Allied Investments Limited v Recon Professional Services Limited

[2023] NZHC 2618

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2023-485-396

[2023] NZHC 2618

UNDER

the Companies Act 1993

IN THE MATTER

of an application to set aside a statutory demand

BETWEEN

ALLIED INVESTMENTS LIMITED

Applicant

AND

RECON PROFESSIONAL SERVICES LIMITED

Respondent

Hearing:

On the papers

Appearances:

D R Tobin for Applicant

M R C Wolff for Respondent

Judgment:

20 September 2023

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[Costs]

[1]                 In this proceeding, the applicant sought an order setting aside a statutory demand for the sum of $81,080.73 served on it by the respondent on 5 July 2023. On 1 August 2023, the respondent’s statutory demand was withdrawn.

[2]                 The matter was called in the banco list on 29 August 2023 and adjourned until 19 September 2023 for the parties to attempt to reach agreement on costs.

[3]The parties have been unable to agree on costs and memoranda have been filed.

ALLIED INVESTMENTS LTD v RECON PROFESSIONAL SERVICES LTD [2023] NZHC 2618

[20 September 2023]

[4]                 The applicant seeks costs on a 2B basis in the sum of $6,453 made up as follows:

(a)	Preparation of application (2 days)	$4,780
(b)	Attendance at first call (0.3 days)	$717
(c)	Preparation of costs memorandum (0.4 days)	$956

[5]In addition, the applicant seeks the filing fee for the application to set aside of

$540, adding to a total of $6,993.

[6]                 The respondent does not oppose (a) above. Nor does the respondent oppose the filing fee.

[7]                 The respondent opposes item (b) above. The respondent’s memorandum suggests that it also opposes item (c) above.

Legal principles

[8]                 Costs are ultimately a matter for the Court’s discretion, the overall objective being to achieve an outcome that best meets the interest of justice.1 That discretion is qualified by the applicable costs rules, contained in pt 14 of the High Court Rules 2016. The primary principle applying to the determination of costs is that costs follow the event – meaning that a party who is unsuccessful pays costs to the party who is successful.2

Discussion

[9]                 The respondent gave notice to the applicant of the withdrawal of the statutory demand on 1 August 2023.

1      High Court Rules 2016, r 14.1; Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7] and [16]; Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [21]–[24] and [28]; and Mansfield  Drycleaners  Ltd  v  Quinny’s  Drycleaning (Dentice Drycleaning Upper Hutt Ltd) (2002) 16 PRNZ 662 (CA) at [27].

2      High Court Rules, r 14.2(1)(a).

[10]             The respondent contends that it should have no liability for costs incurred by the applicant once the statutory demand had been resolved because the applicant should then have withdrawn its application to set aside, and no further costs would have been incurred.

[11]             However, while the respondent advised the applicant on 1 August 2023 that the statutory demand would be withdrawn and it would not take any further steps in respect of the statutory demand, the respondent also advised at that stage that it would not agree to pay 2B scale costs for the setting aside application.

[12]             In its reply memorandum, the applicant submits that the matter was called in the banco list on 29 August 2023 because the issue of costs was unresolved.

[13]             As noted above, the respondent does not now oppose the 2B costs claimed by the applicant for preparation of the setting aside application (based on a time allocation of two days).

[14]             In my view,  if the respondent had agreed to pay costs on a 2B basis as at      1 August 2023, then it is likely that the issue of costs would have been resolved between the parties, and it would not have been necessary for the matter to be called in the banco list on 29 August 2023. Nor would it have been necessary for the applicant to file a memorandum on costs.

[15]             The respondent refers to Bew Properties 2021 Ltd v Rosco Ice Cream Ltd3 as a case supporting its position. However, the costs award in that case is based on a different fact scenario. In the present case, the matter was called in the banco list on 29 August 2023 only because the issue of costs was not resolved.

[16]In the circumstances, I consider that the applicant is entitled to items (b) and

(c) of its cost claim referred to above in addition to item (a) and the filing fee, being the items the respondent does not oppose.

3      Bew Properties 2021 Ltd v Rosco Ice Cream Ltd [2023] NZHC 1310.

Result

[17]             The applicant is entitled to costs in the sum of $6,453.00 and disbursements in the sum of $540.00.

Associate Judge Skelton

Solicitors:

Anja Klinkert, Dunedin for Applicant Morrison Kent, Wellington for Respondent