QQ Homeland Limited v Orewa Corporation Limited

[2024] NZHC 1285

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2310

[2024] NZHC 1285

UNDER

the Companies Act 1993

BETWEEN

QQ HOMELAND LIMITED

Plaintiff

AND

OREWA CORPORATION LIMITED

Defendant

Hearing:

(On the papers)

Appearances:

K K-H Sun for Plaintiff

S W M Piggin for Defendant

Judgment:

22 May 2024

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

This judgment was delivered by me on 22 May 2024 at 4:00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

……………………………….

QQ HOMELAND LIMITED v OREWA CORPORATION LIMITED [2024] NZHC 1285 [22 May 2024]

[1]                 The background to this costs decision is my judgment of 12 April 2024, dismissing QQ Homeland Limited’s (QQ) application to liquidate Orewa Corporation Limited (OCL).1

[2]                 Counsel have filed memoranda with each party claiming success and seeking costs

[3]                 QQ issued a statutory demand seeking payment of $48,222.62. I held the demand contained a significant error in that it was over-stated by $10,000.00. I held QQ’s basis for claiming the additional $10,000.00 was misconceived.

[4]                 In any event, no challenge to the statutory demand was made by OCL, but it filed  a  statement  of  defence  in  response  to  the  statement  of  claim  dated       27 September 2023 and applied to restrain advertising — both applications being heard together. In OCL’s statement of defence of 25 October 2023, it foreshadowed paying the undisputed amount of $32,500.00, which it did on 2 November 2023. The difference between the amount paid and the amount in the demand (less the $10,000.00 referred to above) relates to a set-off/counterclaim by OCL for allegedly faulty workmanship by QQ, which I found to be arguable and a dispute over QQ’s ability  to claim interest. Given the interest OCL was likely to be liable for amounted to

$1,156.40, OCL agreed during the hearing that for the purposes of dealing with the application, it would pay that amount.

[5]                 QQ says it should be entitled to costs as it took the filing of the liquidation proceeding to get the undisputed amount paid. OCL says it should have costs because the only reason the matter went to trial was QQ’s faulty position on its claim for the extra $10,000.00 and QQ’s failure to recognise there was a genuine dispute in respect of the counterclaim (QQ not filing any evidence in response to the counterclaim).

[6]There is merit in both counsels’ position.

[7]                 There is an award of costs for all steps up until the filing of and including the statement of claim.

1      QQ Homeland Ltd v Orewa Corporation Ltd [2024] NZHC 788.

[8]                 There is an award of costs in favour of OCL for all steps from and including its filing of a statement of defence and application to restrain advertising.

[9]                 In each case, the party awarded costs is entitled to disbursements in respect of the costs for which they have been awarded.

[10]             QQ are awarded costs because there is merit in its position that it was only with the issuing of the proceedings that it recovered the amount that OCL accepted was due. If QQ had halted the liquidation proceeding at that stage then, in my view, it would be clear that QQ had been the successful party and so is entitled to costs to that point.

[11]             However, when QQ pursued this proceeding beyond receiving the undisputed amount based on its misconceived approach to the disputed $10,000.00 and in failing to present any evidence in respect of the alleged counterclaim, it became the unsuccessful party in respect of the defended liquidation proceeding. For that reason, OCL is the successful party in respect of events after the filing of its statement of defence and application to restrain advertising and is entitled to the costs award I have made.

Associate Judge Lester

Solicitors:

Capstone Law Limited (for Plaintiff)

Northern Legal Limited, Auckland (for Defendant)

Copy to counsel:
S W M Piggin, Barrister, Auckland (for Defendant)