Rug Expo Limited v Pamir Rugs Limited

[2014] NZHC 2603

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

COMMERCIAL LIST

CIV-2013-404-004902 [2014] NZHC 2603

UNDER

The Fair Trading Act 1986

IN THE MATTER

of breach of the Fair Trading Act 1986 and
Passing Off

BETWEEN

RUG EXPO LIMITED First Plaintiff

BAMIAN RUG HOUSE LIMITED Second Plaintiff

AND

PAMIR RUGS LIMITED First Defendant

SHAUKAT ALI ZAMANI and SHABEENA SAIRUN SHAH Second and Third Defendants

Hearing:	(On the papers)
Judgment:	22 October 2014

COSTS JUDGMENT OF VENNING J

This judgment was delivered by me on 22 October 2014 at 4.50 pm, pursuant to Rule 11.5 of the High

Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Wong & Bong Law Office Limited, Auckland

HDA Lawyers, Auckland

Copy to:            A McDonald, Auckland

M A Karam, Auckland

RUG EXPO LTD v PAMIR RUGS LTD [2014] NZHC 2603 [22 October 2014]

[1]      The plaintiffs discontinued this proceeding by notice of discontinuance dated

4 September 2014.  The remaining issue is costs.  The defendants seek costs on a 2B basis.  The plaintiffs submit that costs should be left to lie where they fall and that if costs are to be awarded they should be, at the least, adjusted from those sought by the defendants.

[2]      Both parties stage rug sales throughout New Zealand.   The plaintiffs’ case was the defendants had engaged in passing off by adopting a concerted programme of conducting sales staged to co-incide with the plaintiffs’ sales which had been heavily marketed.

[3]      The defendants’ position is they have been conducting rug sales in New Zealand, again themselves heavily marketing the sales, for some time prior to the plaintiffs’ involvement in the market.

[4]      In  a  case  of  this  nature  where  the  proceeding  is  discontinued  it  is  not appropriate for this Court to speculate on the particular merits of the parties’ cases. The general rule relating to a discontinuance applies. That is that:

15.23   Costs

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[5]      The discontinuing plaintiffs should pay costs to the defendants.   There is nothing in the correspondence exchanged between the parties that leads the Court to any other conclusion.  While the plaintiffs did issue a letter prior to suit, the plaintiffs nevertheless chose to pursue the proceedings after a detailed response by the defendants on 27 November 2013 shortly after the proceedings were issued.   The position may have been different if the proceeding had been discontinued at that time.

[6]      The defendants  are  to  have  costs  on  a  2B  basis  in  accordance with  the schedule  to  counsel’s  first  memorandum  dated  23  September  2014  with  the following deductions:

(a)      the  second  claim  for  filing  a  memorandum  for  the  first  case management conference (0.4 days) is disallowed;

(b)items  30  and  32,  being  preparation  of  briefs  of  evidence  and preparation of issues, are reduced to a 50 per cent allowance in each case.   I accept that given the stage the proceedings were at it was proper for the defendants to have taken some steps in that regard, but a 50 per cent allowance is sufficient to recognise that rather than the

60 per cent claimed.

[7]      The result is the defendants are to have costs against the plaintiffs for a time allocation of 11.45 days or $22,785.50, together with disbursements of $160.00.

Venning J