Houghton v Saunders - [2019] NZHC 2567

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2008-409-348

[2019] NZHC 2567

BETWEEN
ERIC MESERVE HOUGHTON

Plaintiff

AND

TIMOTHY ERNEST CORBETT SAUNDERS, SAMUEL JOHN MAGILL, JOHN MICHAEL FEENEY, CRAIG

EDGEWORTH HORROCKS, PETER DAVID HUNTER, PETER THOMAS and JOAN WITHERS
First Defendants

CREDIT SUISSE PRIVATE EQUITY INCORPORATED

Second Defendant

CREDIT SUISSE FIRST BOSTON ASIAN MERCHANT PARTNERS LP

Third Defendant

On papers

Judgment:

9 October 2019

JUDGMENT OF DOBSON J

[Stage Two Interlocutory Costs]

[1] By memorandum dated 11 September 2019, counsel for all defendants requested that I settle the quantum of costs entitlements in their favour for a number of interlocutory arguments relating to stage two of this proceeding.

[2] The defendants also sought an order that costs be personally payable by the funder involved, Joint Action Funding Limited (JAFL) and its alter ego, Mr Anthony Gavigan.

HOUGHTON v SAUNDERS [2019] NZHC 2567 [9 October 2019]

[3]On 25 September 2019 I received memoranda from:

· counsel for the plaintiff opposing components of the costs claimed, and

· Mr Gavigan opposing any order to pay costs being made against either him or JAFL.

[4] On 8 October 2019, I received a supplementary memorandum from counsel for the plaintiff relating to disbursements.

[5] At the time of the various judgments to which the present cost claims relate, I considered it appropriate to defer quantification of costs given the state of issues that were then unresolved. Most particularly, these were outstanding issues for funding of the stage two claims, and more recently the non-compliance with orders for security for costs on stage two.

[6] I accept it is now appropriate that the costs for the stage two interlocutory arguments be settled.

Successful opposition to strike out application

[7] The plaintiff sought to strike out pleadings for the defendants that foreshadowed reliance on s 63 of the Securities Act 1978. I dismissed the strike out application in a judgment of 15 May 2019.1 An appeal from that judgment has subsequently been dismissed by the Court of Appeal.2

[8] The defendants contend that the complexity of the proceeding justifies category 3 costs.

[9] Each of the first defendants (former Feltex directors) who were separately represented in opposing the strike out seek separate awards of costs on the basis that individual director defendants had different interests. The first defendants other than Mr Magill and Ms Withers (the majority directors) claim a band C allowance for

1 Houghton v Saunders [2019] NZHC 1061.
2 Houghton v Saunders [2019] NZCA 404.

preparation of written submissions, and band B for other steps, including an appearance by third counsel. Counsel for Mr Magill and Ms Withers additionally claim category 3B costs for their contributions to notices of opposition and preparation of written submissions.

[10] The plaintiff contended this application was not sufficiently complex to warrant category 3 classification. He contended that 2B costs would be sufficient, except for the two sets of written submissions filed (one combined set for…

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 Houghton v Saunders

Details

AGLC: Houghton v Saunders [2019] NZHC 2567
Case: [2019] NZHC 2567
Decision Date: 9 October 2019

CaseChat Overview and Summary

The case of Houghton v Saunders involved a complex dispute with multiple defendants in the High Court of New Zealand. The plaintiff, Eric Meserve Houghton, sought to recover damages from various defendants, including former Feltex directors and financial institutions, over alleged breaches of fiduciary duty and mismanagement of company funds. The defendants contested the claims, leading to a series of interlocutory applications and hearings. The court was tasked with determining the quantum of costs for various interlocutory arguments and applications made by the defendants. This included costs related to a successful strike-out application, a successful application for security for costs, and various stage two interlocutory applications. The defendants sought category 3 costs for the complexity of the proceeding, while the plaintiff argued for lower categories. The court found that while some aspects of the proceeding warranted higher costs, not all steps were equally complex. The court allowed category 3 costs for the preparation of written submissions and category 2 costs for other steps, disallowing certain appearance items. The court also addressed the issue of whether the costs orders should be enforceable against the plaintiff's funder, Joint Action Funding Limited (JAFL) and its alter ego, Mr Anthony Gavigan. Given Mr Gavigan's significant involvement in the litigation and his financial interest in the outcome, the court ruled that he should be liable for costs orders made in favour of the defendants, contingent on the plaintiff failing to meet such liabilities within a reasonable period. The court deferred final enforcement of the costs orders pending resolution of the claimants' appeal to the Court of Appeal.

Orders