Mason v McKay - [2021] NZHC 2440

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1265

[2021] NZHC 2440

IN THE MATTER of Sacred Hill Marlborough Vineyard Limited (in Receivership and in Administration) and Sacred Hill Vineyard Limited (in Receivership)

BETWEEN

DAVID HAMILTON MASON

Plaintiff

AND

ANDREW MCKAY and REES LOGAN

First defendants

WESTPAC NEW ZEALAND
Second defendant

LEONARD MAGINNESS and JARED WAIATA BOOTH

Third defendants

VINLINK MARLBOROUGH LIMITED

Fourth defendant

Hearing: On the papers

Counsel:

B O’Callahan for plaintiff

M Kersey and C F Butters first defendants SCDS Gollin for second defendant

E C Gellert and R A Morris for third defendants L H Scott for fourth defendant

M D O’Brien QC for Mach Flynt Inc

Date of judgment:

17 September 2021

JUDGMENT OF JAGOSE J

[Costs]

This judgment was delivered by me on 17 September 2021 at 10.00am. Pursuant to Rule 11.5 of the High Court Rules.

…………………………
Registrar/Deputy Registrar

MASON v MCKAY – Costs [2021] NZHC 2440 [17 September 2021]

[1] My 15 July 2021 judgment, dismissing the plaintiff’s 14 July 2021 without notice interlocutory application for an interim injunction, reserved costs while noting:1

In principle, being unsuccessful, Mr Mason is liable to pay the other parties’ costs. In my preliminary view, as the proceeding was conducted on a Pickwick basis, that is only for their two-hour appearances before me today, including second counsel.

[2] In the event only the first defendant receivers seek their costs, but there of an award of indemnity — alternatively, increased — costs. Observing scale costs for the Pickwick hearing amount only to $1,195,2 indemnity costs of “$22,165 (plus GST)”3
— or scale costs for an opposed application of $5,377.50, uplifted by 75 per cent to
$9,410.63 — are sought. Necessarily if successful in opposing indemnity or increased costs, Mr Mason would seek $956 costs on his opposition,4 but proposes costs lie where they fall.

[3] As relied on by the receivers, r 14.6(3) and (4) of the High Court Rules 2016 provides:

(3) The court may order a party to pay increased costs if—

…

(b) the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(ii) taking or pursuing an unnecessary step or an argument that lacks merit
… .

(4) The court may order a party to pay indemnity costs if—

(a) the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or

…

1      Mason v McKay [2021] NZHC 1794 at [16].
2      That is, a half-day calculated at category 2. Mr Mason accepts that calculation to be correct. But I allowed also for second counsel, which brings the calculation to $1,792.50.
3      Assuming the receivers to be GST-registered, GST would not be recoverable: New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282, (2016) 27 NZTC 22-058 at [17].
4      Costs for preparation of written submissions on…

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

Case: [2021] NZHC 2440
Decision Date: 17 September 2021

CaseChat Overview and Summary

In the High Court of New Zealand, Auckland Registry, David Hamilton Mason brought an interlocutory application for an interim injunction against Andrew McKay and Rees Logan, the first defendants, Westpac New Zealand, the second defendant, and Leonard Maginnness and Jared Waiata Booth, the third defendants. The plaintiff sought relief against these defendants in relation to the receivership and administration of Sacred Hill Marlborough Vineyard Limited and Sacred Hill Vineyard Limited. The application was dismissed by the court without notice. The primary issue before the court was whether the plaintiff should be ordered to pay the defendants' costs, and if so, at what level. The defendants argued for indemnity or increased costs due to the plaintiff's alleged failure to disclose relevant information, which they claimed would have changed the outcome of the application.

The court found that the plaintiff's conduct did not meet the threshold for indemnity costs, which require "distinctly bad behaviour" or "flagrant" misconduct. The plaintiff's allegation that the receivers were in breach of their duties was deemed a serious question for trial, justifying the application for an interim injunction. The court concluded that the plaintiff's actions did not amount to "improperly" pursuing the application within the meaning of the rules. Regarding increased costs, the court determined that while the plaintiff's appearance before the court was brief, the conversion of this into a full-blown opposition was not entirely justified. The court ordered the plaintiff to pay increased costs of $3,971.25, which was an uplift on the standard costs for the particular step.

Orders