CDC Services Limited (in liquidation) v Clark - [2023] NZHC 2642

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-374

[2023] NZHC 2642

IN THE MATTER
of the Companies Act 1993, ss 131, 135, 137

and 194

AND

IN THE MATTER

of the liquidation of CDC Services Limited

BETWEEN

CDC SERVICES LIMITED (IN LIQUIDATION)

First Plaintiff

KEATON PRONK and IAIN McLENNAN,

as Liquidators of CDC Services Limited (in liquidation)

Second Plaintiff

AND

DAVID WAYNE CLARK

Defendant

Hearing: (On the papers)

Counsel:

A W Johnson for Plaintiffs B J Norling for Defendant

Judgment:

21 September 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

CDC SERVICES LIMITED (IN LIQUIDATION) v CLARK [2023] NZHC 2642 [21 September 2023]

[1] The plaintiffs seek costs (as does the defendant) arising from the judgment in this matter dated 31 August 2023.1

[2] That judgment concerned an application for summary judgment by the plaintiffs. Costs were reserved. I recorded the plaintiffs had a measure of success and submissions were invited.

[3] As I have said, the plaintiffs had some success. The starting point is that: “Success on more limited terms is still success”.2

[4] It is true that in respect of one cause of action the plaintiffs achieved only a limited adjustment to the defendant’s current account; succeeding in only two of six (or seven depending on how the adjustments are counted) of the categories claimed.

[5] In respect of the second cause of action, I determined there had been a failure to keep proper accounting records. While satisfied the records kept by Mr Clark were substandard, I was not prepared to enter summary judgment, albeit by a narrow margin. That conclusion in itself represented some success for the plaintiffs on the second cause of action.

[6] In respect of the claim in relation to the Unimog held in the United States of America, Mr Clark’s position was untenable to say the least.

[7]I do not repeat the comments I made in respect of Mr Clark’s record keeping.

[8] To put it colloquially, the plaintiffs will have taken more comfort from the judgment than the defendant.

[9] Mr Norling, counsel for Mr Clark, says his client was put to significant costs in defending the position including engaging an expert. I do not consider the expert evidence from the defendant advanced matters. I do not accept Mr Norling’s submission that the summary judgment application got the plaintiffs no further.

1 CDC Services Ltd (in liquidation) v Clark [2023] NZHC 2392.
2 Weaver v Auckland Council [2017] NZCA 330 at [26].

[10] I am satisfied this is an appropriate case for costs in respect of the interlocutory application to be awarded to the plaintiffs, given the level of success addressed. The defendant invited the plaintiffs to abandon the summary judgment application with no issue as to costs. That offer was not accepted. I do not consider that offer assists Mr Clark, rather it shows his blanket rejection of the plaintiff’s claim was not realistic. There has been a traditional reluctance…

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: [2023] NZHC 2642
Decision Date: 21 September 2023

CaseChat Overview and Summary

CDC Services Limited (in liquidation) and Keaton Pronk and Iain McLennan, as liquidators of CDC Services Limited, brought a claim against David Wayne Clark in the High Court of New Zealand. The plaintiffs sought costs related to the summary judgment application that was previously decided by the court on 31 August 2023. The plaintiffs had partial success in their application, as they were successful in two out of six (or seven, depending on how the adjustments are counted) of the categories claimed. The court determined that the plaintiffs had achieved some success in their claim, and therefore, they were entitled to costs.

The court considered that the plaintiffs had achieved some success in their claim, and therefore, they were entitled to costs. The court rejected the defendant's argument that the summary judgment application had not advanced the plaintiffs' case. The court found that the defendant's expert evidence did not advance the matter, and the defendant's blanket rejection of the plaintiff’s claim was not realistic. The court also noted that the defendant had invited the plaintiffs to abandon the summary judgment application with no issue as to costs, but the plaintiffs had refused the offer.

The court awarded costs to the plaintiffs in the sum of $8,723.50 plus disbursements as fixed by the Registrar. The court rejected the defendant's claim for costs in respect of the summary judgment application. The plaintiffs' claim for costs was limited to the interlocutory application only, not the proceeding as a whole, given that the substantive proceeding was ongoing. The court considered that this was appropriate and proportionate.

In conclusion, the court awarded costs to the plaintiffs in the sum of $8,723.50 plus disbursements as fixed by the Registrar. The court rejected the defendant's claim for costs in respect of the summary judgment application. The plaintiffs' claim for costs was limited to the interlocutory application only, not the proceeding as a whole, given that the substantive proceeding was ongoing. The court considered that this was appropriate and proportionate.

Orders