Hall v Roderick - [2015] NZHC 1560

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-1378 [2015] NZHC 1560

BETWEEN
TERENCE MICHAEL HALL

Plaintiff

AND

PERCY RODERICK AND MARIE THERESE JOHNSEN Defendants

Hearing:
6 July 2015

(On the papers)

Counsel:

D A Uka for Plaintiff
P Allan for Defendants

Judgment:

6 July 2015

JUDGMENT OF MANDER J

Introduction

[1] The proceeding that gives rise to this costs application has been on foot since

2010. It resulted in both the hearing of an interlocutory application for summary judgment and a substantive hearing of the issues. On both occasions the plaintiff was unsuccessful. Costs have been reserved at all stages along the way.

[2] In respect of the interlocutory application for summary judgement, Mrs Marie Johnsen, the second defendant, seeks costs on a 2B basis. For the remainder of the proceedings, she seeks the amount of the Legal Aid grant which she is required to repay.

[3] Mrs Johnsen’s success at both hearings ordinarily might be thought to result in an orthodox award of costs. However, the plaintiff, Mr Terence Hall, submits
costs should lie where they fall.

HALL v JOHNSEN [2015] NZHC 1560 [6 July 2015]

Background

Background to the proceedings

[4] The first defendant, Mr Robinson, and Mrs Johnsen were joint directors and equal shareholders in Southern Link Coaches Limited (the Company). Mr Hall made a number of advances to assist the struggling company which ultimately went into liquidation. The fact that the advances were made by the plaintiff was not in issue. The question in dispute was whether the advances were made to the Company, or to Mr Robinson and Mrs Johnsen in their personal capacities.

[5] The defendants commenced operation of the Company in 2004. It never made a profit and ran into financial difficulties. By 2006 there was an urgent need for an injection of capital. Mr Robinson knew Mr Hall and approached him for a loan. Over time a series of advances were made by Mr Hall to the defendants at their request. The first advance was made in August 2006 for $52,000, thereafter eight further advances were made, the last two in November 2007. Varying rates of interest were payable on each of the advances.

[6] In August 2008, a personal acknowledgment of debt for $358,000 in favour of Mr Hall was drawn up and signed by both Mr Robinson and Mrs Johnsen in their personal capacities. When the company showed no signs of improving its position, Mr Hall formally demanded repayment of the advances. When met with the response that they did not have the funds to repay the loans, Mr Hall applied for summary judgment.

Summary judgment applications

[7] In August 2010, Associate Judge Osborne entered judgment against Mr Robinson in the sum of $357,650.97 together with interest of $51,899.07. The application was undefended.1 Mr Robinson was bankrupt. A hearing date was set
down for the application against Mrs Johnsen who had retained counsel.2

1 Hall v Robinson HC Christchurch CIV-2010-409-1378, 2 August 2010 [Minute no 1].
2 Hall…

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 Hall v Roderick

Details

AGLC: Hall v Roderick [2015] NZHC 1560
Case: [2015] NZHC 1560
Decision Date: 6 July 2015

CaseChat Overview and Summary

The matter of Hall v Roderick [2015] NZHC 1560 involves Terence Michael Hall, the plaintiff, suing Percy Roderick and Marie Therese Johnsen, the defendants, over a series of financial advances made by the plaintiff to assist Southern Link Coaches Limited, a company in which the defendants were directors and shareholders. The plaintiff sought repayment of the advances, contending they were made to the defendants in their personal capacities, while the defendants argued the advances were made to the company. The case has proceeded through interlocutory and substantive hearings, with the plaintiff being unsuccessful on both occasions. Costs have been reserved throughout.

The primary legal issue the court had to determine was whether the defendants were liable for the repayment of the advances, and if so, what costs should be awarded to the defendants for their successful defences. Specifically, the court had to decide whether Marie Johnsen was entitled to costs on a standard basis for the interlocutory application and for the remainder of the proceedings, and if so, in what amount.

The court ruled that Marie Johnsen was entitled to some costs for successfully defending both proceedings, but these costs should be reduced by 50% due to her persistent non-compliance with court orders and delays in the proceedings. The court found that while the plaintiff had legitimate reasons to pursue the defendants, the delays caused by Marie Johnsen prolonged the litigation unnecessarily. The court calculated the costs, reducing them by 50% and capping the claim for legal aid costs at the level of the grant provided, resulting in a total costs award of $14,129.10 to Marie Johnsen. This was significantly less than the full scale costs she initially sought.

The final orders of the court were that Marie Johnsen would be awarded 2B scale costs for work done prior to the grant of legal aid, less 50%, amounting to $4,228.75. For the costs incurred post the grant of legal aid, she was entitled to recover the cost of the work carried out under the legal aid grant, amounting to $9,900.35, for a total costs award of $14,129.10.

Orders