Soma v Nath - [2019] NZHC 2119

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-1647

[2019] NZHC 2119

BETWEEN
HERA SOMA

Plaintiff

AND

SUNIL RAMENDRA NATH

First Defendant

A1 CARS 2014 LTD

Second Defendant

Hearing: (On the papers)

Counsel:

D A Jaques for Plaintiff

D J Rooke for Defendants

Judgment:

27 August 2019

COSTS JUDGMENT OF BREWER J

This judgment was delivered by me on 27 August 2019 at 4:00 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Legal Associates (Auckland) for Plaintiff David Rooke Law (Auckland) for Defendants

SOMA v NATH [2019] NZHC 2119 [27 August 2019]

Introduction

[1]This is a costs judgment.

[2] The plaintiff had three causes of action. The first was against the first defendant, Mr Nath, and the second defendant, A1 Cars 2014 Ltd, which was nominally their joint business vehicle. The plaintiff claimed the first defendant behaved improperly as director of the second defendant, causing the plaintiff loss of
$800,000. The second cause of action was brought against the second defendant. The plaintiff claimed he advanced it three loans totalling $106,553.50 which had not been repaid despite demands. Alternatively, he claimed against the first defendant for the recovery of the loans. The third cause of action was against the second defendant for recovery of a HiAce van the plaintiff left at its premises or for damages of $24,000. The first defendant counterclaimed against the plaintiff.

[3] In my judgment1 I dismissed the first cause of action. I dismissed the second cause of action against the second defendant but entered judgment for the plaintiff for
$85,000 against the first defendant. On the third cause of action I entered judgment for the plaintiff against the second defendant for $11,000 plus interest. I dismissed the first defendant’s counterclaim.

[4] The first cause of action was not well founded. The parties gave partial truths, at best, rather than clear evidence. I was left with the overall view that the second defendant was largely a fictional cover for a car sales business run on a cash basis by the other two parties for tax purposes. The dispute was driven by emotion rather than rational business decision-making.

[5] The plaintiff seeks costs on a 2B basis. For the reasons that follow I award him costs on a High Court 2B basis reduced by 50 per cent.

1 Soma v Nath [2019] NZHC 1088.

Law

[6] Costs are at the discretion of the Court.2 However, this discretion is qualified by the specific costs rules as well as certain fundamental principles.

[7] One such principle is that costs go to the party who succeeds.3 Success on limited terms is still regarded as success for costs purposes.4

[8] However, r 14.7(d) of the High Court Rules 2016 allows the Court to reduce or refuse an award of costs which would otherwise be awarded, on the basis that that party failed in respect of a cause of action or issue which significantly increased the costs of…

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: [2019] NZHC 2119
Decision Date: 27 August 2019

CaseChat Overview and Summary

The plaintiff, Hera Soma, brought claims against Sunil Ramendra Nath and A1 Cars 2014 Ltd in the High Court of New Zealand, Auckland Registry. The plaintiff's claims included allegations of improper conduct by Nath as a director of A1 Cars, failure to repay loans, and recovery of a HiAce van. Nath counterclaimed against the plaintiff. The court dismissed the first cause of action, entered judgment for the plaintiff for $85,000 against Nath on the second cause of action, and for $11,000 plus interest against A1 Cars on the third cause of action. The court dismissed Nath's counterclaim.

The court was required to determine the appropriate costs order, considering the plaintiff's partial success and the substantial increase in the defendants' costs due to the plaintiff's unsuccessful major claim. The plaintiff sought costs on a High Court 2B basis, while the defendants argued for District Court 2B costs due to the plaintiff's partial success.

The court awarded the plaintiff costs on a High Court 2B basis, reduced by 50%, reflecting the plaintiff's partial success and the defendants' significant unnecessary expense due to the unsuccessful major claim. The court considered it inappropriate to estimate specific costs attributable to each claim and ordered the defendants to pay the plaintiff $22,634.50 in costs plus $3,737.20 in disbursements.

Orders