Benbrak Investments Limited v O'Shea

[2019] NZHC 1871

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2018-419-141

[2019] NZHC 1871

UNDER

section 290 of the Companies Act 1993

BETWEEN

BENBRAK INVESTMENTS LIMITED

Applicant

AND

JOHN JOSEPH O’SHEA

Respondent

Appearances:	T Bowler for the applicant A Cook for the respondent
Judgment:	2 August 2019

COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[On the papers]

This judgment was delivered by me on 2 August 2019 at 11.30am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

[1]    In my judgment dated 25 September 2018 I set aside a statutory demand served on the applicant, Benbrak Investments, by the respondent, Mr John O’Shea, in respect of allegedly unpaid directorship fees. I reserved costs, expecting that counsel would be able to resolve these. I expressed the preliminary view that Benbrak, as the successful party, was entitled to a costs award.

BENBRAK INVESTMENTS LIMITED v O’SHEA [2019] NZHC 1871 [2 August 2019]

[2]    By memorandum dated 31 October 2018, Mr Bowler for Benbrak informed the Court that, contrary to my expectations, costs have not been resolved, and he sought costs on a 2B basis with a 50 per cent uplift on certain bases. Ms Cook filed a memorandum in response opposing a costs award. Mr Bowler filed a second memorandum dated 19 June 2019  and  Ms Cook  replied  by  memorandum  dated 24 June 2019 saying that the respondent was abroad and that she would not be able to respond until his return in early July. On receipt of that material on 18 July 2019, I directed that Ms Cook file a substantive response by 26 July 2019. She did so by memorandum dated 25 July 2019.

[3]    The general rule is of course that costs follow the event, or in other words the successful party is entitled to a costs award, all other things being equal. Costs are awarded according to scale except in exceptional circumstances.

[4]    Ms Cook submits that the Court should not make a costs award at all in this case because:

(a)the applicant did not comply with the timetabling orders made by Associate Judge Osborne (as he was) on 9 July 2018. In particular the applicant was late in filing its affidavit in reply and its submissions and related material were filed four working days prior to the hearing (as opposed to ten working days as required by the timetable).

(b)no evidence has been offered to the applicant’s actual costs;

(c)even on the most favourable view of the case from the applicant’s point of view it still owes an amount to the defendant (of something less than

$1,000);

(d)further back in the history of the matter the applicant was tardy in providing the respondent with a copy of the resolution terminating his directorship;

(e)the applicant also breached his obligations in terms of the amendment of the Companies Register.

[5]    Mr Bowler in his memorandum of 19 June 2019 deals with the question of the applicant’s actual costs which I am satisfied exceed both scale costs and the uplift being sought. Nevertheless, the points made by Ms Cook have some force.

[6]    Furthermore, the respondent may be open to criticism in this case because there is evidence before the Court — albeit in memorandum form — of the applicant having offered to settle all matters on a “drop-hands” basis, that is to say with each party bearing its own costs, at an early stage which proposal was rejected.

[7]    On balance the view I reach is that the applicant, as the successful party should have its costs on a 2B basis without any uplift.

[8]    Accordingly, I order that the respondent pay the applicant’s costs on a 2B basis together with such disbursements as may be allowed by the Registrar.

Associate Judge Johnston

Solicitors:

Neilsons Lawyers, Auckland, for the applicant O’Sheas Solicitors, Hamilton for the respondent