Auckland Trotting Club Incorporated v Canam Group Limited (aka Medway Limited)

[2023] NZHC 3009

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-001110

[2023] NZHC 3009

BETWEEN

AUCKLAND TROTTING CLUB INCORPORATED
Plaintiff

AND

CANAM GROUP LIMITED (a/k/a Medway Limited)

First Defendant

CANAM VENTURES LIMITED, CANAM INDUSTRIAL LIMITED

Second Defendants

LOUKAS SOTERI PETROU, NICHOLAS ARTHUR PAGE and ANDREW CROSBIE CLARK

Third Defendants

CABINETRY INVESTMENTS LIMITED, CANAM BUILDING LIMITED (now

1962Trees Limited), CANAM MANAGEMENT SERVICES LIMITED, and CANAM BUILDING SOLUTIONS LIMITED

Fourth Defendants

Hearing:

On the papers

Appearances:

M C Black for the Plaintiff

D J Chisholm KC for the First-Named Third Defendant

Judgment:

27 October 2023

COSTS JUDGMENT OF ASSOCIATE JUDGE GARDINER

AUCKLAND TROTTING CLUB INC v CANAM GROUP LTD [2023] NZHC 3009 [27 October 2023]

This judgment was delivered by me on 27 October 2023 at 11.30 a.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Introduction

[1]    In a judgment delivered on 13 July 2023 I determined Mr Petrou’s application to strike out the second, third, fourth and sixth causes of action in ATC’s statement of claim as they relate to him, on the basis that none of them can succeed.1 I made orders striking out ATC’s claim to declarations in the second and third causes of action, and striking out the sixth cause of action entirely. Otherwise, Mr Petrou’s application to strike out was dismissed. Consequently, Mr Petrou’s application for summary judgment was dismissed.

[2]    I indicated my preliminary view that ATC should pay Mr Petrou’s costs, on a 2B basis, because despite my decision not to strike out the second, third and fourth causes of action, Mr Petrou had identified significant issues with the statement of claim requiring attention. I invited the parties to agree costs.

[3]    ATC and Mr Petrou have been unable to agree costs. Mr Petrou has filed a memorandum asking for an order for costs on a 2B basis, against ATC. Additionally, Mr Petrou and the first, second and fourth defendants seek a variation of the current timetable for discovery orders, in light of the judgment.

[4]    ATC  has filed  a memorandum in response opposing an order  for costs in  Mr Petrou’s favour, or asking the Court to, in its discretion, reduce any costs order in Mr Petrou’s favour from 2B. ATC submits that it was primarily successful overall in opposing the application, and therefore Mr Petrou should pay ATC 2B costs, adjusted downwards in the exercise of the Court’s discretion, to reflect the issues identified with the statement of claim in the judgment.

1      Auckland Trotting Club Inc v Canam Group Ltd [2023] NZHC 1685 [13 July 2023].

[5]    Having considered the respective arguments made in the costs memoranda, and having reflected on the judgment outcome, I consider that costs should lie where they fall. I am persuaded that while Mr Petrou identified significant issues with the statement of claim, there is merit to ATC’s argument that it successfully defended the application on at least half of the substantial issues.

[6]    To expand, Mr Petrou’s attack on the second and third causes of action had five elements to it. These are set out at [8](a)(i) to (v) of the judgment. The real battle was over the two issues identified at [8](a)(i) and (ii). The first issue was that the second and third causes of action are untenable because they are based on director’s duties under ss 135 and 136 being owed to ATC, rather than to CCL, and on ATC’s rather than CCL’s loss. The second issue was that the relief sought under s 301 is not available.

[7]    The judgment found that Mr Petrou was correct on the first issue. However, rather than striking out the causes of action, I gave ATC the opportunity to replead.

[8]    The judgment found against Mr Petrou and for ATC on the second issue, concluding that the relief claimed by ATC under s 301 was not inarguable.

[9]    Mr Petrou was successful in relation to the two issues identified at [8](a)(iii) and (iv). However, ATC was successful in relation to the issue identified at [8](a)(v). These three issues were relatively minor compared to the first two issues.

[10]   Mr Petrou sought to strike-out the fourth cause of action on the basis that it is time-barred. ATC was successful on this issue. Mr Petrou did identify a valid issue with ATC’s claim to expectation damages that ATC was directed to rectify. Having said that, the time bar issue was the more significant issue in relation to the fourth cause of action, and was the basis that Mr Petrou sought an order for strike-out.

[11]   Mr Petrou was successful in having the sixth cause of action, for recovery of the arbitration costs, struck out.

[12]   Analysed in this way, both ATC and Mr Petrou achieved a broadly even measure of success. If anything, ATC was more successful, but only because I granted them the opportunity to replead the second and third causes of action. Counting against an order in ATC’s favour is the fact that the statement of claim was repetitive, unclear, and in parts difficult to follow. This added to the time and cost involved in the hearing.

[13]   Weighing these considerations, I reach the conclusion that costs in relation to the application should lie where they fall.

[14]   Mr Petrou’s request for an amendment to the timetable for discovery will be addressed in a separate minute to the parties.

Associate Judge Gardiner

Solicitors:

Dawson Harford, Auckland Lindsay & Francis, Auckland

M Black, Auckland
D Chisholm KC, Auckland