BGT Developments Limited v Hewson - [2020] NZHC 3291

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2020-470-97

[2020] NZHC 3291

BETWEEN
BGT DEVELOPMENTS LIMITED

Applicant

AND

STEVEN PAUL HEWSON, VICTORIA HEWSON AND FL TRUSTEES 2013

LIMITED AS TRUSTEES OF THE HEWSON FAMILY TRUST
First Respondent

FENTON McFADDEN

Second Respondent

Hearing: On the papers

Counsel:

D Fraundorfer and R Steens for Applicant N Smith for Second Respondent

Judgment:

14 December 2020

COSTS JUDGMENT OF WHATA J

This judgment was delivered by me on 14 December 2020 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors: Holland Beckett Law, Tauranga

BGT DEVELOPMENTS LIMITED v HEWSON [2020] NZHC 3291 [14 December 2020]

Introduction

[1] The second respondent (Fenton McFadden) responded to a judgment of this Court in respect of freezing orders over proceeds of sale in the hands of the first respondent. In particular, they:

(a)Provided a memorandum to the Court setting out its position in respect of the proceeds of sale, noting that they do not hold them, or have control of them, that it was not aware of the transaction underpinning the freezing orders, that the first and second named first respondents no longer resided in New Zealand and that they are authorised to accept service for the first respondents.

(b)Attended a telephone conference under urgency, at which they confirmed they did not have instructions to disclose the relevant bank account details.

[2] Fenton McFadden now seeks an award of non-party costs pursuant to r 14.6(4)(d) of the High Court Rules 2016. It submits r 14.6(4)(d) applies because they are not a party to the primary proceeding and have acted reasonably.

Fenton McFadden’s submission

[3] Citing various authority, Fenton McFadden submits that, as a “non-party”, it is entitled to its costs for the above attendances.1 It says that their role is akin to that of a non-party subject to a discovery order.

[4] Counsel’s actual costs were $2,774, plus GST in relation to the urgent attendances and appearances are reasonable. Fenton McFadden submits this was modest, because the standard scale 2B award on equivalent items totals $2,390 (more than two-thirds of actual costs). They further note the second respondent partnership has not sought reimbursement for incurred time and costs in responding to and complying with the plaintiff’s application and orders.

1 Jindal v OM Financial Ltd [2020] NZHC 2444; Hemmingson v Rod [2015] NZHC 2021.

[5] Costs on this application for costs are also sought on the basis that the plaintiff has failed to provide a substantive response to the second respondent’s numerous efforts to resolve costs on a discounted basis.2

[6] Counsel’s actual costs of $1,738, plus GST in relation to the various attendances and subsequent preparation of this costs application, are said to be reasonable because a standard scale 2B award on the equivalent item totals $956 – 55 per cent of the actual costs.

Applicant’s submission

[7] The applicant, BGT, accepts there is authority for “true”…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading BGT Developments Limited v Hewson

Details

AGLC: BGT Developments Limited v Hewson [2020] NZHC 3291
Case: [2020] NZHC 3291
Decision Date: 14 December 2020

CaseChat Overview and Summary

In the High Court of New Zealand Tauranga Registry, the case of BGT Developments Limited v Hewson was heard, where the applicant, BGT Developments Limited, sought an award of costs against Fenton McFadden, the second respondent, who was not a party to the primary proceeding but had attended an urgent telephone conference and provided a memorandum to the Court. The central issue was whether Fenton McFadden was entitled to an award of costs for their involvement as a non-party in the proceedings. Fenton McFadden argued that they were entitled to costs under rule 14.6(4)(d) of the High Court Rules 2016 as they were not a party and had acted reasonably. BGT Developments Limited contended that Fenton McFadden was not a true non-party and had taken minimal steps, further arguing that Fenton McFadden's costs were unreasonable.

The court assessed the roles and responsibilities of Fenton McFadden, concluding that while they were entitled to costs for their attendances as a non-party, the costs incurred in communicating with and taking instructions from the first respondent were not costs incurred as a non-party and must be recovered from the first respondent. The court directed Fenton McFadden to file a memorandum setting out the division of costs, with a final order to be made subsequently. The court also noted that the application for costs suffered from evident overreach and made no award for costs on that application.

Orders