Moorhouse Panel & Spray Limited v The Energy Saving Company Limited

[2019] NZHC 3204

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-269

[2019] NZHC 3204

UNDER

the Companies Act 1993

IN THE MATTER

of a statutory demand served on 9 May 2019

BETWEEN

MOORHOUSE PANEL & SPRAY LIMITED

Applicant

AND

THE ENERGY SAVING COMPANY LIMITED

Respondent

Hearing:	5 December 2019 (On the papers)
Counsel:	K L Vilsbaek for Applicant I B Paterson for Respondent
Judgment:	5 December 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 5 December 2019 at 4.30pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

5 December 2019

MOORHOUSE PANEL & SPRAY LIMITED v THE ENERGY SAVING COMPANY LIMITED [2019]

NZHC 3204 [5 December 2019]

[1]    The Energy Saving Company Ltd (“Energy Saving”) applied for a stay of enforcement of a costs judgment against it, which arose from it unsuccessfully opposing an application to set aside a statutory demand it had issued against Moorhouse Panel & Spray Ltd (“Moorhouse”).

[2]    At the first call of Energy Saving’s stay application, I adopted the pragmatic course of ordering a stay on the condition that the costs judgment was paid into Energy Saving’s solicitor’s trust account.

[3]    The point of that condition was that Energy Saving was taking its claim against Moorhouse to the Disputes Tribunal and the amounts in issue, that is, Energy Saving’s claim and the costs claim were very similar.

[4]    Energy Saving, through counsel, advised that it had decided not to comply with that the condition upon which the stay was granted. Accordingly, the stay lapsed.

[5]    In my judgment of 18 October 2019 dealing with the stay, costs were reserved.1 I recorded that Energy Saving in seeking a stay was seeking an indulgence and that ordering a stay on the basis that the costs judgment be paid into the trust account was a pragmatic and reasonable outcome. Energy Saving’s however, notwithstanding that it sought a stay, decided that it would not comply with the condition imposed.

[6]    Counsel for Moorhouse seeks costs in respect of the stay application. Energy Saving has through counsel advised that it “… does not wish to engage any further in this proceeding”. There is no attempt by counsel for Energy Saving to deal with the merits of the costs application.

[7]    I do not classify Energy Saving’s failure to pay the costs award into trust as disobeying a Court order, but rather Energy Saving in practical terms accepting that it did not require a stay. In that sense, the application for a stay did put Moorhouse to unnecessary costs.

1      Moorhouse Panel & Spray Ltd v The Energy Saving Company Ltd [2019] NZHC 2671.

[8]    Moorhouse, the respondent to the stay application, seeks costs on a 2B basis. Responsibly, counsel for the respondent advises that costs on a 2B basis would be “approximately equivalent” to the respondent’s costs. Counsel has explained that they can only advise that 2B would be approximately equivalent to the respondent’s actual costs as Moorhouse has incurred costs for other legal services relating to the ongoing dispute and time records do not allow a strict allocation of that time.

[9]    I consider it necessary to avoid the risk that the present costs award could in any way be seen as “subsidising” costs incurred by Moorhouse for steps unrelated to the stay application. I can only do that on an arbitrary basis.

[10]   Accordingly, there is a costs award in favour of Moorhouse Panel & Spray Ltd against The Energy Saving Company Ltd in respect of The  Energy  Saving Company Ltd’s application for a stay in the sum of $3,000 together with disbursements of $50 being the sealing fee to be incurred on the sealing of the order.

[11]   The reduction from scale is to avoid the risk recognised by Moorhouse’s counsel that not all the time recorded related to the stay. It is a principle that scale costs cannot exceed actual costs in relation to the matter before the Court.

Associate Judge Lester

Solicitors:

Anthony Harper, Christchurch

Ronald W Angland & Son, Leeston, Canterbury