NZVPAS.com Limited v Rural Builders Limited

[2019] NZHC 1578

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2019-454-21

[2019] NZHC 1578

BETWEEN

NZVPAS.COM LIMITED

Applicant

AND

RURAL BUILDERS LIMITED

Respondent

Counsel:	D Sheppard for applicant A Swan for respondent
Judgment:	8 July 2019

COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[On the papers]

[1]    This is a costs application by the respondent, Rural Builders Ltd, following the setting aside of a statutory demand issued against it by the applicant, NZVPAS.Com Ltd. The background is adequately described by Mr Swan for Rural Builders in paragraph [1] of his memorandum of 18 June 2019:

On 21 March 2019 the respondent issued a statutory demand against the applicant for a debt. At the time the respondent had a judgment against Mr Jeremy Sinclair, a director of the applicant, for the same debt. The respondent had in error issued the demand against the applicant when in fact it should have been pursuing Mr Sinclair.

[2]    Rural Builders’ statutory demand was dated 20 March 2019 and was served on NZVPAS on 21 March 2019. On 3 April 2019 Rural Builders commenced this proceeding seeking an order setting aside the statutory demand. Its application was accompanied by affidavit evidence outlining the position. The application was set down to be called on 13 June 2019. On 10 June 2019 counsel by then instructed for Rural Builders filed and served a memorandum saying that Rural Builders did “… not

NZVPAS.COM LIMITED v RURAL BUILDERS LIMITED [2019] NZHC 1578 [8 July 2019]

intend to oppose the application to set aside the demand. Orders can be made in that regard”. Accordingly, when the matter was called on 13 June 2019 the statutory demand was set aside by consent.

[3]NZVPAS now seeks costs on a 2B basis.

[4]    As Mr Sheppard submits, the starting point is that costs follow the event and it is only in unusual circumstances falling into the categories identified in r 14.7 of the High Court Rules that the Court generally departs from that starting point.

[5]    In opposition to NZVPAS’ application for costs Mr Swan says that before Rural Builders commenced this proceeding NZVPAS’ debt collection agent had written as many as four letters of demand. So, the argument goes, NZVPAS had numerous opportunities to point out to Rural Builders its error in pursuing the company. He says that NZVPAS’ failure to do so in the light of what he refers to as “the obvious mistake” resulted in both parties incurring “totally unnecessary and wasted costs”.

[6]    I do not accept that contention. The error which led to the parties incurring costs was that of Rural Builders, presumably on the advice of its debt collection agent, Law Debt Collection. It is Rural Builders which must assume responsibility for that.

[7]    Having been served with a statutory demand the applicant sought legal advice and Rural Builders’ error was pointed out to it. At that stage, it took the proper course and made an application to set the statutory demand aside.

[8]    NZVPAS is entitled to its costs. Had it sought increased costs I would have at least given that application serious consideration. As it happens, Mr Sheppard seeks only scale costs on its behalf which he calculates at $5,798 together with disbursements totalling $643.50. NZVPAS will have costs and disbursements in those amounts.

Associate Judge Johnston

Solicitors:

Fitzherbert Rowe, Palmerston North for applicant

Auckland Property Legal Service, Auckland for respondent