Houghton v Saunders

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.