Flujo Holdings Pty Ltd v Merisant Company

[2017] NZHC 811

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-1019 [2017] NZHC 811

UNDER

the Trade Marks Act 2002

AND UNDER

the Fair Trading Act 1986

BETWEEN

FLUJO HOLDINGS PTY LTD Plaintiff

AND

MERISANT COMPANY First Defendant

AND

MERISANT AUSTRALIA PTY LTD Second Defendant

AND

SUGAR AUSTRALIA PTY LTD Third Defendant

AND

NEW ZEALAND SUGAR COMPANY LIMITED

Fourth Defendant

On the papers
Counsel:	C Elliott QC and J Rutter for the Applicant/Defendants DL Marriott for the Plaintiff/Respondents
Judgment:	28 April 2017

COSTS JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 28 April 2017 at 10:30 am

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Flujo Holdings Pty Ltd v Merisant Company & Ors [2017] NZHC 811 [28 April 2017]

[1]      On 22 February 2017, I heard submissions about the defendants' application for unless orders filed in light of the non-compliance by the plaintiff with timetable orders made previously.  The concern of the defendants was a threat to its ability to prepare adequately for a five-day trial scheduled to begin on 1 May 2017.

[2]      I determined that the making of an unless order would not be appropriate in the circumstances, but directed that the parties should comply with an amended timetable.  Costs were reserved for the exchange of memoranda.

[3]      After the hearing, the defendants withdrew their strike-out application which had been scheduled for an interlocutory hearing.

[4]      The defendants apply for costs of $5,686.50 and disbursements of $550.00. The plaintiff opposes the making of that order and applies for costs on the withdrawn application for strike-out.   The defendants concede that the plaintiff is entitled to costs on a 2B basis in respect of its opposition to the strike-out application in the sum of $1,338.00 with disbursements of $110.00.

[5]      The issue, therefore, is whether the defendants should have a costs order on their application for unless orders which would be off-set against the costs order made in favour of the plaintiff.

[6]      The defendants argue that, although it might be said that they did not succeed in their application for the making of unless orders, the application for amended timetable orders was clearly necessary and that, considered in the round and in terms of a practical outcome, the defendants succeeded.   As a result of the application having been filed, the plaintiff had undertaken to complete its overdue discovery in a timely way and filed its delayed amended statement of claim.  The defendants argue, therefore, that they substantially succeeded in the application and that costs should be payable in accordance with r 14.2(a) of the High Court Rules.

[7]      The plaintiff argues that the application for unless orders was premature, unwarranted and heavy-handed, relying on the proposition that unless orders should only ever be made as a last resort and ought to be reserved for cases where default is

intentional or contumelious, amounting to an abuse of process.1   The plaintiff argued that  it  would  have  been  sufficient  for  the  defendant  merely  to  seek  amended timetable orders which would have needed to result in a hearing only if the plaintiff did not consent.  The plaintiff pointed out that after the filing of the application for

31 January 2017 for unless orders, the plaintiff had filed an amended statement of claim and consented to the completion of discovery within five working days of the hearing.   The plaintiff takes responsibility for its breaches of the timetable orders made previously and submits that it is appropriate that costs should lie where they fall on the defendants’ application.

Decision

[8]      The plaintiff clearly having been in breach of timetable orders, the defendants were entitled to apply to the Court for further orders requiring the plaintiff to complete the steps in respect of which it was in default in order not to threaten the fixture.  In such circumstances, unless orders are the ultimate sanction.  While the defendants did not obtain orders in the terms sought, they did succeed to the extent that the plaintiff took further steps to comply, an amended timetable was made and an indication given, "that the Court would not take a kindly view of any future non- compliance with the orders which were to be made".

[9]      In the exercise of the Court's costs discretion, I consider it appropriate to reflect that the defendants achieved their objective in large measure, although not in full, by allowing the defendants costs on the filing of the application, the appearance at the hearing and the sealing of the order and by reducing the amount payable for the preparation of written submissions to $2,000.  The disbursements should be paid also.   Under r 14.17, the admitted costs payable to the plaintiff on the strike-out application shall be off-set against the result.

[10]     Accordingly, I direct that the plaintiff shall pay to the defendants’ net costs

and disbursements totalling $3,443.50.   That sum is calculated in the  following manner:

1      Victoria   Cottages   Limited   v   FNR   Group   Limited   HC   Blenheim   CIV-2009-406-38,

8 September 2009 at [9].

Costs and disbursements payable to the defendants

(a)    Filing interlocutory application  $1,338.00 (b)    Preparation of written submissions                   $2,000.00 (c)    Appearance at hearing  $557.50 (d)    Sealing Order  $446.00

(e)    Disbursements  $550.00                  $4,891.50

Costs and disbursements (r 14.17) payable to the plaintiff  $1,448.00

Net costs and disbursements to be paid to the defendants  $3,443.50

.............................................

Toogood J