Coupe v Learmonth - [2020] NZHC 2281

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-001858

[2020] NZHC 2281

BETWEEN
AARON PETER COUPE

Plaintiff

AND

PATRICK MURRAY LEARMONTH

First Defendant

NZ CASTLE RESORTS & HOTELS LIMITED
Second Defendant

GARY EIKI ODA
Third Defendant

ALAN ROLAND MATTSON
Fourth Defendant

THE CASTLE GROUP INC
Fifth Defendant

JERRY A RUTHRUFF

Sixth Defendant

Hearing: On the papers

Judgment:

3 September 2020

COSTS JUDGMENT OF DOWNS J

This judgment was delivered by me on Thursday, 3 September 2020 at 11 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Leigh Judd Law, Auckland. Cook Morris Quinn, Auckland. BD Gray QC, Auckland.

COUPE v LEARMONTH [2020] NZHC 2281 [3 September 2020]

[1] NZ Castle Resorts & Hotels Ltd1 and The Castle Group Inc2 seek increased and indemnity costs of $36,198 against the plaintiff, Aaron Coupe, in the wake of Mr Coupe’s abandonment of a claim against them and four other defendants. Mr Coupe acknowledges he is liable for costs but argues these should not exceed scale, on his calculation, $15,296.3

[2] Mr Coupe’s claim concerned a failed joint venture to develop and operate a hotel in Greys Avenue, Auckland.4 Ascent Industries No.33 Ltd5 was the initial corporate vehicle. Its shareholders are Greys Avenue Investments Ltd, or GAIL, and Greys Avenue Partners LLC, or GAP. Mr Coupe is the sole shareholder of GAIL; Mr Oda, the sole shareholder of GAP. Mr Oda is a shareholder of Castle Group, a Hawaiian-based company. Castle Group owns NZ Castle.

[3] GAIL owned the property. It agreed to transfer the property to Ascent. GAP agreed to fund Ascent, so Ascent could turn the property into a hotel. NZ Castle and Ascent entered a hotel management agreement in contemplation of the property being that. NZ Castle was also allegedly responsible for joint venture finances, employing some staff, and negotiating the first agreement.6

[4] Things did not go well. The transfer of the property to Ascent encountered difficulties. These culminated in GAP and Castle Group bringing a claim, in Hawaii, against Mr Coupe and the director of GAIL. The claim was abandoned when a new joint venture vehicle was created, Liberte Investments Ltd.7 Liberte’s shareholders are Mr Coupe and GAP. Liberte agreed to buy the property from GAIL. However, this never occurred and the Bank of New Zealand Ltd sold the property at a mortgagee sale. GAP and Castle Group brought a second claim in Hawaii against Mr Coupe. It too is now abandoned.

1      NZ Castle.
2      Castle Group. NZ Castle’s and Castle Group’s actual costs exceeded $78,000.
3      The remaining defendants and Mr Coupe have agreed scale costs.
4      The property.
5      Ascent.
6      These aspects are disputed by NZ Castle and Castle Group.
7      Liberte.

[5] Mr Coupe, GAP and GAIL blame each other for the losses. NZ Castle and Castle Group, the Castle defendants, say this has nothing to do with them as their role was confined to hotel management.

[6]Mr Coupe…

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.

Continue reading Coupe v Learmonth

Details

AGLC: Coupe v Learmonth [2020] NZHC 2281
Case: [2020] NZHC 2281
Decision Date: 3 September 2020

CaseChat Overview and Summary

In the High Court of New Zealand, Auckland Registry, the case of Coupe v Learmonth and others concerns a claim by Aaron Peter Coupe against multiple defendants, including Patrick Murray Learmonth, NZ Castle Resorts & Hotels Limited, and others, over a failed joint venture to develop and operate a hotel in Greys Avenue, Auckland. The claim was abandoned by Mr. Coupe on 29 April 2020, and the defendants are seeking increased and indemnity costs against Mr. Coupe. Mr. Coupe accepts his liability for costs but disputes the amount claimed, arguing that the costs should not exceed a calculated $15,296. The defendants argue that the claim was hopeless and vexatious, warranting increased and indemnity costs.

The legal issues before the court were whether Mr. Coupe's claim was obviously and incontrovertibly meritless, thus warranting increased costs, and whether there was vexatious or improper litigation, or very unreasonable conduct by a litigant, warranting indemnity costs. The court considered the principle that increased costs for an abandoned claim are appropriate when the claim was obviously and incontrovertibly meritless, and indemnity costs when there is vexatious or improper litigation, or very unreasonable conduct by a litigant. The court examined the pleadings and the conduct of Mr. Coupe to determine if the claim was hopeless or vexatious.

The court found that while Mr. Coupe's claim was poorly pleaded and contained curiosities, it was not obviously and incontrovertibly meritless, nor was it vexatious. However, the court did find that Mr. Coupe pursued the claim unreasonably after being informed of its shortcomings, warranting increased costs of 50 percent from 19 November 2019. The court rejected the argument that costs should not include the preparation of submissions for strike-out and security applications, as these were prepared before the claim was abandoned and in accordance with the customary timetable.

The court ordered that Mr. Coupe must pay the Castle defendants costs of $27,485 and disbursements.

Orders