Prestige Motors Limited v My Trustee Company (Nik and Pet) Limited (fka My Trustee Company (Nikolas and Petra) Limited)
[2022] NZHC 3571
•20 December 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-619
[2022] NZHC 3571
BETWEEN PRESTIGE MOTORS LIMITED
Plaintiff
AND
MY TRUSTEE COMPANY (NIK and PET)
LIMITED (formerly named My Trustee Company (Nikolas and Petra) Limited) Defendant
Hearing: On the papers Counsel:
G Morrison for Prestige Motors Ltd
RB Hucker for My Trustee Company (Nik and Pet) Limited
Judgment:
20 December 2022
COSTS JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
This judgment was delivered by me on 20 December 2022 at 4pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors/Counsel:
G Morrison, Shortland Chambers, Auckland Hucker & Associates, Auckland
PRESTIGE MOTORS LTD v MY TRUSTEE COMPANY (NIK and PET) LTD [2022] NZHC 3571 [20
December 2022]
Introduction
[1] The application by Prestige Motors Limited to liquidate the defendant company was withdrawn by leave on 27 October 2022 with costs reserved. I now issue this judgment determining costs.
[2] A memorandum of counsel for Prestige had been filed prior to the call in the Liquidation List on 27 October 2022 seeking 2B costs and disbursements on:
(a)Prestige’s successful opposition of the defendant company’s application for leave to file a defence out of time totalling $9,964.80; and
(b)Prestige’s application for orders liquidating the defendant company totalling a further $10,218.12.
[3] Counsel for My Trustee Company (Nik and Pet) Limited (MTC) accepts that 2B costs are payable but challenges several of the items claimed. I set out the relevant costs principles and then determine the appropriate costs award firstly for the unsuccessful application for leave to file a statement of defence out of time and then for the liquidation proceedings themselves.
Relevant costs principles
[4] The starting point is that costs are at the discretion of the Court.1 Although the discretion is wide, it is not unfettered. Rule 14.2 of the High Court Rules 2016 sets out the general principles as follows:
(a)the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:
(b)an award of costs should reflect the complexity and significance of the proceeding:
(c)costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application:
(d)an appropriate daily recovery rate should normally be two-thirds of the daily rate considered reasonable in relation to the proceeding or interlocutory application:
1 High Court Rules 2016, r 14.1.
(e)what is an appropriate daily recovery rate and what is a reasonable time should not depend on the skill or experience of the solicitor or counsel involved or on the time actually spent by the solicitor or counsel involved or on the costs actually incurred by the party claiming costs:
(f)an award of costs should not exceed the costs incurred by the party claiming costs:
(g)so far as possible the determination of costs should be predictable and expeditious.
[5] Rule 14.5 provides that a reasonable time for each step is as set out in Schedule 3 of the High Court Rules by reference to three bands, A, B or C, depending on whether a comparatively small, normal or large amount of time is considered reasonable for each step.
Application for leave to file a statement of defence out of time
[6] On 18 October 2022, I declined MTC’s application for leave to file a defence out of time and held that Prestige was entitled to 2B costs.2 Prestige subsequently set out in its memorandum dated 26 October 2022 the items claimed on a 2B basis. Counsel for the defendant company, Mr Hucker, challenges the claim to 0.4 of a day for the appearance on 22 July 2022 at the List hearing, the claim to costs for preparation of the bundle, the claim for 0.4 of a day for the filing of supplementary submissions following the hearing of the application and the claims in respect of further memoranda filed.
[7] Mr Hucker submits that the claim for the hearing on 22 July 2022 ought to be for 0.2 of a day as provided for in Item 12 of Schedule 3 of the High Court Rules, rather than 0.4 as claimed.
[8] Item 50, however, is a specific item for hearings for company liquidation proceedings and provides for the appearance on a 2B basis to be 0.4 of a day. As it turned out, a defended hearing was allocated as a result of the hearing on 22 July 2022. This does not, however, diminish the preparation that would have had to be undertaken for the hearing on 22 July 2022. I, therefore, consider the claim under Item 50 for 0.4 of a day by the plaintiff is appropriate.
2 Kupe Trustee Co Ltd v My Trustee Co (Beach) Ltd [2022] NZHC 2700.
[9] The second matter Mr Hucker challenged in respect of the application for leave is the costs sought for preparation of the “respondent’s bundle of documents”.
[10] Item 25 expressly provides for the applicant to prepare the bundle for the hearing. In this case, the applicant, MTC, did prepare a bundle of documents for the hearing, filed two days prior to the respondent’s bundle. Although the respondent, Prestige, included additional documents in its bundle that does not justify costs. Such an award may encourage respondents to prepare bundles with additional documents when the intention is that there is a common bundle prepared by the applicant. On that basis, the respondent is not able to claim for preparation of the bundle, either for the costs ($717) or the disbursements ($111.60). I, therefore, deduct the amounts claimed in respect of this item.
[11] Counsel for the defendant company further challenges the claim for 0.4 of a day for the filing of supplementary submissions following the hearing on 5 August 2022.
[12] I directed the filing of supplementary submissions as the hearing time allowed was inadequate for a fair hearing of the issue between the parties. The claim for 0.4 of a day is an appropriate claim in the circumstances. Otherwise, the parties would have been entitled to claim for greater hearing time. For completeness, I record that this approach has resulted in costs being greater than the usual hearing time of 0.5 of a day, as adding 0.4 to the hearing time of 0.25 results in 0.65 of a day. I have considered whether to reduce the time claimed to 0.25 for the supplementary submissions so that it adds to the time that would otherwise have been allowed. However, I do not consider that is appropriate where the half hour hearing allocated was inadequate largely as a result of the length of MTC’s oral submissions.
[13] Finally, Mr Hucker challenges the claims for 0.4 of a day for the filing of three further memoranda updating the Court on the mortgagee sale of MTC’s property, in advance of the originally scheduled list hearing on 7 October 2022 and as to the discharge of charging orders. Mr Hucker submits that none of the memoranda claimed were directed to be filed and, further, they were filed without seeking leave in advance as should have been done. In counsel’s submission they were effectively evidence
from the bar and ought more appropriately to have been dealt with by updating affidavit evidence.
[14] Each of the memoranda filed, however, contained relevant information for the Court in respect of the leave application. Furthermore, MTC had not responded to Prestige’s memorandum updating the Court on the mortgagee sale of the defendant’s property dated 31 August 2022. In these circumstances, I consider that the claims in respect of the three further memoranda filed are appropriate.
[15] The costs allowed in respect of the unsuccessful leave application are, therefore, as set out in the table below.
Item Step Time Amount Costs (2B) 50 Appearance at 22 July 2022 list hearing, timetabling defendant’s application for leave to file statement of defence out of time 0.4 $956 24 Preparation of written submissions dated 3 August 2022 opposing defendant’s interlocutory application for leave to file statement of defence out of time 1.5 $3,585 26 Appearance of sole counsel at 5 August 2022 hearing of defendant’s interlocutory application for leave to file statement of defence out of time 0.25 $597.50 Item Step Time Amount 11 Filing memorandum of counsel dated 10 August 2022 (supplementary submissions) 0.4 $956 11 Filing memorandum of counsel dated 30 August 2022 updating Court as to mortgagee sale of defendant’s property 0.4 $956 11 Filing memorandum of counsel dated 5 October 2022 updating Court ahead of 7 October 2022 list hearing 0.4 $956 11 Filing memorandum of counsel dated 17 October 2022 updating Court as to discharge of charging orders 0.4 $956 Subtotal (costs):
$8,962.50
Disbursements Printing: Respondent’s bundle of authorities (193 pages x 3 copies @ 30 cents per page) $173.70 Subtotal (disbursements): $173.70 TOTAL COSTS AND DISBURSEMENTS:
$9,136.20
Liquidation proceedings
[16] Mr Hucker for MTC again challenges the claim under Item 50, to 0.4 of a day for the hearing at the List call on 3 June 2022, submitting that it ought to be 0.2 of a day under Item 11 as a mentions hearing, rather than the hearing of the application. As I said above, Item 50 specifically relates to company liquidation applications and I consider it is appropriate in the circumstances of this case.
[17] Mr Hucker further challenges the claims for 0.4 of a day for each of the two memoranda filed on 20 July 2022, firstly in relation to the filing of a statement of defence out of time and, secondly, in relation to MTC’s name change.
[18] The second memorandum in relation to MTC’s name change is relatively short. To ensure costs fairly reflect the time spent, I consider it is appropriate to reduce the claim for the second memorandum on 20 July 2022 to 0.2 of a day rather than 0.4. However, a claim is appropriate because the steps taken by MTC simply added to the costs for the Prestige.
[19] The final memorandum filed following my judgment and prior to the List hearing on 27 October 2022 was necessary because counsel for Prestige had not heard from counsel for MTC since August 2022 and no memorandum had been filed on behalf of MTC. Again, I consider that the claim is appropriately made.
[20] The defendant company did not raise any issues with the disbursements claimed in respect of the liquidation proceedings. Therefore, I award costs on the liquidation proceedings as sought, with the exception of the second memorandum on 20 July 2022 reduced from 0.4 to 0.2 of a day.
Item Step Time Amount Costs (2B) 48 Issuing statutory demand 0.2 $478 49 Filing a statement of claim and other documents 0.6 $1,434 11 Filing memorandum of counsel dated 1 June 2022 prior to list hearing on 3 June 2022 0.4 $956 11 Filing second memorandum of counsel dated 2 June 2022 prior to list hearing on 3 June 2022 0.4 $956 50 Appearance at list hearing on 3 June 2022 0.4 $956 11 Filing memorandum of counsel dated 20 July 2022 prior to list hearing on 22 July 2022 (and prior to defendant’s application for leave to file a statement of defence out of time dated 21 July 2022) 0.4 $956 11 Filing second memorandum of counsel dated 20 July 2022 updating Court as to defendant’s company name change 0.2 $478 11 Filing memorandum of counsel dated 25 October 2022 prior to list hearing on 27 October 2022 0.4 $956 50 Appearance at list hearing on 27 October 2022 0.4 $956 Subtotal (costs): $8,126.00 Disbursements
Item Supplier Amount Service of statutory demand Translegal Services NZ Ltd $241.50 Filing an application to put a company into liquidation Ministry of Justice $540 Service of liquidation notice of proceeding Translegal Services NZ Ltd $247.25 Advertising in New Zealand Herald New Zealand Herald $381.37 Advertising in New Zealand Gazette Department of Internal Affairs $154 Sealing of orders Ministry of Justice $50 Subtotal (disbursements): $1,614.12 TOTAL COSTS AND DISBURSEMENTS: $9,740.12
Result
[21] The defendant company is to pay Prestige Motors Limited costs on a 2B basis in the amount of $18,876.32 comprising:
(a)costs for the unsuccessful application for leave to file a statement of defence out of time in the amount of $8,962.50 plus disbursements of
$173.70 for a total of $9,136.20; and
(b)costs for the liquidation proceeding in the amount of $8,126.00 plus disbursements of $1,614.12 for a total of $9,740.12.
Associate Judge Sussock
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