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Houghton v Saunders

Houghton v Saunders

Case [2015] NZHC 548 24 March 2015

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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2008-409-348 [2015] NZHC 548

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 INC (FORMERLY CREDIT SUISSE FIRST BOSTON PRIVATE EQUITY INC)

Second Defendant

CREDIT SUISSE FIRST BOSTON ASIAN MERCHANT PARTNERS LP Third Defendant

FIRST NEW ZEALAND CAPITAL Fourth Defendant

FORSYTH BARR LIMITED Fifth Defendant

Hearing: 3-4 February 2015

Counsel:

P A B Mills for plaintiff
D J Cooper and S V A East for first defendants

J B M Smith QC and O E Jaques for second and third defendants

D H McLellan QC and J S Cooper for fourth defendant
A C Challis and D P Turnbull for fifth defendant
K M Paterson for Harbour Litigation Investment Fund LP and
Joint Action Funding Limited (the non-parties)

Judgment:

24 March 2015

HOUGHTON v SAUNDERS [2015] NZHC 548 [24 March 2015]

RESERVED JUDGMENT OF DOBSON J (Costs)

Contents

Does the plaintiff ’s funded status entitle the defendants to indemnity costs? .............................. [5] The nature of the litigation funders’ liability to pay costs orders ............................................... [16] Increased costs ................................................................................................................................. [29] Indemnity costs ................................................................................................................................ [36] Varying previous costs categorisation............................................................................................ [44] Directors’ scale costs entitlement ................................................................................................... [51] Directors’ claim for increased costs ............................................................................................... [66] Directors’ disbursements ................................................................................................................ [80] Mr Horrocks’ scale costs entitlement............................................................................................[112] Mr Horrocks’ disbursements.........................................................................................................[118] Credit Suisse scale costs entitlement ............................................................................................ [120] Credit Suisse claim for increased costs ........................................................................................ [135] Credit Suisse disbursements ......................................................................................................... [136] FNZC scale costs entitlement ....................................................................................................... [148] FNZC claim for increased costs ................................................................................................... [152] FNZC disbursements .................................................................................................................... [156] ForBar scale costs entitlement...................................................................................................... [158] ForBar claim for increased costs.................................................................................................. [162] ForBar disbursements................................................................................................................... [164] Another approach: Holdfast not applying to protracted cases .................................................. [166] Costs on the costs application....................................................................................................... [174]

[1] On 15 September 2014, I delivered judgment in this proceeding which represents a claim by shareholders of Feltex Carpets Limited for losses flowing from allegedly misleading content in, or omissions from, a prospectus issued in May
2004.1 My judgment was in favour of the defendants on all of numerous causes of

action.

[2] The plaintiff accepted that costs should follow the event, but disputed various claims for increased or indemnity costs, challenged the category of scale costs claimed for some pre-trial aspects on which costs have not previously been settled, and questioned numerous items of disbursements claimed on behalf of various defendants.

[3] With a thoroughness commensurate with the rest of the proceedings, counsel spoke to detailed written submissions over two full days, with contrasting final positions on a substantial number of the components of relevant costs claims.

[4] Before addressing the contested aspects of the claims for each defendant, it is appropriate to determine various issues that have broader relevance.

Does the plaintiff ’s funded status entitle the defendants to indemnity costs?

[5] Mr Smith QC for the second and third defendants (Credit Suisse) took the lead on an argument that because the proceedings had…

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 [2015] NZHC 548
Case: [2015] NZHC 548
Decision Date: 24 March 2015

CaseChat Overview and Summary

- Parties: The case involves Eric Meserve Houghton as the plaintiff and several defendants including Timothy Ernest Corbett Saunders, Samuel John Magill, John Michael Feeney, Craig Edgeworth Horrocks, Peter David Hunter, Peter Thomas, Joan Withers, Credit Suisse Private Equity Inc (formerly Credit Suisse First Boston Private Equity Inc), Credit Suisse First Boston Asian Merchant Partners LP, First New Zealand Capital, and Forsyth Barr Limited.

- Nature of the dispute: The dispute stems from a claim by shareholders of Feltex Carpets Limited for losses arising from allegedly misleading content in, or omissions from, a prospectus issued in May 2004. The plaintiff accepted that costs should follow the event but disputed various claims for increased or indemnity costs, challenged the category of scale costs claimed for some pre-trial aspects, and questioned numerous items of disbursements claimed on behalf of various defendants.

- Court: The case was heard in the High Court of New Zealand, Wellington Registry.

- Legal issues: The court had to decide on several legal issues including whether the plaintiff’s funded status entitles the defendants to indemnity costs, the nature of the litigation funders’ liability to pay costs orders, the criteria for increased or indemnity costs, and the appropriate scale and category for costs claimed by various defendants.

- Court's reasoning and outcome: The court rejected the argument that the plaintiff’s funded status should entitle the defendants to indemnity costs, reasoning that it would deter the pursuit of class actions where they are justified in facilitating access to justice. The court found that while the litigation funders had a realistic prospect of liability for adverse costs, it was not appropriate to impose joint and several liability on them without considering the circumstances of their involvement. The court also addressed the claims for increased or indemnity costs by each defendant, considering the complexity of the case, the conduct of the parties, and the reasonableness of the costs claimed. The court awarded costs to the defendants, including increased costs and disbursements, but did not grant indemnity costs.

- Final orders: The court ordered that each defendant is entitled to costs and disbursements as detailed in the judgment, with specific amounts allocated for scale costs, increased costs, and disbursements. The total costs awarded to the defendants, together with disbursements, amounted to approximately $3,066,044.05. The court also ordered that the plaintiff is to pay costs on the costs application.

Orders