Smith Elements & Controls Limited v EPI Group Limited

[2018] NZHC 803

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2017-419-000364

[2018] NZHC 803

BETWEEN

SMITH ELEMENTS & CONTROLS LIMITED

Plaintiff

AND

EPI GROUP LIMITED

First Defendant

INTROL PRODUCTS LIMITED

Second Defendant

Hearing:	On the papers
Judgment:	26 April 2018

COSTS JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie On 26 April 2018 at 1.30pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:

Clancy Fisher Oxner & Bryant, Tokoroa/M J Fisher, Auckland Harkness Henry, Hamilton

SMITH ELEMENTS & CONTROLS LTD v EPI GROUP LTD [2018] NZHC 803 [26 April 2018]

Introduction

[1]                 In a reserved decision issued on 7 March 2018,1 I refused Smith Elements & Controls Ltd’s (Smith’s) application for further interim orders against the first defendant, EPI Group Limited (EPI), under the Arbitration Act 1996, but confirmed that what the parties referred to as interim/interim measures, which they had drafted and consented to, should remain in place.2 I expressed the preliminary view that costs should lie where they fall, but invited the parties to file memorandum if they did not agree.3

[2]                 The first defendant – EPI – sought costs. It argued that it was successful in opposing Smith’s application. Costs were sought on a 2B basis, in the sum of

$6,801.50, together with disbursements of $110 – a total of $6,911.50. In its submissions, EPI detailed the background to the proceedings – alleging that Smith had failed to comply with the dispute resolution clause contained in the agreement between the parties, and consistently delayed matters. It was pointed out that it was Smith’s application to increase the protection afforded by the interim/interim orders, and to seek further interim orders. EPI relied on r 14.2(1)(a) of the High Court Rules, and argued that it was the successful party and that Smith should pay its costs.

[3]                 Smith not only opposed EPI’s application for costs, but also sought costs against EPI. It argued that it was the successful party and accordingly is entitled to its costs, again on a 2B basis, in the total sum of $7,916.50, together with disbursements of $274.63 – making a total of $8,191.13. It was claiming costs not only in relation to the hearing before me, but also in relation to an earlier hearing before Whata J.4

Analysis

[4]                 Smith made the initial interlocutory application seeking interim relief. EPI filed an appearance under protest to jurisdiction, based on the dispute resolution clause contained in the agreement between the parties. Smith then applied to set aside that

1      Smith Elements & Controls Ltd v EPI Group Ltd [2018] NZHC 336.

2      At [43]-[44].

3 At [45].

4      Smith Elements & Controls Ltd v EPI Group Ltd [2018] NZHC 99.

protest, to the extent that it protested the jurisdiction of the Court to grant interim orders. It also sought interim orders.

[5]                 The applications were heard by Whata J on 8 February 2018. At that hearing, counsel for EPI conceded that the Court did have the necessary jurisdiction to grant the interim/interim measures sought, and Whata J imposed the interim/interim measures which the parties had drafted, and which both consented to. He did not, however, award costs to either party. Smith argued that I should do so. I do not, however, consider that this is appropriate. Any application for costs in respect of this earlier hearing should be referred to Whata J.

[6]                 At the hearing before me, Smith was seeking further or enhanced interim orders against EPI. I declined to make those orders.

[7]                 While it was my initial impression that costs should lie where they fall, having considered the submissions of the parties, I have changed my mind in this regard. EPI is correct when it points out that the issue which was before me, was occasioned by Smith’s application. Smith was seeking the enhanced interim measures and its application was declined in the face of opposition from EPI. Prima facia, EPI is entitled to its costs as the party who succeeded pursuant to r 14.2(1)(a). Further, the matter came before the Court as an opposed interlocutory application. Rule 14.8(1) provides that unless there are special reasons to the contrary, costs must be fixed in accordance with the rules when the application is determined and that costs become payable when they are fixed.

[8]                 Having reconsidered the issue, I accept that it is appropriate to make a costs order against Smith and in favour of EPI. It is also appropriate to direct that costs be fixed on a 2B basis – that categorisation properly reflects that the proceedings were of average complexity, requiring a normal allocation of time.

[9]                 I have reviewed the schedule attached to EPI’s submissions. Insofar as I can see, it is in order. All of the costs claimed by EPI post-date Whata J’s judgment. For the reasons I have set out above, that is clearly appropriate. No issue is taken by Smith with the quantum of the costs claimed.

[10]              I make an order in favour of EPI and against Smith, awarding costs and disbursements in the sum of $6,911.50.

Wylie J