Intelact Limited v Fonterra TM Limited

[2017] NZHC 2267

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

COMMERCIAL LIST

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-002465 [2017] NZHC 2267

BETWEEN

INTELACT LIMITED

First Plaintiff/First Respondent

NUTRINZA LIMITED
Second Plaintiff/Second Respondent

AND

FONTERRA TM LIMITED First Defendant/First Applicant

RD1 LIMITED

Second Defendant/Second Applicant

Hearing:	(On the papers)
Judgment:	19 September 2017

COSTS JUDGMENT OF VENNING J

This judgment was delivered by me on 19 September 2017 at 11.30 am, pursuant to Rule 11.5 of the

High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Chapman Tripp, Wellington

INTELACT LIMITED v FONTERRA TM LIMITED [2017] NZHC 2267 [19 September 2017]

Anthony Harper, Auckland

Copy to:           D McLellan QC, Auckland

[1]      In the judgment of 6 June 2017 granting the application for strike out and summary judgment the Court indicated the defendants were entitled to costs with Category 2 being appropriate.   Counsel subsequently exchanged memoranda but regrettably  the  Registry  failed  to  refer  those  costs  memoranda  to  me  until  18

September 2017.  I apologise to counsel and parties for the attendant delay in issuing this costs judgment.

[2]      The successful defendants argue for costs to be calculated on a 2B basis except for the following steps which they argue should be calculated on a 2C basis:

(a)       commencement of defence;

(b)       filing interlocutory application;

(c)       preparation of written submissions;  and

(d)      preparation of bundle.

[3]      The defendants also seek an uplift in costs at the rate of 75 per cent as they submit:

(a)the plaintiffs contributed unnecessarily to the time and expense of the proceeding;  and

(b)the plaintiffs’ unmeritorious challenge was to a confidential and privileged settlement agreement, and parties which seek to relitigate settlement agreements should expect adverse consequences.

[4]      On receipt of counsels’ memoranda I have reviewed the file.  I have a clear view as to costs. It is that costs should be fixed on a category 2 time band B basis for all steps in the proceeding and that there should be no uplift.

Time allocation

[5]      The preparation of the defence, application for strike out/summary judgment, submissions and bundle should have taken no more than a normal amount of time for steps of that nature in proceedings of this nature in this Court.  I do not consider that a comparatively large amount of time should have been required for such steps.  This was an application primarily focused on the correct construction of a settlement agreement.

Uplift

[6]      Nor do I accept that any uplift, let alone an uplift of 75 per cent is justified in this case.  The points taken by the plaintiff, while ultimately dismissed by the Court, were not devoid of legal merit. It cannot be said the plaintiff acted unreasonably. The interlocutory matters leading up to the ultimate hearing including the application to join Mr Minkhorst were able to be dealt with in short order.

[7]      Rather than being an aggravating factor the fact that counsel did not rely on a particular cause of action or argument at the hearing counts against an increase in costs rather than supporting it.

[8]      In the context of a commercial case involving a settlement with significant commercial ramifications for the parties the arguments advanced by the plaintiff were reasonably available to it.

[9]      The  defendants  also  refer  to  the  practical  effect  of  the  challenge  to  the settlement agreement and publicity relating to it. It is not the function of a costs award to punish parties for the practical consequences of a hearing before the Court.

[10]     I decline the defendants’ application for an increase in costs.

Second counsel

[11]     I deliberately did not allow for second counsel in the costs award. While there

were two defendants represented by defendants’ counsel, second counsel did not take

an active part in the hearing. Without diminishing the assistance that I am sure second counsel gave to Mr Kalderimis, given the context of a short hearing involving a half day I confirm my decision not to make an allowance for second counsel.

Result

[12]    The defendants are to have costs in the sum of $19,788 together with disbursements of $1,960, in total $21,748.00.

Venning J