Commercial & Industrial Consultants Ltd v Leamington Holdings Ltd HC Hamilton Civ-2011-419-1125

[2011] NZHC 1694

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2011-419-1125

UNDER  the Companies Act 1993

IN THE MATTER OF     an application to put a company into liquidation

BETWEEN  COMMERCIAL & INDUSTRIAL CONSULTANTS LTD

Plaintiff

ANDLEAMINGTON HOLDINGS LTD Defendant

Hearing:         23 November 2011

Counsel:         R Lewis for the Plaintiff

G Wilkin for the Defendant

Judgment:      23 November 2011

JUDGMENT AS TO COSTS OF ELLIS J

This judgment was delivered by me on 23 November 2011 at 4pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:      Rodney Lewis Law, PO Box 591, Hamilton

Jon Webb, PO Box 132, Hamilton

Counsel:       G Wilkin, PO Box 1394, Hamilton

COMMERCIAL & INDUSTRIAL CONSULTANTS LTD V LEAMINGTON HOLDINGS LTD HC HAM CIV-

2011-419-1125 23 November 2011

[1]      These liquidation proceedings were set down for hearing today, 23 November

2011.  A full day had been set aside for the hearing on the basis that the plaintiff had given notice to the defendant to produce a deponent for cross-examination.

[2]      The application  for liquidation  had  its  origins  in  a statutory demand  for

$46,000 that had been served on the defendant on 29 June 2011.   The relevant statement of claim and associated documents were filed on 16 August 2011. Advertising took place in late September. A statement of defence and affidavits were filed on behalf of the defendant and on 16 November 2011, the plaintiff filed and served its submissions, bundle of cases and bundle of pleadings in accordance with directions made by the Court on 7 November 2011.

[3]      Yesterday, 22 November 2011, the defendant paid the $46,000 to the plaintiff. The plaintiff says that this payment was accepted on the basis that the issue of its costs in the proceedings had yet to be determined or agreed and on the understanding that, once the issue had been resolved and the costs paid, a notice of discontinuance would be filed.  As will subsequently become apparent, this latter understanding is disputed by the defendant.

[4]      In terms of the quantum of the costs payable, the parties have been unable to agree.   The plaintiff filed a memorandum in which it has calculated its 2B costs. Although both Mr Lewis and Mr Wilkin agreed that proceedings such as this are ordinarily 2B for costs purposes I record that there has, as yet, been no determination by the Court of the appropriate category or band in the instant case.

[5]      Based on a 2B categorisation Mr Lewis has calculated the costs to which the plaintiff is entitled as $10,716 which, together with disbursements of $763.05 totals

$11,479.05.  No issue is taken with Mr Lewis’s mathematics.

[6]      As well as seeking an order for costs in that amount, Mr Lewis also sought an order that that sum is payable by the defendant within seven days.  He asked that the matter be called in the next liquidation callover on 5 December 2011 so that the Court can monitor compliance.

[7]      Mr  Wilkin  for  the  defendant  said  that  the  costs  sought  were  too  high, principally on the basis that:

(a)      a  one-day  hearing  was  never  going  to  be  necessary  and  that accordingly the band B allocation of two days’ preparation time was too long; and

(b)an award of costs under the Rules is intended to give the successful party only a contribution to his actual and reasonable costs rather than a complete reimbursement of them.   In this respect he noted that Mr Lewis’s  advice  is  that  the  plaintiff ’s  actual  costs  have  been

$11,270, which is essentially the same as the costs claimed by him.

[8]      Mr Wilkin also opposed any order that payment be made within seven days and the relisting of the matter on 5 December 2011.  He said that the effect of the payment by the defendant of the debt was that the proceedings must be discontinued or, if they were not, that they must be struck out.  For that reason, he said that there was nothing for the Court to monitor and that, to the extent there was any subsequent issue arising as to the non-payment of the costs award, that would have to be dealt with as a separate matter.

[9]      As regards quantum, and in terms of my overriding discretion, I agree with Mr Wilkin that some adjustment to the costs calculated by Mr Lewis is appropriate. In light not only of the standard practice in liquidation proceedings, but also in this case the fact that there was to be cross-examination of witnesses, I am satisfied that the proceeding properly falls within costs category 2.  That said however, and having reviewed  the  file,  it  is  my  view  that  in  terms  of  time  allocation,  band  A  is appropriate.

[10]     My determination that costs should be calculated on a 2A rather than 2B basis should necessarily take care of Mr Wilkin’s point about the length of time required to to prepare for the hearing and about the relationship of the costs awarded under the rules  and  the plaintiff ’s  actual  costs  in  this  case.    For  the avoidance  of doubt,

however, I record that the revised costs calculations should still be based on the assumption that a one day hearing was allocated for this matter.

[11]     Accordingly, I direct that the defendant is to pay the plaintiff ’s costs on a 2A basis, by reference to the steps set out in Mr Lewis’s memorandum.  There was no dispute about disbursements and they are to remain as set out in that memorandum.

[12]     Having now made that order, it does seem to me that these proceedings must be at an end.   In that respect the present case is to be differentiated from those in which debtors have disputed a petitioner’s entitlement to costs upon the payment of the underlying debt, such as Re Yana Fashions Ltd.1   There is no such dispute here. While, in light of the history of this matter, I have some sympathy for the plaintiff’s concerns, I do not consider that there is a proper basis upon which the Court can remain involved.

[13]     Accordingly the only order I make today is that the defendant is to pay the defendant’s disbursements and 2A costs calculated in accordance with the steps set out in the plaintiff’s memorandum of today’s date.   I nonetheless record my expectation that the defendant will comply with the costs order I have made in a

timely manner.

Rebecca Ellis J

1 Re Yana Fashions Ltd SC Napier, M7/75, 18 April 1975.