Mercedes-Benz Financial Services New Zealand Ltd v Conway

[2018] NZHC 3098

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-1076

[2018] NZHC 3098

BETWEEN

MERCEDES-BENZ FINANCIAL SERVICES NEW ZEALAND LTD

Plaintiff

AND

DESMOND JAMES ALBERT CONWAY

Defendant

Hearing:	(On the papers)
Counsel:	B M Stewart for Plaintiff
Judgment:	28 November 2018

COSTS JUDGMENT OF BREWER J

This judgment was delivered by me on 28 November 2018 at 12:30 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Simpson Western (Auckland) for Plaintiff

MERCEDES-BENZ FINANCIAL SERVICES NZ LTD v CONWAY [2018] NZHC 3098 [28 November 2018]

Introduction

[1]This is a costs judgment.

[2]        On 16 August 2016, Fogarty J held that the plaintiff was entitled to its claim against the defendant.1 However, Fogarty J stayed entry of the judgment pending the hearing of the defendant’s counterclaim.2 He also reserved the issue of costs.3

[3]        The defendant appealed Fogarty J’s decision. His appeal was dismissed by the Court of Appeal on 17 October 2017.4

[4]        The defendant then applied for leave to appeal to the Supreme Court. The application was denied on 28 February 2018.5

[5]        On 15 August 2018, I struck out the defendant’s counterclaim which, due to Fogarty J’s judgment being upheld, technically remained afoot:6

[8] I agree that the application for strike out must be granted. The counterclaim could only be brought if Mercedes Benz had been unsuccessful. That is because the counterclaim is in the tort of conversion with exemplary damages following in the claim. Of course, Mercedes-Benz has been found to have acted correctly in repossessing and selling the motor vehicles in question. On this basis, I strike out the counterclaim.

[6]I also directed the parties to file memoranda as to costs.

[7]        The defendant did not file a notice of opposition to the strike-out application and made no appearance.

1      Mercedes-Benz Financial Services New Zealand Ltd v Conway [2016] NZHC 1896.

2 At [74]. The defendant had been given leave to file a counterclaim by Heath J on 13 July 2016, which was to be heard separately due to the late hour at which it was brought: Mercedes-Benz Financial Services Ltd v Conway [2016] NZHC 1587.

3 At [75].

4      Conway v Mercedes-Benz Financial Services New Zealand Ltd [2017] NZCA 463, (2017) 10 NZBLC 99-730.

5      Conway v Mercedes-Benz Financial Services New Zealand Ltd [2018] NZSC 16.

6      Mercedes-Benz Financial Services New Zealand Ltd v Conway HC Auckland CIV-2014-404- 1076, 15 August 2018.

Costs

[8]        The plaintiff filed its memorandum on 29 August 2018. The defendant was to file his reply by 12 September 2018. No memorandum has been filed by the defendant and nothing has been heard from his legal representatives. I directed the Case Officer to attempt to establish contact with the defendant in order to establish if and when the Court might expect his memorandum. Several efforts to contact the defendant were made. None was successful.

[9]        Costs are at the discretion of the Court.7 I will determine the allocation of costs in this case without the benefit of a memorandum from the defendant.

[10]      The plaintiff’s submission is clear. It says that it has a contractual entitlement to costs on a solicitor/client basis. These total $184,120.79.

[11]      The basis of this entitlement is found within a term in each of the three finance agreements that the defendant entered into with the plaintiff. These three agreements were the respective subjects of the three causes of action contained within the plaintiff’s statement of claim.

[12]Clause 6.3 of each contract stated:8

You shall pay to the Lender all costs and expenses, including all legal costs and expenses incurred on a solicitor/own client basis, and all disbursements (including any duties or taxes), sustained or incurred by the Lender in relation to the preparation, negotiation of, and entry into this Contract, each waiver of or consent in or, and each amendment to this Contract, the registration and discharge of any security in relation to this Contract and the exercise, protection or enforcement, by the Lender of its rights under this Contract or in suing for or recovering any amounts owing by you under this Contract.

[13]      Clause 6.3 is clear. It allocates to the defendant all costs incurred by the plaintiff, on a solicitor/client basis, in respect of the enforcement by the plaintiff of its rights under each of the three contracts. This is what the plaintiff now seeks.

[14]There is nothing to indicate the costs claimed are unreasonable.

7      High Court Rules 2016, r 14.1.

8      The general terms of each of the three contracts, including cl 6.3, were contained in a separate brochure and incorporated into each of the three contracts by reference.

Result

[15]      I award costs to the plaintiff on a solicitor/client basis as set out in the schedule attached to its memorandum.

Brewer J