Strata Title Administration Ltd v Body Corporate Administration Ltd - [2014] NZCA 96

IN THE COURT OF APPEAL OF NEW ZEALAND

CA152/2013
[2014] NZCA 96

BETWEEN

AND

STRATA TITLE ADMINISTRATION LIMITED
First Appellant

CYRUS MEHTA
Second Appellant

AND

BODY CORPORATE ADMINISTRATION LIMITED
Respondent

Hearing:	12 March 2014
Court:	Harrison, White and Venning JJ
Counsel:	M I S Phillipps for First Appellant R J Thompson for Second Appellant P J Wright for Respondent
Judgment:	26 March 2014 at 12 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellants are ordered to pay the respondent one set of costs for a standard appeal on a Band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Harrison J)

Introduction

Strata Title Administration Ltd (STA) and Body Corporate Administration Ltd (BCA) compete in providing property administration services in Auckland. Cyrus Mehta was employed by BCA as a property administrator until he resigned on 31 October 2008. Shortly afterwards he commenced employment with STA.
Nearly a year later BCA issued a proceeding against STA and Mr Mehta in the High Court at Auckland. Various causes of action were pleaded including breach of confidence, misuse of confidential information and conspiracy to injure. BCA sought the remedies of damages, accounting for profits, exemplary damages and permanent injunctions. At the same time the company applied successfully on a without notice basis for a search order and an interim injunction.
The search order was carried out at STA’s offices and at Mr Mehta’s family home. Many pages of hard copy material were seized together with entire hard drives of computers; others were cloned over a series of days. As Mr Phillipps notes, not a single confidential BCA document was identified among the seized material. A great deal of interlocutory activity followed, leading Allan J to issue these three judgments:
(a)First, on 10 May 2010, dismissing STA’s application to discharge the search order and adjourning the application to discharge the interim injunction pending inspection of the seized soft copy material;[1]
(b)Second, on 16 March 2011, discharging the interim injunction to the extent that it prohibited STA or Mr Mehta from dealing with BCA’s clients but maintaining it to the extent of prohibiting either STA or Mr Mehta from misusing BCA’s confidential information;[2]
(c)Third, on 17 April 2012, granting BCA leave to discontinue with costs to be determined.[3]
[1]Body Corporate Administration Ltd v Mehta HC Auckland CIV-2009-404-6656, 10 May 2010.
[2]Body Corporate Administration Ltd v Mehta (No 2) HC Auckland CIV-2009-404-6656, 16 March 2011.
[3]Body Corporate Administration Ltd v Mehta (No 3) [2012] NZHC 717.
On 15 February 2013 the Judge issued a fourth judgment, an interim judgment, running to 115 paragraphs and determining multiple cost applications.[4] Relevantly to this appeal, he:
(a)declined to award STA and Mr Mehta costs on their costs application; and
(b)ordered BCA to pay a 50% increase on scale costs – not indemnity costs as STA and Mr Mehta claimed – for interlocutory steps taken during a one year period of the litigation.
[4]Body Corporate Administration Ltd v…

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: [2014] NZCA 96
Decision Date: 26 March 2014 at 12 pm

CaseChat Overview and Summary

Strata Title Administration Limited (STA) and Cyrus Mehta (Mehta) appealed against orders of Allan J, the High Court Judge at Auckland, dismissing their application for indemnity costs and awarding them an increase of 50% on scale costs for a one year period of the litigation. The respondents, Body Corporate Administration Limited (BCA), cross-appealed, but only in relation to the costs order. BCA brought an action against STA and Mehta in 2009. Among other claims, it alleged that Mehta breached a post-employment non-compete clause and misused confidential information. BCA obtained a search order and interim injunction. After BCA applied successfully for leave to discontinue, Allan J made an interim judgment on costs. STA and Mehta appealed against the refusal to award them costs on their costs application and the refusal to award them indemnity costs for the period from 3 May 2011. The Court found that Allan J’s approach to the costs application was orthodox and unimpeachable. The Court found that Allan J was best placed to determine whether BCA’s conduct satisfied the necessarily high threshold for an award of indemnity costs. The appeal was dismissed. STA and Mehta were ordered to pay BCA one set of costs for a standard appeal on a Band A basis and usual disbursements.

Orders