Alpine Drinks NZ Limited v New Zealand Miracle Water Limited

[2022] NZHC 619

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-001798

[2022] NZHC 619

BETWEEN

ALPINE DRINKS NZ LIMITED

Plaintiff

AND

NEW ZEALAND MIRACLE WATER LIMITED

Defendant

Hearing:	On the papers
Judgment:	31 March 2022

JUDGMENT OF DOWNS J

(Costs)

This judgment was delivered by me on Thursday, 31 March 2022 at 4 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Epsilon Law, Auckland.

Righteous Law, Auckland.

KF Gould, Auckland.

ALPINE DRINKS NZ LTD v NEW ZEALAND MIRACLE WATER LTD [2022] NZHC 619 [31 March 2022]

[1]    The  plaintiff  markets  bottled  water.   The  defendant  bottles  water.   On  22 March 2021, the parties entered a manufacturing agreement in relation to bottled water. Six months later, the plaintiff filed an application for an interim injunction, seeking to prevent the defendant from cancelling the agreement. The plaintiff ultimately abandoned its application, leaving only costs, which I address here.

[2]    The defendant seeks indemnity costs of $14,170. It contends the plaintiff knew its application for an interim injunction was hopeless, and therefore acted “vexatiously, frivolously, improperly, or unnecessarily” in seeking one.1

[3]    Case law emphasises the high threshold in relation to indemnity costs. Put broadly, a party must behave badly or very unreasonably to attract them.2

[4]    The threshold is not crossed here. While the defendant told the plaintiff it had breached the agreement, it is not clear the defendant provided the plaintiff 30 days’ written notice of the alleged breaches before cancelling the agreement 2 July 2021 (as required by cl 14.1 of the agreement).3 So, there was some basis for the plaintiff to believe it was entitled to injunctive relief.4

[5]    The defendant also seeks indemnity costs because the plaintiff twice failed to comply with timetable directions. The (high) threshold is not crossed here either, albeit scale costs should be increased by 50 percent (from 24 November 2021) to recognise the plaintiff’s non-compliance. It follows the plaintiff must pay the defendant (increased) costs of $7,170 and disbursements of $660.

……………………………..

Downs J

1      High Court Rules 2016, r 14.6(4)(a).

2      Bradbury v Westpac Banking Corp [2009] 3 NZLR 400, (2009) 19 PRNZ 385 (CA) at [27] – [28].

3      The defendant could not rely on its breach notice of 16 June 2021 for the obvious reason it would not permit cancellation until mid-July 2021. The defendant’s “meeting note” of 11 May 2021 would have permitted cancellation 2 July 2021 if, and only if, it constituted written notice in terms of the agreement. Reasonable minds could differ on this point.

4      This is not to conclude the plaintiff’s case was strong.