Macey v J K Trading Limited

[2020] NZHC 1591

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE

CIV-2019-443-076

[2020] NZHC 1591

UNDER

part 19 of the High Court Rules 2016 and s 284 of the Companies Act 1993

IN THE MATTER

of an application concerning Rimpro-Tec Ltd (in liquidation)

BETWEEN

PHILIP CRAIG MACEY and JAMES GREGORY EDEN

Applicants

AND

J K TRADING LIMITED

Respondent

Counsel:

T Wano for applicants

E St John for respondent

Judgment:

7 July 2020

COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[On the papers]

[1]    This is an application for costs by the respondent following the applicant’s filing of a notice of discontinuance. Rule 15.23 provides that when a plaintiff or applicant files such a notice in the absence of any arrangement in relation to costs then the defendant or respondent is entitled to scale costs in respect of matters up to the date of the discontinuance. However, costs are of course always a matter for the Court’s discretion so that is not an absolute entitlement.

[2]    Mr Wano for the applicants and Mr St John for the respondent have filed memoranda in relation to costs, for which I thank them.

MACEY v J K TRADING LIMITED [2020] NZHC 1591 [7 July 2020]

[3]    The essential issue seems to be whether the applicants were justified in commencing their proceeding in the first place.

[4]    For reasons that it is not necessary to go into here, on 20 May 2020 I had occasion to issue a minute in this proceeding. In that minute I indicated that my preliminary view was that the applicants, who were the liquidators of Rimpro-Tec Ltd (in liq) were not entitled to the first order sought by them in their proceeding, that is to say an order effectively approving their actions to date in the liquidation, but that I expected that it would be appropriate to make the second order sought by them, an order removing them as liquidators and appointing alternative liquidators (that application being supported by the respondent).

[5]    I do not accept the submission made on behalf of the respondent that the liquidators should not have commenced this proceeding. Even although I was unsympathetic to the first component of their application, I can see why they thought it appropriate to seek the Court’s assistance with their own removal and replacement. Essentially, as I commented in my minute, this company is deadlocked, with the respondent and the other creditors unable to agree on the appointment of alternative liquidators if the applicants were to be replaced.

[6]    To that extent, I accept Mr Wano’s submission that it was necessary for the liquidators to commence this proceeding.

[7]    In my view, the appropriate course here is to award costs on a 2B basis against the liquidators on the basis that those costs are to be paid from the assets of the company in liquidation, and that is the order that I make.

Associate Judge Johnston

Solicitors:

Govett Quilliam, New Plymouth for applicants Ewart & Ewart, Auckland for respondent