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 as likely to be required for the particular step.

Steps claimed for

[9]    Counsel for Mr Gillovic attaches a schedule to his memorandum setting out the steps claimed for. These include steps in relation to the application for leave the plaintiff was required to file in order to bring these proceedings. Leave was granted by Associate Judge Brittain on 28 August 2023.4 However, his Honour at the same time granted the defendants’ application to strike out the second cause of action in Mr Gillovic’s claim and recorded that both parties had had some success.

[10]   Following that judgment, a costs memorandum was filed on behalf of Mr Gillovic dated 8 September 2023 proposing that costs ought to lie where they fall or alternatively that costs could be reserved to be determined when the substantive claim is heard.

[11]   A memorandum  was  filed  in  response  on  behalf  the  defendants  dated  14 September 2023 agreeing with Mr Gillovic’s submission that it would be appropriate for costs to lie where they fall.

[12]No costs order was made by the Court following the filing of those memoranda.

[13]   Having reviewed the steps taken and Associate Judge Brittain’s judgment, I consider it is appropriate for costs to lie where they fall in respect of the applications for leave and for strike-out. As a result, costs for the steps associated with those applications ought also to lie where they fall. This includes the second to ninth steps

4      Gillovic v Nayacakalou [2023] NZHC 2348 [Leave decision].

set out in Mr Gillovic’s schedule of costs and the disbursements for the filing fees for the application for leave and for the notice of opposition to the strike-out application.

[14]   I  allow  the  remainder  of  the  costs  claimed  except  the  appearance  on  17 April 2024, as there is no record of a conference on that date, and I reduce the appearance at the hearing to 0.5 of a day, rather than the 0.75 claimed, as the hearing was completed prior to the luncheon adjournment. Mr Gillovic claims 1.5 days for the preparation of submissions under step 24 rather than 2 days for the preparation for an affidavit hearing under step 32 but I consider that the time allocation for step 24 is appropriate so include that as sought.

[15]   In addition, I do not allow a filing fee for the second amended statement of claim as it was filed to remove the second cause of action after it had been struck out. It is not appropriate for the defendant to bear that cost.

[16]I summarise the steps below for which costs are awarded as follows:

Costs
Item	Description	Time	Amount
1	Commencement of proceedings by plaintiff	3	$7,170
11	Filing memorandum 9/02/24	0.4	$956
13	Appearance at CMC 12/02/24	0.3	$717
13	Appearance at CMC 11/03/24	0.3	$717
30	Preparation of affidavits, list of issues, authorities and bundle of documents for hearing	2	$4,780
24	Preparation of written submissions	1.5	$3,585
34	Appearance at hearing	0.5	$1,195
11	Filing memorandum as to costs	0.4	$956
29	Sealing judgment	0.2	$478
Subtotal		$20,554

Disbursements
Item	Amount
Filing fee — Statement of claim	$1,350
Filing fee — Application for leave	$500
Filing fee — First amended statement of claim	$110
Service — West Document and Investigation Services	$115
Sealing judgement fee	$50
Subtotal	$2,125

Result

[17]Ms Nayacakalou is to pay costs to Mr Gillovic on a 2B basis in the amount of

$20,554 plus disbursements of $2,125 for a total of $22,679.

Associate Judge Sussock