Green Cabs Limited v Naidu

[2014] NZHC 3351

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-002177 [2014] NZHC 3351

IN THE MATTER

of an application for interim injunction

BETWEEN

GREEN CABS LIMITED Plaintiff

AND

PARSHU RAM NAIDU First Defendant

SMART CABS Second Defendant

Hearing:	On the papers
Appearances:	O Lund for Plaintiff R Keenan for First Defendant No appearance by or on behalf of Second Defendant
Judgment:	19 December 2014

JUDGMENT OF WOOLFORD J [As to costs]

This judgment was delivered by me on Friday, 19 December 2014 at 2.00 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:           Duncan Cotterill, Barristers & Solicitors, PO Box 10-376, Wellington 6143

Liberty Law Chambers, PO Box 28161, Remuera, Auckland 1541

David Rice & Associates, PO Box 72266, Papakura, Auckland 2244

GREEN CABS LIMITED v PARSHU RAM NAIDU [2014] NZHC 3351 [19 December 2014]

[1]      On 5 November 2014, on the application of Green Cabs Limited, I granted an interim injunction against Parshu Ram Naidu prohibiting him from operating his Toyota Camray hybrid motor vehicle Registration GGJ30 painted in its green colour as a commercial passenger vehicle effective immediately until further order of the Court.  I reserved costs and indicated that if they were to be pursued memorandum should be filed within ten days of the date of the judgment.

[2]      Costs are now pursued by Green Cabs Limited.  It seeks costs on an increased basis for all steps taken in the proceeding or, in the alternative, costs on a category

2B basis together with disbursements.   Green Cabs Limited is seeking increased costs (a 50 per cent uplift of category 2B costs) on the basis that Mr Naidu has contributed unnecessarily to the time and expense of the proceeding by:

(a)       Pursuing an argument that lacked merit and/or failing to accept facts or evidence; and

(b)Failing   without   reasonable   justification   to   accept   an   offer   of settlement made by the plaintiff.

[3]      Green Cabs Limited submits that Mr Naidu’s primary defence was that his vehicle had been repainted a different shade of green to Pantone 368C (Green Cabs green)  and  he  was  therefore  not  in  breach  of  contract  or  misleading  actual  or potential Green Cabs customers.  This is said to have been unrealistic and lacking merit.

[4]      Furthermore,  Green  Cabs  Limited  submits  that  Mr  Naidu  was  given numerous opportunities to repaint the colour of his vehicle after leaving Green Cabs Limited, but he refused to do so.  As a result, Green Cabs Limited was left with no other option but to file proceedings to force Mr Naidu to take action and protect its reputation  in  the  market.     In  particular,  Green  Cabs  Limited  notes  that  on

10 September 2014, Venning J directed Mr Naidu, together with his painter to meet with Green Cabs Limited.  The purpose of the meeting was to allow Green Cabs Limited  to  inspect  the  colour  of  Mr  Naidu’s  vehicle,  decide  whether  it  was  a different to Green Cabs green and to assess whether the matter could be resolved on

a practical basis.  Venning J discussed the issue of costs with the parties and noted that the proceedings could incur substantial costs for all parties.  A final settlement offer was made by Green Cabs Limited on 22 September 2014.  It was prepared to absorb the costs of the proceeding if Mr Naidu agreed to repaint his vehicle.  Green Cabs  Limited  submits that  Mr Naidu  refused  it’s settlement  offer without  good reason.

[5]      Mr Naidu submits that costs should lie where they fall.   He has filed an affidavit in support of his submission.  During the course of the judgment, while discussing the interests of justice, I had noted that Mr Naidu had not been able to drive his vehicle for a considerable period of time because of his drink/driving conviction and therefore had to support his family through other means of economic endeavour.  Mr Naidu now says that during that year long period he was on a benefit and his household was supported through his wife’s employment, who was on a minimum wage and worked 25 hours per week.   Further, he says that, while he is prohibited from working until the car colour is changed, he is receiving an accommodation supplement.  He also says that he has reached an agreement with his painter, Eden Park Panel and Paint, to pay $50 per week towards the cost of repainting his vehicle, which is $1,925.  He says he is in extreme financial difficulty and would find it impossible to pay any costs awarded against him.  He attaches a letter from his accountant to support his submission.  He also says that he owes outstanding legal fees to his counsel who represented him in the hearing.  If the decision is made to award costs to the plaintiff, Mr Naidu says he is able to pay a maximum of $5.00 per week.

[6]      The letter  from  the  accountant  indicates  that  Mr Naidu  receives  a  gross income  of  $300  per  week  from  driving  his  taxi  from  which  he  makes  a  car repayment of $1,000 per month, and pays a taxi levy of $60.00 per month and petrol of $60.00 per week. Additionally, he pays child support of approximately $74.00 per month.

[7]      As the successful party, Green Cabs Limited would normally be entitled to costs.  Rule 14.2 High Court Rules provides that the party who fails with respect to an interlocutory application should pay costs to the party who succeeds.   In the

present circumstances, I do not see any reason to differ from the normal course. Mr Naidu’s financial circumstances and ability to pay costs is not a principle that applies to the determination of costs under r 14.2.   On the other hand, the determination of costs should be predictable and expeditious.  Mr Naidu’s financial circumstances are a matter to be considered during the enforcement stage if an order for costs is granted.

[8]      The only real issue is whether the costs should be scale costs or increased costs.  In that regard, I am of the view that increased costs are not appropriate. Although a primary defence of Mr Naidu’s was that his vehicle had been repainted a different shade of green, his counsel did argue with some conviction that a prima facie case of passing-off or breach of s 9 of the Fair Trading Act 1986 had not been made out because of the lack of a Green Cabs sign or distinctive Blue World logo.  It seems Mr Naidu did genuinely believe that his car was sufficiently different from a normal Green Cabs Limited taxi for him not to be in breach of common law or statute.  The offers of settlement by Green Cabs Limited did not include an offer to pay for the repaint of the car and given Mr Naidu’s straightened financial circumstances, I can understand why he did reject the offers.

[9]      In those circumstances, there will be an order that Mr Naidu pay Green Cabs Limited the sum of $15,223.50 together with disbursements of $2,091.50, being scale costs on a 2B basis.

……………………………….

Woolford J