Island Grace (Fiji) Limited (in receivership and in liquidation) v Satori Holdings Limited (in interim liquidation)

[2023] NZHC 997

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2022-419-000145

[2023] NZHC 997

BETWEEN

ISLAND GRACE (FIJI) LIMITED (IN

RECEIVERSHIP AND IN LIQUIDATION)
Plaintiff

AND

SATORI HOLDINGS LIMITED (IN INTERIM LIQUIDATION

Defendant

Hearing:	On the papers
Counsel:	A S Olney and B E Marriner for Plaintiff L A O’Gorman KC for Defendant
Judgment:	1 May 2023

JUDGMENT OF ANDREW J

[Costs]

This judgment was delivered by Justice Andrew on 1 May 2023 at 3.00 pm

pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar

Date …………………………..

ISLAND GRACE (FIJI) LTD (IN REC AND IN LIQ) v SATORI HOLDINGS LTD (IN INTERIM LIQ) [2023] NZHC 997 [1 May 2023]

Introduction

[1]                 On 17 February 2023, I granted the plaintiff’s application and placed the defendant company into liquidation pursuant to s 241 of the Companies Act 1993.1

[2]This judgment contains my decision on costs.

Discussion

[3]The general approach is, of course, that costs should follow the event.2 Rule

14.1 of the High Court Rules 2016 confers a wide discretion generally on the Court in relation to costs.

[4]                 I find that the contributory, Mr Griffiths, should pay costs to the plaintiff and on a 2B basis plus disbursements. Although formally a non-party, he effectively acted as a party and had, in my view, made himself liable to costs. He opposed, in substance, the liquidation application.3

[5]                 As to the calculation of the 2B costs, they are awarded on the basis of the calculations set out in the plaintiff’s memorandum dated 3 March 2023, though with some adjustments as follows.

[6]                 Firstly, I do not accept that costs should be awarded against Mr Griffiths for steps taken relating to the appointment of interim liquidators. In particular, no allowance will be made for items 22,  24  and  29,  either because  they  preceded  Mr Griffiths taking active steps in the proceeding or, in the case of the sealing of the order appointing interim liquidators to the company (item 29), would have been required in any event. These costs are to be ordered against the defendant company, Satori Holdings Limited.

[7]                 However, I accept that costs should be awarded against Mr Griffiths in relation to item 49 (filing of the statement of claim and other documents relating to the

1      Island Grace (Fiji) Ltd (in rec and in liq) v Satori Holdings Ltd (in interim liq) [2023] NZHC 219.

2      High Court Rules 2016, r 14.2(1)(a).

3      Concrete Structures (NZ) Ltd v Smith [2019] NZHC 2572 at [13]–[19], citing Reserve Bank of New Zealand v CBL Insurance Ltd [2019] NZHC 737.

liquidation) given that Mr Griffiths actively opposed the substantive liquidation proceedings.

[8]                 Furthermore, I accept that costs are appropriately awarded with respect to appearances at the case management conferences. The fundamental principle is that costs ought to follow the event and there is no basis for departing from this given that the case management conferences were necessitated by the applications and other steps taken in the proceeding by Mr Griffith as contributory. This includes steps taken in preparation for the first case management conference (item 10).

[9]                 I also accept that the hearing was of sufficient complexity to warrant a costs award for second counsel.  I agree with [10] of the plaintiff’s memorandum dated   17 March 2023 on this point.

[10]             The combined effect of these findings is to order costs against Mr Griffiths on a reduced basis of $33,092.50. The balance of the costs sought, $5,497, relating to items 22, 24 and 29, are ordered against the defendant company.

[11]             As to the disbursements, I accept that allowance should be made for process server fees. The fees claimed are supported by invoices, and I accept the quantum sought appropriately reflects the complexity of the service required. However, I agree with the submission of counsel for Mr Griffiths that this disbursement is properly that of the defendant company and not Mr Griffiths personally. The documents were served on the defendant company, rather than Mr Griffiths, with the three instances of service comprising of a notice of demand against the defendant company, a statutory demand for unpaid capital calls and the proceedings for the liquidation of the defendant company and appointment of interim liquidators.

[12] Disbursements associated with costs relating to the appointment of interim liquidators, outlined at [6] above, are also to be ordered against the defendant company rather than Mr Griffiths. The filing fees for the interlocutory application and for the sealed order for interim liquidation, totalling $217.39, are therefore ordered against Satori Holdings Limited.

[13]             However, I find that it is appropriate for disbursements to be awarded against Mr Griffiths in respect of the accommodation and meals of counsel. Again, invoices relating to these disbursements have been disclosed and I accept that the instruction of out of town counsel was appropriate in the circumstances.

Result

[14]             I order that Mr Griffiths is to pay costs of $33,092.50 to the plaintiff, along with disbursements of $4,037.72.

[15]             The defendant company, Satori Holdings Ltd, is to pay the remaining costs sought of $5,497 and disbursements of $1,749.29.

Andrew J