SHALEEN SINGH and SHAILESH (SAM) SINGH s AND COZY LIFE KITCHEN LIMITED

[2024] NZHC 2822

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-1617

[2024] NZHC 2822

BETWEEN

SHALEEN SINGH and SHAILESH (SAM) SINGH

Plaintiffs

AND

COZY LIFE KITCHEN LIMITED

Defendant

Hearing:

30 August 2024

Appearances:

L Ponniah for the Plaintiff

K Sun and T Jones for the Defendant

Judgment:

1 October 2024

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 1 October 2024 at 10 am pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Capstone Law, Auckland

SINGH v COZY LIFE KITCHEN LTD [2024] NZHC 2822 [1 October 2024]

Introduction

[1]                 On 30 August 2024, I granted leave to the plaintiffs to withdraw these liquidation proceedings after payment of the debt in full by the defendant. I reserved the question of costs for determination on the papers.

[2]The plaintiffs seek costs on a 2B basis and disbursements for a total of $6,972.

[3]                 The defendant instead submits that costs ought to lie where they fall because the defendant paid the debt that was the subject of the proceedings promptly. In the alternative, the defendant says costs should be ordered on a 1A basis and ought to be limited to the filing of the initial statement of claim.

[4]                 The starting point in any costs decision is that costs are at the discretion of the Court.1 Although the discretion is a wide one, it is not unfettered. Rule 14.2 of the High Court Rules 2016 sets out the general principles and includes:2

(a)the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:

(b)an award of costs should reflect the complexity and significance of the proceeding:

…

(g)so far as possible the determination of costs should be predictable and expeditious.

[5]                 Rules 14.3 to 14.5 provide for the categorisation of proceedings, appropriate daily recovery rates, and the determination of a reasonable time for each step by reference to Schedule 3.

[6]                 Rule 15.23 sets out the presumption that a plaintiff who discontinues proceedings pays costs. That presumption is rebutted when the plaintiff has clearly succeeded.

1      High Court Rules 2016, r 14.1.

2      Rule 14.2(1).

Discussion

[7]                 I begin by recording that as the debt has been paid the plaintiff has clearly succeeded so the r 15.23 presumption is rebutted.

[8]                 The defendant submits that costs ought to lie where they fall because the defendant paid the debt promptly. The timeline for payment is as follows:

(a)The original judgment on which the liquidation proceedings were based was issued in September 2023 by the Disputes Tribunal and required payment by 20 October 2023.

(b)Following the failure to pay, the plaintiffs served a statutory demand on the defendant in May 2024.

(c)The defendant failed to pay the amount demanded and as a result of the failure to comply, a presumption of insolvency arose.

(d)The plaintiffs filed the liquidation proceedings on 5 July 2024, serving them on the defendant on 16 July 2024.

(e)No statement of defence was filed within 10 working days as required.3

(f)The defendant then paid the total debt owing of $29,875.74 on 29 July 2024.

[9]                 After considering this timeline I do not accept that costs ought to lie where they fall. The defendant only appears to have paid the debt following the filing of the liquidation proceeding, nine months after being required to pay by the Disputes Tribunal.

[10]              The usual category and band for costs in liquidation proceedings is category 2, band B. There is no reason to depart from category 2B in this case (as proposed by the defendant) as the steps for which the plaintiff will be awarded costs are only those

3      High Court Rules 2016, r 31.17.

steps prior to payment of the debt. The fact that the defendant paid the debt promptly does not therefore affect the appropriate category or band.

[11]              However, some of the steps and disbursements claimed for by the plaintiffs are not properly claimed.

[12]              The plaintiffs sought to claim for the preparation of a memorandum for the first call of this matter together with costs for the appearance at the hearing. At the hearing, because the debt had been paid, the only matter to be determined were costs. These have been significantly reduced from those claimed and so it is not appropriate for the plaintiffs to be awarded costs for that hearing. The hearing may have been able to be avoided if costs had been more appropriately claimed.

[13]              In addition, costs are claimed for the preparation of the statement of advertising. No separate amount is claimable for this work as it is included within step 49, described in Schedule 3 as “[f]iling statement of claim and other documents”.

[14]              Furthermore, one of the disbursements claimed by the plaintiffs is for $1,440 and is described as fees of the law firm Patel Nand for “arranging signing and filing of proceedings and the affidavit in support, process service fees, affidavit of service plus disbursements excluding court filing fee as per invoice attached”. Claiming law firm fees as a disbursement in this way is essentially claiming indemnity costs for preparatory work other than counsel’s appearances. As discussed at the hearing on 30 August 2024, it is not an appropriate practice. I do not, therefore, allow this disbursement. I do however allow $175 exclusive of GST as a service fee as service fees are properly claimed as disbursements.

[15]              Finally I note the plaintiffs claim all disbursements inclusive of GST. The Court proceeds on the basis that the plaintiffs are registered for GST unless it is confirmed otherwise. Disbursements are therefore awarded on a GST exclusive basis to prevent double recovery. If the plaintiffs are not registered for GST, counsel may file a short memorandum proposing amended disbursement figures on a GST inclusive basis.

[16]Costs are therefore awarded as follows:

Step (Sch 3)	Category 2B costs at $2,390 per day	Time	Costs
48	Issuing statutory demand	0.2	$478.00
49	Filing statement of claim and other documents	0.6	$1,434.00
11	Memorandum for hearing	0.4	$956.00
29	Sealing order for costs and disbursements	0.2	$478.00
Subtotal:	$3,346.00
Disbursements (exclusive of GST)
Filing fee for liquidation proceedings	$610.43
Service fee	$175.00
Sealing fee on order for costs and disbursements	$56.52
Subtotal:	$841.96
Total costs and disbursements	$4,187.96

Result

[17]              The defendant is to pay the plaintiffs’ costs on a 2B basis and disbursements exclusive of GST in the amount of $4,187.96.

Associate Judge Sussock