Beardsmore v Prime Bookkeeping Ltd

[2021] NZHC 2054

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2018-470-175

[2021] NZHC 2054

BETWEEN

CLARENCE EDWARD BEARDSMORE

Plaintiff

AND

PRIME BOOKKEEPING LTD

First Defendant

CATHERINE ANNE DAVIES

Second Defendant

Judgment:

(On the papers)

10 August 2021

COSTS JUDGMENT OF BREWER J

This judgment was delivered by me on 10 August 2021 at 10 am pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Braun Bond and Lomas (Hamilton) for Plaintiff

Rejthar Stuart Law (Tauranga) for First and Second Defendants

BEARDSMORE v PRIME BOOKKEEPING LTD [2021] NZHC 2054 [10 August 2021]

Introduction

[1]    In my costs judgment dated 28 August 2020, I awarded indemnity costs to Prime Bookkeeping and Ms Davies against Mr Beardsmore.1 I did not fix the quantum of indemnity costs between 3 June 2020 and 20 July 2020, or the appropriate 2B costs on the costs application itself. I now determine those quanta.

Background

[2]    Mr Beardsmore commenced a proceeding against Prime Bookkeeping Ltd (“PBL”) and Ms Davies. He alleged that PBL and Ms Davies had acted in a fashion that was oppressive, unduly discriminatory, and unfairly prejudicial to him in his capacity as a shareholder and director of PBL. He alleged, among other things, that his shares were transferred to Ms Davies without his consent or payment, that the sole shareholder was registered as Ms Davies, that he was removed as director, that the company’s accounts wrongly recorded payments to him, and that someone had illegitimately used his electronic signature to sign documents. Mr Beardsmore sought declarations that he continued to be a shareholder and director of PBL and that he was entitled to the payment of dividends.

[3]    Before Mr Beardsmore brought his claim, he was provided with copies of the share transfers he had signed. There was extensive documentary evidence that weighed against Mr Beardsmore’s allegations, as well as the evidence of witnesses. The trial was set down for 27 July 2020. On or about 3 June 2020, Mr Beardsmore advised PBL and Ms Davies he would discontinue the proceedings. On 20 July 2020, a week before trial, he did so.

My first costs decision

[4]    I considered that  Mr Beardsmore’s  proceedings  effectively  alleged  that  Ms Davies had engaged in extensive and serious fraud.2   I took into account that    Ms Davies was a chartered accountant, and the allegations could be expected to jeopardise her professional future.3 I considered that Mr Beardsmore acted improperly

1      Beardsmore v Prime Bookkeeping Ltd [2020] NZHC 2231.

2 At [30].

3 At [33].

and unreasonably.4 I considered that in all the circumstances an award of indemnity costs was appropriate.5

[5]    However, the only costs before me were those to 3 June 2020. I noted that 2B costs would be $25,642 and actual costs to 3 June 2020 (according to counsel) were

$38,957.15.6    I  awarded  indemnity  costs  to  3 June  2020,  and  provided  that    Mr Beardsmore was to pay actual and reasonable costs from 3 June 2020 until the actual…