Redcoats Limited v Day - [2023] NZHC 2152

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2023-485-000188

[2023] NZHC 2152

BETWEEN
REDCOATS LIMITED

Plaintiff

AND

CHRISTOPHER DAY

Defendant

AND

ANDCO REALTY LIMITED

Second Defendant

Hearing: 24 May 2023

Appearances:

D G Dewar and J Pietras for Plaintiff S Iorns and J Sylvester for Defendants

Judgment:

16 June 2023

Costs Judgment:

11 August 2023

JUDGMENT OF CULL J

[On Costs]

[1] By judgment dated 16 June 2023,1 I declined an application by Mr Day and Andco Realty Limited (Andco), the defendants, to set aside the interim injunction obtained by Redcoats Limited (Redcoats), the plaintiff, restraining Mr Day from undertaking any private business or employment that competes with Redcoats within a 15 kilometre radius of Redcoats’ business premises for a period of three months.2 The interim order also restrained Andco, Mr Day’s intended employer, from employing Mr Day in any capacity to undertake work that competes with Redcoats.

1 Redcoats Limited v Day [2023] NZHC 1502.
2 Redcoats Limited v Day [2023] NZHC 1037.

REDCOATS LTD v DAY and ANDCO REALTY LTD [Costs] [2023] NZHC 2152 [11 August 2023]

[2] I declined to set aside the interim injunction on the basis that there remained a serious question to be tried as to the reasonableness and enforceability of the restraint of trade clause. I concluded that the balance of convenience and overall justice of the case favoured the plaintiffs, and accordingly upheld the interim injunction. I directed that in the event the parties could not agree on costs, they were to file memoranda. Therein the plaintiff states that the interim relief granted to the plaintiff has effectively concluded the case.

[3] The plaintiff seeks costs on a 2B basis and asks the Court to consider awarding increased costs under r 14.6 of the High Court Rules 2016. They submit that the costs award should reflect an uplift of 20% because of the egregious nature of the defendants’ breach of the plaintiff’s rights.

[4] The defendants do not dispute conventional scale costs on a 2B basis. However, the defendants take issue with the plaintiff’s scale calculation which includes provision for second counsel, and provision for two applications for injunctive relief, one ex parte and one on notice.

[5]I consider the issues in the following order:

(a) The disputed aspects of the plaintiff’s calculation of 2B scale costs.

(b) Whether increased costs are appropriate.

Scale Costs

[6] I consider that these proceedings were of average complexity and that the reasonable time for the steps in this proceeding is a normal time.3 Costs are a matter of the Court’s discretion, and I am of the view that the appropriate scale is 2B for costs in this proceeding.4

3 High Court Rules 2016, rr 14.3 and 14.5.
4 Rule 14.1. I note also the Court’s power to recategorise proceedings under r 14.3(2).

Second Counsel

[7]The plaintiff appended a costs schedule to their memorandum which allocated

0.25 days to second counsel. The plaintiff made…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 2152
Decision Date: 16 June 2023

CaseChat Overview and Summary

In the High Court of New Zealand, Wellington Registry, Redcoats Limited filed a lawsuit against Christopher Day and Andco Realty Limited over an interim injunction. Redcoats sought to restrain Day from engaging in private business or employment that competes with Redcoats within a 15 kilometre radius of its business premises for three months. The injunction also restrained Andco, Day's intended employer, from employing Day in any capacity to undertake work that competes with Redcoats. The court declined the defendants' application to set aside the interim injunction, finding that there remained a serious question to be tried as to the reasonableness and enforceability of the restraint of trade clause. The court concluded that the balance of convenience and overall justice of the case favoured the plaintiff.

The plaintiff now seeks costs on a 2B basis and asks the Court to consider awarding increased costs under rule 14.6 of the High Court Rules 2016. The defendants do not dispute conventional scale costs on a 2B basis but take issue with the plaintiff's scale calculation which includes provision for second counsel, and provision for two applications for injunctive relief, one ex parte and one on notice. The court considered the issues in the following order: (a) the disputed aspects of the plaintiff's calculation of 2B scale costs; and (b) whether increased costs are appropriate.

The court considered that these proceedings were of average complexity and that the reasonable time for the steps in this proceeding is a normal time. The court found that the appropriate scale is 2B for costs in this proceeding. The court found that the plaintiff did not require second counsel and that the allocation for the two applications for injunctive relief was a duplication in the plaintiff's schedule. The court found that the defendants' actions in these proceedings were not unreasonable, such that increased costs should be awarded. The application for increased costs is declined. The defendants, jointly and severally, are ordered to pay to the plaintiff costs on a 2B basis in the amount of $16,491 plus disbursements in the amount of $1,870.00.

Orders