Park v Karaka Vege Shop Limited HC Auckland CIV-2011-404-2902

[2011] NZHC 1204

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-2902

BETWEEN  BOUNG GU PARK Applicant

ANDKARAKA VEGE FARM LIMITED Intended Plaintiff

ANDKARAKA VEGE SHOP LIMITED Intended Defendant

AND  JUNG ILL KIM

Second Intended Defendant

Hearing:         (on papers)

Appearances: Mr Soo Jin Kim for Applicant

Mr S H Barter for Intended Defendants

Judgment:      7 October 2011 at 4:30 PM

JUDGMENT OF ASSOCIATE JUDGE DOOGUE [On Costs]

This judgment was delivered by me on

07.10.11 at 4.30 pm, pursuant to

Rule 11.5  of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors/Counsel:

K Oh, Kenton Chambers Lawyers, Auckland –  [email protected]

S Barter, Barter & Co, Albany – [email protected]

PARK & Anor V KARAKA VEGE SHOP LIMITED & Anor HC AK CIV-2011-404-2902 7 October 2011

[1]      This  proceeding  was  a  claim  brought  by  a  company  coupled  with  an application  by a shareholder of  the  company to  bring those  proceedings  in  the company’s name.  As I understand it the matter that was before the Court on 28 July when it was called before me was the latter part of the proceedings, namely, the application for leave to bring the substantive proceeding.  My minute noted that “the applicant has elected to withdraw his application on the basis that costs are reserved. If the respondents wish to apply for costs they are to do so by memorandum filed by

10 August 2011 or earlier and the applicant is to respond seven days thereafter”.

[2]      Other proceedings have been raised by the applicant as well as those in the

High Court which came before me.

[3]      Following the hearing the respondent elected to seek costs and it now seeks costs on a 2B basis subject to a 25% uplift.

[4]      The applicant apparently disputes the respondents’ entitlement to costs on the basis that the parties entered into an agreement to compromise which was expressed to offer a sum of money “in full and final settlement of all matters between the parties”.

[5]      It would appear from paragraph 9 of the letter of offer dated 26 July 2011 that the only matter that was not included in the accord was the respondents’ entitlement to costs of $8,600 awarded in proceedings between the parties.   The author of the letter sent on behalf of the respondents, Mr Barter, expressly noted that the respondents were not prepared to include the costs entitlement within the settlement offer.

[6]      The respondents say that although the applicant purported to accept the offer of settlement set out in Mr Barter’s letter of 26 July 2011, subsequent exchanges between the parties revealed that the applicants had been contemplating that settlement would be on a different basis from that which the respondents say they understood it was to be.  Reference was made to contractual mistake amongst other things.  The respondents purported to “withdraw” the offer.  Of course if a valid and

enforceable contract had been entered into, contrary to the respondents’ assertions, the actions of the respondents in purporting to withdraw from the contract would not have legal affect.

[7]      If the settlement is in fact binding as the applicants contend, then it would prevent  the  respondents  putting  forward  any  claim  for  costs  in  the  present proceeding.  That is because they had bargained away their right to such costs, if the accord is contractually binding.

[8]      The question of the interpretation of the parties’ contract is not a matter that can be determined in the context of a summary hearing of an determination concerning questions of costs.   It would have to be dealt with by its own form of substantive proceeding.  However before the Court would decline to settle costs on the usual summary basis it would need to be satisfied that there was at least a valid argument that the parties contract was visiated by a lack of true meeting of minds or was impeachable on the ground of contractual mistake.  It would seem to me that the applicant has at least established that there is a substantial argument which would prevent the Court from fixing costs in favour of the respondents on a summary costs hearing.  As matters stand I decline to exercise the jurisdiction to order costs until the question of the validity of the accord has been authoritatively determined.  The parties may apply for further directions in due course if steps are taken with that

objective in view.

J.P. Doogue

Associate Judge