Bailey v Earth Crest Limited

[2013] NZHC 1689

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2012-470-1033 [2013] NZHC 1689

BETWEEN	SAMUEL L BAILEY Plaintiff
AND	EARTH CREST LIMITED Defendant

Hearing:	on Papers
Appearances:	Mr S Bailey Plaintiff in person Mr T Savage for Defendant (on Papers)
Judgment:	3 July 2013

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE [ON COSTS]

This judgment was delivered by me on

3.07.13 at 5 pm, pursuant to

Rule 11.5  of the High Court Rules.

Registrar/Deputy Registrar

Date……………

BAILEY v EARTH CREST LIMITED [2013] NZHC 1689 [3 July 2013]

[1]      In my judgment of 31 May 2013 I dismissed the plaintiff’s application for an order winding up the defendant.  The essential ground was that there was some uncertainty about whether the plaintiff or a company with which he was associated was the creditor.  There were good grounds for supposing that there was a debt but insufficient certainty about who it was owed to.

[2]      In my judgment I invited the parties to file memoranda on costs.  Mr Bailey filed a memorandum which set out arguments why, not withstanding the Court’s decision, he should receive costs. He also set out the quantum of the costs sought.

[3]      The defendant filed a memorandum but made no submissions on the question of entitlement to costs, restricting itself to the issue of quantum.

[4]      Costs  orders  are  at  the  discretion of  the  Court1   but  the  exercise  of  the discretion is guided by applicable principles under r 14.2.   These include that the party who fails with respect of a proceeding should pay costs to the party who succeeds. It is notable as well that r 14.2 includes the principle that so far as possible the determination of costs should be predictable and expeditious.2   In achieving the last objective, the Court should, in my view, adhere to the guidance provided by r 14.2(a) unless there are good reasons why, in the particular circumstances of the case, it is the unsuccessful party who should receive costs.

[5]      The next question is whether there is anything in the circumstances of the present case which would require the Court to give other than the usual weight that is accorded to the principle in r 14.2(a).

[6]      Any argument justifying a departure from the principle in r 14.2(a) would necessarily be based upon the contention that while there is uncertainty about who the creditor is there is a reasonable level of certainty that a debt is actually owed,

either to the plaintiff or his company.

1 High Court Rule 14.1.

2 Subrule (g).

[7]      The Court’s have on many occasions stated that liquidation proceedings are not intended to resolve substantive disputes about the underlying debt.  Instead, such disputes are better resolved in the course of the proceeding which is better suited to a thorough and systematic review of the facts which enquiry is assisted by the availability of discovery.  It would be consistent with such an approach and reinforce it if an award for costs were made against the plaintiff in the present case.

[8]      The fact that the plaintiff has been self represented throughout is not a matter

which should not be influential on the Court’s costs decision.

[9]      For all of those reasons I consider that an order for costs ought to be made against the plaintiff.

[10]     The  plaintiff has  referred  to  other  unreported  decisions  where Associate Judges have made orders directing that costs lie where they fall.  It is Mr Bailey’s submission that such an order ought to be made in the circumstances of this case. However, there is little advantage to be had from considering the details of those judgments.   In those cases the Court no doubt considered that there was some particular aspect of the facts of the case under consideration which justified the approach which the Court took.  In my view the most prudent course is to base the decision for costs firmly on the plain meaning of the applicable rule, namely High Court Rule 14.2.

[11]    There will accordingly be an order that the plaintiff pay the costs of the defendant. The costs which the defendant seeks appear to be in compliance with the allowances under category 2B.  The plaintiff is ordered to pay costs of $2,388 and

disbursements of $262.80.

J.P. Doogue

Associate Judge