NZ Multi Media Magazines Limited v Crucial Colour Limited

[2018] NZHC 1989

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000860

[2018] NZHC 1989

BETWEEN

NZ MULTI MEDIA MAGAZINES LIMITED
Plaintiff

AND

CRUCIAL COLOUR LIMITED

Defendant

Hearing:	(On the papers)
Counsel:	Sandra Grant and Jordan Grimmer for the Plaintiff John Walters for the Defendant
Judgment:	7 August 2018

[COSTS] JUDGMENT OF MOORE J

This judgment was delivered by me on 7 August 2018 at 11:00 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

NZ MULTI MEDIA MAGAZINES LIMITED v CRUCIAL COLOUR LIMITED [2018] NZHC 1989 [7 August 2018]

Background

[1]                 On 10 May 2018 I issued a Minute granting an injunction that restrained the commencement of liquidation proceedings brought by Crucial Colour Ltd (CCL) against NZ Multi Media Magazines Ltd (MMM).

[2]CCL had earlier served MMM with a statutory demand claiming a debt of

$77,786.53. This demand was not brought to the attention of MMM’s sole director until after the specified date of payment. MMM was therefore unable to apply to set the notice aside, hence the injunction application.

[3]                 In a nutshell, I granted the injunction because I was satisfied that CCL could not prove that it was a creditor of MMM.

[4]As to the matter of costs, I said:1

“On the question of costs I note that Ms Grant [for MMM] seeks an award of indemnity costs. However, following discussion in chambers Ms Grant accepted that an award on a 2B basis would be appropriate, noting that her costs to date are likely to be less than the scale prescribes. Accordingly, I order costs on a 2B basis to be paid subject only to CCL objecting within five working days of the service of this order. In that event the parties are directed to consult with a view to filing a consent memorandum as to costs or, in the event of disagreement, separate memoranda which are not to exceed three pages in length. Any such memorandum/memoranda is to be filed within 14 days of the service of this order.”

[5]CCL now objects to the imposition of 2B costs.

The objection

[6]CCL suggests each party should be responsible for its own costs because:

(a)CCL had reasonable grounds to believe that MMM had assumed responsibility for the debt which gave rise to the statutory demand and, subsequently, the liquidation proceedings;

1      NZ Multi Media Magazines Ltd v Crucial Colour Ltd HC Auckland CIV-2018-404-000860, 10 May 2018 at [17].

(b)injunction proceedings would not have been required had MMM objected to the statutory demand within 15 days; and

(c)counsel for CCL, Mr Walters, advised Ms Grant on the morning of the hearing that CCL could not afford to take any further action in the liquidation proceedings; akin to an undertaking.

Analysis

[7]                 CCL’s objection is without merit. CCL is essentially attempting to use the matter of costs to relitigate the substantive part of the proceeding. I have already found that CCL could not prove that it was a creditor of MMM. Attacking the reasonableness of that finding is not appropriate in an application for costs.

[8]                 Similarly, the suggestion that the injunction proceedings would have been unnecessary in various hypothetical scenarios is unhelpful. The fact was that after missing the deadline to set the statutory demand aside, MMM was entitled to anticipate that liquidation proceedings would be commenced against them. And at the hearing I understood that the parties had not been able to resolve the matter between themselves:2

“Discussions with CCL’s solicitors have failed to secure an undertaking that liquidation proceedings will not be commenced.”

[9]                 CCL cannot now challenge this finding via Mr Walters’ evidence from the bar. Moreover if CCL genuinely wanted to eliminate the need for a hearing, it was open to it to make a formal undertaking rather than expecting MMM to take it at its word.

2 At [6].

Result

[10]              The defendant’s objection to costs is dismissed. I confirm my costs order of 10 May 2018.

Moore J

Solicitors/Counsel:

Ms Grant, Auckland Mr Grimmer, Auckland Mr Walters, Auckland