Red Bond Limited v Formation Holdings Limited

[2019] NZHC 481

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2018-412-000055

[2019] NZHC 481

BETWEEN

RED BOND LIMITED

Plaintiff

AND

FORMATION HOLDINGS LIMITED

Defendant

Hearing:

On the papers

Counsel:

G A Paine for the Plaintiff

L A Andersen for the Defendant

Judgment:

18 March 2019

JUDGMENT OF NATION J AS TO COSTS

[1]                  On 4 July 2018, Red Bond filed an application for relief against forfeiture and an on-notice application for an interim injunction restraining the termination of a lease.

[2]                  Through a telephone conference with counsel on 2 November 2018, the parties agreed no steps would be taken to remove the plaintiff from the leased premises until a time after there would be a hearing of the application.

[3]                  The hearing of the application for an interim injunction took place on 21 November 2018. Through my judgment of 23 November 2018, the application was denied.1

1 Red Bond Ltd v Formation Holdings Ltd [2018] NZHC 3053.

RED BOND LTD v FORMATION HOLDINGS LTD [2019] NZHC 481 [18 March 2019]

[4]                  On 27 November 2018, counsel for the defendant filed a memorandum seeking costs as to the application for an interim injunction, on a 2B basis, in the sum of

$6,132.50. Counsel’s memorandum referred only to the fact the defendant had been successful and set out the costs claimed on a 2B basis.

[5]                  Counsel for Red Bond filed a memorandum on 19 December 2018 saying that, after that application for costs had been filed, the parties had resolved “all issues between them”. He advised that, on settlement, the defendant would purchase from the plaintiff the stock and business currently operated from the leased premises. As part of the settlement, the defendant agreed to pay back one-half of the rental for the month to the plaintiff. I was also told that the parties agreed all Court actions would come to an end with no further activity or applications made. The parties agreed that all costs would lie where they fell and the application for costs would be withdrawn.

[6]                  As referred to in the memorandum filed for the plaintiff and in a further memorandum from counsel for the defendant, counsel for the defendant says the plaintiff had not agreed costs on the interim injunction would be waived. All that was agreed was that costs on the substantive proceedings would not be sought.

[7]                  In response, counsel for Red Bond has said that Red Bond have instructed him that settlement reached last year was on the basis that no costs of any sort would be claimed from either party. The price for the purchase of the business by the defendant was formulated on that basis.

[8]                  Counsel also suggested that, in any event, the application for an interim injunction was successful because the defendant’s re-entry to the premises was postponed.

[9]                  I will deal with the contested application on the basis of the limited information that has been put before me.

[10]              The application for costs was filed a short time after my judgment was issued. There was no reference in it to any settlement having been reached between the parties as I could have expected if counsel had been aware of such a settlement.

[11]              The memorandum in which costs were sought was filed on 27 November 2018. In my judgment, I recorded that the defendant had confirmed it would not be taking any steps to remove Red Bond from the leased premises until 30 November 2018.

[12]              There appears to be no dispute that matters were settled between the parties on the basis there would be a refund of some rent from the defendant to Red Bond and the defendant would take over the stock and business of Red Bond. It seems most unlikely that such a settlement would have been reached on the basis Red Bond could still have to pay the landlord some $6,000 in costs or that either party would have thought there could have been any issues as to costs on the substantive proceedings. With the settlement, there was going to be no need for further steps to be taken in the substantive proceedings.

[13]              There appears to be no dispute that a settlement was reached between Red Bond and the defendant which, in part, involved a refund of rent from the defendant to Red Bond. I consider it unlikely that an agreement would be reached over the amount involved if the parties had thought there was still an outstanding issue over costs.

[14]              Red Bond did, through filing the proceedings, by agreement, obtain a short term and interim delay in forfeiture. Although the defendant was successful after there had been a hearing of the application for an injunction, the parties have now reached a settlement of the substantive issues.

[15]              In these circumstances, I do not consider it appropriate to make any order for costs in favour of either party. Costs are to lie where they fall.

[16]              With the undisputed advice that the proceedings have been settled, the Court will now treat them as being at an end.

Solicitors:

G A Paine, Barrister, Dunedin

L A Andersen, Barrister, Dunedin.