NZ Fintech Limited t/a Moola v Credit Corp Financial Solutions Pty Limited t/a Wallet Wizard

[2019] NZHC 2810

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-002640

[2019] NZHC 2810

UNDER

the Trade Marks Act 2002 and Fair Trading Act 1986

BETWEEN

NZ FINTECH LIMITED T/A MOOLA
Plaintiff

AND

CREDIT CORP FINANCIAL SOLUTIONS PTY LIMITED T/A WALLET WIZARD

Defendant

Hearing:	On the papers
Judgment:	31 October 2019

JUDGMENT OF DOWNS J

(Costs)

This judgment was delivered by me on Thursday, 31 October 2019 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Simpson Grierson, Auckland. Russell McVeagh, Auckland. CL Elliott QC, Auckland.

EC Gray, Auckland.

NZ FINTECH LTD T/A MOOLA v CREDIT CORP FINANCIAL SOLUTIONS PTY LTD T/A WALLET WIZARD [2019] NZHC 2810 [31 October 2019]

The issue

[1]    NZ Fintech Ltd trades as Moola. Credit Corp Financial Solutions Pty Ltd trades as Wallet Wizard. Both lend money. Moola sued Wallet Wizard in relation to the latter’s use of the term “Moola”. For the uninitiated, moolah is slang for money. In return, Wallet Wizard sued Moola alleging “Moola” is an invalid trademark.  On  1 October 2019, Lang J allowed Moola to discontinue its suit against Wallet Wizard, and Wallet Wizard to discontinue its suit against Moola. Moola had earlier failed to obtain an interim injunction against Wallet Wizard.1

[2]    Moola and Wallet Wizard do not agree about costs. Moola accepts it should pay 2B costs of $24,727 to Wallet Wizard but says Wallet Wizard should pay it 2B costs of $8,393.75. In other words, Moola accepts it should pay Wallet Wizard

$16,333.25. Wallet Wizard does not dispute these figures.2 But, Wallet Wizard argues

Moola should pay it indemnity costs of more than $428,000.

[3]    Indemnity costs are rarely awarded but may be when a party has “acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding”.3 Wallet Wizard contends indemnity costs are warranted for reasons that reduce to three. In the alternative, Wallet Wizard seeks increased costs.  I can be brief.

Anti-competitive behaviour by Moola?

[4]    Wallet Wizard contends Moola’s behaviour is anti-competitive, and Moola’s proposals vis-à-vis Wallet Wizard equally so. Wallet Wizard has complained to the Commerce Commission about Moola, and the Commission is investigating it.

[5]    I cannot know whether Moola has engaged in anti-competitive behaviour. The mere fact of an investigation cannot establish that. The evidence adduced by Wallet Wizard does not unequivocally do so (bearing in mind I must determine this on the papers). And, this is at best an unconventional context for resolution of this issue.

1      NZ Fintech Ltd t/a Moola v Credit Corp Financial Solutions Pty Ltd t/a Wallet Wizard

[2019] NZHC 654.

2      Except in relation to discovery, to which I return.

3      High Court Rules 2016, r 14.6(4)(a).

A plainly hopeless case?

[6]    Wallet Wizard contends Moola’s case was plainly hopeless—my phrase rather than its. I use the phrase because the law holds in a cost context, courts should not speculate on the merits of a discontinued case unless these are “entirely clear”.4 This threshold is not met.

[7]    Gault J dismissed Moola’s application for an interim injunction and later application for permission to appeal. The Judge awarded 2B costs for the former and encouraged agreement about the latter. While Moola was unsuccessful, the Judge said nothing to suggest Moola’s case was hopeless. Nor did any other Judge along the way.

[8]    I have read the file. It appears the case was keenly fought, but this is hardly surprising of business rivals. Nothing signals an obviously hopeless case.

Timing of Moola’s discontinuance

[9]    Wallet Wizard contends Moola withdrew only after much time had been spent preparing for trial. Moola sought more time to make discovery, and only then withdrew. Wallet Wizard says there is “no plausible basis … why an extension was sought and discovery … still not provided”.

[10]   Moola notes it discontinued approximately 10 months before trial. By then, it was defending a suit brought by someone else and responding to the Commerce Commission’s investigation (following Wallet Wizard’s complaint to that body).

[11]   I am not satisfied Moola acted vexatiously or improperly. The timeline does not imply either. Wallet Wizard has not identified anything else from which I could safely infer either. The mere fact Wallet Wizard believes it is the victim is not reason for awarding indemnity costs.

4      N-Tech Ltd v Abooth Ltd [2012] NZHC 1167 at [99] and [101].

Costs in relation to discovery

[12]   Wallet Wizard submits irrespective of indemnity or increased costs, Moola should not have the costs of discovery in relation to Wallet Wizard’s discontinued counterclaim. This because Moola did not complete discovery. Moola responds its discovery was largely complete, hence its claim for this time.

[13]I agree with Wallet Wizard for the reason it gives.

Result

[14]Subject to the discovery allowance at [13], Moola must pay Wallet Wizard

$16,333.25 in costs (it is not obvious from the papers what the adjustment should be).

……………………………..

Downs J