Levin v Rastkar

IN THE COURT OF APPEAL OF NEW ZEALAND

CA755/2009
[2011] NZCA 399

BETWEEN HENRY DAVID LEVIN AND BARRY PHILLIP JORDAN
Appellants

AND SOMBOUN RASTKAR
Respondent

Hearing: 17 November 2010

Court: Chambers, MacKenzie and Simon France JJ

Counsel: T J Cooley and M L Broad for Appellants
R A A Weir for Respondent

Judgment: 19 August 2011 at 12 pm

JUDGMENT OF THE COURT

AThe appellant’s application to recall the judgment of 23 May 2011 ([2011] NZCA 210) is granted.
BOrder C is deleted and the following order is substituted:
No order as to costs in this Court. The costs order made in the High Court is quashed and the respondent must repay the costs of $5,920 paid to her by the appellants.

(There are consequential changes to the reasoning on costs in the High Court.)
CThe respondent must pay the appellant:
(a) costs of $1,000 with respect to this application; and
(b) disbursements namely $920 filing fee on the recall application.

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REASONS OF THE COURT

(Given by Chambers J)

On 23 May this year, we delivered a decision in this proceeding.[1] Henry Levin and Barry Jordan, the liquidators of Western Clothing Limited, were partly successful in their appeal against the High Court judgment.[2] Because honours were shared, we considered that the appropriate order so far as costs in this Court were concerned is that costs should lie where they fall.
[1] Levin v Rastkar [2011] NZCA 210.
[2] Levin v Rastkar HC Auckland CIV-2008-404-3965, 9 November 2009.
As for costs in the High Court, we said this:
[58]... The High Court judgment did not fix costs in that court. We express the view that costs in that court should also lie where they fall.
What we did not realise was that, after the parties received the High Court judgment, which gave a preliminary indication as to how costs should be dealt with, the liquidators and Somboun Rastkar, the defendant in the High Court and the respondent in this Court, agreed costs. They agreed the liquidators would pay Ms Rastkar costs in the sum of $5,920. The liquidators paid that sum.
Following the release of our judgment, Mr Cooley, for the liquidators, asked Ms Rastkar to repay the costs the liquidators had paid to her, it being clear that we thought costs in the High Court should lie where they fall. Ms Rastkar refused to repay. Mr Cooley then sought from Mr Weir, for Ms Rastkar, consent to recall of our judgment to provide for an order by consent that Ms Rastkar repay the High Court costs. Ms Rastkar refused to give her consent to such recall.
Mr Cooley then applied for a recall, on the basis it was obvious that we had proceeded on a mistaken assumption that no order to costs had yet been made with respect to the High Court proceeding. Ms Rastkar opposed the application. By consent, we dealt with the application on the papers.
We have no doubt at all that the application must be granted. It is clear from our judgment that we were labouring under a mistaken impression as to costs in the High Court. We made it abundantly clear that we considered costs in the High Court should lie where they fell. Ms Rastkar must have realised that, had we appreciated the parties had agreed costs in her favour based on her total success in the High Court, we would have quashed that High Court order and ordered her to repay the costs she had received.
For these reasons, the liquidator’s application is granted and we now make the order we should have made when delivering our earlier decision. We also retract [58] of the reasons for judgment and, in its place, substitute two new paragraphs ([58] and [59]) in the reasons supporting the reissued judgment.
We consider Ms Rastkar’s opposition to the recall application quite unreasonable and opportunistic. She has needlessly caused the liquidators extra expense in her attempt to hold on to what, following our decision, was a windfall. In those circumstances, it is proper that she should have to pay costs to the liquidators on the recall application. We fix those costs at $1,000. In addition, Ms Rastkar must reimburse the liquidators for the filing fee on the recall application ($920).

Solicitors:
Kensington Swan, Auckland, for the Appellant
DMA Burgess, Auckland for Respondents

The Court of Appeal of New Zealand was asked to review a decision made by the High Court in Levin v Rastkar. The liquidators of Western Clothing Limited, Henry Levin and Barry Jordan, were partly successful in their appeal against the High Court judgment. The appeal centred on the distribution of costs between the parties. The liquidators sought a recall of the Court of Appeal's earlier judgment, arguing that the Court had mistakenly assumed no order regarding High Court costs had been made. The Court of Appeal agreed that it had erred and recalled its earlier judgment.

The primary legal issue was whether the Court of Appeal had the authority to recall its previous judgment and correct its error regarding the distribution of High Court costs. The liquidators argued that the Court of Appeal had overlooked the fact that they and Ms Rastkar had agreed on High Court costs before the appeal was decided, resulting in the liquidators paying Ms Rastkar $5,920. Following the Court of Appeal's initial judgment, the liquidators requested Ms Rastkar to repay the sum, which she refused. The liquidators then applied to recall the judgment to ensure Ms Rastkar repaid the costs, but Ms Rastkar opposed the recall.

The Court of Appeal concluded that it had indeed erred in its previous judgment by not recognising the agreement on High Court costs between the parties. The Court granted the liquidators' application to recall the judgment and ordered Ms Rastkar to repay the $5,920 she had received from the liquidators. Additionally, the Court of Appeal ordered Ms Rastkar to pay the liquidators $1,000 for the costs of the recall application and $920 for the filing fee associated with it. The Court found Ms Rastkar's opposition to the recall application to be unreasonable and opportunistic, leading to the additional costs.

In summary, the Court of Appeal recalled its earlier judgment and corrected its error by ordering Ms Rastkar to repay the High Court costs to the liquidators and to pay additional costs related to the recall application. This decision ensured that the liquidators were not left bearing the burden of an unintended windfall.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established