Exportrade Corporation v Irie Blue New Zealand Limited HC Auckland CIV-2008-404-007130

[2011] NZHC 153

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2008-404-007130

BETWEEN  EXPORTRADE CORPORATION Plaintiff

ANDIRIE BLUE NEW ZEALAND LIMITED First Defendant

ANDEDITH SHELLEY ROZANNE GRIBBLE AKA ROZANNE GRIBBLE

Second Defendant

ANDSCOTT GEOFFREY GRIBBLE AKA SCOTT GRIBBLE

Third Defendant

Hearing:         On the papers

Counsel:         G J Thwaite for the Plaintiff

H Fulton for the Defendants

Judgment:      25 February 2011

JUDGMENT OF DUFFY J [As to Costs]

This judgment was delivered by me on 25 February 2011 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:      H Fulton, PO Box 5577, Wellesley Street, Auckland 1141

Counsel:       G J Thwaite, PO Box 6239, Wellesley Street, Auckland 1141

EXPORTRADE CORPORATION V IRIE BLUE NEW ZEALAND LIMITED HC AK CIV-2008-404-007130

25 February 2011

[1]      The defendants were successful in their review of a decision of Associate Judge Christiansen dismissing the defendants’ protest as to jurisdiction against the plaintiff’s attempted enforcement in this Court of a judgment obtained from the Florida, United States of America, circuit court (the Florida judgment).

[2]      The defendants now seek costs.  The defendants contend that costs quantified on a category 2B basis under the High Court Rules comes to $7,144.  Disbursements of $1,180 are also sought.   In addition, the defendants seek costs for the initial hearing which they have quantified in the sum of $4,640.  The total amount of costs, both for the initial hearing and the review hearing and the disbursements, comes to

$12,964.

[3]      The plaintiff has not addressed the issue of whether the defendants have correctly quantified the costs at a category 2B basis in terms of the schedule in the High Court Rules.   Since the plaintiff had an opportunity to consider the costs quantification and chosen not to challenge it, I shall proceed on the basis that the costs have been correctly quantified.

[4]      The  defendants  seek  increased  or  indemnity  costs  under  r  14.6.    The defendants argue that the proceeding, which led to the successful review, is the third attempt by the plaintiff to enforce the Florida judgment against the defendants.  The defendants contend that on two prior occasions the same remedy or relief was sought by the plaintiff and rejected.

[5]      The first occasion was when the Barbados Supreme Court dismissed the plaintiff’s attempts to enforce the Florida judgment in Barbados on the ground of lack of jurisdiction to enforce a foreign judgment on an in personum cause of action. The second occasion was in 2007 when proceedings in this Court between the same parties were discontinued  by the plaintiff.   Associate Judge Doogue,  in  a costs judgment on the discontinued proceedings commented at [3] of his judgment that he considered the proceedings would inevitably have failed given that they involved an attempt to enter a foreign judgment on an in personum cause of action in a New Zealand  court.    The  defendants  contend  that  against  this  background  that  the

inevitability of the finding reached in my judgment would have been obvious to the plaintiff.

[6]      The defendants also contend that before Associate Judge Christiansen and before me in the review hearing, the plaintiff has pursued arguments lacking merit, namely by focusing on arguments about the defendants domicile or residence in New Zealand when the key issue as to domicile was whether or not they were domiciled or resident in Florida at the time the proceedings were commenced and judgment entered against them in Florida.

[7]      The defendants, therefore, contend that in terms of r 14.6 the proceedings are vexatious or unnecessary in that:

(a)      The plaintiff has sought to enforce, by summary judgment, a default Florida judgment which the plaintiff clearly knew was unenforceable in New Zealand;

(b)Pursued arguments that lacked merit and in particular in which it had twice before vexed the defendants; and

(c)       Failed to admit or accept legal argument.

[8]      The defendants outline actual costs in dealing with the plaintiff in the sum of

$19,045.   Accordingly, they seek costs covering both the review and  the initial hearing before the Associate Judge in the sum of $19,045.

[9]      The  plaintiff  has  filed  a  memorandum  concerning  costs  which  does  not address any issues raised by the defendant.   Rather, the plaintiff has attempted to raise  arguments  which  challenge  the  correctness  of  the  judgment  I  issued  on

22 December 2010.  I do not propose to deal with those arguments as I consider that they are irrelevant to my consideration of the present application.   If the plaintiff wants to challenge my judgment on the review application, there are available procedures for doing so.

[10]     Whilst I have sympathy with the circumstances the defendants have faced, I do not consider an award of increased costs or indemnity costs is appropriate.  The two previous occasions on which the defendants now rely as supporting increased costs should have provided a warning to the plaintiff of the need for caution in pursuing the arguments it did before me in the review application.  Nonetheless, I consider that the form in which the warning was given, namely a judgment in a foreign court and secondly a comment made by an Associate Judge in the course of dealing with a separate issue, are dissimilar enough from the present proceeding to mean that they could have no legal consequences for the plaintiff if ignored by it. The plaintiff was entitled, if it wished, to treat the judgment in Barbados as having no influence on a decision of this Court.

[11]     Whilst it may have been sensible to take note of the comment of Associate Judge Doogue, it could have no binding legal effect on the plaintiff.  The comment was prefaced by the Associate Judge with a reference to the usual rule in a costs application on a discontinuance that a court would not inquire into the merits of the proceeding.  The Associate Judge refused to go into the merits of the proceeding as invited to by the plaintiff but then went on to say that had he done so, he considered, in essence, that the plaintiff would have failed on the merits.

[12]     It is clear from reading the judgment that the Associate Judge was dealing with a discontinuance and whether or not he should follow the usual rule to award costs to a plaintiff following a discontinuance.  The Associate Judge did not have the benefit of the full argument that I had.  A more careful plaintiff would have taken note of the Associate Judge’s comment.  However, the fact that the plaintiff here has not, does not seem to me to make his conduct unreasonable to the point where increased or indemnity costs should be awarded.

[13]     I have considered the occasions set out in r 14.6 when an award of increased costs and indemnity costs could be made.   It is clear from Bradbury v Westpac Banking Corp [2009] 3 NZLR 400 at [27] that increased costs may be ordered where there is a failure by the paying party to act reasonably. The unreasonable conduct must be in relation to the proceeding and thus after it was commenced not earlier

conduct: see Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188

CA at 160.

[14]     This proceeding is the first time in which the issue of whether or not this Court had jurisdiction to recognise and enforce the Florida judgment was before the Court  for  argument.     Whilst  the  issue  may  have  been   raised   earlier,   the discontinuance of the earlier proceeding, coupled with a payment of costs award, cannot in itself be a bar to the plaintiff bringing a second proceeding provided there are no issues as to limitation.   I consider that the plaintiff’s conduct falls outside r 14.6(a) and  (b).    I do  not  consider that  some other reason  exists  in terms  of r 14.6(d).  I do not consider that the plaintiff’s conduct falls within r 14.6(4).  The plaintiff has not behaved badly or very unreasonably.

[15]     It follows that the defendants are entitled to costs on a category 2 basis.   I consider that the amount of disbursements sought is reasonable and should be awarded.  I also accept that the defendants are entitled to costs for the hearing before the Associate Judge.  Costs awarded to the plaintiff are:

(a)       $7,144 in this proceeding;

(b)      Disbursements of $1,180; and

(c)       Costs  of  $4,640  for  the  initial  hearing  before  Associate  Judge

Christiansen.

Duffy J