Jaychem Industries Limited v Vincents Preparations Limited

[2018] NZHC 1371

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2017-404-002875

[2018] NZHC 1371

BETWEEN

JAYCHEM INDUSTRIES LIMITED

Plaintiff

AND

VINCENTS PREPARATIONS LIMITED

First Defendant

LUCY VINCENT

Second Defendant

Hearing:

On the papers

Appearances:

K Gould for Plaintiff

A McDonald and C Rutledge for the First and Second Defendants

Judgment:

12 June 2018

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW ON COSTS

This judgment was delivered by me on

12.06.18 at 11:30am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

JAYCHEM INDUSTRIES LIMITED v VINCENTS PREPARATIONS LIMITED AND L VINCENT [2018] NZHC 1371 [12 June 2018]

Introduction

[1]                 Following my judgment of 24 May 2018 dismissing the plaintiff’s application for summary judgment, the defendants have sought indemnity costs of $25,000 plus GST or alternatively increased costs, based on a 50 per cent uplift from 2B costs of

$6,132.50.

[2]                 The plaintiff accepts that 2B costs should be awarded but opposes any indemnity or increased costs orders.

Decision

[3]                 In my judgment of 24 May 2018, I concluded that the plaintiff’s application went beyond simply failing; it was flawed and fell well short of establishing, in a clear and cogent manner and by reference to the critical documents, that the defendants had no defence to the claims.

[4]                 There is obvious merit to the submissions of Ms McDonald for the defendants that considerable time had to be spent by the defendants in attempting to navigate and understand the claim and reconstruct the historic chain of correspondence to piece together a coherent account of what had indeed taken place. On 22 December 2017 counsel for the defendants wrote to the plaintiff setting out in detail the manner in which the application and affidavit in support was flawed. The letter requested the plaintiff withdraw the application. No response was received, and the plaintiff continued pursuit of its summary judgment application.

[5]                 In the circumstances, I find that the defendants should be awarded increased costs, being costs on a 2B basis together with a 50 per cent uplift. The plaintiff’s pursuit of summary judgment was an unnecessary step or one that lacked sufficient merit. As counsel for the defendants submits, the plaintiff’s claim in the inadequate form presented, was not amenable to the summary judgment procedure.

[6]                 I do not accept that indemnity costs should be awarded. In Bradbury v Westpac Banking Corp1 it was held that the word “unnecessarily” in Rule 14.6 (4)(a) takes its

1 [2009] 3 NZLR 400.

meaning and flavour from the preceding adverbs “vexatiously, frivolously, improperly”. That high threshold has not been met in this case.

[7]                 In opposing the application for increased costs, the plaintiff has referred to passages in the evidence that were referred to me at the hearing. It is said that this evidence constitutes an admission of liability by the defendants. However, that evidence does not assist the plaintiff in defending the costs application. As I noted in my judgment, the evidence is ambiguous about what these acknowledgements relate to. The plaintiff fell well short of establishing that the defendants have no defence.

Result

[8]                 The plaintiff is to pay costs to the defendants in the sum of $9,319.71, being costs on a 2B basis, together with a 50 per cent uplift and disbursements.

Transfer of the proceeding to the District Court.

[9]                 In my judgment of 24 May 2018 I directed the parties to address the issue of whether I should transfer the proceeding to the District Court pursuant to s 94 of the District Courts Act 2016.

[10]              In his memorandum of 5 June 2018 counsel for the plaintiff submitted that there is little point in my transferring the proceeding to the District Court as ordinary proceedings will be commenced against the defendants in the District Court.

[11]              In the event that fresh proceedings are commenced in the District Court, it will be necessary to discontinue the proceeding in this Court. It may be that unnecessary cost and time can be avoided by transferring the proceedings to the District Court rather than commencing fresh ones in that jurisdiction. Counsel for the plaintiff is to advise the Court and the parties of his position by Friday, 22 June 2018.

Associate Judge P J Andrew