Mansfield v Pram Enterprises Limited HC Wellington CIV-2011-485-1892 - [2011] NZHC 2089

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-1892

IN THE MATTER OF PRAM ENTERPRISES LIMITED

BETWEEN ALEXANDER WALTER MANSFIELD Plaintiff

ANDPRAM ENTERPRISES LIMITED Defendant

Hearing: Memorandum of Plaintiff as to Costs dated 22 November 2011
Submissions for Defendant dated 23 November 2011

Judgment: 9 December 2011 at 3:30 PM

JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL

This judgment of Associate Judge Gendall is delivered on 9 December 2011 at 3.30 pm under r 11.5 of the High Court Rules.

Solicitors: P C Gilbert, Solicitor, PO Box 2420, Wellington
Guy & Toby Manktelow, Solicitors, PO Box 31-265, Lower Hutt

AW MANSFIELD V PRAM ENTERPRISES LIMITED HC WN CIV-2011-485-1892 9 December 2011

Introduction

[1] This is a judgment as to costs with respect to first, a withdrawn application to stay liquidation proceedings and restrain publication of advertising, and secondly, a discontinued liquidation application.

[2] On 23 September 2011, Pram Enterprises Limited, filed in this Court an application to stay liquidation proceedings which had been brought against it by the plaintiff Alexander Walter Mansfield (Mr Mansfield) and to restrain advertising. An affidavit in support was filed.

[3] This followed the filing on 16 September 2011 of a statement of claim by Mr Mansfield seeking an order to place the defendant company, Pram Enterprises Limited into liquidation. The proceeding was based upon a debt of $10,331.76 said in the statement of claim to be for “outstanding rent and expenditures made on behalf” of the applicant. It followed the issue of a statutory demand served on the applicant on 8 August 2011 which went unanswered. It is rather curious to note that this statutory demand had made demand for payment of the $10,331.76 but stated this was:

(a) The sum which remains outstanding for holiday pay and annual leave as acknowledged by Invoice dated 26 July 2011.

[4] A statement of defence to Mr Mansfield’s claim seeking liquidation of the

applicant was also filed on 18 October 2011.

[5] The liquidation application and the application by Pram Enterprises Limited for a stay and to restrain advertising were called in this Court on 10 October 2011 and 7 November 2011. On that latter call, counsel advised the Court that the matter was settled and leave was granted to withdraw the liquidation proceeding and the application for a stay. In doing so, costs were reserved with leave granted to either party to file memoranda on costs if they were unable to decide that issue.

[6] Costs do not appear to be resolved between the parties. Instead, Mr Smith counsel for Mr Mansfield filed a memorandum on costs dated 22 November 2011. This seeks an order for costs on his application in favour of Mr Mansfield on a 2B

basis together with disbursements. And Mr Manktelow, counsel for Pram Enterprises Limited filed his memorandum costs dated 23 November 2011 also seeking costs on a 2B basis plus disbursements, but in this case in favour of Pram Enterprises Limited.

[7] Before setting out the essence…

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.

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Details

AGLC: Mansfield v Pram Enterprises Limited HC Wellington CIV-2011-485-1892 [2011] NZHC 2089
Case: [2011] NZHC 2089
Decision Date: 9 December 2011

CaseChat Overview and Summary

In the High Court of New Zealand, Wellington Registry, the case of Alexander Walter Mansfield versus Pram Enterprises Limited was heard. Mansfield, the plaintiff, filed a claim seeking the liquidation of Pram Enterprises Limited, citing a debt of $10,331.76 for outstanding rent and expenditures. This followed a statutory demand served on the defendant, which remained unanswered. Pram Enterprises Limited filed a statement of defence and subsequently sought to stay the liquidation proceedings and restrain advertising. The case was settled, and the liquidation application and the stay application were withdrawn. The matter of costs was reserved, leading to submissions from both parties. The legal issues at hand involved determining who should bear the costs of the withdrawn applications and the discontinued liquidation application. Specifically, the court had to decide whether the costs should follow the usual event, with the defendant being the recipient, or if the plaintiff, having discontinued the substantive liquidation proceeding, should be awarded costs.

Associate Judge D.I. Gendall, in delivering the judgment, first considered the background facts. Mansfield owned a local dry-cleaning business and had previously been an employee of Pram Enterprises Limited, which rented premises from a company in which Mansfield was a shareholder. The statutory demand referenced in the case was for holiday pay and annual leave due to Mansfield, which was paid separately at a reduced amount. The court noted that the liquidation claim by Mansfield was based on a debt that had already been settled, and the claim for rent and expenditures was incorrect. Pram Enterprises Limited argued that it should be awarded costs as the liquidation claim was based on an incorrect debt, and Mansfield's actions caused considerable expense and trouble. Mansfield, on the other hand, argued that the proceedings were necessary to recover the outstanding holiday pay and that any deficiencies in pleading could have been addressed by filing an amended statement of claim.

The court ruled that under rule 15.23 of the High Court Rules, the plaintiff who discontinues a proceeding must pay costs to the defendant unless otherwise agreed or ordered by the court. The court found that Mansfield had discontinued the substantive liquidation proceeding, and there were no circumstances to displace the presumption that costs should follow the event. The court also noted that Mansfield's failure to plead properly in his statement of claim was fatal. Therefore, the court awarded costs to Pram Enterprises Limited on both the defence of the liquidation proceeding and the application for a stay and to restrain advertising, on a category 2B basis together with disbursements as fixed by the Registrar.

Orders