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…

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: [2020] NZHC 1603
Decision Date: 7 July 2020

CaseChat Overview and Summary

Colin Gower and Stephen John Tubb, as receivers of Tuam Ventures Limited, applied for an order disqualifying the lawyers representing FTG Securities Limited, the first respondent. FTG Securities Limited is a defendant in the proceedings in the receivership of Tuam Ventures Limited. Robert Bruce Walker, as liquidator of Tuam Ventures Limited, is the second respondent. The primary legal issue the court had to address was whether the application to disqualify FTG Securities Limited's legal representatives was justified. The court also had to determine the appropriate quantum of costs to be awarded to FTG Securities Limited for opposing the application.

The court found that the application to disqualify FTG Securities Limited's legal representatives lacked merit and was made in bad faith. The application was made close to the trial date, long after the liquidator's solicitors had raised concerns about FTG Securities Limited's representation, which had already been addressed. The court found that the application was a misuse of the court's processes, leading to its dismissal for abuse of process. The court accepted the submission that this was a case for increased costs under the High Court Rules 2016, based on the lack of merit in the application. The court calculated the appropriate costs by performing a 2B calculation and applying a 50 per cent uplift on all items, resulting in a total of $8,245.50.

The court ordered Robert Bruce Walker, the second respondent, to pay FTG Securities Limited's costs in opposing the application to disqualify their legal representatives. The total costs and disbursements awarded were $8,245.50 and $110, respectively. The court found that the 50 per cent uplift was appropriate in the circumstances and rejected any suggestion that the liquidator acted very badly or very unreasonably. The court also noted that the sincerity with which the liquidator made the application was already reflected in the fact that he was ordered to pay increased costs rather than indemnity costs.

Orders