The Whyte Group Limited v Chand

[2015] NZHC 2166

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2015-485-168 [2015] NZHC 2166

UNDER	the Companies Act 1993
BETWEEN	THE WHYTE GROUP LIMITED Applicant
AND	ARTI LATA CHAND Respondent

CIV-2015-485-169

UNDER  the Companies Act 1993

BETWEEN  THE WHYTE GROUP LIMITED Applicant

ANDDUNDAS STREET LIMITED Respondent

On papers
Judgment:	8 September 2015

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS (Costs)

[1]      On 25 November 2014, the Employment Relations Authority issued a consent determination  on  cases  between  Ms Chand  and The Whyte Group  Limited, and Dundas Street Limited and The Whyte Group Limited, respectively.

[2]      Ms Chand and Dundas Street Limited, respectively, issued statutory demands under s 289 of the Companies Act 1993 against The Whyte Group Limited in respect

of the sums awarded to them by the Employment Relations Authority.

THE WHYTE GROUP LTD v CHAND [2015] NZHC 2166 [8 September 2015]

[3]      On 26 February 2015, The Whyte Group Limited applied to set aside each statutory demand, on separate proceedings.  After a period for exchange of evidence and preparation of submissions, the applications were scheduled to be heard by this Court in June.  The day before the hearing of the two applications, The Whyte Group Limited paid both debts in full.

[4]      Ms Chand and Dundas Street Limited now apply for costs on the originating applications.

[5]      Rule  15.23  of  the  High  Court  Rules  provides  that  “unless  a  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”.

[6]      This direction may be displaced if there are circumstances that make it just and equitable that it should not apply.1    Generally the Court will not consider the merits of the case unless they are so obvious that they ought to be considered.2

[7]      Rule 15.23 has been applied by analogy where a plaintiff has effectively abandoned  a  proceeding  without  a  formal  election  not  to  continue,  or  where  a plaintiff has consented to a stay of proceedings.

[8]      In this case, the notices under s 289 were issued as a result of a decision which has the status of an enforceable judgment.3    The Whyte Group Limited has indicated that it intends to continue to challenge the decision on which the statutory notices were based, and in submissions filed in opposition to these applications for costs it refers to making an application for a re-hearing in the Employment Relations Authority, a complaint to the New Zealand Law Society, and in particular its concern that the agreement which led to the determination contains a provision which, on its face, appears to prevent not only any further claim by one party against the other, but

also a complaint, including complaints to regulatory bodies. This, it says, is illegal.

1      Kroma Colour Prints Ltd v Tridonicatoato NZ Ltd [2008] NZCA 150.

2      FM Custodians Ltd v Pati [2012] NZHC 1902.

3      Employment Relations Act 2000, s 141.

[9]      It is not for this Court on this application to go behind the decision of the Authority, and the outcome of the two proceedings before this Court.  If, in time, it transpires that the payments which The Whyte Group Limited has made to each of Ms Chand and Dundas Street Limited must be repaid, so be it.  On the applications presently before me, I am satisfied that the appropriate course is to proceed on the basis that there was a determination enforceable as a judgment, that appropriate steps were taken under s 289 of the Companies Act, that applications were brought to set those aside and that just before the fixture full payment of the awarded sums was made.   In my opinion, both Ms Chand and Dundas Street Limited are entitled to costs as a result.

[10]     In the ordinary course of events it would be appropriate to award costs on a

2B basis in the circumstances outlined.  There is little doubt, however, that there is substantial (although not total) overlap between the two proceedings.   Contrary to the submission by The Whyte Group Limited that one notice could have been issued, I am satisfied that it was appropriate for two demands under s 289 to be issued.  The response was the filing of two applications to set aside the demands, which in turn had to be met.  To take account of the overlap, there should be one full award of costs on one proceeding, and a lesser award of costs on the other.

[11]     Scale costs on a 2B basis amount to $10,049, to which disbursements of $110 must be added, making a total for one proceeding of $10,159.  If the same sum were awarded on each proceeding, the total of $20,318 would exceed the total costs incurred  of  $17,250  plus  disbursements.    That  is  not  permissible,  by  virtue  of r 14.2(f), as counsel for the respondents recognises.

[12]     Taking into account the factors drawn to my attention in the memoranda filed, and a review of each proceeding, I am satisfied that there should be one award of full costs on a 2B basis, and one award of costs on the same basis but discounted by 50 per cent.   In each case, the disbursement of the filing fee on the notice of opposition of $110 should be awarded.  The result is an award of costs calculated thus:

One award of costs on a 2B basis

$10,049.00

One  award  of  costs  discounted  by

50 per cent

5,024.50

Two filing fees of $110

220.00

Total

$15,293.50

[13]     The appropriate order is for half this total to be awarded to each of Ms Chand and Dundas Street Limited.  I therefore direct that The Whyte Group Limited will pay the sum of $7,646.75 to Ms Chand, on proceeding CIV-2015-485-168, and will

pay the sum $7,646.75 to Dundas Street Limited on proceeding CIV-2015-485-169.

J G Matthews

Associate Judge

Solicitors:

O’Sullivan & Associates, Wellington for applicant

Morrison Mallett Lawyers, Wellington for respondent