High Quality Limited v Eco Cubes Limited - [2023] NZHC 3424

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-2464

[2023] NZHC 3424

UNDER the Copyright Act 1994 and the Fair Trading Act 1986

BETWEEN

HIGH QUALITY LIMITED

Plaintiff

AND

ECO CUBES LIMITED

First Defendant

AND

BLAINE THOMAS MAIHI RAKENA

Second Defendant

AND

APRIL HU JIANG

Third Defendant

Hearing: On the papers

Representation:

J R Wach & J R Rowland for plaintiff

D Zhang & E Tie for first and second defendants No appearance by or for third defendant

Judgment:

29 November 2023

JUDGMENT OF JOHNSTONE J

(Costs)

This judgment was delivered by me on 29 November 2023 at 3pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
James & Wells, Auckland Integritas Law, Auckland

HIGH QUALITY LTD v ECO CUBES LTD [2023] NZHC 3424 [29 November 2023]

[1] In this proceeding, High Quality Limited sues Eco Cubes Limited, Blaine Rakena, and April Jiang for breach of its copyright. A substantive five-day trial is set to commence on 29 July 2024.

[2] In late November 2022, High Quality sought particular discovery from all three defendants. And in January 2023, Eco Cubes sought particular discovery from High Quality. These discovery applications were resolved, but not until July 2023. The defendants had failed to meet various timetable orders.

[3] This judgment deals with the issue of costs payable in respect of both applications. I am required to consider the question of which party was successful in respect of Eco Cubes’ application. And whether reduced, increased or indemnity costs should be awarded.

[4]First, I will set out some of the background.

Background

[5] Associate Judge Sussock issued the first judicial direction on discovery, by minute dated 12 December 2022. The Judge directed Eco Cubes to file its discovery application with supporting affidavits, and any notice of opposition to High Quality’s discovery application, by 22 December 2022. In doing so, Associate Judge Sussock declined High Quality’s application for “unless orders”, instead noting that the “dates are to be strictly complied with”. But it was clear the Judge considered there was some cause for concern that Eco Cubes and both of the other defendants (at that stage all jointly represented by counsel) had not been responding to judicial direction promptly. A half-day discovery hearing was fixed for 18 April 2023.

[6] In breach of Associate Judge Sussock’s direction, Eco Cubes did not file its discovery application, and the three defendants did not file their opposition to High Quality’s application, until 16 January 2023.

[7] The next relevant judicial direction was that of Moore J on 5 April 2023. The defendants had filed a memorandum seeking adjournment of the discovery hearing, because their former counsel had withdrawn, and the defendants were now self-

represented. High Quality accepted that it would be appropriate to adjourn the hearing but noted the defendants’ further non-compliance.

[8] Justice Moore expressed disappointment at the defendants’ conduct but granted the adjournment, re-fixing the discovery hearing for Thursday, 20 July…

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: [2023] NZHC 3424
Decision Date: 29 November 2023

CaseChat Overview and Summary

High Quality Limited brought proceedings against Eco Cubes Limited, Blaine Rakena, and April Jiang for breach of copyright. This case concerns the costs payable in respect of two discovery applications, one by High Quality and the other by Eco Cubes. The substantive trial is scheduled for 29 July 2024. The primary focus of this judgment is the issue of costs awarded in respect of the discovery applications, specifically whether the defendants were successful on Eco Cubes' application and whether reduced, increased or indemnity costs should be awarded.

High Quality submitted that it should be regarded as the successful party in respect of Eco Cubes' discovery application because Eco Cubes did not make an informal request for documents prior to filing the application. They argue that increased costs are warranted due to Eco Cubes' failure to comply with judicial directions, seek unnecessary documents, and fail to admit facts. In contrast, Eco Cubes argued that it should be considered the successful party as its application resulted in the provision of at least some documents. They argued that High Quality was not entitled to a costs award and if the court were to award costs, they should be scale costs at most.

The court found that High Quality should be regarded as the successful party to Eco Cubes' discovery application. The court accepted that Eco Cubes achieved some measure of success but found that a realistic appraisal of success favoured High Quality. The court awarded High Quality 2B costs of $4,541 in respect of Eco Cubes' application. In respect of High Quality's discovery application, the court found that High Quality was the successful party and that there was a proper basis for an increase of scale costs. The court awarded scale costs of $7,170 with an uplift of 25 per cent of $1,434 for steps incurred after 16 January 2023 (totalling $8,604).

In conclusion, the court awarded High Quality total costs in respect of both discovery applications of $13,145. Of this sum, Eco Cubes is solely liable to pay $4,541. All three defendants are jointly and severally liable to pay the balance.

Orders