Gaylard v Milk Millers Moos Limited HC Wanganui CIV-2011-483-81

[2011] NZHC 743

IN THE HIGH COURT OF NEW ZEALAND WANGANUI REGISTRY

CIV-2011-483-81

BETWEEN  TONY RAYMOND GAYLARD Plaintiff

ANDMILK MILLERS MOOS LIMITED Defendant

Hearing:         15 June 2011

(Heard at Wanganui (Video Conference))

Counsel:         J. Waugh - Counsel for Plaintiff

S.J. Burlace - Counsel for Defendant

Judgment:      17 June 2011 at 11:00 AM

JUDGMENT AS TO COSTS

OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by Associate Judge Gendall on 17 June 2011 at 11.00 am under r 11.5 of the High Court Rules.

Solicitors:           Horsley Christie, Solicitors, PO Box 655, Wanganui

Treadwell Gordon, Solicitors, PO Box 4084, Wanganui

TONY RAYMOND GAYLARD V MILK MILLERS MOOS LIMITED HC WANG CIV-2011-483-81 17 June

2011

[1]      On  22  March  2011  the  plaintiff  commenced  a  proceeding  in  this  Court seeking an order to place the defendant company into liquidation.   The defendant filed a statement of defence on 12 April 2011.   The liquidation application was brought following the failure by the defendant to comply with a statutory demand issued against it on 28 January 2011.

[2]      The debt claimed by the plaintiff in his statement of claim is the sum of

$2,700.00 representing the balance of a $7,000.00 total settlement amount due following default by the defendant under an Employment Relations Authority Settlement Agreement (the Settlement) entered into between the parties.

[3]      This Settlement which was reached around June 2010 required payment by the defendant of the total sum of $7,000.00 by one $3,500.00 payment and the balance at the rate of $200.00 per month.  The Settlement also required the plaintiff to  continue to pay back  debt  contributions owed  to  the Legal  Services Agency (LSA).

[4]      By 27 January 2011, the $3,500.00 lump sum payment and a number of the monthly  $200.00  instalments  had  been  paid  to  the  plaintiff.     Two  monthly instalments were outstanding, however.  The defendant says it had stopped these as it had concerns over the plaintiff’s alleged failure to meet his payment obligation to the LSA. This was then resolved and the monthly payments brought up to date.

[5]      It was on this basis that the plaintiff has now sought leave to withdraw its present liquidation proceeding.  Leave is to be granted by this Court.

[6]      That left outstanding the issue of costs.  On this, the defendant seeks costs against the plaintiff on the discontinued proceeding of $3,400.00 and the plaintiff in turn  seeks  costs  against  the  defendant  based  on  this  discontinuance  totalling

$1,280.00.

[7]      Counsel for the parties have filed memoranda on this issue of costs.

[8]      Before dealing with the question of costs for completeness I simply confirm the order of this Court that (at the request of the plaintiff), leave is now granted to the plaintiff to discontinue this liquidation proceeding.

[9]      I now turn to consider the question of costs.

[10]     The starting point on any costs question where there is a discontinuance must be r 15.23 High Court Rules which provides:

15.23    Costs

Unless the defendant otherwise agrees or the Court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[11]     Notwithstanding this, it is clear that the general costs discretion which the Court has contained in r 14.1 High Court Rules can override r 15.23.  In addition, the presumption in r 15.23 noted above may be displaced if the circumstances make a different costs outcome just and equitable – Coromandel Heritage Protection Society Inc v Thames Coromandel District Council, HC, Hamilton, 11 February 2008, Stevens J, CIV-2007-419-1649.

[12]     In the present case, the detailed memoranda filed by counsel outline various claims and counter-claims as to who may have been at fault regarding what was the cessation and reinstatement of two of the $200.00 per month payments from the defendant to the plaintiff under the Settlement.   It is difficult to some extent to resolve this dispute between the parties on the facts before the Court.

[13]     What is clear, in this case, is that the plaintiff according to his counsel is entirely impecunious and has been in receipt of a grant of legal aid for the purposes of bringing the present proceeding.

[14]     As to this, it is clear from ss 40 and 41 Legal Services Act 2000 that the liability of a legally aided party under any costs order made by a Court must not exceed any amount that is reasonable for the aided person to pay having regard to all

the circumstances including all parties means and the conduct of the dispute – s

40(1).

[15]     As McGechan on Procedure at para HRpt14.11(1)(c) makes clear, it is only in exceptional circumstances that a costs order is to be made against a legally aided person.  Those circumstances must be “quite out of the ordinary” and must relate to the conduct of the proceeding not to the events however unusual which have led up to it.

[16]     Under the circumstances of the present case, I am satisfied that although the legally aided plaintiff here has discontinued this proceeding, this is simply because the earlier Settlement is now back on track.  It is inappropriate therefore for an order for costs to be made against the plaintiff.

[17]     And, as to the plaintiff’s claim for costs against the defendant, in my view this should also be refused. As I see it this is an appropriate case where costs should simply lie where they fall.  Here the plaintiff has discontinued this proceeding but only after the Settlement payments were put back on track.  This is a case, in my view, where sensible discussions between the parties would have achieved this result particularly as the amount at issue, under the circumstances, being only $400.00 was on anyone’s view, not particularly substantial.  Issues over whether the plaintiff was repaying his debt to Legal Services Agency were important, but could have been properly addressed on an informal basis.

[18]     For these reasons I am satisfied that no order for costs should be made here. Costs are to lie where they fall.

‘Associate Judge D.I. Gendall’