Booth v Poplar Road Farms Ltd - [2019] NZHC 1889

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2018-454-065

[2019] NZHC 1889

BETWEEN
RAY CHARLES BOOTH

First Plaintiff

RAY CHARLES BOOTH AND ANNE BOOTH

Second Plaintiffs

AND

POPLAR ROAD FARMS LIMITED

First Defendant

JASON BOOTH
Second Defendant

TANIA BOOTH

Third Defendant

Hearing: On the papers

Counsel:

A N Isac QC and G M Richards for First Plaintiff J J Delany for Third Defendant

Judgment:

5 August 2019

JUDGMENT OF CLARK J (COSTS)

Introduction

[1] On 12 April 2019 I granted the first plaintiff’s application for rectification of a deed of debt. 1 The effect of rectification was to increase by approximately $428,000 the amount which the first defendant, Poplar Road Farms Ltd, owes to Ray Booth. I concluded that, having succeeded, the first plaintiff was entitled to costs. I reserved

1 Booth v Poplar Road Farms Ltd [2019] NZHC 807.

BOOTH v POPLAR ROAD FARMS LIMITED [2019] NZHC 1889 [5 August 2019]

costs in respect of an abandoned interlocutory application pending receipt of an application and memoranda.2

[2]The plaintiffs now seek costs:

(a)against the first defendant in respect of the successful rectification application;

(b)against the third defendant in respect of an abandoned application for leave to bring a derivative action;

(c)on the costs application.

Discussion

Costs on the rectification application

[3] The plaintiffs seek the following costs against the first defendant calculated on a 2B basis except in respect of the preparation of evidence. Those costs are sought under band A as the first plaintiff filed only three affidavits and otherwise relied on affidavits filed in related proceedings.

Step Description Days Sum

1 Commence proceeding 3 6690

3 File reply 0.8 1782

10 Prepare for case management conference 0.4 892

11 File memo for CMC 31 October 2018 0.4 892

13 Attend CMC 31 October 2018 0.3 669

11 File memo for call 4 December 2018 0.2 $446

30 Prepare evidence 1.5(A) 3345

33 Preparation for hearing 3 6690

34 Appearance at hearing 0.25 557.5

22 Filing interlocutory application 0.6 1338

29 Sealing order 0.2 446

Total costs claim $23,749.50

Disbursements

Filing fee: statement of claim  1350

Scheduling fee  1600

Interlocutory application  500

Sealing judgment  50

Total costs and disbursements  $27,249.50

2 At [48].

[4] For the third defendant Mr Delany submitted costs should be calculated on a 2A basis given the matter proceeded by way of formal proof and most stages were “relatively straightforward”. Mr Delany submitted the time allocations for category A “obviously relate to a normal defended hearing and are not analogous to a formal proof hearing”. Mr Delany offered no authority in support of his position with which I disagree.

[5] Costs are set by reference to the skill and experience requirement of the proceeding and by determining what amount of time is reasonable for particular steps in the proceeding. I am aware of no principle suggesting that where a matter proceeds by way of formal proof it is by that account alone, susceptible to…

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.

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Details

Case: [2019] NZHC 1889
Decision Date: 5 August 2019

CaseChat Overview and Summary

In the High Court of New Zealand, Ray Charles Booth, as the first plaintiff, and Ray Charles Booth and Anne Booth, as the second plaintiffs, brought an action against Poplar Road Farms Limited, as the first defendant, Jason Booth, as the second defendant, and Tania Booth, as the third defendant. The plaintiffs sought rectification of a deed of debt to increase the amount owed by the first defendant to Ray Booth by approximately $428,000. The court granted the rectification application and ordered costs against the first defendant. The plaintiffs further sought costs against the third defendant in respect of an abandoned application for leave to bring a derivative action, and costs on the costs application.

The court considered the appropriate basis for calculating costs for the rectification application, with the plaintiffs seeking 2B costs except for the preparation of evidence, which they sought under band A. The third defendant argued for a 2A basis, but the court disagreed, stating that the complexity and reasonableness of time taken for discrete steps must apply equally to matters proceeding by way of formal proof as to those that proceed to a contested hearing. The court concluded that scale costs calculated on a 2B basis were appropriate, except for the preparation of evidence.

The court also considered the costs for the third defendant's abandoned application for leave to bring a derivative action. The plaintiffs sought 2B costs with a 50% uplift to reflect the lack of merit in the application and the wasted costs incurred in responding to the application. The court found that the third defendant's financial circumstances did not justify displacing the presumption of costs payable up to the point of discontinuance. However, the court declined to award a 50% uplift as the lack of merit was not "utterly clear." The court did, however, award the plaintiffs modest costs of $1,338 in respect of the costs application.

The first defendant must pay costs to the plaintiffs in the sum of $23,749.50 together with disbursements of $3,500. The third defendant must pay costs to the plaintiffs in the sum of $5,129 on the discontinued interlocutory application, together with disbursements of $110, and $1,338 on the plaintiffs' costs application.

Orders