Pisidia Holdings Limited v Darby

[2019] NZHC 1724

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2019-425-47

[2019] NZHC 1724

BETWEEN

PISIDIA HOLDINGS LIMITED

Applicant

AND

KRISTEN MARY DARBY

First Respondent

AND

CABO LIMITED

Second Respondent

Hearing:

(Determined on the Papers)

Counsel:

J W A Johnson and J J Anson-Holland for the Applicant

D A T Chambers QC and E F Armstrong for the First Respondent N A Harrison for the Second Respondent

Judgment:

23 July 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 23 July 2019 at 11.am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 23 July 2019

PISIDIA HOLDINGS LIMITED v DARBY [2019] NZHC 1724 [23 July 2019]

[1]    Following my judgment of 30 May 2019 granting the application to remove notices of claim from various properties, the successful applicant has sought costs against the first respondent.1

[2]    In my judgment costs were reserved, as they were not argued. It was therefore open to the applicant to seek costs.

[3]    As one would expect, the first respondent accepts that costs should follow the event. The real contest between the parties is whether the proceedings should be categorised as a Category 2 or a Category 3 matter.

[4]    Apart from  the  element  of  urgency,  I  consider  that  the  application  was  a Category 2 matter being a proceeding of average complexity requiring counsel of skill and experience considered average in the High Court.

[5]    I hold that view essentially for the grounds given by the first respondent’s counsel at para [9] of her memorandum dated 21 June 2019.

[6]    Ultimately, the applicant presented its case as being a straightforward one for the removal of the notices of claim. The central theme of the applicant’s case was that the first respondent’s claim could not on any view of it succeed because of the company structure. That argument depended on long established legal principles.  Ms Chambers QC’s argument was to invite the Court to take a more expansive view of the law with reference being made to Bourne v Baker,2 which in turn relied on the Supreme Court decision in Clayton v Clayton.3

[7]    Mr Johnson’s reply was to make the submission, which I accepted, that even if Clayton applied that would not give the first respondent an interest in the Trust property but would rather result in an adjustment to the sharing of relationship property with the value of the Trust assets taken into account. In short, Mr Johnson’s

1      Pisidia Holdings Ltd v Darby [2019] NZHC 1216.

2      Bourne v Baker [2016] NZFC 2668, [2016] NZFLR 944.

3      Clayton v Clayton [2016] NZSC 29, [2016] 1 NZLR 551.

submissions proceeded on the basis that the claim to a notice of claim was relatively easy to counter. The submission that the notice of claim was unsustainable counts against it now being argued that the matter was of such complexity as to warrant being a Category 3 matter.

[8]    However, in respect of the urgency,  I  consider  that  the  allowance  for  item 40, preparation of written submissions, should be allowed on a 2C basis. The applicant prepared comprehensive submissions in short order. Otherwise, all other steps are to be on a 2B basis.

[9]    Also because of the element of urgency, I consider it was appropriate for the applicant to have second counsel.

[10]   In dealing with costs the way I have, I have not lost sight of first respondent’s counsel’s suggestion that some items should be categorised on a 2A basis. I suspect first respondent’s counsel is correct in concluding that where the applicant’s costs memorandum has recorded costs in its schedule on a 2A basis, that is an error. The schedule itself records that the highlighted items are meant to be on a 2B basis. Inevitably, there are some “unders and overs” when it comes to the application of the cost schedule  and  I again consider that the  element of urgency that  ran through  the application stands against adjusting the bands for what are relatively minor items.

[11]   Accordingly, there is an award of costs against the first respondent in favour of the applicant in terms of the schedule attached to the memorandum prepared by the applicant (dated 17 June 2019), save that all items in the schedule are to be calculated on a 2B basis except for item 40, which is to be calculated on a 2C basis.

[12]There is no issue between counsel in respect of disbursements.

[13]   The second respondent seeks costs against the first respondent. The second respondent filed an affidavit in support of the application and a memorandum advising that it would abide the decision of the Court.

[14]   The second respondent seeks costs on a 2B basis for item 38 of the Third Schedule to the High Court Rules which sets out the allowance for the filing of an opposition and supporting affidavits in relation to an originating application.

[15]   The first respondent submits that as the second respondent advised it would abide the outcome that it was not a successful party for the purposes of the costs rules.

[16]   The first respondent’s counsel also submits that if costs are to be considered in favour of the second respondent then costs on a 2A basis would be more appropriate given a notice of opposition was not in fact filed, rather a reasonably brief memorandum.

[17]   Costs may be awarded against a party who abides. The task of the Court is to make an assessment of overall justice as between the parties.4

[18]   Ultimately, the need for the second respondent to be involved in the proceeding and to incur costs resulted from the first respondent’s lodging of the notice of claim.

[19]   In my opinion, the interests of justice as between the parties is in favour of an award of costs in the second respondent’s favour as against the first respondent but on a 2A basis to reflect that a full notice of opposition was not filed.

Associate Judge Lester

Solicitors:

Wynn Williams, Christchurch Duthie Whyte, Auckland

Copy to counsel: Lady Deborah Chambers QC, Barrister, Auckland

4      Kawaru Jet Services Holdings Ltd v Queenstown Lakes District Council, HC Invercargill CIV-2008-425-518, 10 May 2018.