Dunder Holdings Limited v Dexter Holdings Limited

[2013] NZHC 1673

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2012-419-001622 [2013] NZHC 1673

IN THE MATTER OF	an application to set aside a statutory demand
UNDER	Section 290 of the Companies Act 1993
BETWEEN	DUNDER HOLDINGS LIMITED Plaintiff
AND	DEXTER HOLDINGS LIMITED Defendant

Hearing:	On the papers
Appearances:	AJB Holmes for the Applicant K A Lomas for the Respondent
Judgment:	3 July 2013

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

03.07.13 at 4:30pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

DUNDER HOLDINGS LIMITED v DEXTER HIOLDINGS LIMITED [2013] NZHC 1673 [3 July 2013]

[1]      My minute dated 27 May 2013 timetabled the filing of submissions on the issue of costs in the outcome of the respondent’s agreement to withdraw its statutory demand, which in turn enabled the applicant to withdraw its application to set aside that statutory demand.

[2]      Although in effect the applicant has succeeded by its setting aside application it is the respondent that pursues an award of costs in the outcome.

[3]      The issues arising in the setting aside application and also in the related application to sustain a caveat have a connection with a substantive claim (CIV

2011-419-216) between the parties which is the subject of an appeal to the Court of Appeal.  The respondent was the defendant in that proceeding, the applicant the plaintiff.  By judgment dated 14 September 2012 Woodford J delivered a judgment dismissing all of the plaintiff’s claims.  The plaintiff filed an appeal.  Following discussions between the parties counsel agreed on the level of costs that would have been payable in the outcome of the High Court judgment.

[4]      Notwithstanding the appeal the respondent has pursued recovery of those costs.   Certainly in the absence of an application for stay there was nothing to prevent this course of action.  However it is because costs were being pursued that the parties have since become embroiled with the time and expense of the caveat application, the setting aside application and also an application for a stay of execution.  In relation to the latter application a stay was granted on the basis that the costs  in  question  (less  an  amount  claimed  for  adjustments)  were  paid  into  a solicitor’s trust account pending outcome of the appeal.  It is against this background of matters that the respondent considers itself to have been successful despite it having  agreed  that  its  opposition  to  the  setting  aside  application  would  be withdrawn.

[5]      The respondent claims it was justified in seeking to recover costs, and says the applicant was dilatory in pursuing its stay application pending appeal.

Discussion

[6]      Although it was within the rights of the respondent to seek recovery of the costs following the judgment in its favour, it did so in the knowledge that an appeal had been filed and in circumstances where the parties had agreed what costs would have been payable upon the judgment being appealed.

[7]     The progress of an appeal is subject to regulation designed to prevent unnecessary delay.  That is a consequence the appeal respondent must forebear.  In this case the issue of a statutory demand for the purpose of collecting a debt which itself would become subject to review upon an appeal, was probably unwise. Apparently there already existed sufficient security (in the form of the respondent’s caveat)  for  payment  of  costs  even  before  those  were  required  to  be  paid  to  a solicitor’s trust account as a condition of the grant of stay.

[8]      Overall  it  seems  the  respondent  has  forced  the  applicant  to  file  the applications it has to sustain the ordinary and usual position of the appellant parties pending appeal.

Conclusion

[9]      An award of costs to the respondent is not warranted in the circumstances.

Judgment

[10]     Costs upon the withdrawal of the setting aside application are directed to lie where they fall.

Associate Judge Christiansen