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 to award increased costs for “walk away” offers. Even had the application for summary judgment failed, I do not consider the “walk away” offer made by the defendants would have carried much weight.

[11]              Costs have been sought by the plaintiffs in respect of the interlocutory application only, not the proceeding as a whole, given the substantive proceeding is ongoing. I consider that appropriate and proportionate.

[12]              Mr Norling, in his submissions, did not take issue with the accuracy of the costs calculation produced by the plaintiffs.

[13]              Accordingly, there is a costs award in favour of the plaintiffs against Mr Clark in the sum of $8,723.50 plus disbursements as fixed by the Registrar. It follows, I do not accept that Mr Clark is entitled to costs in respect of the summary judgment application.

Associate Judge Lester

Solicitors:

Martelli McKegg, Auckland (for Plaintiffs)

Norling Law Limited, Auckland (for Defendant)