Grant v Pandey - [2013] NZHC 3323

IN THE HIGH COURT OF NEW ZEALAND [NAME OF REGISTRY] REGISTRY

CIV-2012-404-000648 [2013] NZHC 3323

BETWEEN DAMIEN GRANT and STEVEN KHOV as liquidators of CAPITAL HOSPITALITY HOLDINGS LIMITED (IN LIQUIDATION)
Applicants

ANDPRAKASH PANDEY First Respondent

C P HOTELS LIMITED Second Respondent
C P INVESTMENTS LIMITED Third Respondent
C P CARPARKS LIMITED Fourth Respondent
intituling cont'd

Hearing: 23 October, 28 November 2013

Appearances: B J Norling and A Ho for Applicants
R B Hucker for Respondents

Judgment: 11 December 2013

JUDGMENT OF COURTNEY J [Review of Associate Judge's decision]

This judgment was delivered by Justice Courtney on 11 December 2013 at 4.30 pm
pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

CAPITAL HOSPITALITY HOLDINGS LTD (IN LIQUIDATION) v PANDEY ORS [2013] NZHC 3323 [11
December 2013]

C P PROPERTY INVESTMENTS LIMITED
Fifth Respondent

C P ASSET MANAGEMENT LIMITED
Sixth Respondent

J D RAI & SONS LIMITED Seventh Respondent

ASIA PACIFIC HOTEL INVESTMENTS LIMITED Eighth Respondent

RAISONS PACIFIC INVESTMENTS LIMITED
Ninth Respondent

BABOO MAHENDRA PRATAP RAI Tenth Respondent

CAPITAL INVESTMENTS CORPORATION LIMITED Eleventh Respondent

Introduction

[1] In this proceeding Damien Grant and Steven Khov, as liquidators of Capital Hospitality Holdings Limited (in liquidation) (CHH) are seeking orders under s 266 of the Companies Act 1993. The tenth and eleventh respondents unsuccessfully protested the jurisdiction of the Court to make such orders.1 Associate Judge Bell ordered them pay costs on a 2B basis.2 The liquidators were represented by in-house counsel and there was no evidence regarding the actual cost to the liquidators of that representation. The respondents have applied to review the costs order3 on the ground that, in ordering costs without such evidence, the Associate Judge failed to apply the principles in r 14.2(f) of the High Court Rules which precludes costs being
awarded in excess of the actual costs incurred.

[2] The awarding of costs is an exercise of a discretion and therefore I would only interfere with the Associate Judge’s decision on a review if there had been an error of law through failing to take into account a relevant factor, taking into account an irrelevant factor, applying a wrong principle or otherwise plainly being wrong.4

[3] Although costs are discretionary under the High Court Rules, it is a discretion to be exercised in accordance with the principles contained in the rules.5 Under r 14.2(f) an award of costs should not exceed the costs incurred by the party claiming costs.

Costs where party represented by in-house counsel.

[4] In his decision, Bell AJ allocated the time for steps taken in the application as

2.1 days then uplifted it by a further .2 of a day because there was delay by the respondents in filing submissions on time. This produced costs on a 2B basis of 2.3 days at $1,900 per day, totalling $4,370. The issue of Mr Norling’s status as in- house counsel for the liquidators was raised and the Associate Judge declined to
make any reduction on that account. His reason was:

1

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.

Continue reading Grant v Pandey

Details

AGLC: Grant v Pandey [2013] NZHC 3323
Case: [2013] NZHC 3323
Decision Date: 11 December 2013

CaseChat Overview and Summary

The High Court of New Zealand was presented with a case where Damien Grant and Steven Khov, as liquidators of Capital Hospitality Holdings Limited, sought orders under section 266 of the Companies Act 1993. They were contesting a costs order made by an Associate Judge, who had directed that the tenth and eleventh respondents pay costs on a 2B basis. The respondents applied to review the Associate Judge's decision, arguing that he failed to apply the principles in rule 14.2(f) of the High Court Rules, which states that costs should not exceed the actual costs incurred by the party claiming costs.

The court examined whether the Associate Judge had erred in law by failing to consider the actual costs incurred by the liquidators when they were represented by in-house counsel. The Associate Judge had declined to reduce costs on the basis that the liquidators were represented by in-house counsel, but the court found that this was irrelevant under rule 14.2. The court held that while the liquidators were entitled to costs under rule 14.2, the basis on which these costs should be awarded needed clarification. The court concluded that there was no reason the statutory costs regime should operate differently for in-house and external counsel, and that it was incumbent on all counsel to not seek costs in excess of the actual costs.

The court dismissed the application for review and determined that the liquidators were entitled to costs. The liquidators had also sought increased costs due to the application being without merit and the respondents' failure to comply with directions regarding the service of submissions. The court found the application for review to be without merit and awarded costs to the liquidators on a 2B basis, with an uplift of 50%.

Orders