HJS AG Limited v Tumatatoro Limited

[2016] NZHC 2502

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2015-419-274 [2016] NZHC 2502

BETWEEN

HJS AG LIMITED

Plaintiff

AND

TUMATATORO LIMITED First Defendant

MATILDA ORA THOMPSON, MOANA VICKI THOMPSON, MARTIN THOMPSON, RIPEKA PATENE-STOUT,

TE ARAMOANA WILSON, JOE THOMPSON AND SAME THOMPSON AS TRUSTEES OF THE KAHUPEKA TE WAERO WHANGA TRUST

Second Defendants

Hearing:	19 October 2016
Appearances:	GHJ Brant for the Plaintiff J Golightly for the Defendants
Judgment:	19 October 2016

ORALJUDGMENT OF MUIR J (COSTS)

Counsel/Solicitors:

GHJ Brant, Stace Hammond, Hamilton

J Golightly, Marsden Woods Inskip & Smith, Whangarei

HJS AG LIMITED v TUMATATORO LIMITED [2016] NZHC 2502 [19 October 2016]

[1]       The plaintiff has filed a memorandum in which it; [a] discontinues the proceedings; and

[b]       consents to orders discharging interim orders made by Toogood J on

23 October 2015

[2]      I note the discontinuance and make orders discharging the interim orders accordingly.

[3]      The defendants seek costs in relation to the proceedings of $11,037 plus an uplift.   These relate exclusively to the steps taken in respect of the plaintiff’s application for interim relief.

[4]      That application sought orders as set out in paragraph A(a) of the statement of claim in terms generally preventing the defendants from access to the leased premises other than on certain terms.

[5]      That application was made against a background traversed extensively in the affidavits, which included allegations of inappropriate and unnecessarily frequent visits to the demised premises by the lessor and an underlying dispute relating to the adequacy of a house required to be constructed by the lessor for the purpose of accommodating the plaintiff’s farm manager.

[6]      The affidavit evidence disclosed an ever more fractious relationship between the lessee and representatives of the lessor, culminating in a discussion on 20 July

2015 which was considered by the plaintiff’s farm manager to be threatening.

[7]      On 16 September 2015 the matter came before Hinton J who made orders setting the interlocutory application down for hearing on 28 October 2015 and for the provision of submissions in support of the application.

[8]      Shortly before that hearing, the parties were able to reach a consent position in respect of the interlocutory application.   Orders were accordingly made by Toogood  J  on  23  October  2015,  in  terms  that  the  defendants,  their  agents  or

representatives, would not enter on to the demised premises other than in the specific circumstances identified in para 3(a) of his Honour’s orders.  Among other things, the order provided for limitations in terms of the frequency with which inspection of the property could take place.  His Honour also ordered in terms of para 3(5) that “costs of the plaintiff’s interim injunction application are reserved”.

[9]      I must conclude from the fact that the defendant consented to interim orders restricting access to the premises that it and its advisors considered there was a serious question in that context and the balance of convenience favoured such orders.

[10]     Toogood J’s orders also stayed the proceedings for a period of six months to enable the parties to undertake what was by that stage a consent arbitration process. There was and remains a dispute between the parties as to whether the lease provided for arbitration or expert determination.   Mrs Golightly says that her client felt “bullied” into agreeing to an arbitration and says that the High Court proceedings were an abuse of process designed to facilitate that outcome.

[11]     I cannot approach the costs application on that basis.  The defendants were represented by experienced counsel throughout.   Had they considered themselves sufficiently “bullied” in  that  respect  then inevitably that  is  the submission  they would  have  made  to  the  Court  on  the  interlocutory  application  and  equally inevitably, had the Court considered the application an abuse of process, no orders would have been made by it.

[12]     I  must  therefore  address  the  costs  application  on  the  basis  that  the interlocutory application was properly brought.   I am advised that the arbitrator’s decision is now to hand and Mrs Golightly says that the underlying disputes were resolved in her client’s favour.  I am also advised that the arbitrator helpfully made observations relevant to the circumstances in which the lessor might exercise its powers of inspection or otherwise come on to the property.

[13]     In my view the defendants improperly conflate the outcome in relation to the arbitration and the matters that were before the Court on the interlocutory application and for which costs orders are now sought.   On any measure the application for

interim relief was substantially successful, albeit that this was as a result of consent orders sensibly entered into by the parties in advance of the hearing.

[14]     In the ordinary course I would have been minded to have granted costs in favour of the plaintiff on its interlocutory application.  However, this is not a usual case.  In support of the application for interlocutory relief Mr Silich filed an affidavit to which he annexed a purported email dated 23 February 2013 at 6.14 am.   It is acknowledged by the plaintiff that this email was fraudulently altered to include the words “Farm Managers” before the word “house” in the fourth line of the email. However, that alteration was identified by the defendant prior to settlement of the interlocutory application and acknowledged by Mr Silich in a reply affidavit.  It was not therefore operative in terms of the settlement ultimately reached between the parties.

[15]     However, it is appropriate that this Court expresses its strong denunciation of any fraudulent alteration of documents submitted for the purpose of an interlocutory application.  Mr Brant responsibly concedes that such conduct rightly deprives his client of any entitlement to costs it might otherwise have.

Result

[16]     For  the  foregoing  reasons  I  consider  this  is  a  case  where  costs  should properly lie where they fall and I order accordingly.

Muir J