Hodder v Baker - [2017] NZHC 548

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2016-454-92 [2017] NZHC 548

UNDER the Companies Act 1993

BETWEEN

WALLACE DOUGLAS HODDER AND ANN ADELE HODDER

Plaintiffs

AND

CHRISTOPHER DUNCAN BAKER AND KATHRYN ANN BAKER

First Defendants

KADD FARM LIMITED Second Defendant

Hearing: On the papers

Counsel:

M E Parker for Plaintiffs
J W Maassen and S F Clark for Defendants

Judgment:

24 March 2017

JUDGMENT OF ELLIS J

[1] On 6 October 2017 I delivered judgment in favour of the plaintiffs under conditions of some urgency. The judgment was concerned with both a substantive application for shareholder relief under the Companies Act 1993 and with an interlocutory application by the defendants relating to various matters that had arisen immediately prior to the hearing. My judgment recorded that I had not heard from the parties on costs and that memoranda could be filed.

[2] Subsequently:

(a) the plaintiffs have sought costs on a 2B basis (generally) and on a 2C

basis (in relation to particular steps) plus a 50 per cent uplift under

HODDER v BAKER [2016] NZHC 548 [24 March 2017]

r 14.6 on the basis that (they say) the defendants’ conduct was

unreasonable and contributed to the costs of the proceeding;1

(b) the defendants have said that:

(i) for a number of reasons, costs should be refused; or

(ii)an award of 2B costs reduced by 50 per cent should be made pursuant to r 14.7; and

(iii)they take issue with a number of the costs specific items claimed;

(c) the defendants also seek a stay of any costs order made, pending their appeal of my judgment.

Discussion

[3] I have carefully read the submissions for both sides. I can see no reason to depart from a standard 2B costs order (I deal with the specific disputed items later, below). Informing that view is the following:

(a) although the proceeding was brought under the Companies Act it is, at its heart, a family dispute;

(b)there was a period of 16 days from the filing of proceedings until the delivery of judgment. It is difficult to see how a costs award of approximately $85,000 (as sought by the plaintiffs) could possibly be justified;

(c) the fact that some of the steps took longer than is contemplated by the
2B scale is not, by and of itself, a reason to make a 2C award in relation to those steps;

1 The increased costs and disbursements claimed total $85,338.88.

(d)the claim as it was originally framed did not really succeed. In particular, the statutory provisions relied upon and the relief sought changed as a result of the Court’s involvement;

(e) although I dismissed the defendants’ interlocutory application relating to alleged pre-hearing procedural defects on the grounds that any such defects caused them no significant prejudice, there is no doubt that some unfortunate mistakes were made by the plaintiffs which would certainly have added to the pressure that the defendants were put under;

(f) equally, there can be little doubt that the…

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 Hodder v Baker

Details

AGLC: Hodder v Baker [2017] NZHC 548
Case: [2017] NZHC 548
Decision Date: 24 March 2017

CaseChat Overview and Summary

In the High Court of New Zealand, the plaintiffs, Wallace Douglas Hodder and Ann Adele Hodder, sought shareholder relief under the Companies Act 1993 against the defendants, Christopher Duncan Baker, Kathryn Ann Baker, and Kadda Farm Limited. The plaintiffs argued that the defendants were engaging in conduct that unfairly prejudiced the minority shareholders of the company. The defendants contested the claims and raised several interlocutory issues. The court was required to decide on the substantive shareholder relief claims and the interlocutory matters raised by the defendants.

The court determined that the proceeding, although initiated under the Companies Act, was fundamentally a family dispute. The court considered that the defendants' conduct was unreasonable, which contributed to the costs of the proceeding. The plaintiffs sought a costs order on a 2B basis and a 2C basis for particular steps, along with a 50 per cent uplift. The defendants argued that costs should be refused or reduced, and they contested specific items claimed by the plaintiffs. The defendants also sought a stay of any costs order pending their appeal of the substantive judgment.

The court decided that a standard 2B costs order was appropriate, noting that the proceeding was a family dispute and the time taken to resolve the matter was not excessive. The court rejected the defendants' arguments for refusing or reducing costs, as the defendants were the unsuccessful party. The court made adjustments to the costs claimed by the plaintiffs, reducing the amount to $40,000. The defendants requested a stay of the costs order pending their appeal, but the court noted that no formal application had been filed, and no evidence supported the request. The court ordered the defendants to file a formal application with supporting evidence, allowing the plaintiffs an opportunity to respond.

The court ordered the defendants to pay the plaintiffs' costs and disbursements in the amount of $40,000. If the defendants pursued the stay application, they were required to file a formal application with an affidavit and brief submissions within 10 working days. The plaintiffs would then have 10 working days to file a notice of opposition and brief submissions in response, after which the matter would be referred to the court for a decision on the papers.

Orders