Hughes v Fea

[2014] NZHC 206

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2013-425-261 [2014] NZHC 206

BETWEEN  JOHN STANLEY HUGHES and IRMA AINSLIE HUGHES

Appellants

ANDDUNCAN VARNHAM FEA and PETER HEENAN

Respondents

Hearing:                   On the papers

Appearances:           C S Withnall QC and J G Lucas for appellants

J N P Young and E L R Higbee for respondents

Judgment:                19 February 2014

JUDGMENT OF LANG J [on costs]

This judgment was delivered by me on 19 February 2014 at 2.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

HUGHES v FEA and HEENAN [2014] NZHC 206 [20 February 2014]

[1]      On 30 October 2013, I delivered a judgment determining an appeal by Mr and Mrs Hughes against a determination of the District Court on a preliminary issue.1      At  the  conclusion  of  my  judgment,  I  observed  that  both  parties  had succeeded to some extent.   For that reason, my preliminary view was that costs should lie where they fall.  I invited counsel to file brief memoranda if they took a different view.  Both counsel have now availed themselves of the opportunity to file memoranda in relation to costs.

[2]      Counsel for Mr and Mrs Hughes submits that his clients should receive costs because they were effectively the successful parties on the appeal.   Counsel for Messrs Fea and Heenan submits that both parties succeeded to some extent, and that my judgment effectively extinguished the basis of Mr and Mrs Hughes’ substantive claim.  He therefore submits that costs should lie where they fall.

Decision

[3]      The substantive claim in the District Court is based on conversion.  Mr and Mrs Hughes contend that Messrs Fea and Heenan converted bulbs that Mr and Mrs Hughes had agreed to lease to Global Bulbs Limited in 2005.   The issue I was required to determine on the appeal was whether the lease arrangement created a security  interest  that  was  required  to  be  registered  under  the  provisions  of  the Personal Properties Securities Act 1999 (“the Act”).

[4]      I held that the lease arrangement did not create a registrable security interest in  respect  of  either  the  original  bulbs  or  any  bulbs  that  Global  Bulbs  Limited acquired to replace bulbs that it had sold in the ordinary course of its business.   I held, however, that the lease created a security interest in respect of the sale proceeds of any bulbs sold by Global Bulbs or its receivers.  The latter conclusion led to my tentative view that both parties had succeeded to some extent, and that costs should lie where they fall.

[5]      Counsel for Mr and Mrs Hughes rightly points out that his clients have never sought an interest in the proceeds of sale.   Rather, their claim is based solely in

1      Hughes v Fea [2013] NZHC 2863.

conversion, and relates only to the bulbs themselves.  This persuades me that Mr and Mrs Hughes were the successful parties on the appeal, and that they should be entitled to an award of costs.

[6]      It would be inappropriate for me to reach any conclusion on the submission for Messrs Fea and Heenan that my judgment has effectively determined the substantive claim in their favour.  That issue will need to be determined when the proceeding returns to the District Court.

Result

[7]      Mr and Mrs Hughes are entitled to costs on a Category 2 Band B basis, together with disbursements as fixed by the Registrar.

Lang J

Solicitors:

Lucas and Lucan, Dunedin

Preston Russell Law, Invercargill
Counsel:

C Withnall QC, Dunedin