Greenfield Global Limited v MKAH Limited

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-002748 [2017] NZHC 1298

BETWEEN

GREENFIELD GLOBAL LIMITED

First Applicant

CASSANDRA GREENFIELD Second Applicant

REBOUND LIMITED Third Applicant

BRIGHT FIVE LIMITED Fourth Applicant

AND

MKAH LIMITED Respondent

Hearing:	(On the papers)
Counsel:	Jack Rafiei for the Applicants Rick Phillips and Margaret Hickton-Burnett for the Respondent
Judgment:	16 June 2017

[COSTS] JUDGMENT OF MOORE J

This judgment was delivered by me on 16 June 2017 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

GREENFIELD GLOBAL LIMITED & ORS v MKAH LIMITED [2017] NZHC 1298 [16 June 2017]

Introduction

[1]      This is a costs judgment following an application for an interim injunction.

[2]      The  underlying  dispute  related  to  a  loan  made  by  the  respondent  to  a corporate trustee and guaranteed by the applicants.  The amount at issue was modest, some $13,000.   The respondent claimed that an early repayment fee was payable under the loan agreement.   The applicants demurred.   Their position was that the loan agreement did not include an early repayment penalty provision and that all payable interest had been repaid.

[3]      The applicants say the respondent threatened to have a receiver appointed over all of the applicant companies and to bankrupt Ms Greenfield, the second applicant.  In response to the perceived threat, the applicants filed a without notice application seeking to restrain the respondent from exercising its rights as a secured creditor against three companies and from issuing proceedings against their director, Ms Greenfield.   As it transpired, the application was never determined because, following judicial encouragement, the parties managed to resolve the interlocutory application and the substantive dispute was referred to the Disputes Tribunal by agreement.

[4]      The parties were unable to agree as to costs.   On that issue, they remain diametrically opposed.  The applicants contend that indemnity costs, or alternatively increased costs, should be awarded against the respondent because it pursued a wholly unreasonable course leaving the applicants no choice but to file their application.  The respondent, on the other hand, claims that the applicants did not put all  relevant  material  before  the  Court  and  mischaracterised  the  nature  of  the perceived threat.  The respondent seeks indemnity costs against the applicants and against their solicitor, Mr Norling.

Factual background

[5]      It is necessary to set out the factual background to this dispute in some detail in order to properly understand and resolve the competing contentions of the parties.

As the dispute underlying the application was never ventilated in this Court, I rely on the affidavit evidence provided by the parties.

[6]      The   first   applicant   is   a   company   called   Greenfield   Global   Limited (“Greenfield Global”).   Its sole director is Ms Greenfield, the second applicant. Ms Greenfield is also the sole director of Rebound Limited (“Rebound”) and Bright Five Limited (“Bright Five”), the third and fourth applicants respectively.

[7]      In early July 2014 Ms Greenfield sought funding for Greenfield Global and Rebound in order to purchase a debtor’s ledger.  Ms Greenfield instructed Mr Pope, a consultant  to…