Jerling v Moss Brothers Limited

[2013] NZHC 3438

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

CIV 2013-435-14 [2013] NZHC 3438

BETWEEN  MARK JOHN JERLING, ANNELINE JERLING & GAWITH TRUSTEES LIMITED JOINTLY (AS TRUSTEES OF THE JERLING TRUST),

CHRISTOPHER MAURICE KINGDOM, ANETTE KRISTIN KINGDON AND GAWITH TRUSTEES LIMITED JOINTLY (AS TRUSTEES OF THE HAVEN TRUST), MARK JOHN JERLING, CHRIS MAURICE

KINGDON AND TIMELESS HOMES LIMITED (FORMERLY RESIDENTIAL WELLINGTON-WAIRARAPA LIMITED)

Applicants

ANDMOSS BROTHERS LIMITED, MASTERTON RENTALS LIMITED, JACKIE LIM MOSS, JULIAN ROY MOSS AND SADLER OAKLY NEWMAN TRUSTEES LIMITED JOINTLY (AS TRUSTEES OF THE LIM MOSS JOINT TRUST), JACKIE

LIM-MOSS, JULIAN ROY MOSS AND PERIOD REPLICA HOMES LIMITED Respondents

Hearing:                   On Papers

Counsel:                  P S J Withnall for Applicants

D S Lester for Respondents

Judgment:                17 December 2013

COSTS JUDGMENT OF RONALD YOUNG J

JERLING & ORS v MOSS BROTHERS & ORS [2013] NZHC 3438 [17 December 2013]

[1]      In these proceedings the plaintiffs who were former franchisees and the respondents the franchisors had a falling out.  They subsequently were parties to an arbitration.   These proceedings  challenged  the  arbitrator’s  decision.    I found  in favour of the applicants.

[2]      The   applicants   sought   costs.      I   released   a   costs   judgment   on

4 December 2013 but as it turned out unbeknown to me, the day before, counsel for the respondents had  filed a memorandum  relating to  costs.   That memorandum sought further time to make submissions.   I, therefore, recalled my original costs judgment and gave the respondents further time to respond to the applicants’ application for costs.

[3]      The respondents mention three matters as relevant in their costs submissions: (a)     the applicants were only partially successful in their application;

(b)the basis on which the award was set aside did not arise from any act or omission by the respondents;

(c)       the balance of the reward remains enforceable.

[4]      In the proceedings in this court Timeless challenged three aspects of the award made against them:

(a)       the injunction;

(b)      damages of $50,000; and

(c)       costs.

[5]      I concluded that all three aspects of the awards, I accept that in making the orders I did, the applicants did not succeed in every argument raised, but they did succeed in every challenge.

[6]      As to the respondents’ observation that there was no act or omissions on their behalf which caused or contributed to the reasons to set aside the award, I agree with the observation but note it is irrelevant to a question of costs.

[7]      I  accept  that  the  balance  of  the  award  does  remain  enforceable  but  my concern was solely the three grounds of challenge, each of which were successful.

[8]      I have reconsidered my costs judgment of 2 December 2013 in light of those submissions.  The submissions made by the respondents have not changed any view I expressed in that judgment (of course the respondents had no onus on it to do so).

[9]      I,  therefore,  adopt  the  reasons  and  the  quantum  of  my  costs  award  of

2 December 2013 by reproducing the reasoning as follows in this judgment.

[10]     In these proceedings the applicants (collectively called Timeless) sought an order setting aside an arbitration award.  In my judgment of 1 November 2013 the applicants succeeded.  At the end of my judgment I invited the applicants, if they sought costs, to file a memorandum within 14 days and for Moss Brothers the respondents to respond within a further 14 days.

[11]     A   memorandum   as   to   costs   was   received   by   the   applicants   on

15 November 2013.    No  responding  memorandum  has  been  received  from  the respondents.

[12]     Timeless seek costs on a 2B basis save for one matter.  They seek 2C costs on filing the application for an order setting aside the arbitral award and supporting affidavit.

[13]     First, I am satisfied that this is a case where costs should follow the event and the applicant should have costs.   Secondly, I am satisfied that save for the commencement of the proceedings costs should be on a 2B basis.

[14]     As to the 2C costs application, the applicants say that given the complexity of the case there is a sound basis for awarding costs on a 2C rather than a 2B basis. The reasons include the complexity of the arbitration itself.  The affidavit in support of

the  application  was  substantial,  the  transcript  of  evidence  some  800 pages  was significant and the arbitrator’s decision lengthy.  The affidavit had to trace the arbitration process so that the Court understood one of the grounds for setting aside the arbitral award.

[15]     Further,  no  claim  is  made  by  the  applicant  for  costs  under  item 41  in Schedule 3 of the Rules for the preparation of a bundle for hearing.   Most of the relevant documents were attached to the affidavit filed by the applicants.  Finally, an affidavit in reply by the applicants was required.

[16]     In the circumstances, I am satisfied 2C costs are justified for the first step in the proceedings.  Accordingly, I award costs in favour of the applicants against the

respondents for $17,512; disbursements $4,178.59; a total of $21,690.59.

Ronald Young J

Solicitors:

P S J Withnall, Barrister, Wellington

Zone Law Limited, Wellington