Levin v Lawrence

[2012] NZHC 2166

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-956 [2012] NZHC 2166

UNDER  the Companies Act 1993

IN THE MATTER OF     the liquidation of Waterman Building

Supplies Limited (in liquidation)

BETWEEN  HENRY DAVID LEVIN AND VIVIEN JUDITH MADSEN-RIES AS LIQUIDATORS OF PERSONAL HOMES LIMITED

Applicants

ANDSTEPHEN MARK LAWRENCE AND ANTHONY JOHN MCCULLAGH AS LIQUIDATORS OF WATERMAN BUILDING SUPPLIES LIMITED Respondents

Hearing:         18 June 2012

Counsel:         N Malarao and J Blythe for applicants

D Hughes and P Gautam for respondents
K Fulton for Fletcher Distribution Limited

Judgment:      28 August 2012

COSTS JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 28 August 2012 at 2:15 pm

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:   N Malarao, Meredith Connell, Auckland:  [email protected] DM Hughes/P Gautam, Kensington Swan, Auckland: [email protected]; [email protected]

C L Waugh, Craig Griffin & Lord, Auckland: Copy: K Fulton, Auckland:  [email protected]

LEVIN & ANOR V LAWRENCE & ANOR HC AK CIV 2012-404-956 [28 August 2012]

[1]      The applicants are the liquidators of Personal Homes Limited, a company which was a creditor of Waterman Building Supplies Limited, of whom the respondents are the liquidators.

[2]      In a judgment dated 25 June 2012, I dismissed the application for orders that Waterman not be removed from the Companies Register and directing the liquidators to permit inspection of the accounts and records of the liquidation and the accounts and records of Waterman under s 256(1)(a)(ii) of the Companies Act 1993.

[3]      Waterman was the company vehicle for a joint venture between Waterman Enterprises Limited, Trade Mart Limited and Fletcher Distribution Limited (FDL) for the operation of a PlaceMakers franchise.   In the originating application, the applicants sought a direction that the application be served on the liquidators and FDL as a party affected by the application.

[4]      FDL was not formally joined as a party but it filed a notice of opposition to the application.   FDL issued a notice that it wished to cross-examine one of the applicants,  but  subsequently  abandoned  that  intention.    FDL  did  not  file  any evidence in relation to the matter but was represented by counsel at the hearing and Mr Fulton appeared to advance oral argument in support of written submissions which he had filed. The submissions were helpful.

[5]      The respondent liquidators seek costs of $8,955 calculated in accordance with the schedules to the High Court Rules on a category 2B basis.  That application is not opposed by the applicants.

[6]      FDL also seeks costs, claiming $5,970 on a 2B basis.

[7]      It is not disputed that the Court has jurisdiction to award costs to FDL as an intervener.[1]    Mr Fulton first points to service of the proceeding on FDL as a party affected by the application, being the other primary creditor of the company in liquidation.  He also indicates that FDL or, at least, the joint venture company, was

the  ultimate  target  of  the  applicants  in  applying  for  permission  to  review  the

accounts of the liquidation and the company in liquidation.  I accept that it was clear that the applicants’ purpose in seeking access to the accounts and records was to determine whether there was evidence to suggest that FDL or the joint venture company had received preferential treatment in the course of the liquidation, or whether the liquidators had elected without good cause not to pursue the possibility of a claim against either of those companies.

[1] Judicature Act 1908, s 99A; High Court Rules, r 14.1; Diagnostic Medlab v Auckland District

Health Board HC Auckland CIV 2006-404-4724, 13 June 2007.

[8]      Mr Fulton also points to aspects of the argument which he presented on behalf of FDL to which reference was made in the course of my judgment.  Further, he submits that FDL’s involvement did not unduly prolong the hearing.  Finally, he pointed to an invitation in an email to the plaintiffs’ solicitors some weeks before the hearing inviting the applicants to “gracefully withdraw the application.”

[9]      While Mr Fulton’s arguments are well founded, I am not persuaded that a separate award of costs should be made in favour of FDL.  FDL’s interests and those of the liquidators were similar or overlapping.  To the extent that submissions were presented on behalf of FDL which did more than merely repeat arguments advanced on behalf of the respondent liquidators, co-operation between counsel could have seen  those  additional  arguments  incorporated  into  the  respondents’ submissions. Although r 14.15 did not apply, in that FDL was not a respondent, I consider the policy underpinning that rule to have analogous application here.   The respondent liquidators and FDL had common or overlapping interests in the outcome of the proceeding.   The combined submissions of counsel for the respondents and FDL were   directed   to   the   principal   argument   which   was   focused   on   statutory interpretation and the application of the statutory regime.

[10]     FDL’s  application  for  costs  is  refused.    Without  opposition,  I direct  the applicants to pay a contribution of $8,995 to the costs of the respondent liquidators.

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Toogood J