Principle Developments Limited v Slotemaker

[2022] NZHC 3336

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2022-442-000018

[2022] NZHC 3336

UNDER

the Companies Act 1993

IN THE MATTER

of an application to set aside a Statutory Demand

BETWEEN

PRINCIPLE DEVELOPMENTS LIMITED

Plaintiff

AND

DYLAN SLOTEMAKER

Defendant

Hearing:

On the papers

Counsel:

A G Stallard for Plaintiff

R J D Fitchett for Defendant

Judgment:

9 December 2022

COSTS JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 9 December 2022 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

PRINCIPLE DEVELOPMENTS LTD v SLOTEMAKER [2022] NZHC 3336 [9 December 2022]

[1]    In a judgment of 8 September 2022,1 I granted an application by the plaintiff to set aside a statutory demand served upon it by the defendant. I also directed the parties to confer on costs and if they could not reach agreement, they could file memoranda. I did not hear anything more about the matter until 7 December 2022 when I was provided with memoranda that had been filed by counsel some weeks ago.

[2]    The plaintiff seeks costs. There is no dispute that the plaintiff was the successful party and is entitled to costs. There is also no dispute that costs on a 2B basis total $9,560 and that the plaintiff is entitled to reasonable disbursements.

[3]    The sole issue is whether the plaintiff is entitled to an uplift on scale costs. The plaintiff claims an uplift of 50 per cent on 2B scale costs.

[4]The applicable rule is r 14.6(3) High Court Rules 2016 which relevantly reads:

The court may order a party to pay increased costs if—

(a)…

(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)…

(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii)failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument;

…

[5]    The plaintiff submits an uplift on scale costs is appropriate as several of the arguments advanced by the defendant were not accepted and I recognised in my judgment that the plaintiff had raised a dispute as to its liability for the sum claimed prior to the issue of the statutory demand. The plaintiff also submits this was no simple debt collection matter and the defendant simply failed to acknowledge there was a difference of view that could not appropriately be dealt with by the issue of a statutory demand.

1      Principle Developments Ltd v Slotemaker [2022] NZHC 2283.

[6]    In my view it is not appropriate to award an uplift on scale costs in this case. There are several reasons for this. First, it is important that the costs regime should be applied in a predictable manner and that increased costs should not be awarded simply because a party is unsuccessful. Second, while I accept that increased costs may be awarded where the statutory demand process is used inappropriately, on balance I am not satisfied that is the case here. It certainly was not inevitable that the statutory demand would be set aside. The decision turned on an issue of interpretation of the contract which was clearly arguable, the exact nature of which was not clearly enunciated by the plaintiff in my view. Finally, while the defendant’s arguments were not accepted, the same is the case for some arguments that the plaintiff advanced.

Result

[7]    There shall be an order that the defendant is to pay the plaintiff costs of $9,560 plus reasonable disbursements as fixed by the Registrar.

O G Paulsen Associate Judge

Solicitors:

Stallard Law Limited, Nelson Rout Milner Fitchett, Nelson