Patel v Patel - [2020] NZHC 875

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2018-404-000601

[2020] NZHC 875

BETWEEN
PARESHKUMAR PATEL

Plaintiff

AND

PRAKASHKUMAR PATEL

Defendant

Hearing: In Chambers (on the papers)

Counsel:

P Cogswell for the Plaintiff

A Kashyap and S C R Raju for the Defendant

Judgment:

1 May 2020

JUDGMENT OF GWYN J

(No.3 - Costs)

This judgment was delivered by me on 1 May 2020 at 10.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:
Duggan & Murphy, Auckland Cogswell Law, Auckland
A Kashyap, Barrister, Auckland

PATEL v PATEL [2020] NZHC 875 [1 May 2020]

Introduction

[1] This case concerned a dispute over the distribution of the proceeds of a development project undertaken between the plaintiff and the defendant.

[2] On 22 October 2019 I gave judgment for the plaintiff.1 I found that there was an oral partnership between the parties, giving rise to fiduciary obligations as between them, and that the defendant had acted in breach of those obligations and the requirements of the Partnership Act 1908.

[3] In my second judgment dated 13 December 2019 I finalised the quantum of the judgment and sought memoranda as to costs.2

Submissions as to costs

[4] The plaintiff has filed a memorandum dated 31 January 2020, in which he seeks payment of his costs on an indemnity basis or, alternatively, increased costs. The plaintiff says that indemnity costs are justified because the Court found that the defendant acted in breach of the fiduciary duties imposed on him by the partnership between the defendant and the plaintiff by failing or refusing to account to the plaintiff for his financial contribution to the development project between the two, his half share of the profit derived from the development and interest on those monies.3 The plaintiff says that as a defaulting fiduciary the defendant may not benefit from his wrongdoing and should therefore meet all the plaintiff’s costs.

[5] The Court allocated Category 2 for costs. Category 2 costs are $2,390.00 per day. The plaintiff submits that Band B is considered appropriate for the steps taken. On that basis the plaintiff has calculated scale costs at $51,624.00. His actual costs are $52,649.83. In addition, the plaintiff seeks $17,350.00 for court filing and other fees and $5,037.00 for expert witness fees. The latter relates to the plaintiff’s expert accountant who gave evidence during the course of the hearing. The total amount sought by the plaintiff is $75,899.33.

1      Patel v Patel [2019] NZHC 2705 (Judgment No. 1).
2      Patel v Patel [2019] NZHC 3306.
3      Judgment No. 1 at [72].

[6] In his memorandum of 22 February 2020, the defendant accepts the accuracy of the plaintiff’s scale costs calculations but submits that each party should bear his own costs of the proceedings. The basis for the submission is that the defendant defended the claim in good faith and, while he is taking all necessary steps to clear the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Patel v Patel

Details

AGLC: Patel v Patel [2020] NZHC 875
Case: [2020] NZHC 875
Decision Date: 1 May 2020

CaseChat Overview and Summary

The High Court of New Zealand heard a case involving a dispute over the distribution of proceeds from a development project between Pareshkumar Patel (the plaintiff) and Prakashkumar Patel (the defendant). The case was heard in Auckland, and the judgment was delivered by Gwyn J on 1 May 2020. The plaintiff claimed that there was an oral partnership between him and the defendant, which gave rise to fiduciary obligations. The plaintiff also alleged that the defendant had breached these obligations and the requirements of the Partnership Act 1908. The court had already ruled in favour of the plaintiff on the substantive issues and now had to determine the costs of the proceedings. The plaintiff sought indemnity costs, arguing that the defendant had acted in breach of fiduciary duties by failing to account for his financial contributions, share of the profit, and interest on those monies. The plaintiff argued that the defendant should not benefit from his wrongdoing and should therefore meet all the plaintiff's costs. The defendant, on the other hand, argued that each party should bear their own costs of the proceedings, as he had defended the claim in good faith and was facing considerable financial hardship in clearing the amounts owing to the plaintiff.

The court considered the High Court Rules, which provide that, as far as possible, the determination of costs should be predictable and expeditious. The court noted that indemnity costs could be ordered only in specific circumstances, such as when the party against whom such damages are awarded has acted in an egregious manner. The court found that the defendant had not acted egregiously enough to justify an award of indemnity costs. The court also considered the defendant's financial hardship but noted that it was not a shield against a costs award. The court concluded that the plaintiff was entitled to costs as follows: 2B costs and disbursements totalling $51,624.00, court filing and other fees $17,350.00, and expert witness costs $5,037.00. The total amount awarded to the plaintiff was $74,011.00.

Orders