Gillovic v Nayacakalou - [2024] NZHC 3979

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2022-419-216

[2024] NZHC 3979

UNDER

AND
sections 284 and 286 of the Companies Act 1993

IN THE MATTER

of the removal of liquidator and review of liquidator’s remuneration

BETWEEN

BRENT STEPHEN GILLOVIC

Plaintiff

AND

KELERA NAYACAKALOU as liquidator of TESIO BLOODSTOCK SERVICES

LIMITED (in liquidation) First Defendant

KELERA NAYACAKALOU as liquidator of TESIO THOROUGHBRED SERVICES

LIMITED (in liquidation) Second Defendant

Hearing: On the papers

Appearances:

D Delic for the Plaintiff

No memorandum filed on behalf of the defendants

Judgment:

20 December 2024

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

(Costs)

This judgment was delivered by me on 20 December 2024 at 12.45 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Braun, Bond & Lomas Limited, Hamilton

GILLOVIC v NAYACAKALOU [2024] NZHC 3979 [20 December 2024]

Introduction

[1] In a judgment delivered on 2 September 2024, I granted Mr Gillovic’s application for orders removing Ms Nayacakalou as liquidator of Tesio Bloodstock Services Ltd and Tesio Thoroughbred Services Ltd, appointing Stephen Khov and Kieran Jones as replacement liquidators.1

[2] In addition, I fixed Ms Nayacakalou’s remuneration as liquidator of each company at $3,500 plus GST. I directed that the parties confer in relation to costs and only if they could not be agreed, to file memoranda. A memorandum was filed on 3 October 2024 on behalf of the plaintiff. I then issued a further minute granting an extension to 11 October 2024 for the filing of any memorandum in response by Ms Nayacakalou. No memorandum has since been filed.

[3]I therefore proceed to determine costs in the absence of a response.

[4] Mr Gillovic seeks costs on a 2B basis in the amount of $29,755.50 plus disbursements of $2,345 for a total of $32,100.50.

[5] I set out the relevant costs principles briefly below and then consider the steps claimed for.

Costs principles

[6] The starting point in any costs decision is that costs are at the discretion of the Court.2 Although the discretion is a wide one, it is not unfettered. Rule 14.2 of the High Court Rules 2016 sets out the general principles and includes:3
(a)the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:
(b)an award of costs should reflect the complexity and significance of the proceeding:

…
(g)so far as possible the determination of costs should be predictable and expeditious.

1      Gillovic v Nayacakalou [2024] NZHC 2496 [Removal decision].
2      High Court Rules 2016, r 14.1.
3      Rule 14.2(1).

[7] Rules 14.3 to 14.4 provide for the categorisation of proceedings and the appropriate daily recovery rate.

[8] Rule 14.5 then provides for the determination of a reasonable time for each step by reference to sch 3. If sch 3 does not refer to the step then the reasonable time is determined by analogy with the schedule or, if no analogy can usefully be made, the time assessed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] NZHC 3979
Decision Date: 20 December 2024

CaseChat Overview and Summary

The case of Gillovic v Nayacakalou was heard in the High Court of New Zealand, Hamilton Registry. The plaintiff, Brent Stephen Gillovic, sought costs following the removal of Kelera Nayacakalou as liquidator of two companies, Tesio Bloodstock Services Ltd and Tesio Thoroughbred Services Ltd. The dispute centred around the determination of costs incurred during the proceedings, specifically the removal of the liquidator and the review of her remuneration. Nayacakalou did not file a memorandum in response to Gillovic's claim for costs.

The court had to decide on the appropriate costs to be awarded to Gillovic, considering the steps taken during the litigation process and the principles governing costs in New Zealand. The court applied the general principles outlined in the High Court Rules 2016, focusing on predictability, expeditiousness, and the proportionality of costs to the complexity and significance of the proceedings. The court also considered the specific steps claimed by Gillovic, including the application for leave, the application for strike-out, and the substantive hearing.

Associate Judge Sussock determined that costs should lie where they fell for the steps associated with the application for leave and the application for strike-out. Costs for the remaining steps were assessed, with some adjustments made to the time claimed and certain costs disallowed. The court awarded costs of $20,554 plus disbursements of $2,125, totaling $22,679, to be paid by Nayacakalou to Gillovic.

The final orders of the court were that Kelera Nayacakalou was to pay the plaintiff, Brent Stephen Gillovic, costs on a 2B basis in the amount of $20,554 plus disbursements of $2,125, for a total of $22,679. The court's decision was based on a detailed assessment of the steps taken during the proceedings, ensuring that the costs awarded were fair and proportionate to the work done.

Orders