EBR Holdings Limited v Van Duyn

[2018] NZHC 1542

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2009-090-001560

[2018] NZHC 1542

BETWEEN

EBR HOLDINGS LIMITED (IN LIQUIDATION)
First Plaintiff

VIVIEN JUDITH MADSEN-RIES and HENRY DAVID LEVIN

Second Plaintiffs

AND

JOHANNES VAN DUYN (SENIOR) AND GERARDA JACOBA MARIA VAN DUYN

First Defendants

RENE MARINUS VAN DUYN
Second Defendant

JOHANNES VAN DUYN (JUNIOR)
Third Defendant

…./2 cont’d

Hearing:	(On the Papers)
Judgment:	26 June 2018

RE-ISSUED COSTS JUDGMENT (NO 2) OF VENNING J

This judgment was delivered by me on 26 June 018 at 11.45 am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Meredith Connell, Auckland

Forest Harrison, Auckland

Counsel:            I Hutcheson, Auckland

EBR HOLDINGS LIMITED (IN LIQ) v VAN DUYN [2018] NZHC 1542 [26 June 2018]

AND

JOHANNES VAN DUYN (SENIOR),

GERARD JACOBA MARIA VAN DUYN, RENE MARINUS VAN DUYN AND JOHANNES VAN DUYN (JUNIOR)

Fourth Defendants

MCLAREN GUISE ASSOCIATES LIMITED

Third Party

[1]    The issue of costs, like other issues in this proceeding, has become complicated. The situation has not been assisted by the retirement of both the High Court and District Court Judges who dealt with the interlocutory and substantive hearings in the case.

[2]    In a judgment delivered on 16 May 2018 this Court dealt with the issue of costs.1 The plaintiffs then applied to review or recall that decision as the Court had not dealt with the issue of costs in the District Court prior to transfer to this Court.

[3]    In a subsequent decision on 5 June 2018 this Court noted that it had intended the issue of costs in the District Court would be dealt with in the District Court.2 However as the Judge who dealt with the file in the District Court had retired I acceded to counsels’ request that the issue of costs in the District Court prior to and leading up to the transfer be dealt with in this Court. I have now received further submissions from both parties regarding the issue of costs in the District Court.

[4]    The defendants oppose the plaintiffs’ application for costs in the District Court noting that the defendants themselves had incurred substantial costs including legal fees of $99,473.71 in the District Court. The defendants consider that they should be awarded those costs or, at the least, the costs that Judge D M Wilson QC intimated might be payable to the defendants in relation to the application for transfer. The defendants oppose the plaintiffs’ application for uplifted costs in the District Court.

[5]    The plaintiffs respond by claiming costs for all steps in the District Court (uplifted by 50 per cent) and submit that Heath J intended that his costs award, including the uplift, would apply to the costs in the District Court also.

[6]    The plaintiffs make the point that if they are not awarded costs in the District Court then there will effectively be a double deduction on the basis that they accept that the full amount claimed in the District Court (whether awarded or not) is to be deducted at the third stage of fixing the costs award.

1      EBR Holdings Ltd (in liq) v van Duyn [2018] NZHC 1065.

2      EBR Holdings Ltd (in liq) v van Duyn, minute of 5 June 2018.

[7]    As this Court noted in the minute issued on 5 June 2018 the effect of s 48(1) District Courts Act 1947 is that:

“subject to any order made by the court which ordered the transfer [the costs of the whole proceedings both before and after the transfer shall] be in the discretion of the [High] court … and that [High] court shall have power to make orders with respect thereto.”

[8]    The section provides jurisdiction for this Court to make orders in relation to the costs incurred in the District Court before transfer.

[9]    On my reading of the judgment of Heath J the Judge’s intent was that defendants should pay the costs incurred by the plaintiffs in bringing the proceedings generally because of the defendants’ actions (which applied generally to the defendants’ conduct in the District Court and High Court proceedings). The Judge took a clear view as to the defendants’ conduct and reflected that in his directions regarding costs.

[10]   On the other hand, the District Court Judge’s clear intimation was that he considered the plaintiffs had miscued procedurally by bringing the proceedings in the District Court, and that in achieving the transfer of the proceedings to the High Court they were effectively seeking an indulgence from the District Court and should pay the costs associated with that transfer.

[11]   The difference between the two approaches is the difference between the unmeritorious opposition by the defendants to the plaintiffs’ substantive claim, which Heath J directed himself to, and the mistaken procedural approach taken by the plaintiffs which Judge D M Wilson QC was dealing with.

[12]   To give effect to those different approaches, I consider the appropriate result is to award costs in the plaintiffs’ favour for the District Court excluding the application for transfer and that the defendants should have costs on the application for transfer.

[13]   That leads to the result that, in calculating the final costs award, in addition to the order for costs in this Court confirmed in the judgment of 16 May 2018, the plaintiffs are to have costs in the sum of $31,506, being the scale costs in the District

Court (excluding the costs associated with the application for transfer) uplifted by 50 per cent.

[14]The defendants are to have costs on the application for transfer in the sum of

$4,094. That sum may be set off against the costs award payable by the defendants: HCR 14.17.

[15]   It follows from the above that the plaintiffs are also entitled to disbursements in the District Court with the exception of disbursements on the application for transfer. To the extent the defendants incurred any disbursements on the application for transfer, they are to have those.

[16]On my calculations that leads to a costs award in the plaintiffs’ favour of

$127,747.50 calculated as follows:

Costs in the High Court (uplifted by 50%)	$180,555.00
Costs in the District Court (as above)	$31,506.00
$212,061.00
Plus costs on the Registrar’s review	$6,244.00
$218,305.00
Less costs to the Defendants on the application to transfer	$2,557.50
	$215,747.50
	Less deductions directed by Heath J	$88,000.00
Costs payable by Defendants to Plaintiffs	$127,747.50

[17]   The result is that when the costs on the review of the Registrar’s decision are taken into account the figure the costs awarded in the plaintiffs’ favour should be

$127,747.50, together with the disbursements of $58,043.49.

[18]I make no order for costs on the most recent exchange in relation to costs.

Venning J