Francis v 500 Ti Rakau Limited

[2025] NZHC 2230

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-1598 [2025] NZHC 2230

UNDER

Part 19 of the High Court Rules 2016 and Part 16 of the Companies Act 1993

IN THE MATTER OF

Avantiplus Botany Limited (in liquidation)

BETWEEN

BENJAMIN BRIAN FRANCIS and GARRY CECIL WHIMP

Applicants

AND

500 TI RAKAU LIMITED

Respondent

Hearing:

On the papers

Counsel:

M J Tingey for Applicants

N H Malarao for Respondent

Judgment:

8 August 2025

JUDGMENT OF O’GORMAN J

[as to costs]

This judgment was delivered by me on 8 August 2025 at 11 am pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

…………………………………

Solicitors/Counsel: Tompkins Wake, Hamilton M J Tingey, Auckland Lawler & Co, Auckland

N H Malarao, Auckland

FRANCIS v 500 TI RAKAU LTD [2025] NZHC 2230 [8 August 2025]

[1]    On 24 July 2025, I granted orders under s 266 of the Companies Act 1993 requiring 500 Ti Rakau Ltd (Ti Rakau) to attend Court for cross-examination and to produce further documents relating to Avantiplus Botany Ltd’s business, particularly those relating to a rental bond, fit-out and leasehold improvements.

[2]    On 22 July 2025, Ti Rakau had filed a memorandum advising that it did not oppose, but nor did it consent, so the applicants would still need to satisfy the Court that the orders were appropriate.

[3]    At the hearing on 24 July 2025, the liquidators advanced their submissions on the merits, with a bundle in support. They also sought costs on a 2B basis (including for steps taken after 22 July 2025). Counsel for Ti Rakau reiterated that his client did not consent, and that it also disputed the  applicant’s entitlement to any costs after   22 July 2025. I therefore made timetable directions for the parties to file memoranda, so the issue of costs could be determined on the papers.

Party submissions

[4]    The liquidators claim a total of $11,343.91 calculated on a 2B basis consisting of:

(a)costs for steps taken up to 22 July 2025 of $5,727.41 (including disbursements of $947.41), as set out in a letter to the respondent dated 22 July 2025;

(b)further costs of $5,616.50 for subsequent steps consisting of:

(i)step 40 written submissions for the hearing on 24 July 2025 (1.5 days, band B);

(ii)step 41 preparation of the bundle for the hearing (0.4 days, band A);

(iii)step 42 appearance at the hearing (0.25 days); and

(iv)step 29 sealing the order (0.2 days).

[5]    Counsel for the liquidators has confirmed that their actual costs exceed the costs sought.

[6]    The respondent contends that an agreement was reached on the terms set out in the 22 July 2025 letter, being that the sum of $5,227.41 was all that would be payable on a 2B basis, so long as Ti Rakau did not oppose (consent was not expressly required). Ti Rakau says that if the liquidators wanted consent to avoid subsequent steps, then they ought to have asked for that. In reliance on the offer, the respondent says it did not oppose, but it was entitled to withhold consent without incurring any further cost liability.

[7]    If there were no binding settlement on costs, then the respondent says the further time allocations are excessive. In particular, around 24 hours elapsed between the respondent’s memorandum and the liquidators’ submissions, so a claim of 1.5 days for submissions is excessive. Ti Rakau also submits that band A time allocations should be used for some steps.

Legal principles

[8]    The Court has a general discretion to award  costs  under  r  14.1  of  the  High Court Rules 2016.

[9]    Subject to that discretion, r 14.2 provides the principles to be applied in most cases:

(a)Under r 14.2(1)(a), the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds.

(b)Under r 14.2(1)(b), an award of costs should reflect the complexity and significance of the proceeding. For those purposes, r 14.3 provides for three categories of proceeding (1, 2 or 3).

(c)Rule 14.2(1)(c) provides that costs should generally be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application. The reasonable determination of time is set out in r 14.5 by band (A, B or C).

(d)Rule 14.2(1)(f) provides that an award of costs should not exceed the actual costs incurred by the party.

Analysis

[10]   I have reviewed the correspondence culminating in the letter dated 22 July 2025 and do not consider that this constitutes a binding offer to restrict costs to the sum of $5,727.41 even if Ti Rakau did not consent. Rather, it was standard correspondence calculating the 2B costs incurred to that point and seeking to ascertain Ti Rakau’s position on the application. It advised that any opposition documents were due by 5 pm on 22 July 2025. While it only asked whether Ti Rakau intended to oppose, I consider it obvious that if the orders could not be made by consent, then further steps would be required. That much is clear as a matter of procedure, and the default position under r 14.2(1)(a) is that the successful party is entitled to costs. It was therefore incumbent on Ti Rakau to clarify any ambiguity about its “no opposition but no consent” position.1

[11]   In my view, where band B has been sought in this case by the liquidators, that normal amount of time is reasonable. Even though only 24 hours passed between the respondent’s memorandum and the liquidators’ submissions, I find the 1.5 day allocation is appropriate for the work involved. The submissions addressed whether the orders were appropriate on the merits, and the hearing bundle included pleadings, evidence and memoranda, as well as relevant legislative provisions and cases. The time allocations in sch 3 are a proxy for notional hours considered reasonable, but the work can be done by more than one practitioner, and by practitioners working longer hours than a standard day.

1      A respondent who does  not  consent  runs  the  risk  of  an  adverse costs award:  Almond  v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [39(b)].

[12]Accordingly, I award costs in the sums sought by the liquidators.

Result

[13]I award the liquidators costs of $10,396.50 plus disbursements of $947.41.

O’Gorman J