FM Custodians Limited v Kooiman

[2018] NZHC 875

IN THE HIGH COURT OF NEW ZEALAND

WELLINGTON REGISTRY

CIV-2017-485-343

[2018] NZHC 875

BETWEEN

FM CUSTODIANS LIMITED

Plaintiff

AND

MICHAEL EDWIN KOOIMAN

Defendant

Hearing:	On the papers
Appearances:	S D Munro and A L Davidson for the Plaintiff j d Dallas for Defendant
Judgment:	30 April 2018

RESERVED JUDGMENT (2) OF ASSOCIATE JUDGE SMITH

[1]        On 31 July 2017, I entered summary judgment for the plaintiff (FM) against the defendant (Mr Kooiman), on a guarantee Mr Kooiman had given in support of a company called Ribble Limited (Ribble). I entered summary judgment for FM on the amount of its claim as set out in its statement of claim ($873,232.62), together with interest to the date of judgment in the further sum of $56,871.28.

[2]        At the hearing, Mr Munro handed up a quantum schedule in which various additional sums were claimed. The schedule included claims which Mr Kooiman may not have seen before the hearing, so I reserved leave to him to file and serve a memorandum addressing FM’s claims on these scheduled items, within 15 working days of the date of my judgment. FM was allowed 10 working days from its receipt of Mr Kooiman’s memorandum to file a reply.

[3]        Mr Kooiman did not file any memorandum addressing the quantum schedule, and counsel for FM has since requested the Court to issue a judgment on the additional schedule items.

FM CUSTODIANS LIMITED v KOOIMAN [2018] NZHC 875 [30 April 2018]

The amounts claimed in FM’s quantum schedule

[4]The amounts claimed are were:

(i)Judgment as per the Statement of Claim:       $873,232.62

(ii)Costs on a solicitor client basis pursuant to clause 15 of the Loan Agreement to 30 June 2017 (including disbursements of

$2,618.88):

$23,801.04

(iii)Additional costs incurred by FM between 30 June 2017 and the hearing on 24 July 2017 (on a 2B basis):

$4,683.00

(iv)Additional costs not yet incurred by FM for the appearances at the hearing on 24 July 2017, and for sealing costs (again, on a 2B basis):  $2,118.50

(v)Interest and default interest to the date of payment at 24 July 2017, amounting to:

$57,310.84

(vi)Receivership costs incurred by FM between 4 April 2017 and 24 July 2017 pursuant to clause 15 of the Loan Agreement:

$17,441.65

(vii)Legal costs incurred by FM in relation to the receivership between 4 April 2017 and 24 July 2017 pursuant to clause 15 of the Loan Agreement:

$20,669.63

(viii)Increased collection costs incurred by FM pursuant to clause 15 of the Loan Agreement:  $553.49

Total claimed as at 24 July 2017:                $999,810.77

Amounts claimed in the statement of claim

[5]In its statement of claim, FM asked for judgment for:

(a)The sum of $873,232.62; and

(b)Interest and penal interest pursuant to the Loan Agreement for the period from 4 April 2017 to the date of payment at a combined daily rate of $481.96; and

(c)Costs on a solicitor client basis pursuant to cl 15 of the Loan Agreement.

Clause 15 of the Loan Agreement

[6]Clause 15 of the loan agreement provided:

15       OTHER COSTS

All fees, expenses and liabilities at any time incurred or charged by the Lender or by the Lender’s agents or employees in connection with the processing, variation, release or administration of the Loan, or in the course of protecting or enforcing or attempting to protect or enforce the Lender’s right under this Agreement must be paid by the Borrower to the Lender Upon Demand.

By way of example only, fees and expenses may include:

(a)Administrative time and costs including the time of the Lender’s staff or agents, whose time shall be charged at reasonable rates; or

(b)Legal fees and expenses on a solicitor client basis.

Receiver’s costs and legal costs in the receivership

[7]        I do not think it appropriate to enter summary judgment on the sums claimed by FM at subparagraphs (vi) (receivership costs) and (vii) (legal costs in the receivership) of the quantum schedule. Summary judgment was sought only for solicitor/client legal costs, and I do not think receiver’s fees come into that category.

As for the legal costs of $20,669.63 charged to the receiver by Hucker and Associates, I do not have sufficient information on the work done or the hourly rates charged to form a view on whether these fees are properly and fully claimable under cl 15 of the Loan Agreement. We are talking here about costs that might not relate directly to the litigation, and I think Mr Kooiman was entitled to have them quantified and properly pleaded if summary judgment was to be sought on them (it may be that Mr Kooiman could have adduced evidence directed to some of them if they had been pleaded in the statement of claim). Nor did FM’s application for summary judgment provide any particulars for these items.

[8]        The claim for collection costs of $553.49 is also not sufficiently clear for me to enter summary judgment on it. The single invoice is headed “Expenses Reimbursement Collection costs”, but it contains no narration or other information to show that it was properly claimed under cl 15 of the Loan Agreement.

[9]        The claims at subparagraphs (vi), (vii) and (viii) in the quantum schedule will accordingly need to go forward to trial in the usual way.

FM’s costs claim

[10]      However, I think it clearly is appropriate to deal with the claim for costs in the litigation on the summary judgment application. FM claims $23,801.04 on a solicitor/client basis, together with costs on a 2B basis in respect of the period between 30 June 2017 and the date of hearing on 24 July 2017.

[11]      Under r 14.6(4)(e) of the High Court Rules 2016, the Court may order a party to pay indemnity costs if the party claiming costs is entitled to indemnity costs under a contract or deed.

[12]      In this case the legal costs totalling $23,081.04 are the fees and disbursements charged by FM’s solicitors and their Wellington agents in this proceeding, and I think they clearly come into the category of enforcement or attempted enforcement of FM’s rights under the loan agreement. The total amount does include GST, but as FM appears to be a finance company (and would not be able to claim back the GST as input tax) that part of the claim would appear to be recoverable. Looking at the size

of the claim against Mr Kooiman, the work done in preparing and perusing the affidavits, and taking account of Mr Kooiman’s election not to challenge the claim, I am satisfied that the $23,081.04 is properly claimed under cl 15 of the Loan Agreement.

[13]      The remaining costs are claimed in respect of the period from 30 June 2017 to the date of the hearing on 24 July 2017. The amounts sought are based on costs in category 2, band C (daily recovery rate $2,230), and I am satisfied they are properly claimed. The amounts are set out in the following table:

Item	Description	Allowance in days	Total
24	Preparation      of     written submissions.	1.5	$3,345
25	Preparation by the Applicant of bundle for hearing.	0.6	$1,338
26	Appearance at hearing of defended application for sole or principal counsel	0.5	$1,115
27	Second and subsequent counsel if allowed by the Court	0.25	$557.50
29	Sealing order	0.2	$446
Total:	3.05	6801.50

[14]      These costs are correctly calculated on a 2B basis and, given the size of the claim, I think it was reasonable for Mr Munro to be assisted by junior counsel at the hearing. FM is entitled to judgment for its costs under this head.

Result

[15]Judgment is entered for FM against Mr Kooiman for costs in the total sum of

$30,602.54, together with any disbursements as fixed by the Registrar.

[16]      FM is to file an amended statement of claim setting out its claims for items (vi), (vii) and (viii) in the quantum schedule reproduced in paragraph [4] of this judgment, within 20 working days from the date of this judgment. Any statement of defence to the amended statement of claim is to be filed by Mr Kooiman within 20 working days of service of FM’s amended statement of claim.

Associate Judge Smith

Solicitors:
Anderson Lloyd, Christchurch for Plaintiff