Eichelbaum v Gavigan - [2018] NZHC 2772

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2013-404-4910

[2018] NZHC 2772

BETWEEN
JOHN REVANS EICHELBAUM

Plaintiff

AND

JOINT ACTION FUNDING LIMITED

Defendant

CIV-2012-004-2330

BETWEEN

JOHN REVANS EICHELBAUM
Plaintiff

AND

ANTHONY JOHN GAVIGAN

First Defendant

JOINT ACTION FUNDING LIMITED

Second Defendant

Hearing: 13 September 2018

Counsel:

Plaintiff in person

A R Gilchrist for Defendant

Judgment:

29 October 2018

COSTS JUDGMENT OF WHATA J

This judgment was delivered by me on 29 October 2018 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors: Kiely Thompson Caisley, Auckland

EICHELBAUM v JOINT ACTION FUNDING LTD [2018] NZHC 2772 [29 October 2018]

Introduction

[1] This costs application stems from two closely related proceedings. In the first, CIV-2012-004-2330 (“the 2330 proceedings”), Mr Eichelbaum claimed against Mr Gavigan and Joint Action Funding Ltd (“JAFL”) for a ten per cent share of a “project management fee”, as defined by a litigation funding agreement between JAFL and the litigants in the Feltex litigation. In the second, CIV-2013-404-4910 (“the 4910 proceedings”), Mr Eichelbaum sought to enforce an entitlement to a ten per cent shareholding in JAFL.

[2] The application relates to steps dating back to the commencement of proceedings in the District Court in 2012, the transfer of those proceedings to this Court (now known as the 2330 proceedings), and their (purported) consolidation with the 4910 proceedings. It extends to and includes multiple interlocutory steps in the 4910 proceedings and all steps in the District Court and in the 2330 proceedings up to and including the decision of this Court handed down on 29 April 2016. This brief overview belies a very complicated costs claim. It is not at all possible to make sense of any costs award without providing a detailed summary of the background.

2330 commencement (District Court)

[3] A notice of claim for the 2330 proceedings was filed in the District Court by Mr Eichelbaum in November 2012. Mr Eichelbaum claimed, among other things, that Mr Gavigan and JAFL had engaged in misleading and deceptive conduct under the Fair Trading Act (“FTA”) by promising him a ten per cent share of JAFL’s project management fee, and then failing to pay him those funds.

[4]Multiple interlocutory applications were also made, including the following:

(a)Mr Eichelbaum sought an interim injunction preventing the defendants from accessing five per cent of funds paid to them from overseas funders as well as preventing them from paying directors fees. He further sought property preservation orders requiring the defendants to pay funds into Court pending resolution of the proceedings. Neither of these steps were resolved in the District Court.

(b)Mr Eichelbaum served notices to produce documents. This issue was ultimately resolved by consent before Judge Marshall on 28 March 2013 after the defendants made undertakings as to information disclosure.

(c)Finally, the defendants made an application for suppression and sealing of the Court file, which was granted by Judge Marshall.

[5] In 2014, Mr Eichelbaum applied…

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 Eichelbaum v Gavigan

Details

AGLC: Eichelbaum v Gavigan [2018] NZHC 2772
Case: [2018] NZHC 2772
Decision Date: 29 October 2018

CaseChat Overview and Summary

In this case, Eichelbaum v Gavigan, the High Court considered a complex costs application arising from two closely related proceedings. The first proceeding, CIV-2012-004-2330, involved a claim by Mr Eichelbaum against Mr Gavigan and Joint Action Funding Ltd (JAFL) for a ten per cent share of a “project management fee”. The second proceeding, CIV-2013-404-4910, was an attempt by Mr Eichelbaum to enforce an entitlement to a ten per cent shareholding in JAFL. The costs application covered steps dating back to the commencement of proceedings in the District Court in 2012, the transfer of those proceedings to the High Court, and their (purported) consolidation with the 4910 proceedings. The defendants sought costs against Mr Eichelbaum in the sum of $212,725.60, primarily on a 2B basis. The Court categorised both proceedings as 2B, but noted that many steps claimed by the defendants were not properly claimable. The Court found that success was shared, with Mr Eichelbaum succeeding in relation to his claim to the JAFL shares in the 4910 proceedings and defending the counterclaim in the 2330 proceedings, while Mr Gavigan and JAFL succeeded in defending the JAFL management fee claim in 2330. The Court awarded costs in favour of the defendants, on a 2B basis, reduced by 50 per cent, subject to the Registrar’s approval of the claimed steps. The defendants were also entitled to their reasonable disbursements, reduced by 50 per cent and subject to the Registrar’s approval. Costs on the application were to lie where they fell.

In reaching this decision, the Court considered the conduct of the parties, the measure of success, and whether a party succeeded on appeal based on grounds not raised at first instance. The Court also noted that both parties had not conducted themselves with the requisite accuracy or objectivity, but commended the balanced and fair approach taken by Mr Gilchrist in argument. The Court emphasised that the costs process was not the proper forum for examining whether the defendants sought to place Mr Eichelbaum under unfair duress, as alleged by him.

Orders