Corbans Viticulture Limited v Waihopai Valley Management Limited (formerly Ants Nest Limited)

[2016] NZHC 2113

IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

CIV-2010-406-000046 [2016] NZHC 2113

BETWEEN

CORBANS VITICULTURE LIMITED

Plaintiff

AND

WAIHOPAI VALLEY MANAGEMENT LIMITED (FORMERLY ANTS NEST LIMITED)

First Named First Defendant

ACHILLES VENTURES LIMITED, ATRIEDES HOLDINGS LIMITED, BLICKS ROAD INVESTMENTS LIMITED, FARRAH INVESTMENTS LIMITED, RTK INVESTMENTS LIMITED, ASTRAL NELSON LIMITED, TWO MOORE WINES LIMITED trading as PATRIACH JOINT VENTURE

Second Named First Defendants

ANTHONY LEWIS MOORE Second Defendant

DENNIS LUNKEN Counterclaim Defendant

Hearing:	6 September 2016 (Determined on the papers)
Counsel:	S J Shamy for Second Named First Defendants (Applicant in this proceeding) L Ponniah for Corbans Viticulture Limited
Judgment:	6 September 2016

COSTS JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      The defendants applied to remove a caveat from the title to a parcel of land,

the planting of which is in issue in this proceeding.  They had sold the land and had

CORBANS VITICULTURE LTD v WAIHOPAI VALLEY MANAGEMENT LTD (FORMERLY ANTS NEST LTD) and ORS [2016] NZHC 2113 [6 September 2016]

offered to the plaintiff security over part of the proceeds of sale sufficient to cover the amount of any prospective judgment.

[2]      After negotiations, following the filing of the application and opposition by the plaintiff, counsel reached an agreed outcome by which the caveat was removed from the title to enable the sale to proceed, and funds were set aside as security at least equivalent to, if not greater than, the security the plaintiff enjoyed as caveator. Counsel have not been able to agree on costs.

[3]      Counsel have filed comprehensive memoranda.  I have considered them with care.  Mr Shamy, for the defendants, takes two alternative positions.  First, he says that as the substantive proceeding will determine whether or not the plaintiff had any right to lodge a caveat over the land in question in the first place, costs on this application should be reserved to await the outcome of the trial.  His second position is that his clients have essentially succeeded in obtaining a release of the caveat. The success of an application is best assessed by a realistic appraisal of the end result, and his clients have succeeded when assessed in that way. As a result they should be awarded costs.

[4]      Mr Ponniah says that the outcome could have been negotiated without the need for proceedings.  The plaintiff has always been willing to reach a compromise and should not have been put to the cost of opposing an application.

[5]      As far as can be ascertained from the material  before the Court  on this application, one of the issues raised by the plaintiff was whether the land was being sold  at  market  value.    Despite  being  provided  with  part  of  a  valuation  report sufficient to establish this position, the plaintiff insisted through its counsel on seeing the whole report.   In fact, the sale price is some $10,500,000, but the claim of

$465,000 plus interest, amounts to around $1,000,000 plus costs, just a small fraction of this sum.   As a result it is not immediately apparent why it was in any way relevant to consider whether the sale price reflected an independent valuation assessment.  The key point from the plaintiff ’s perspective was whether it retained security exceeding $1,000,000 by a sufficient margin, a position which should have been easy to establish by a very brief negotiation.

[6]      I have formed the view that the application was justified, and that it broadly succeeded.   At the same time I acknowledge that the defendant exhibited some willingness to negotiate an outcome throughout, albeit that reference appears to have been made to a level of detail which is difficult to understand.

[7]      I acknowledge Mr Shamy’s argument that the validity of the caveat remains at issue for determination at the trial.  This is not an issue warranting comment in this judgment.  The validity of the caveat is a different issue from whether it should have readily been partially released in exchange for adequate security by another means.  I think it preferable therefore to follow the usual rule that costs are assessed on an interlocutory application at the time, rather than being reserved for trial.

[8]      The application by the plaintiff for costs does not, in my view, have merit.  It cannot be said that the plaintiff succeeded in any material way, entitling it either to an award of costs or to costs lying where they fall.

[9]      As a result I award costs to the defendants on a 2B basis with disbursements fixed by the Registrar.

J G Matthews

Associate Judge

Solicitors: Knapps, Nelson.

Corban Revell, Auckland.