Luo v Shiu

[2020] NZHC 3310

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-706

[2020] NZHC 3310

BETWEEN

ZHENLIN (ROBERT) LUO

First Plaintiff

KC BROTHERS LIMITED
Second Plaintiff

ANG YIP
Third Plaintiff

MANFEI COMPANY LIMITED
Fourth Plaintiff

AND

XIONGLING (ANNIE) SHIU

First Defendant

R & G PHOENIX LIMITED
Second Defendant

CSR POKENO LIMITED

Third Defendant

Hearing:

On the papers

Appearances:

SRG Judd for the First Plaintiff

D Bigio QC and H Lanham for the First Defendant

Judgment:

15 December 2020

JUDGMENT OF GAULT J

This judgment was delivered by me on 15 December 2020 at 2:30 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

LUO v SHIU [2020] NZHC 3310 [15 December 2020]

[1]    In this proceeding concerning a joint venture dispute, the first plaintiff sought an interlocutory injunction against the first defendant relating to the formation and governance of a company to enable a purchase of 50,000 square metres of land at Pokeno, due to settle on 23 December 2020. Following a hearing of the interim injunction application on 30 October 2020, the parties filed further memoranda and   I issued a minute on 4 November 2020 varying by consent an earlier 23 March 2020 consent order. In relation to costs, I said that the first plaintiff had not succeeded in terms of the interim order sought but the variation further protects his position, and that it may be appropriate for there to be no order as to costs. But if costs could not be agreed, I provided for brief memoranda to be filed and served and for costs to be determined on the papers.

Submissions

[2]    The first defendant seeks 2B scale costs and disbursements of $9,789.50 on the interlocutory application on the basis that the applicant abandoned the application for the relief sought in the application, and the amendments made to the 23 March 2020 orders were not proposed by the applicant but by the first defendant – no such variation was sought in the original application. The first defendant’s position is that those amendments were more in the nature of clarifications, rather than strictly necessary as the applicant was already protected post-settlement under the 23 March 2020 orders. The  first  defendant  submits  the  relief  actually  sought  by  the  first  plaintiff   –   a mandatory order directing the formation of a company and directorships – never had any prospect of success.

[3]    The first plaintiff submits there should be no order as to costs following resolution of the interlocutory application as the application was resolved by consent on terms that provide additional protection for his position. He submits that, although different from the orders sought, he had a measure of success. He relies on the negotiations preceding filing of the application, which indicated an agreement in principle and that the issue was whether both the first defendant and the first plaintiff should be directors of the company to be formed. Hence, Mr Judd for the first plaintiff submits it was reasonable to file the application, and then explore alternatives and reach a compromise.

Discussion

[4]    The interlocutory application was determined by consent but only after the hearing. As Mr Judd submitted, it was resolved on terms that provide additional protection for the first plaintiff’s position – even if in part clarification. While in this sense the first plaintiff had a measure of success, it was not in relation to the orders sought in the application.

[5]    Further, the fact that the parties were close to agreement on the incorporation of a company prior to the filing of the application is not significant. The parties did not agree as the appointment of directors was a sticking point. In those circumstances, the first plaintiff’s expectation that the Court would simply address that issue and in the face of opposition grant a mandatory interim injunction in the terms sought was at least optimistic. The first plaintiff’s position on costs would have more merit if the application had sought (even in the alternative) something like the further protections ultimately agreed.

[6]    On the other hand, the first defendant could have proposed the further protections earlier and avoided or minimised the protracted process. In the circumstances, an award of costs should be limited. I consider the first defendant is entitled to costs for its opposition to the interlocutory application, the preparation of written submissions and one memorandum only.

Result

[7]The first defendant is entitled to costs of $5,975 plus disbursements of $110.

Gault J

Solicitors / Counsel:

Mr SRG Judd, Barrister, Auckland

Mr Z Chen (first plaintiff’s instructing solicitor), Righteous Law, Auckland Mr D Bigio QC and M H Lanham, Barristers, Auckland

Ms J Pidgeon (first defendant’s instructing solicitor), Pidgeon Law, Auckland