LWR Durham Properties Limited (in receivership) v Vero Insurance New Zealand Limited

[2015] NZHC 1354

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-001781 [2015] NZHC 1354

BETWEEN

LWR DURHAM PROPERTIES

LIMITED (IN RECEIVERSHIP) Plaintiff

AND

VERO INSURANCE NEW ZEALAND LIMITED

First Defendant

IAG NEW ZEALAND LIMITED Second Defendant

Judgment:                15 June 2015

JUDGMENT OF GENDALL (As to Costs)

[1]      On 27 November 2014 the defendants applied to strike out this proceeding for failure on the part of the plaintiff to pay security for costs.  The plaintiff then provided security on or about 16 February 2015, just prior to the date for hearing of the strike out application on 19 February 2015.

[2]      The defendants say they effectively succeeded on their application in the sense that security for costs was paid immediately prior to the allocated hearing date. Accordingly, they now seek an award of costs and disbursements on a 2B basis with respect to their strike out application.

[3]      The  amount  sought   for  costs  here  totals  $4,278.50  together  with   a disbursement of $500 being the filing fee on the strike out application.

[4]      The defendants say their position is a simple one.  They contend that, had the plaintiff responded to their enquiries regarding its intention to pay the security for

costs required, this application could have been avoided.

LWR DURHAM PROPERTIES LIMITED (IN RECEIVERSHIP) v VERO INSURANCE NEW ZEALAND LIMITED [2015] NZHC 1354 [15 June 2015]

[5]      Certainly there is no argument that it was some months earlier on 18 July

2014 that Kós J in this Court ordered the plaintiff to pay security of $108,606.00 within 21 days of that date.

[6]      No security for costs was paid despite what seems to be regular enquiries made by the defendants of the plaintiff as to its intentions.  Indeed, in October 2014 the defendants advised the plaintiff that if it did not respond, the defendants would look to have the substantive proceeding dismissed.  No response was received from the plaintiff with respect to this comment.

[7]      In   all   these   circumstances   it   seems   entirely   understandable   that   the defendants filed the strike out application on 27 November 2014.

[8]      The strike out application itself was set down for hearing on 19 February

2015, and the defendants advised counsel for the plaintiff of this on 22 December

2014.

[9]      It seems that in January 2015 counsel for the plaintiff finally responded.  He told the defendants that security would be paid soon.  Further communication took place on the part of the defendants who asked when this security would be paid.  It seems nothing was heard further from the plaintiff until Friday 13 February 2015. At that point, counsel for the plaintiff advised that he had been instructed security would be paid on Monday 16 February 2015 and, if it was not, then there would “likely” be no opposition to the strike out application.

[10]     Finally, on 16 February 2015 the defendants were advised that the plaintiff’s solicitors had received funds to meet the security for costs.  Later this was paid.  The hearing of the strike out application accordingly did not go ahead.  However, it is clear that, as late as 13 February 2015, security for costs had not been paid and the plaintiff had not ruled out opposing the application if security was not paid.  It must follow therefore in my view that the defendants acted entirely properly in completing their preparations up to 16 February 2015 for hearing of the strike out application, a hearing which was due to take place on 19 February 2015.

[11]     In his memorandum dated 26 February 2015 regarding costs filed in this Court by Mr Rennie, counsel for the plaintiff, it does seem that the plaintiff accepts there is jurisdiction to make an award of costs here but he suggests that these costs should be assessed on a category 2A basis rather than as category 2B.

[12]     The plaintiff also appears to take issue with any costs allocation being made for written submissions on the strike out application itself, because the plaintiff says it advised the defendant that it did intend to provide security and no formal steps were taken to oppose the application itself.

[13]     Having considered this memorandum filed on behalf of the plaintiff, together with a memorandum dated 23 February 2015 from counsel for the defendants, I am of the view that costs on the usual category 2B basis in favour of the defendant should be awarded here.   There is no real opposition to an award of costs itself advanced by counsel for the plaintiff.  And, and indeed, I am satisfied that all steps taken by the defendants leading up to the hearing of the strike out application until the security was itself paid on 16 February 2015, were properly undertaken.

[14]     And, so far as Mr Rennie’s submissions regarding an allocation of costs for written submissions claimed by the defendants are concerned, I am satisfied that the amount claimed for this item, being 50% of the permitted costs under the schedule, was entirely proper.

[15]     In addition I find too that the claim by the defendants for 0.4 of a day for filing the costs submissions themselves is appropriately made here.

[16]     The 2B costs amounts claimed by the defendants in the memorandum from their counsel, which total $4278.50, together with the $500 disbursement for the filing fee on the strike out application, are reasonable here and appropriately sought.

[17]     An order is now made therefore that the plaintiff is to pay to the defendants costs on a category 2B basis totalling $4278.50 and disbursements totalling $500 for the filing fee on the strike out application.

...................................................

Gendall J

Solicitors:

Rhodes & Co, Christchurch

Jones Fee, Auckland