Chris de Ruyter Painting Limited (in liquidation) v ASB Bank Limited
[2017] NZHC 2515
•30 October 2017
IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE TIHI-Ō-MARU ROHE
CIV-2016-404-000814 [2017] NZHC 2515
BETWEEN CHRIS DE RUYTER PAINTING
LIMITED (IN LIQUIDATION) Applicant
AND
ASB BANK LIMITED First Respondent
AND
CHRIS DE RUYTER Second Respondent
AND
CHRIS DE RUYTER, LESLEY DE RUYTER AND ROBERT JOHN SHAW AS TRUSTEES OF THE BOZTARLUC TRUST
Third Respondents
Hearing: 30 October 2017 (On the papers) Appearances:
K Wakelin and P Murray for Applicant
E C Gellert for First RespondentDate ofJudgment:
30 October 2017
JUDGMENT OF DUNNINGHAM J
[1] These proceedings concern an application for pre-proceeding discovery which was made by the applicant, a company in liquidation (“the discovery order proceedings”). The company’s liquidators were seeking banking documents to support the company’s claim that the second respondent made payments from the company for the benefit of the second or third respondents, and to the detriment of
the company and its creditors.
CHRIS DE RUYTER PAINTING LIMITED (IN LIQ) v ASB BANK LIMITED [2017] NZHC 2515 [30 October 2017]
[2] The applicant explained that it was impossible or impracticable for the company to formulate its claim without reference to documents held by the first respondent, the ASB Bank, and which the second and third respondents had not provided on request.
[3] On 16 June 2016, the discovery orders sought were made by Faire J.1 The ASB Bank, the first respondent, did not oppose the orders sought and the second and third respondents did not appear. Although the applicants sought an order for costs against the second and third respondents, Faire J reserved costs to be determined at a later stage in the proceeding.
[4] Proceedings were subsequently issued against:
(a) Chris de Ruyter, as sole director of the company, a shareholder of the company and a trustee of the BozTarLuc Trust (the Trust);
(b) Lesley de Ruyter as a shareholder in the company and trustee of the
Trust; and
(c) Robert John Shaw as a trustee of the Trust.
[5] No steps were taken in the proceedings by the defendants, save for steps by the third trustee, Mr Shaw, to ensure his liability was limited to the assets of the Trust.
[6] On 8 August 2017, following a formal proof hearing, I granted orders sought by the plaintiffs, including judgment against the trustees of the Trust in the sum of
$66,175.84 plus interest and costs.2
Application for costs
[7] The applicant in the discovery order proceedings now seeks to have costs awarded pursuant to the leave reserved by Faire J. The applicant submits that as the
1 Minute of Faire J issued 6 June 2016.
2 Chris de Ruyter Painting Ltd (in liq) and Anor v Chris de Ruyter and Ors [2017] NZHC 1810.
successful party in both sets of proceedings, it is entitled to costs for obtaining the discovery order and that those are properly met by the second and third respondents in this case. The applicant says the second and third respondents put it to those costs unnecessarily by failing to engage with the applicant at an earlier date, and failing to consent to the documents being provided as requested by letter on 24 February 2016. The 24 February 2016 letter explained that if the request for documents was not complied with then the applicant would commence the discovery order proceedings.
[8] The applicant seeks costs as set out in the schedule annexed to the memorandum of counsel for the applicant dated 2 October 2017, in the total of
$5,676.10. This sum is reached based on a claim for 2B costs totalling $4,014, plus disbursements of $1,662.10 related to service of the proceedings on the respondents and advertising the proceedings in accordance with an order for substituted service.
[9] As with the substantive judgment, the applicant accepts that the liability of the third named third respondent, Mr Shaw, should be limited to the assets of the trust available for distribution from time to time.
Outcome
[10] I am satisfied that this is a case where costs should follow the event. It is clear that, but for the non-cooperation of the trustees, the discovery order proceedings would not have been required. Furthermore, the substantive claims made against the trustees, using the information obtained in the discovery order proceedings were successful.
[11] Accordingly, costs are ordered in the applicant’s favour on the terms set out at paragraph 4.7 of the memorandum of counsel for the applicant, and the attached schedule A.
Solicitors:
Meredith Connell, Auckland
Simpson Grierson, Auckland
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