HJS AG Ltd v Tumatatoro Ltd

[2021] NZHC 1978

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-570

[2021] NZHC 1978

IN THE MATTER

of a claim for specific performance of an obligation to renew a lease and related

claims under a guarantee

BETWEEN

HJS AG LTD

Plaintiff

AND

TUMATATORO LTD

First Defendant

RIPEKA PATENE-STOUT, SAMUEL NGAKAPA THOMPSON, MATILDA ORA THOMPSON, MOANA VICKI

THOMPSON (aka MOANA APAAPA) and RAYMOND WAERO THOMPSON in their

capacity as trustees of the Kahupeka Te Waero Whanau Trust

Second Defendant

Judgment:

(On the papers)

3 August 2021

JUDGMENT OF BREWER J

(Costs)

This judgment was delivered by me on 3 August 2021 at 11 am pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

McMahon Butterworth Thompson (Auckland) for Plaintiff Tamaki Legal (Auckland) for Defendants

HJS AG LTD v TUMATATORO LTD [2021] NZHC 1978 [3 August 2021]

Introduction

[1]                  HJS Ag Ltd is a farming company. It subleases a farm from Tumatatoro Ltd, which in turn leases the farm from the Kahupeka Te Waero Whanau Trust. The five second defendants are the trustees or former trustees of that trust. The sublease was for seven years, expiring on 31 May 2021. It provided for a renewal of eight years. HJS wished to renew the lease, but Tumatatoro did not wish to grant the renewal. HJS sued, including a claim for specific performance requiring the lease to be renewed. HJS also applied for an interim injunction restraining the defendants from re-entering the property or evicting HJS.

[2]                  Tumatatoro and three of the five trustees were represented by counsel (“the represented defendants”). The other two trustees were not.

[3]                  I heard the case on 11 May 2021 and gave judgment on 13 May 2021.1 I considered that the criteria enumerated in Klissers Farmhouse were met2 and considered that the relevant factors weighed in favour of granting the interim injunction. While it was true (as the represented defendants pointed out) that HJS had breached the lease, it was also true that Tumatatoro owed HJS a significant sum that was much greater than the payments due under the lease. I considered that it was possible that HJS would be awarded specific performance and a renewal of the lease in the substantive proceeding, that their harm could not be adequately measured by damages, and that the balance of convenience lay in favour of granting the interim injunction. I made orders accordingly.

[4]                  I indicated that I would award costs to HJS on a 2B basis unless I received a memorandum submitting to the contrary within 10 working days. On 28 May – the eleventh working day after the date of my judgment – counsel for HJS filed submissions seeking costs on a 2B basis. The represented defendants issued a memorandum seeking costs to be ordered on a several basis, on the ground that some of the costs were incurred exclusively against the unrepresented defendants.

1      HJS AG Ltd v Tumatatoro Ltd [2021] NZHC 1070.

2      Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 140 (CA); American Cyanamid v Ethicon Ltd [1975] AC 396.

The quantum of costs claimed

[5]HJS seeks costs for the following steps:

Step	Step Number	Days	Total
Filing memorandum for first mentions hearing	11	0.4	$956
Appearance at first mentions hearing	12	0.2	$478
Filing interlocutory application	22	0.6	$1,434
Preparation of written submissions	24	1.5	$3,585
Preparation of bundle	25	0.6	$1,434
Appearance at hearing	26	0.25	$597.05
Sealing judgment	29	0.2	$478
Filing memorandum on costs	11 (by analogy)	0.4	$956
Sealing costs judgment	29	0.2	$478
Overall Total:	4.35	$10,396.05

[6]                  The costs are largely orthodox. The only questionable entry is the penultimate step. While the Court has power to award such costs (costs on costs), it tends to happen only when the costs memoranda were significant and the subject of dispute.3 The costs memorandum here is extremely brief and essentially consists only of a list of the steps claimed. Furthermore, it has not been contested by the represented defendants. It would be unfair to make them contribute to the cost of that memorandum. I do not consider that it would be appropriate to certify for the memorandum in this case. This reduces the costs payable to $9,440.50.

[7]HJS claims the following disbursements:

Disbursement	Cost
Sealing fee ($50.00) x 2	$86.96
Filing fee ($500)	$434.78
Service fees ($1,265)	$1,100
Overall Total:	$1,621.74

3      Jeffreys v Morgenstern [2013] NZHC 1361 at [40]; Epsom Woods Ltd v Waitakere Farms Ltd [2020] NZHC 3137 at [4]; and Combined Property Maintenance Limited v Singh [2021] NZHC 621.

[8]These are orthodox and the represented defendants do not take issue with them.

Should the costs order be made severally?

[9]                  Rule 14.14 provides that the liability of multiple parties ordered to pay costs is by default joint and several, but permits the court to order otherwise. This discretion is generally employed when one defendant (or plaintiff) was successful while their fellow defendant (or plaintiff) was unsuccessful, so it would be unjust to make the successful party liable for the unsuccessful party’s costs order, or where one defendant (or plaintiff) took a reduced part in the proceeding.4

[10]              In this case, the defendants were sued in their capacities as trustees. Costs are not sought against them in their personal capacities. They are entitled to be indemnified from the assets of the trust.

[11]I decline to make the order severally.

Result

[12]              I award HJS Ag Ltd costs on a 2B scale basis, which totals $9,440.50. I also award HJS Ag Ltd $1,621.74 in disbursements. The total award is therefore

$11,062.24. The defendants are jointly and severally liable for payment of that sum.

Brewer J

4      Hong v Deliu [2016] NZCA 75.