Cain v Mettrick - [2020] NZHC 2597

IN THE HIGH COURT OF NEW ZEALAND a REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000548

[2020] NZHC 2597

UNDER the Companies Act 1993

IN THE MATTER

of an application under section 301 of the Act

BETWEEN

R J CAIN and R G LOGAN as liquidators of Stonewood Homes Limited (in liquidation) First Plaintiffs

AND

R J CAIN and R G LOGAN as liquidators of Stonewood Homes New Zealand Limited (in liquidation)

Second Plaintiffs

AND

R J CAIN and R G LOGAN as liquidators of Holmfirth Group Limited (in liquidation)

Third Plaintiffs

AND

B A METTRICK

First Defendant

AND

J BOULT

Second Defendant

Hearing: Determined on the Papers

Counsel:

M G Colson and J W A Johnson for Plaintiffs

G J Ryan and K M Anderson for Second Defendant

Judgment:

2 October 2020

COSTS JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 2 October 2020 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

CAIN v METTRICK (Costs Judgment) [2020] NZHC 2597 [2 October 2020]

Introduction

[1] The second defendant applied for a stay of this proceeding due to factors relating to the plaintiffs’ funding arrangements. This resulted in several other interlocutory skirmishes. Ultimately, two judgments of the court have issued. These were judgments on:

(a)the second defendant’s application for stay dated 31 July 2019;1 and

(b)the second defendant’s application for production of documents dated 25 September 2019;2

[2] The plaintiffs and the second defendant both seek costs against each other on the applications. Counsel have filed helpful and focused submissions.

The application for production of documents

The application

[3] The plaintiffs’ funding agreements were disclosed to the defendants but with redactions. The second defendant sought disclosure of unredacted copies of the funding agreements as well as other related documents. The application was brought on the basis that disclosure was necessary for the purposes of the second defendant’s stay application.

[4] When the application came on for hearing there were 10 clauses of the litigation funding agreements still in issue which I individually considered in my judgment. I made orders the plaintiffs disclose just two of the clauses, but otherwise accepted the redactions were appropriate and necessary.

1 Cain v Mettrick [2020] NZHC 2125.
2 Cain v Mettrick [2019] NZHC 2756.

Second defendant’s submissions

[5] The second defendant argues that the starting position in respect to costs is that the successful party is entitled to costs, which is consistent with the principles that the determination of costs should be predictable and expeditious.3

[6] The second defendant asserts he achieved success on this application as the plaintiffs were ordered to make disclosure of redacted clauses. He submits the application was relevant to the determination of the stay application and it was appropriate the court have before it versions of the funding agreements that contained only necessary and appropriate redactions.

[7] The second defendant seeks costs on a 2B basis with an allowance for second counsel.

The plaintiffs’…

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 Cain v Mettrick

Details

AGLC: Cain v Mettrick [2020] NZHC 2597
Case: [2020] NZHC 2597
Decision Date: 2 October 2020

CaseChat Overview and Summary

The High Court of New Zealand was presented with a case involving liquidators of Stonewood Homes Limited, Stonewood Homes New Zealand Limited, and Holmfirth Group Limited against B A Mettrick and J Boult. The case centered around applications for a stay of proceedings and the production of documents, with both parties seeking costs against each other. The key legal issues were the determination of who was the successful party on each application and whether there were grounds to refuse or reduce costs. The court had to balance the need for predictability and expediency in the determination of costs against the circumstances of each case.

The court found that on the application for the production of documents, neither party succeeded overall. The second defendant achieved limited success by securing the disclosure of two clauses of the funding agreements, but this was out of ten clauses in issue. The court held that the redactions were appropriate in eight instances and the two disclosed clauses had limited relevance to the stay application. The plaintiffs claimed overall success for themselves, but the court found this claim incorrect as it overlooked the success achieved by the second defendant. The court decided that costs on this application should lie where they fall.

On the stay application, the second defendant was the successful party overall as the proceeding was stayed. However, the court found grounds to reduce the second defendant's costs. Firstly, the focus of the stay application was on allegations of improper motives of the funder, which had little prospect of success and significantly increased the plaintiffs' costs. Secondly, the plaintiffs had offered to engage in dialogue with the second defendant to address any legitimate concerns about the funding agreements, but this offer was not taken up. Considering these factors, the court decided that costs on this application should also lie where they fall.

The final orders of the court were that costs on both applications lie where they fall, and the previously suppressed judgment of 29 October 2019 could now be released.

Orders