Court Rules 2016 consolidating proceeding CIV-2019-404-1160, CIV-2021-404-2018 and CIV-2010-409-123;

(b)in the absence of opposition, stayed an application by Mr Whitley, the fifth defendant in proceeding CIV-2019-404-1160, in relation to the remuneration of the first and second defendants; and

(c)I allowed, in part, an application by the plaintiffs in proceeding CIV- 2019-4054-1160 to set aside claims to confidentiality made by the first, second and third defendants in that proceeding.

I recorded that both parties (the plaintiffs and LPF) had had a measure of success in their respective applications but expressed the preliminary view that the plaintiffs had been the more successful party. I also expressed the preliminary view that costs should be fixed on a 2B basis. I invited counsel to file memoranda as to costs if they were unable to agree costs.

[2]        It now transpires that counsel were unable to agree and that memoranda were filed as long ago as June/early July 2022. Unfortunately, those memoranda were not brought to my attention until the evening of Wednesday 8 February 2023. I had assumed that the parties had agreed costs and that no order from the Court was required. I have spoken to Registry staff responsible for the file and am advised that the failure to place the memoranda before me was an error, arising as a result of over- work and short staffing issues. I have asked the Court Manager to investigate. I apologise to the parties for the Court’s failure to deal with the costs issue more promptly.

1      100 Investments Ltd v Walker [2022] NZHC 1379.

The memoranda filed

[3]        The plaintiffs seek costs from LPF of $20,195.50, calculated on a 2B basis, in respect of both the consolidation application and the confidentiality application. They also seek disbursements, claiming in total $21,848.32. The plaintiffs claim that they were the successful party for the purposes of r 14.2(1)(a) and that they are therefore entitled to costs.

[4]        The fifth defendant, Mr Whitley, (and the various companies in liquidation — the sixth to seventeenth defendants  in  proceeding  CIV-2019-404-1160)  (jointly  Mr Whitley) also seek costs from LPF on a 2B basis, in the sum of $7,887, together with disbursements of $1,031,96. Mr Whitley claims that he was also a successful party and that there is no basis for departing from the principle that costs should follow the event.

[5]        LPF argues that it was substantively successful in the applications. It says that Mr Whitley was seeking to challenge expenses incurred in the liquidations, but that shortly before the hearing of the consolidation application, he conceded that he was not in fact entitled to challenge some expenses previously claimed. It also says that the Court stayed a remuneration application brought by Mr Whitley. It argues that the confidentiality application was substantially amended as a result of its submissions filed shortly before the hearing, although it concedes that the plaintiffs nevertheless enjoyed a “measure of success”. It seeks costs of $10,669.09 from the plaintiffs and Mr Whitley jointly.

Analysis

[6]        Costs are of course at the discretion of the Court.2 The overall objective is to achieve an outcome that best meets the interests of justice. The discretion is not unfettered. It is qualified by the applicable costs rules — rr 14.2 to 14.10 — and the exercise of the discretion must be consistent with established principles. It is important that the integrity of the costs regime set out in the High Court Rules is

2      High Court Rules 2016, r 14.1.

maintained and there is a strong implication that the Court should apply the regime in the absence of some reason to the contrary.

[7]        One of the principles applying to the determination of costs is that the party who fails with respect to a proceeding should pay costs to the party who succeeds.3 There has to be good cause to depart from this position.4

Who were the successful parties?

[8]        I have no hesitation in finding that the plaintiffs and Mr Whitley were the successful parties for the purposes of r 14.2(1)(a).

[9]        The application for consolidation was brought by LPF. I dismissed the application. While I found that the low threshold for consolidation was met, such that it was open to the Court to make an order, in the exercise of my discretion, I declined to do so. I listed a large number of considerations which in my judgment, told against consolidation. None of those considerations was conceded by LPF. Rather, I accepted the arguments advanced by the plaintiffs and Mr Whitley in large part.

[10]      While LPF says that the stay ordered by me is relevant, I do not accept this argument. I did not decline the consolidation application on the basis of the stay. I first declined the application and then proceeded to grant a stay on the basis that all parties either consented to it or at least did not oppose. From recollection, I raised whether or not a stay was appropriate; it was not suggested by LPF. I do not consider that the grant of a stay affects who was or was not the successful party.

[11]      LPF also says that the plaintiffs’ pleadings were relevant to the consolidation application and that the plaintiffs belatedly offered to amend the pleadings, but only in limited respects. Again, I do not consider that this issue is relevant. I did not determine the consolidation application on the basis of any proposed amendments to the pleadings. Rather, I dealt with the consolidation application on the basis of the then third statement of claim. I did not take the amendments into account.

3      Rule 14.2(1)(a).

4      Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].

[12]      LPF also argues that Mr Whitley belatedly conceded various issues and that that concession resolved matters raised by LPF in its consolidation application. Again, I do not accept this. While there were movements by the parties immediately before and in the course of the hearing, LPF maintained its application notwithstanding the (relatively subtle) changes in position. In any event, matters of this kind would reflect in a reduction in costs under r 14.7, rather than a denial of costs to the successful parties.

[13]      I now turn to the confidentiality application. The plaintiffs brought this application and in large part they succeeded. The plaintiffs acknowledged, along with most of the counter parties to the various documents in issue, that individual settlement contributions should remain confidential, but submitted that the total settlement sum should not. LPF agreed with this but it was only one of the matters in issue. There were five additional categories of documents in respect of which confidentiality was claimed by LPF. I set aside confidentiality in respect of most documents, subject in some cases to redactions. LPF withdrew its claim for confidentiality over its funding agreement. I set aside claims to confidentiality in respect of two of the three documents detailing a settlement with Dominion Finance Group Ltd. I set aside the claim for confidentiality in respect of two other categories of documents. Again, in my judgment, the plaintiffs were in large part the successful party.

Quantum

[14]      The plaintiffs seek costs against LPF on a 2B basis. In my judgment, this is appropriate. Notwithstanding the calibre of counsel appearing, such categorisation properly recognises that the matters in issue were only of average complexity, requiring counsel of skill and experience considered average in this Court. The time allowances claimed are in accordance with the rules and are not excessive.

[15]      Again, costs on a 2B basis for Mr Whitley are appropriate, for the same reasons as are set out above. There is nothing out of the ordinary in the disbursements claimed.

[16]      I cannot see that there is any reason to reduce the costs otherwise payable under r 14.7. In my judgment, none of the provisions in that rule are engaged.

Result

[17]      In my judgment, it is appropriate to award costs and disbursements in favour of the plaintiffs against LPF in the sum of $21,848.32. I so order.

[18]      The plaintiffs do not seek costs against Mr Walker and Mr Scutter. They supported LPF’s consolidation application, but they took no active stance at the hearing. There is no costs order against them.

[19]      I award costs and disbursements totalling $8,918.96 in favour of Mr Whitley (and the companies in liquidation) against LPF in relation to the consolidation application.

[20]      Mr Whitley supported the plaintiffs’ application seeking to set aside LPF’s claims to confidentiality, but did not take a formal position on it. He responsibly acknowledges that he cannot fairly claim costs in regard to it.

Wylie J