NZ Natural Therapy Ltd (in liquidation) v Little

[2017] NZHC 1416

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4866 [2017] NZHC 1416

UNDER

the Companies Act 1993

IN THE MATTER

of the Liquidation of NZ Natural Therapy
Ltd (in liquidation)

BETWEEN

NZ NATURAL THERAPY LTD (IN LIQUIDATION)

First Plaintiff

VIVIEN JUDITH MADSEN-RIES AND HENRY DAVID LEVIN AS LIQUIDATORS OF NZ NATURAL THERAPY LTD (IN LIQUIDATION) Second Plaintiffs

AND

JOHN LAWSON LITTLE First Defendant

JOHN LAWSON LITTLE AND DEIDRE ANN LITTLE AS FORMER TRUSTEES OF THE WOODSIDE TRUST

Second Defendants

Hearing:	(On the papers)
Counsel:	K H Morrison and G A Campbell for Plainiffs P J Dale for First Defendant
Judgment:	23 June 2017

COSTS JUDGMENT OF BREWER J

Solicitors:

Meredith Connell (Auckland) for Plaintiffs

Saunders Robinson Brown (Christchurch) for First Defendant

NZ NATURAL THERAPY LTD (IN LIQUIDATION) v LITTLE [2017] NZHC 1416 [23 June 2017]

Introduction

[1]      This case languishes part-heard. That is the fault of the first defendant.

[2]      On  22  December  2016,  the  plaintiffs  sought  the  joinder  of  the  second defendants.     That  application  was  inevitable  given  the  way  the  hearing  was adjourned part-heard because of the unpleaded further evidence sought to be introduced by the first defendant.

[3]      The first defendant opposed the application for joinder.  A hearing date for the application was allocated for 12 May 2017.   The plaintiffs complied with timetabling directions.  The first defendant was due to file and serve his synopsis of submissions on 10 May 2017 but did not do so.  Instead, the plaintiffs were advised that the application for joinder was no longer opposed.  A joint memorandum to that effect was filed and joinder was ordered on 12 May 2017.

[4]      This Judgment determines the plaintiffs’ application for costs in relation to the foregoing.

[5]      The plaintiffs seek indemnity costs or, at least, scale 2B costs, with a 50 per cent uplift.

[6]      As to indemnity costs, the plaintiffs submit that the opposition to joinder was always hopeless and that it has resulted in significant delay in completing the hearing of the substantive case.

[7]      As to increased costs, if those are to be awarded then the Court should consider that the first defendant contributed unreasonably to the time or expense of the  proceeding  and  that  in  the  circumstances  of  this  case  the  uplift  should  be

50 per cent.

Discussion

[8]      Having read the memorandum on behalf of the first defendant, I am satisfied that the opposition to the application for joinder was not hopeless and certainly not

unprincipled.   I have had regard to the draft submissions prepared by Mr Dale in opposition to the application for joinder.  I accept Mr Dale’s advice that the reason for the withdrawal of the first defendant’s opposition to joinder was because Mr Dale concluded that I would decide his arguments on standing would best be dealt with at the resumed trial.  He was right.

[9]      In my view, although not hopeless or improper, there was nevertheless no reasonably arguable case for not ordering joinder of the second defendants.   By opposing, and maintaining the opposition to the day before the allocated hearing, the first defendant put the plaintiffs to unnecessary and largely wasted costs.  I do not find that this is a matter for indemnity costs, but I do find that it is a suitable case for increased costs.

[10]     Mr Dale advises that he made a without prejudice offer of scale 2B costs with a 25 per cent uplift. The offer was refused, hence this Judgment being necessary.

[11]     Looking at the time allowed by scale 2B (a day-and-a-half for the preparation of written submissions, 0.6 of a day for the filing of the application, 0.6 of a day for preparation of the bundle), I think that a 25 per cent uplift is reasonable.

Decision

[12]     I  award  costs  to  the  plaintiffs  on  the  joinder  application  on  a  2B  basis

($6,467) plus a 25 per cent uplift ($1,616.75).   The total awarded is, therefore,

$8,083.75.

[13]     The plaintiffs seek costs of $892 on the application for costs and the first defendant (relying on the Calderbank offer) seeks costs in the same amount.

[14]     I award costs to the first defendant on the application for costs on a 2B basis, namely $892.

Brewer J