For a Court ready (fee required) version please follow this link
IN THE SUPREME COURT OF NEW ZEALAND
SC 105/2009 [2010] NZSC 124
BETWEENMANA PROPERTY TRUSTEE LIMITED Appellant
ANDJAMES DEVELOPMENTS LIMITED Respondent
Court:Elias CJ, Blanchard, Tipping, McGrath and Anderson JJ
Counsel:J M McCartney SC for Appellant C S Withnall QC for Respondent D M Lester for Liquidators of Respondent
Judgment:11 October 2010
JUDGMENT OF THE COURT (COSTS)
AThe application for costs against the liquidators personally is dismissed with costs to the liquidators of $2,500.
BThe costs award made by the Court of Appeal in favour of the respondent is reversed.
CThe appellant is awarded costs in this Court against the respondent in the sum of $15,000 together with reasonable disbursements to be fixed by the Registrar.
REASONS
(Given by Blanchard J)
[1] Mana Property Trustee Ltd has made an application for costs following its successful appeal to this Court.[1] It seeks costs in relation to both the Court of Appeal and Supreme Court stages of the proceeding not only against James Developments Ltd but also against its liquidators personally.
[2] James agreed to purchase some land from Mana for $4.5 million. It paid a deposit of $450,000 but later failed to settle. It alleged that it had validly cancelled the contract and asked for refund of the deposit. Mana brought the proceeding against James in the High Court seeking specific performance of the contract. On Mana’s application for summary judgment, the High Court made an order for specific performance.[2]
[2] Mana Property Trustee Ltd v James Developments Ltd (2009) 10 NZCPR 295 (HC).
[3] James appealed to the Court of Appeal and paid for security for costs in the sum of $4,740. It also applied to the High Court for a stay of execution pending appeal. On 28 May 2009 the High Court granted a stay on terms that James would, within 10 days, pay Mana’s costs awarded by the High Court and also pay $821,214.80 into Mana’s solicitors’ trust account. A further condition of the stay was that James would obtain a hearing of the appeal in the week commencing 20 July 2009 and diligently prosecute the appeal.
[4] These conditions, which necessarily related to the stay rather than to James’s ability to pursue the appeal (it was not an “unless” order), were not complied with. On 6 July Mr Chris James, the sole shareholder of James, by resolution placed James into liquidation and appointed two Dunedin insolvency practitioners, Mr Jenkins and Mr Nellies, to be its liquidators.
[5] On 17 July counsel for Mana asked the liquidators whether they intended to pursue the appeal. It was not until 20 August that the liquidators advised that they did. Mana then applied to the Court of Appeal for orders adjourning, staying or striking out the appeal. It also sought an increase in the amount of the security for costs if the appeal was to proceed. The appeal…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Continue reading Mana Property Trustee Ltd v James Developments Ltd
Sign in free to access the full text
Details
AGLC
Mana Property Trustee Ltd v James Developments Ltd [2010] NZSC 124
Case
[2010] NZSC 124
Decision Date
CaseChat Overview and Summary
In the case of Mana Property Trustee Limited v James Developments Limited, the Supreme Court of New Zealand was asked to consider a costs application following a successful appeal. The primary issue was whether the liquidators of James Developments Limited should be personally liable for costs. The Court of Appeal had awarded costs against James Developments Limited, but Mana Property Trustee Limited sought to also hold the liquidators personally liable. Mana argued that the liquidators should be liable because they delayed in responding to inquiries about whether they would pursue the appeal and because the liquidation was a tactic to avoid the stay conditions imposed by the High Court. The Supreme Court held that the liquidators were not personally liable for costs as they were acting in the interests of the company and its creditors and were not involved in any impropriety. They were merely agents of the company in liquidation. The Court did, however, award costs against James Developments Limited, reversing the Court of Appeal’s costs award and ordering James Developments Limited to pay costs of $15,000 plus reasonable disbursements.
The Court found that the liquidators were acting within their powers under the Companies Act 1993 and were not the real parties to the litigation. The Court noted that liquidators are typically not held personally liable for costs unless there is some impropriety or bad faith on their part. The Court held that the liquidators were not acting improperly by continuing with the appeal, as they had a duty to investigate whether there was any claim against James Developments Limited as creditor and to recover any assets of the company. The Court also noted that it was not unreasonable for the liquidators to seek legal advice before deciding whether to continue with the appeal. The Court concluded that the liquidators were not personally liable for costs, but dismissed the application for costs against them with costs to the liquidators of $2,500. The Court then addressed the costs application against James Developments Limited, reversing the Court of Appeal’s costs award and ordering James Developments Limited to pay costs of $15,000 plus reasonable disbursements.