Audio Essentials Limited v Tripathi

[2019] NZHC 311

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2016-004-616

[2019] NZHC 311

BETWEEN

AUDIO ESSENTIALS LIMITED

Plaintiff

AND

URMANG TRIPATHI

First Defendant

VARUN CHAWALA
Second Defendant

VIKAS ROHILLA

Third Defendant

Hearing:	On the papers
Judgment:	1 March 2019

COSTS JUDGMENT OF DUFFY J

This judgment was delivered by me on 1 March 2019 at 1.30 pm pursuant to

Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors/Counsel:

Shieff Angland, Auckland Kidd Legal, Auckland

AUDIO ESSENTIALS LIMITED v TRIPATHI & ORS Costs [2019] NZHC 311 [1 March 2019]

[1]    Following delivery of my judgment on 20 December 2018 leave was granted to the parties to file memoranda on costs.1 The successful party (Audio Essentials) has filed a memorandum seeking solicitor client costs including GST and disbursements up to judgment date for the total sum of $60,299.96 against the first defendant Urmang Tripathi. On 21 January 2019 Audio Essentials filed a notice of discontinuance against the second defendant, Varun Chawala, on the basis there was no issue as to costs. The notice of discontinuance also recorded that Audio Essentials had been unable to locate the third defendant, Vikas Rohilla. On 25 January 2019 Davison J granted Audio Essentials leave to discontinue against the second defendant.2 Accordingly, Audio Essentials is now focused on recovering costs from Mr Tripathi.

[2]    This proceeding was brought by Audio Essentials against the defendants, who were sued on guarantees they had provided for the payment of rent of a leased property at 340 Ponsonby Road, Auckland. Audio Essentials was the lessee of the property (the premises). Associate Judge Christiansen found Mr Tripathi was liable under the guarantees.3

[3]    Christiansen AJ upheld Audio Essentials’ calculation of debt for unpaid rent or costs incurred until the premises were rented again. At [28] of Christiansen AJ’s decision he records that key terms of the lease included all rent was to be paid without deduction and interest would be payable on monies owing in default. Further, the tenants would pay the landlord’s solicitor client costs of and incidental to the enforcement of the landlord’s rights, remedies and powers. On the evidence before Christiansen AJ in the summary judgment application he concluded:4

No reliable evidence undermines [Audio Essentials’] calculation of debt for unpaid rent or for costs incurred until the premises was rented again.

[4]    At [85] of the judgment Christiansen AJ entered summary judgment on Audio Essentials’ claim against Mr Tripathi and ordered he pay the costs and disbursements on Audio Essentials’ application.

1      Audio Essentials Ltd v Tripathi [2018] NZHC 3425 [20 December 2018].

2      Minute of Davison J dated 25 January 2019.

3      Above n 1.

4 At [84].

[5]    Given the findings of Christiansen AJ it follows that Mr Tripathi as the guarantor of the lease is obliged to pay all that is owing under this lease, which includes the legal costs associated with this proceeding.

[6]    Audio Essentials has filed an affidavit of Collette Fenton in support of the costs it now seeks. This affidavit shows that the solicitor client costs for Audio Essentials total $60,299.96. Attached to the affidavit are copies of the relevant invoices and other related material which satisfy me that the claim for solicitor client costs is well made out.

[7]    Rule 14.6(e) of the High Court Rules enables the Court to award indemnity costs where the party claiming costs is entitled to indemnity costs under a contract or deed. Here the lease provided for the recovery of solicitor client costs in circumstances where those costs were of and incidental to the enforcement of Audio Essentials’ rights, remedies and powers under the lease. Thus the obligation to meet those costs falls on Mr Tripathi as a guarantor of the lease. The sum sought is a reasonable amount which would be consistent with the trouble to which Audio Essentials has been put in order to recover what it is owed under the lease. As a guarantor of the tenant’s payments under the lease Mr Tripathi is liable to pay those costs. I am satisfied that the appropriate award of costs, including GST and disbursements up to the judgment date, is the sum of $60,299.96. Accordingly costs in the sum of $60,299.96 are awarded to Audio Essentials.

[8]    Mr Tripathi’s solicitor has filed a memorandum advising the Court that counsel who appeared for Mr Tripathi is no longer employed by his solicitor. Further, that Mr Tripathi intends to appeal his liability as guarantor of the tenants’ obligations under the lease. In short Mr Tripathi seeks to have award of costs deferred until he has pursued further attempts to avoid payment of his liabilities under the guarantee. Nothing that has been advanced for Mr Tripathi warrants delaying an award of costs and disbursements to Audio Essentials.

[9]    In its costs memorandum Audio Essentials has also set out the interest to which it is entitled up to 23 January 2019, that being the date of its memorandum. It is not clear to me from the memorandum whether Audio Essentials requires any further order

of the Court to confirm whether its calculation of interest to 23 January 2019 is accurate and that those sums are also now payable to Audio Essentials. If further assistance of the Court is required in order for Audio Essentials to recover the interest it is entitled to recover under the lease it has leave to file further memoranda on this topic.

Duffy J