Peace and Glory Society Limited (in liq) v Samsa HC Auckland CIV-2007-404-700

[2011] NZHC 325

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2007-404-700

BETWEEN  PEACE AND GLORY SOCIETY LIMITED (IN LIQUIDATION) First Plaintiff

ANDDAVID STEWART VANCE AND HENRY DAVID LEVIN LIQUIDATORS OF PEACE AND GLORY SOCIETY LIMITED (IN LIQUIDATION)

Second Plaintiffs

ANDSTEFANO SAMSA Defendant

Hearing:         By memoranda

Appearances: Mr S Wimsett for second plaintiffs

Mr A M Swan for defendant

Judgment:      20 April 2011 at 10:00 AM

JUDGMENT OF LANG J [as to costs]

This judgment was delivered by me on 20 April 2011 at 10 am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

PEACE AND GLORY SOCIETY LTD (IN LIQUIDATION) V SAMSA HC AK CIV-2007-404-700 20 April

2011

[1]      On 2 December 2008 Hugh Williams J delivered a reserved judgment in which he dismissed claims by the plaintiffs alleging breaches by the defendant of ss 131, 135, 136, 137 and 194 of the Companies Act 1993.

[2]      The Court of Appeal subsequently upheld the Judge’s decision, although it held that a breach of s 136 had been made out.  It was not satisfied, however, that compensation  should  be  awarded  in  respect  of  the  breach.    For  that  reason  it dismissed the appeal.  The breach of s 136 led the Court of Appeal to conclude that costs should lie where they fall in relation to the appeal.

[3]      The defendant now seeks costs in relation to the trial in this Court.  He claims that he was the successful party, and that the second plaintiffs ought to pay costs and disbursements to him on a Category 2B basis.   Given that Hugh Williams J has retired, it now falls to me to deal with the issue of costs on the papers.

[4]      The Court of Appeal has now finally determined the issue of liability.  That determination informs the approach to be taken in relation to costs in this Court.

[5]      Although the Court of Appeal was not prepared to award compensation in respect of the breach, nevertheless counsel for the defendant had conceded a clear breach of s 136 on the part of the defendant.  That concession formed the basis for the Court’s conclusion that no order for costs should be made.

[6]      No justification exists for adopting a different approach to costs in this Court. It is clear, in fact, that Hugh Williams J did not anticipate that the defendant would seek an award of costs even though he was the successful party.  At [118] he noted that it was “unlikely” that he would take that step.  I take that comment to relate to the fact that the Judge had found that the defendant had been tardy in producing documents to the liquidator.  He had also failed to keep proper records, although the Judge did not consider this to be causative of the company’s loss.

[7]      Added  to  this  is  the  fact  that  the  defendant  was  guilty  of  significantly breaching his obligations regarding discovery in this Court on two occasions.  This led  to  a  trial  being  vacated  in  March  2010,  and  to  further  problems  when  he

produced more undiscovered documents just before the commencement of the trial before Hugh Williams J in October 2010.

[8]      For these reasons I have concluded that costs should lie where they fall.

Lang J

Solicitors:

Meredith Connell, Auckland Walker Associates, Auckland Counsel:

Mr A M Swan, Auckland