Blackhawk Farm Limited v Armada Equine Limited

[2017] NZHC 686

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-002540 [2017] NZHC 686

BETWEEN

BLACKHAWK FARM LIMITED

Plaintiff

AND

ARMADA EQUINE LIMITED Defendant

Hearing:	On the papers
Judgment:	10 April 2017

COSTS JUDGMENT OF DOWNS J

This judgment was delivered by me on Monday, 10 April 2017 at 3.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Tripe Matthews & Feist, Wellington.

Anthony Harper, Auckland.

BLACKHAWK FARM LTD v ARMADA EQUINE LTD [2017] NZHC 686 [10 April 2017]

[1]      The only outstanding issue as between the parties—at least in this Court— concerns  costs.    The  plaintiff  seeks  2B  costs  in  relation  to  its  interlocutory application for an injunction, and increased costs in relation to the defendant’s abandoned application to rescind or vary consent orders. The defendant resists costs. And, it contends it should have the costs in relation to its (abandoned) application on the basis it was brought only because the plaintiff failed to comply with the Court’s directions.

[2]      The plaintiff emphasises it “won”, and so r 14.2(a) of the High Court Rules. The defendant emphasises the discretionary nature of costs awards pursuant to r 14.1 of those rules.

[3]      The case is before me as Duty Judge.

[4]      Some background.  Tomahawk II is a racehorse.  The plaintiff is its owner (with others).  The defendant grazes and train horses.  The plaintiff and defendant entered  an  oral  agreement  by  which  the  defendant  was  to  graze  and  train Tomahawk II at the plaintiff’s cost.

[5]      On 10 October 2016, the plaintiff filed a statement of claim alleging the defendant   had   breached   the   agreement,   including   by   failing   to   surrender Tomahawk II.  By way of interlocutory application, the plaintiff sought an injunction for Tomahawk II’s return.

[6]      That application was served on a Pickwick basis.  The defendant consented to injunctive relief providing the plaintiff held certain monies on trust in relation to the underlying  dispute.     On  11  October  2016,  Muir  J  made  orders  by  consent. His Honour’s  orders  recognised  the  plaintiff  would  notify  the  defendant  of  its intention in relation to Tomahawk II’s sale.

[7]      The case came back to Muir J the next day.  His Honour recorded the plaintiff would not commit to not selling Tomahawk II within 21 days.   Further consent orders were made, including a direction the plaintiff would, within 21 days, provide

the defendant with its proposal for the horse’s sale.  The defendant was given leave

to apply to vary or rescind the orders if agreement was not reached in relation to sale.

[8]      On 19 December 2016 the defendant filed an application to vary or rescind the orders as the plaintiff had not identified a sale proposal.   It adduced affidavit evidence  in  support.    The  plaintiff  filed  a  notice  of  opposition  with  affidavit evidence.  But the parties also negotiated.

[9]      Agreement was reached on 14 February 2017.  The defendant abandoned its application. And Tomahawk II remained with the plaintiff.  But the parties could not agree on costs.  Hence this decision.

[10]     I have concluded costs should lie where they fall for five interrelated reasons.

[11]     First, at the heart of this dispute is a structural problem: the absence of a written agreement between the parties, and consequential disagreement about the agreement’s terms. The plaintiff appears to have believed it was entitled to the return of Tomahawk II as it had cancelled the agreement and given the defendant notice of cancellation.  Conversely, the defendant appears to have believed it was entitled to retain possession of Tomahawk II until the horse was sold, with 10 percent of the sale proceeds to go to it irrespective of who brokered the sale.

[12]     Second, each of these competing contentions finds support in the affidavit evidence.    Each  is  plausible.   And facially reasonable.   Materially,  I am  in  no position to resolve which is correct given the absence of any adjudicative ruling to this point and now settlement.

[13]     Third,  while  the  plaintiff  sought  and  obtained  interlocutory  relief,  the defendant consented to that relief providing certain conditions were met.  They were. Terms were agreed as between the parties.

[14]     Fourth, I am in no position to resolve who, if anyone, was at fault in relation to non-compliance with the timetable fixed by Muir J on 12 October 2016.   The plaintiff contends it was not at fault because the horse’s condition was so poor it was

worthless, hence could not be sold, hence there could be no proposal for sale.  The defendant contends it properly cared for Tomahawk II.  And, asserts the plaintiff had utterly unrealistic expectations in relation to sale price.

[15]     To the extent the defendant appears not to have complied with the timetable, there is force in its submission that was because the plaintiff did not comply with Muir J’s directions to provide the defendant with a sale proposal.  Beyond this, I say no more.

[16]     Fifth, against this background, it is commensurate with the interests of justice costs lie where they fall.

……………………………..

Downs J