Peninsula Road Limited (in rec and in liq) v NZ Transport Agency HC Wellington CIV-2009-485-2260

[2011] NZHC 6

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2009-485-2260

BETWEEN  PENINSULA ROAD LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION)

Applicant

ANDNZ TRANSPORT AGENCY Respondent

Judgment:      26 January 2011 at 3.30 pm

JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by Associate Judge Gendall on 26 January 2011 at

3.30 pm under r 11.5 of the High Court Rules.

Solicitors:           Chapman Tripp, Solicitors, PO Box 993, Wellington 6140

Buddle Findlay, Solicitors, PO Box 1433, Auckland

PENINSULA ROAD LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION) V NZ TRANSPORT AGENCY HC WN CIV-2009-485-2260  26 January 2011

[1]      On 3 November 2009, Peninsula Road Limited (PRL) applied for an order setting aside a statutory demand issued by the applicant, NZ Transport Agency (NZTA). However, prior to the hearing of that matter, PRL was placed into liquidation by shareholders’ resolution on 24 March 2010. PRL’s liquidator subsequently discontinued the application to set aside NZTA’s statutory demand, with the result that the only remaining issue is that of costs.

[2]      NZTA seeks costs against PRL, on the basis of the general rule that a plaintiff must pay the costs of a defendant upon discontinuance of the proceeding: r 15.23. PRL, however, contends that costs should lie where they fall because it is in liquidation,  and  discontinuance  was  without  prejudice  to  its  position  that  the statutory demand was not validly issued. PRL also submits that NZTA did not incur any further unnecessary costs, because it says the decision to discontinue was made swiftly following the liquidation. It further points out that, according to the latest liquidator’s report, PRL has no funds available to meet the claims of unsecured creditors.  PRL suggests that costs here should simply lie where they fall.

[3]      I disagree.  In my view this is a reasonably clear-cut case.  The presumption in favour of awarding costs against a party which has discontinued a proceeding is well-established (see North Shore CC v Local Government Commission (1995) 9

PRNZ  182).  I  agree  with  NZTA’s  submission  that  PRL’s  liquidation  does  not provide a ground for displacing this general rule contained in r 15.23. It is also immaterial that PRL’s discontinuance was without prejudice to its position regarding the merits of its application, given that the Court will generally refrain from considering the merits of a discontinued proceeding. Overall, as I see it, there are simply no relevant factors to displace the presumption here.

[4]      For this reason, I conclude that NZTA is entitled to costs on a 2B basis, amounting to $4,320.00 as set out in its schedule of costs.  No issue was taken by PRL as to the $4,320.00 quantum sought by NZTA.

[5]      An order is now made that PRL is to pay costs to NZTA on this proceeding amounting to $4,320.00 together with disbursements (if any) as approved by the Registrar.

‘Associate Judge D.I. Gendall’