PURE PAC SALES LIMITED AND MATANGI BERRY FARM LIMITED
[2024] NZHC 2842
•1 October 2024
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2023-419-353
[2024] NZHC 2842
UNDER section 241 of the Companies Act BETWEEN
PURE PAC SALES LIMITED
Plaintiff
AND
MATANGI BERRY FARM LIMITED
Defendant
Hearing: On the papers Appearances:
MR Walker and BB Gresson for the Plaintiff M Si for the Defendant
Judgment:
1 October 2024
JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
(Costs)
This judgment was delivered by me on 1 October 2024 at 3 pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
Todd & Walker Law, Queenstown My Legal Limited, Hamilton
PURE PAC SALES LTD v MATANGI BERRY FARM LTD [2024] NZHC 2842 [1 October 2024]
Introduction
[1] In a judgment delivered on 31 July 2024, I declined an application by Pure Pac Sales Ltd (Pure Pac) to liquidate Matangi Berry Farm Ltd (Matangi) and recorded that Matangi would be entitled to costs.1 The parties have since filed costs memoranda. They agree that Matangi is entitled to costs on a 2B basis but Pure Pac disputes certain steps claimed by Matangi.
[2] I set out the costs principles briefly below and then consider the disputed steps claimed for.
Costs principles
[3] The starting point in any costs decision is that costs are at the discretion of the Court.2 Although the discretion is a wide one, it is not unfettered. Rule 14.2 of the High Court Rules 2016 sets out the general principles and includes:3
(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:
…
(g)so far as possible the determination of costs should be predictable and expeditious.
[4] Rules 14.3 to 14.4 provide for the categorisation of proceedings and the appropriate daily recovery rate.
[5] Rule 14.5 then provides for the determination of a reasonable time for each step by reference to sch 3. If sch 3 does not refer to the step then the reasonable time is determined by analogy with the schedule or, if no analogy can usefully be made, the time assessed as likely to be required for the particular step.
1 Pure Pac Sales Ltd v Matangi Berry Farm Ltd [2024] NZHC 2114.
2 High Court Rules 2016, r 14.1.
3 Rule 14.2(1).
Steps claimed for
[6] I set out a table below of the steps claimed by reference to sch 3 of the High Court Rules:
Schedule setting out costs claimed on a 2B basis Sch 3 step Step in the proceeding (Daily recovery rate at $2,390.00) Days 2 Commencement of defence by defendant 2.0 10 Preparation for hearing on 15.04.2024 0.4 11 Filing memorandum for the hearing on 15.04.2024 0.4 13 Appearance at hearing on 15.04.2024 0.3 38 Filing supporting affidavits for hearing on 19.06.2024 2.0 40 Preparation of written submissions for hearing on 19.06.2024 1.5 42 Appearance at hearing on 19.06.2024 0.5 Hours in total: 7.1 Total costs claimed: $16,969.00
[7] Pure Pac submits that items 10, 13 and 38 ought not to be included for the reasons discussed below.
Step 10 — preparation for first case management conference
[8] Pure Pac submits that step 10 in schedule 3 is for preparation for the first case management conference and that these conferences involve making directions on a number of matters, including the terms and scope of discovery (as expressly referred to) and require a reasonable degree of preparation and thought. Pure Pac says that this step does not apply to list hearings for proceedings such as this, where the only procedural directions relate to the setting down of a hearing and the timetabling of submissions. Counsel says those steps are already captured in step 11 — the step for filing memoranda for first or subsequent case management conference or mentions hearings.
[9]Matangi does not address this step separately in its costs submissions.
[10] I agree with the submissions made on behalf of Pure Pac and do not consider costs should be awarded for item 10 in liquidation proceedings. Costs are not therefore awarded for this step below.
Step 13 — appearance at hearing on 15 April 2024
[11] A list hearing for the proceeding was scheduled on 15 April 2024. Both parties filed memoranda in advance of the hearing. Pure Pac accepts that Matangi is entitled to costs for its memorandum (step 11 as referred to above).
[12] Pure Pac submits, however, that counsel were ultimately not heard due to a VMR outage. Directions were, therefore, made on the basis of the memoranda filed. There being no hearing, Pure Pac does not consider it reasonable for costs to be awarded for this step.
[13] I consider costs ought to be awarded for step 13 as the purpose of costs is to compensate the successful party for its costs in terms of the proceeding. It is unfortunate that there was a VMR outage but counsel for the defendant still attended court on that day and the defendant still incurred costs. I therefore include this step in the award below.
Step 38 — filing supporting affidavits for hearing on 19 June 2024
[14] Pure Pac submits that step 38 (along with steps 40 and 42) have been claimed on the basis an application for liquidation is analogous to an originating application. Pure Pac agrees with this, given the similarities between the two proceedings as affidavits are filed together with the application or claim and opposition or defence, and there is no cross-examination unless notice is given. However, Pure Pac submits that Matangi has claimed two days for its affidavits in opposition under step 38 and two days for its statement of defence under step 2. Pure Pac does not consider that to be appropriate and says it amounts to double counting.
[15] Pure Pac instead says that in an originating application, step 38 allows for two days to be claimed for all documents filed in opposition and there is no additional allowance for the notice of opposition. Alternatively, Pure Pac says if step 2 applies then both the defence and affidavits filed in support are accounted for in the two days allowed for the statement of defence.
[16] Pure Pac says this point is reinforced by the fact the statements of claim and defence in a liquidation proceeding, where based on a failure to respond to a statutory demand, are usually brief. In this case, the statement of defence was just three pages. In addition, Pure Pac submits that sch 3 recognises this as step 49 — which applies to the filing of the statement of claim and other documents in a liquidation proceeding only allows for 0.6 days. In Pure Pac’s submission, it would be inconsistent for a plaintiff in a liquidation proceeding only to be entitled to 0.6 days if a defendant is entitled to four days.
[17] I agree that steps 2 and 38 cannot both be claimed. Step 49 in sch 3 applies to the filing of the statement of claim and other documents in a liquidation proceeding but there is no equivalent step for the filing of a statement of defence and other documents in opposition. Rule 14.5(1)(b) provides that where time is not specified for a step in sch 3 then time should be determined by analogy. I note that in Natural Fibre Innovations Ltd v Blossom Wool 2007 Ltd, Master Faire awarded 0.6 days for the filing of the statement of defence and affidavits in opposition, presumably by analogy with step 49.4
[18] The documents required to be filed to apply for liquidation are pro forma with the affidavit filed in support simply to verify the statement of claim. In this case it was four paragraphs long.
[19] By contrast, there is not a prescribed form for a statement of defence in a liquidation proceeding or the affidavit(s) filed in opposition. In this case one affidavit was five pages long and annexed six exhibits and a second affidavit of one page was also filed.
[20] I consider that the documents filed in defence in this case should be treated as analogous to the opposition to an originating application as Pure Pac accepts. This is provided for at step 38 with two days able to be claimed for the filing of the opposition and supporting affidavits. I do not consider that two days can also be claimed under
4 Natural Fibre Innovations Ltd v Blossom Wool 2007 Ltd HC Auckland CIV-2009-404-5177, 30 November 2009.
step 2 for the statement of defence. I therefore allow for costs in respect of step 38 but not step 2.
[21]In summary, I allow the following costs:
Schedule setting out costs awarded on a 2B basis Sch 3 Step Step in the proceeding (Daily recovery rate at $2,390.00) Days 11 Filing memorandum for the hearing on 15.04.2024 0.4 13 Appearance at hearing on 15.04.2024 0.3 38 Filing statement of defence and supporting affidavits for hearing on 19.06.2024 2.0 40 Preparation of written submissions for hearing on 19.06.2024 1.5 42 Appearance at hearing on 19.06.2024 0.5 Hours in total: 4.7 Total cost: $11,233.00
[22] No disbursements have been separately claimed but I award disbursements as fixed by the Registrar as there will be a filing fee for the statement of defence and for sealing the costs order if necessary.
Result
[23]The plaintiff is to pay the defendant costs on a 2B basis in the amount of
$11,233 plus disbursements as fixed by the Registrar.
Associate Judge Sussock
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