Robert Jones Holdings Limited v McCullagh - [2017] NZHC 70

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-003475 [2017] NZHC 70

UNDER
Sections 292, 294 and 295 of the

Companies Act 1993

IN THE MATTER

of the liquidation of Northern Crest
Investments Limited (in liquidation)

BETWEEN

ROBERT JONES HOLDINGS LIMITED Applicant

AND

ANTHONY JOHN MCCULLAGH AND STEPHEN MARK LAWRENCE Respondents

Hearing: On the papers

Counsel:

D G Chesterman for Applicant
B P Keene QC and L Van for Respondents

Judgment:

3 February 2017

COSTS JUDGMENT OF DOWNS J

This judgment was delivered by me on Friday, 3 February 2017 at 11 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Anthony Harper, Auckland.
B P Keene QC, Auckland.
D G Chesterman, Auckland.

ROBERT JONES HOLDINGS LTD v MCCULLAGH [2017] NZHC 70 [3 February 2017]

[1] On 26 June 2015 Associate Judge Bell dismissed a suite of discovery applications and an application to set aside privilege brought by Robert Jones Holdings Ltd, or RJH, in relation to documents held by the liquidators. The Associate Judge ordered costs against RJH on an increased basis. RJH applied for a review of those determinations. I heard that application on 17 October 2016. I gave
judgment on 21 October 2016.1 I upheld the Associate Judge’s conclusions in all but

one area, set aside His Honour’s costs order and made no costs order of my own. I encouraged agreement in relation to costs. The parties, however, have been unable to agree. Hence this judgment.

[2] The liquidators seek costs of $20,099: $13,651.40 in relation to the applications before Associate Judge Bell, and $6,447.60 in relation to the review application. Their proposed figure acknowledges RJH’s partial success in relation to one area (waiver of privilege) by discounting:

(a) The Associate Judge’s costs order (of $17,064.25) by 20 percent.

(b) 2B costs in relation to the review application by 10 percent.

[3] RJH resists the application. It contends costs should lie where they fall on the basis each party enjoyed a broadly similar measure of success.2

[4] Costs normally follow the event. So too in this case for five reasons. First, the liquidators were successful in relation to all of the interlocutory applications before the Associate Judge. Second, the liquidators succeeded on RJH’s review application, save for one matter dealt with shortly. More particularly, the liquidators succeeded in resisting discovery of seven categories of documentation and the associated inspection of a High Court file. Third, RJH’s success on review was confined to one issue: waiver of privilege. I held the liquidators’ use of otherwise privileged material operated to constitute a waiver of privilege in respect of a small number of communications. Fourth, that victory was modest. The ruling was
confined to the communications of two correspondents in relation to three discrete

1 Robert Jones Holdings Ltd v McCullagh [2016] NZHC 2529.
2 Packing in Ltd (in liquidation) v Chilcott (2003) 16 PRNZ 958.

topics. Context also assumes importance. RJH contended waiver attracted to all otherwise privileged material. That argument failed. So…

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.

Keep reading for free

Create a free CaseChat account to read Robert Jones Holdings Limited v McCullagh and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2017] NZHC 70
Decision Date: 3 February 2017

CaseChat Overview and Summary

The case of Robert Jones Holdings Limited v McCullagh involved a dispute over costs in the context of the liquidation of Northern Crest Investments Limited. Robert Jones Holdings Limited, the applicant, challenged the liquidators' costs in relation to various applications and a review application. The liquidators sought costs totaling $20,099, which they calculated by discounting the original costs order by 20 percent and the costs for the review application by 10 percent. Robert Jones Holdings Limited contested this, arguing that the costs should lie where they fell as both parties had a similar measure of success.

The central legal issue before the court was whether the liquidators should be awarded costs in light of Robert Jones Holdings Limited's partial success on the review application. The court had to determine the appropriate costs categorisation for both the original applications and the review application, and whether any discounts were justified based on the parties' respective levels of success. The court had to balance the principle that costs generally follow the event with the specific circumstances of this case.

The court found that the liquidators were successful on the majority of the issues, including all of the interlocutory applications and the review application, except for one matter regarding the waiver of privilege. The court held that Robert Jones Holdings Limited's success on this single issue was modest and did not warrant an equal distribution of costs. The court agreed with the liquidators that a 2C categorisation for the original applications and a 2B categorisation for the review application were appropriate. However, the court reduced the uplift in costs from 40 percent to 30 percent for the original applications and from 10 percent to 20 percent for the review application to reflect Robert Jones Holdings Limited's partial success.

The court ordered that the liquidators were to be awarded $12,676.30 for the original applications and $5,731.20 for the review application, totaling $18,407.30 in costs.

Orders