DTB SOLUTIONS LIMITED AND HEIGHT 4 HIRE AUCKLAND LIMITED

[2024] NZHC 2862

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2781

[2024] NZHC 2862

UNDER

Section 290 of the Companies Act 1993

BETWEEN

DTB SOLUTIONS LIMITED

Applicant

AND

HEIGHT 4 HIRE AUCKLAND LIMITED

Respondent

Hearing:	On the papers
Counsel:	A J Woodhouse for the Applicant A Ho for the Respondent
Judgment:	2 October 2024

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

[costs]

This judgment was delivered by me on 2 October 2024 at 4 pm.

Pursuant to Rule 11.5 of the High Court Rules.

…………………..

Registrar/Deputy Registrar

Solicitors:

Woodhouse Law, Auckland Crimson Legal, Auckland

DTB SOLUTIONS LTD v HEIGHT 4 HIRE AUCKLAND LTD [2024] NZHC 2862 [2 October 2024]

Introduction

[1]    The applicant, DTB Solutions Ltd (DTB), hired scissor lifts from the respondent, Height 4 Hire Auckland Ltd (H4H). There was a dispute regarding DTB’s liability for some of the invoices rendered by H4H. On 8 November 2023, H4H issued a statutory demand to DTB for $42,088.85 for the outstanding invoices.

[2]On 21 November 2023, DTB’s solicitor sent an email to H4H proposing:

(a)DTB pay the undisputed portion of the statutory demand of $18,450.60;

(b)the statutory demand be withdrawn; and

(c)the parties then deal with the disputed portion of the debt.

[3]H4H did not agree and did not withdraw the statutory demand.

[4]    On 22 November 2023, DTB made a part payment of $19,416.60, being the undisputed portion of the amount demanded. DTB then applied to set the statutory demand aside.

[5]    On 1 December 2023, DTB deposited $22,000 into a trust account as security for the disputed portion of the invoices, and DTB filed an application in the Disputes Tribunal at Pukekohe.

[6]    H4H still refused to withdraw its statutory demand, which required DTB to file further evidence in support of its application to set aside the statutory demand. The application was adjourned pending determination of the Disputes Tribunal claim.

[7]    On 24 July 2024, the Disputes Tribunal determined that DTB was liable for a further $10,401.75 in respect of the disputed invoices.

[8]    The only outstanding issue between the parties is costs in respect of the steps taken in the High Court.

DTB’s position

[9]    DTB seeks costs for commencing the application and for filing memoranda, on a 2B basis with an uplift of 50 per cent. DTB argues that H4H should have withdrawn the statutory demand:

(a)after the part payment and notice of the dispute on 22 November 2023; or

(b)after the payment into trust and the filing of the claim in the Disputes Tribunal in early December 2023.

[10]   DTB submits that a 50 per cent uplift is common where the statutory demand process has been misused, citing Norwich Properties Ltd v Mark Gray Architect.1

H4H’s position

[11]   H4H says that DTB did not raise a dispute in respect of the invoices that were the subject the statutory demand until after the statutory demand was issued.

[12]   Initially, H4H was content for costs to lie where they fall. That was not acceptable to DTB, and H4H now submits that it should be awarded costs as the substantially successful party, on the basis that it ultimately recovered approximately 75 per cent of the invoices that were the subject of the statutory demand.

Discussion

[13]   The parties agree that H4H is the appropriate respondent in this proceeding, although DTB incorrectly named the respondent as “Height 4 Hire Limited” when the proceeding was commenced. I order that Height 4 Hire Auckland Limited is named as respondent.

[14]   My view is that it was appropriate for H4H to issue the statutory demand, but it ought to have withdrawn the demand and accepted DTB’s settlement proposal made

1      Norwich Properties Ltd v Mark Gray Architect [2015] NZHC 994.

on  21  November  2023.    The proposal was followed by a part payment of the undisputed part of the claim on 22 November 2023.

[15]   However, DTB made its proposal and part payment at the last minute, and in doing so carries some responsibility for finding itself in the position of having to apply to set aside the statutory demand within the strict statutory time limit to do so.

[16]   The fact that the Disputes Tribunal made an award that DTB should pay approximately half of the disputed invoices does not alter the fact that there was a dispute. H4H acknowledged that there was a dispute by submitting to the jurisdiction of the Disputes Tribunal.

[17]   H4H’s failure to accept DTB’s settlement proposal was compounded by H4H’s failure to withdraw the demand when DTB lodged $22,000 into trust and filed the claim in the Disputes Tribunal in early December 2023. This required DTB to file further evidence and attend to procedural steps in this Court.

[18]   Considering these circumstances together, I consider that DTB is entitled to costs calculated on a 2B basis, with a deduction of 0.2 days for H4H issuing the statutory demand. This is not an appropriate case for an uplift.

[19]   I am not prepared to award costs for submissions on costs. Therefore, I calculate costs to be $9,560 as follows:

Step	Time allocation	Subtotal
Commencing proceeding	3	$7,170
Filing memoranda (x3)	1.2	$2,868
Issuing statutory demand	(0.2)	($478)
Total	4	$9,560

[20]   I order that Height 4 Hire Auckland Limited pay costs to DTB Solutions Limited of $9,560 together with disbursements of $790.

Associate Judge Brittain