Gower v FTG Securities Limited

[2020] NZHC 1603

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV–2018–409–229

[2020] NZHC 1603

UNDER

s 34 of the Receiverships Act 1993

IN THE MATTER

of the receivership of Tuam Ventures Limited (in rec and in liq)

BETWEEN

COLIN ANTHONY GOWER and

STEPHEN JOHN TUBBS as receivers of Tuam Ventures Limited (in rec and in liq) Applicants

AND

FTG SECURITIES LIMITED

First Respondent

AND

ROBERT BRUCE WALKER as liquidator of Tuam Ventures Limited (in rec and in liq) Second Respondent

AND

BANK OF NEW ZEALAND

Third Respondent

AND

CROWN ASSET MANAGEMENT

Fourth Respondent

AND

B J HUNT

Fifth Respondent

Representation:	A J Forbes QC and H Weston for FTG Securities Ltd R B Walker in person
Judgment:	7 July 2020
(Determined on the papers)

JUDGMENT OF OSBORNE J

(costs)

GOWER v FTG SECURITIES LIMITED [2020] NZHC 1603 [7 July 2020]

[1]                 Robert Walker, the second respondent in this proceeding, was unsuccessful on an application for an order disqualifying the lawyers representing the first respondent,

FTG Securities Ltd (FTG).1

[2]                 Mr Walker was ordered to pay FTG’s costs in opposing the application, with the quantum of costs and disbursements reserved.2 In reserving costs, I recorded the tentative  view  that   this   was   appropriately  a   case  for  increased   costs   under  r 14.6(3)(b)(ii) High Court Rules 2016 on the basis that Mr Walker’s application had lacked merit.

Submissions on quantum

[3]                 For FTG, Mr Forbes QC submits that this is appropriately a case for increased costs. He submits that, for the reasons identified in the interlocutory judgment, Mr Walker’s application lacked merit and was inherently unlikely to succeed. This submission is clearly correct – the application was dismissed for abuse of process. The application had been made very close to trial long after Mr Walker’s solicitors had raised issues in relation to FTG’s representation, which had been responded to at the time. The application involved a plain misuse of the Court’s processes.3

[4]                 Mr Forbes submitted that the following represented the appropriate steps for the calculation of costs:

(a)a 2B calculation, the proceeding appropriately being a category 2 proceeding: $5,497;4 and

(b)a 50 per cent uplift (on all items): $2,748.50.5

1      Gower v FTG Securities Ltd [2020] NZHC 1105.

2 At [25].

3 At [19].

4      High Court Rules 2016, rr 14.3 and 14.5.

5      Applying NR v MR [2014] NZCA 623, (2014) 22 PRNZ 636 at [52] – all of the steps being taken by FTG to oppose the application being steps that should not have been necessary.

[5]                 Mr Walker, in his submissions, while recognising that there had been an order of costs made, submitted that a 50 per cent uplift as claimed by FTG was inappropriately high.

[6]                 Mr Walker recorded that by his application he had sought to ensure that the Court was addressed for FTG by lawyers who were in a position to discharge fully their duties as officers of the Court. Mr Walker emphasised that he had throughout sought to pursue his duties as liquidator under the Companies Act 1993 and as an officer of the Court. He submitted that his disqualification application should be viewed in that light.

[7]                 Mr Walker referred to this Court’s decision in other litigation involving FTG – 100 Investments Ltd v Walker.6 With other defendants in that proceeding, Mr Walker successfully applied for orders to restrain the same law firm as here (Canterbury Legal) acting for FTG (and other “Henderson” companies)7 in that proceeding.

[8]                 As I read the judgment of Venning J in 100 Investments Ltd v Walker, the circumstances relied on in that case were markedly different to those in this case. In particular, the Court there found a reasonable likelihood that one or both of the particular solicitors involved would be required to give evidence.8 As the heading to Venning J’s relevant discussion indicates, the ruling arose from the likelihood of contentious evidence being given in the proceeding. There was no such likelihood in this case at the time of my interlocutory ruling (25 May 2020). As it transpired, the substantive hearing in this case proceeded entirely on the affidavit evidence filed without any oral evidence from witnesses, let alone cross-examination.

Outcome

[9]                 I find this to be an appropriate case for increased costs for the reasons I have previously identified. To some extent, the sincerity with which Mr Walker made his application is already reflected in the fact that he faces an order for increased costs

6      100 Investments Ltd v Walker [2020] NZHC 165.

7      FTG is one of numerous companies associated with David Ian Henderson, many of which (including FTG) were affected by the collapse of Property Ventures Ltd (in rec and in liq).

8      100 Investments Ltd v Walker, above n 6, at [42].

rather than indemnity costs. In not considering an award based on indemnity costs, I have rejected any suggestion that Mr Walker acted either very badly or very unreasonably as identified by the Court of Appeal in Bradbury v Westpac Banking Corp.9

[10]              I accept that the uplift of 50 per cent advocated by Mr Forbes is appropriate in the circumstances.10

[11]The sum of $8,245.50 as a costs award is just.

[12]Additionally, FTG incurred a filing fee of $110, which is recoverable.

Order

[13]              I fix the quantum of costs and disbursements to be paid by the second respondent to the first respondent in the sums of $8,245.50 and $110 respectively.

Osborne J

Solicitors:

Canterbury Legal, Christchurch Copy to: R B Walker

9      Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27]–[28].

10     Holdfast NZ Ltd v Selleys Pty Ltd [2005] 17 PRNZ 897 (CA).