Napier City Council HC Napier CIV 2010-441-524

[2010] NZHC 2116

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV 2010-441-524

IN THE MATTER OF	the Declaratory Judgments Act 1908
AND
IN THE MATTER OF	the Incorporated Societies Act 1908
Hearing:	BY On Papers	NAPIER CITY COUNCIL

Counsel:         M Lawson for Applicant

M Macfarlane and H Gray for Affected Clubs

Judgment:      29 November 2010

COSTS JUDGMENT OF RONALD YOUNG J

[1]      In  these  declaratory  judgment  proceedings  Napier  City  Council  posed  a question relating to s 20 of the Incorporated Societies Act 1908 and the right of such societies to own controlling shares in a company operated for pecuniary gain.

[2]      The question particularly related to the Napier Returned Services Association in the Hawke’s Bay Sports Fishing Club.  Both organisations were shareholders in companies being operated for pecuniary gain.

[3]      In my judgment delivered 1 November 2010 I concluded that, contrary to the

Council’s submissions:

[24]      Here I can see no objection to the RSA or the Fishing Club receiving pecuniary gain, by way of dividends, from a company which it wholly owns and which is set up for pecuniary gain.

NAPIER CITY COUNCIL HC NAP CIV 2010-441-524  29 November 2010

[4]      As a result I preferred the arguments of the two incorporated societies to the case mounted by Napier City Council.  I invited memorandum as to costs.

[5]      While the resolution of this case did have a public aspect to it there is no reason in my view why the Napier City Council should not pay costs.   The two incorporated societies were successful and there is, in my view, no reason why costs should not follow the event.

[6]      I note s 13 of the Declaration Judgments Act 1908 gives the Court a wide discretion as to costs although typically Courts have followed the broad costs discretion and rules in the High Court Rules.

[7]      The incorporated societies seek total costs of $9,730 which they say is their actual fees slightly less than the 2B scale costs of $9,920.  Those amounts cover both organisations.  The Napier City Council argues for costs of $1,840 alleging that is the appropriate scale.

[8]      Firstly,  I  am  satisfied  broadly  that  the  scale  set  out  in  the  incorporated societies’ submissions involving 3.1 days at $1,600 is the appropriate scale.

[9]      Secondly, given the arguments for the two societies were essentially the same I would not ordinarily order full 2B costs with respect to both incorporated societies. Although the particular facts for each society were different the facts were by an agreed statement.  The principle arguments therefore were the same.

[10]     In these circumstances it seems to me the appropriate course is to make a global award based broadly on 2B allowing for:

a)        the incorporated societies success in the argument;

b)        the fact that there were two opposing parties;

c)        the fact that there were appropriately two counsel involved for the opposing parties; and

d)       the fact that the essential arguments were the same for both.

[11]     In those circumstances I think the appropriate overall fee is the sum of $6,500 plus disbursements as certified by the Registrar.   I see no reason why that sum should not be divided equally between the two incorporated societies.  I allow them

each costs of $3,250 plus disbursements against the Napier City Council.

Ronald Young J

Solicitors:

M Lawson, Lawson Robinson, PO Box 45, Napier 4140, email:  [email protected]
M Macfarlane, Sainsbury Logan & Williams, PO Box 41, Napier 4140, email:  [email protected]