Mainzeal Property and Construction Limited (in receivership and in liquidation) v Yan

[2016] NZHC 3071

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2015-404-001094

[2016] NZHC 3071

BETWEEN

MAINZEAL PROPERTY AND CONSTRUCTION LIMITED (IN RECEIVERSHIP AND IN

LIQUIDATION)
First Plaintiff

KING FAÇADE LIMITED (PREVIOUSLY KNOWN AS RICHINA

LAND LIMITED (in liquidation) Second Plaintiff

MAINZEAL GROUP LIMITED (in
liquidation)
Third Plaintiff

/2

Hearing:

(On the papers)

Appearances:

M OʼBrien QC, Z Kennedy and M Pascariu for Plaintiffs

D Chisholm QC, T P Mullins and C I Hadlee for 1st, 7th and 8th Defendants
J E Hodder QC, M D Arthur and L L Fraser for 2nd to 5th Defendants

Judgment:

15 December 2016

COSTS JUDGMENT OF VENNING J

ON APPLICATION TO VARY DISCOVERY ORDER

This judgment was delivered by me on 15 December 2016 at 2.15 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Minter Ellison Rudd Watts, Auckland

Lee Salmon Long, Auckland Chapman Tripp, Auckland

MAINZEAL PROPERTY AND CONSTRUCTION LIMITED (IN LIQ) v YAN [2016] NZHC 3071 [15

December 2016]

Copyto:            M O’Brien QC, Auckland D Chisholm QC, Auckland J E Hodder QC, Auckland

AND

ANDREW JAMES BETHELL, BRIAN MAYO-SMITH and STEPHEN JOHN

TUBBS as liquidators of MAINZEAL PROPERTY AND CONSTRUCTION

LIMITED (in receivership and in

liquidation), KING FAÇADE LIMITED (PREVIOUSLY KNOWN AS RICHINA

LAND LIMITED (in liquidation) and MAINZEAL GROUP LIMITED (in

lquidation) Fourth Plaintiffs

RICHARD CILIANG YAN

First Defendant

PETER GOMM
Second Defendant

RT HON JENNIFER MARY SHIPLEY
Third Defendant

CLIVE WILLIAM CHARLES TILBY
Fourth Defendant

SIR PAUL DAVID COLLINS

Fifth Defendant

SIEW MAY KWAN
Sixth Defendant

RICHINA GLOBAL REAL ESTATE LIMITED

Seventh Defendant

ISOLA VINEYARDS LIMITED

(previously known as WAIHEKE VINEYARDS LIMITED)

Eighth Defendant

Application for costs

[1]    On 27 October 2016 the Court made consent orders varying a previous discovery order originally made on 24 September 2015 and otherwise striking out the plaintiffs’ application for variation of discovery orders. Costs were reserved. Counsel have exchanged memoranda.

[2]    The second to fifth defendants seek costs on the application on a 2B basis ($6,355.50) together with disbursements of $110.00. The first, seventh and eighth defendants note they are content for the costs on the application to be reserved.

[3]    The plaintiffs propose that costs on the application should lie where they fall or alternatively should be reserved.

[4]    The second to fifth defendants argue for costs in their favour on the basis that the plaintiffs’ application to vary the discovery order was based on a mistaken premise as to the scope of discovery that would be required, that as a result of the defendants’ efforts the total number of documents required to be reviewed have been substantially reduced, and the plaintiffs’ application was far too broad ranging. The second to fifth defendants say that with their co-operation the time and costs associated with the discovery process has been reduced substantially. The defendants have gone to considerable lengths to assist the plaintiffs to undertake sensible electronic searches. By contrast the plaintiffs took a “suboptimal” approach to the discovery burden and applied to vary the discover orders prematurely.

[5]    The plaintiffs suggest costs should lie where they fall as the initial order required variation particularly because the defendants’ insistence that the period in issue should go back to 1 January 2009 increased the potential burden for discovery.

[6]    The plaintiffs say they have achieved a significant variation of the discovery orders reducing discovery from potentially in excess of 35,000 documents to some 2,305 documents.

Categorisation

[7]    A preliminary point arises. While the second to fifth defendants seek costs on a 2B basis, the proceeding was categorised as category 3 at the initial conference. Once fixed, categorisation for the proceeding itself remains throughout the proceeding unless there are special reasons to the contrary: r 14.3. What remains flexible throughout the proceeding is the time band to be allocated to each step in the process. Given the energy, attention and the issues raised by the discovery application I am satisfied it is appropriate that category 3 continue to apply and that there are not special reasons to the contrary.

[8]    The next preliminary point is that r 14.8 provides that costs on an interlocutory application must be fixed unless there are special reasons to the contrary. The presumption in that rule weighs against the suggestion that costs on the application be reserved.

[9]    Again I do not consider there are any special reasons in this case why the costs on the application should not be dealt with at this stage.

Decision

[10]   While there is some force in the defendants’ submission that the plaintiffs’ application to vary the original discovery order was overstated and the end result has been that the burden on the plaintiffs’ discovery has been significantly reduced, the outcome of the application was a variation to the original discovery order. To that extent the plaintiffs were successful.

[11]   It is apparent that a variation of some extent was required given the breadth of the initial order and the potential scope of the discovery exercise.

[12]   Further, r 8.2 expressly directs the parties to co-operate to ensure that discovery and inspection are proportionate and facilitated by agreement on practical arrangements. While the defendants make the point (reasonably) that through their efforts the scope was able to be reduced, there was an obligation on them to co-operate and to facilitate practical arrangements.

Result

[13]   Against that background and having reviewed the matter again, I consider that the costs on the application should lie where they fall. Order accordingly.

Venning J