Farmlands Co-Operative Society Limited v Scott & Sons Earthmoving Limited

[2022] NZHC 3048

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2022-442-009

[2022] NZHC 3048

UNDER

the Companies At 1993

IN THE MATTER

of an application for putting a company into liquidation

BETWEEN

FARMLANDS CO-OPERATIVE SOCIETY LIMITED

Plaintiff

AND

SCOTT & SONS EARTHMOVING LIMITED

Defendant

Hearing:

On the papers

Appearances:

C Houghton for Plaintiff

T Scott (Director) on his own behalf and given permission to make submissions on behalf of the Defendant

Judgment:

22 November 2022

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON [COSTS]

[1]                 This matter was called in the Associate Judge’s list on 7 November 2022. On the application of the plaintiff an order was made winding up the defendant company. That order is to come into force at 4.00 pm on Tuesday 13 December 2022, unless, by that time and date, the company has paid the outstanding debt together with any costs it is ordered to pay.

FARMLANDS CO-OPERATIVE SOCIETY LIMITED v SCOTT & SONS EARTHMOVING LIMITED [2022] NZHC 3048 [22 November 2022]

[2]                 Regrettably, although the plaintiff sought indemnity costs on a contractual basis, counsel was not in a position to inform the Court as to the quantum of these, and costs therefore had to be reserved.

[3]                 The Court now has a memorandum from Ms Houghton on behalf of the plaintiff as to costs, to which Mr Scott has replied.

[4]                 The plaintiff’s claim is based on r 37(h)(iii) of the contract between the plaintiff and the defendant, which provides that if the plaintiff is obliged to commence recovery proceedings it is entitled to recover its solicitor-and-client (indemnity) costs.

[5]                 The plaintiff claims costs of $20,231.49 and disbursements of $1,244.75, a total of $21,476.24.

[6]                 In her submissions, Ms Houghton identifies the hourly rates charged by the plaintiff’s solicitors and schedulises the firm’s attendances going to make up the claim. In my assessment, the plaintiff’s costs are within the range of reasonable costs for the work carried out.

[7]                 Mr Scott’s argument boils down to the proposition that it would be unreasonable for the plaintiff to recover the costs it is claiming.

[8]                 He points out that the plaintiff’s claim was the subject of a settlement agreement between the parties (he may have been a party to this in his personal capacity). He says that, whilst not all payments called for under that agreement were made on time, the company’s payments are now up to date.

[9]                 He says that the costs occurred after June 2022 are excessive and that the Court should not sanction such costs.

[10]              It is not difficult to see how Mr Scott has reached that view. After that time, there was limited communication between the parties. However, what he does not factor in is that the plaintiff’s solicitors and counsel have been required to prepare for and participate in two if not three hearings.

[11]              In the end, all the Court would be doing by awarding costs in the amount sought by the plaintiff is enforcing the terms of the original contract between these two commercial entities, into which they entered freely.

[12]              In my view, the appropriate course this case is to award the full amount of costs sought by the plaintiff, which I have already concluded are reasonable.

[13]              The defendant will pay the plaintiff’s total costs and disbursements in the sum of $21,476.24.

Associate Judge Johnston

Solicitors:
Anderson Lloyd, Christchurch for Plaintiff