Body Corporate 172108 v Manchester Securities Ltd (in liq)

[2021] NZHC 1542

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2018-485-225

[2021] NZHC 1542

BETWEEN

BODY CORPORATE 172108

Plaintiff

AND

MANCHESTER SECURITIES LIMITED

(in liquidation) Defendant

Hearing:

On the papers

Appearances:

J B Orpin-Dowell and T J G Allan for plaintiff No submissions for defendant

K Sullivan for R J Cummins

Judgment:

30 June 2021

COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]    This application for an order appointing liquidators over Manchester Securities Ltd was heard on 10 December 2019. A judgment was issued on 19 February 2020. It was reissued on 28 February 2020.1 There was an order for the appointment of liquidators. The plaintiff now seeks costs in relation to the proceedings in this Court. To the extent that there has been any delay in relation to that application, the explanation is that, in the meantime, Mr R J Cummins, who was a shareholder and director of Manchester Securities Ltd, and who participated actively in the hearing in this Court, then appealed this Court’s decision. The Court of Appeal’s decision dismissing Mr Cummins’ appeal was not delivered until 29 April 2021.2

1      Body Corporate 172108 v Manchester Securities Ltd [2020] NZHC 198.

2      Cummins v Body Corporate 172108 [2021] NZCA 145.

BODY CORPORATE 172108 v MANCHESTER SECURITIES LIMITED (in liquidation) [2021] NZHC 1542 [30 June 2021]

[2]    In my judgement, there is no question that the Court has jurisdiction to award costs  against   Mr  Cummins  (jointly  along  with  Manchester   Securities  Ltd).   Mr Cummins made himself a party by filing and serving documentation and taking an active part in the proceeding and then appealing that decision. As Mr Orpin-Dowell submits, had Mr Cummins not been a party, he would not have had standing to commence and prosecute an appeal. In any event, the law has been well settled for some time that a participant in proceedings, whether technically a party or not, exposes himself, herself or itself to a costs award by taking an active part.3

[3]    As the successful party it appears to me that the plaintiff is entitled to a costs award. There is nothing in Mr Sullivan’s submissions that would suggest otherwise.

[4]    Mr Orpin-Dowell for the plaintiff does not contend for anything other than an award of scale costs, and nor would any such contention be appropriate.

[5]    The only question, then, is what scales should apply. Mr Orpin-Dowell submits on behalf of the Body Corporate that the Court should award costs on a 2C basis. To explain, in all but exceptional cases the Court awards costs according to scales contained in the High Court Rules 2016. There are two such scales. The first  is intended to reflect the relative complexity of the case and therefore the relative demands on counsel, with Category 1 being for straightforward cases and Category 3 being for complex cases. The second is intended to reflect the amount of time demanded by the case, with Category A for cases which require a comparatively modest amount of time and Category C being for cases that demand a comparatively large amount of time.

[6]    Inevitably, then, most costs awards are made on a 2B basis — average complexity and average demand in terms of time.

[7]    In this case, Mr Orpin-Dowell for the Body Corporate submits that the Court should award costs on a 2C basis, so is contending that, although the case is not out of the ordinary in terms of its complexity, it demanded a comparatively large amount of

3      See Concrete Structures (NZ) Ltd v Smith [2019] NZHC 2572, (2019) 25 PRNZ 74 and the cases referred to.

time. In the course of his submission he referred to the amount of time invested in the matter by the Body Corporate’s solicitors and counsel — 150 hours — and contrasted this with the number of hours allowed in band C-59.2.

[8]    I do not accept that that is necessarily the correct approach. The issue is never the actual level of seniority of counsel required, or the actual hours expended in the case. To analyse costs awards on that basis would defeat the purpose of the scales in the first place. The analysis is an objective assessment of the complexity of the case and time that it is likely to demand of the relevant party’s advisers.

[9]    This case is not without its difficulties (and indeed frustrations). However, it is not my observation that it is a case which should have required a comparatively large investment of time. Indeed, there are features of it which might suggest the reverse. In saying that, I am thinking of the fact that the litigation has been ongoing for well over a decade and the factual background against which the issues that have arisen have been argued is now well understood.

[10]   Be that as it may, standing back from the matter as best I can, the view I take is that this is a case in respect of which the plaintiff as the successful party should be awarded costs on a 2B basis.

Conclusion

[11]   I award the plaintiff costs against the defendant and Mr Cummins jointly. Those costs are to be calculated on a 2B basis. The costs, along with any relevant disbursements, may be fixed by the Registrar.

Associate Judge Johnston

Solicitors:
Grove Darlow & Partners, Auckland for plaintiff