Torchlight Funds no 1 LP (in receivership) v NZ Credit Fund (GP) 1 Limited
[2014] NZHC 2869
•18 November 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
COMMERCIAL LIST
CIV 2014-404-002166 [2014] NZHC 2869
UNDER Part 19 of the High Court Rules and
section 34 of the Receiverships Act 1993
IN THE MATTER
of TORCHLIGHT FUND NO. 1 LP (IN RECEIVERSHIP)
BETWEEN
TORCHLIGHT FUNDS NO. 1 LP (IN RECEIVERSHIP)
Plaintiffs
AND
NZ CREDIT FUND (GP) 1 LIMITED First Defendant
GEORGE CHARLES DESMOND KERR Second Defendant
TORCHLIGHT REAL ESTATE FUND LIMITED
Third Defendant cont: .../2
On the papers Counsel:
SCDA Gollin and M D Pascariu for Plaintiffs
B A Tompkins for the First, Second and Third DefendantsJudgment:
18 November 2014
JUDGMENT OF GILBERT J [Costs on discontinuance against Wilaci]
This judgment is delivered by me on 18 November 2014 at 4.30 pm pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
TORCHLIGHT FUNDS NO. 1 LP (IN RECEIVERSHIP) v NZ CREDIT FUND (GP) 1 LIMITED [2014] NZHC 2869 [18 November 2014]
TORCHLIGHT FUND L.P. Fourth Defendant
TORCHLIGHT GP LIMITED Fifth Defendant
WILACI PTY LIMITED (Discontinued) Sixth Defendant
[1] On 10 October 2014, I granted leave to the plaintiffs to discontinue against Wilaci Pty Ltd, then named as sixth defendant. This leave was granted at the commencement of the hearing of an application by the first to third defendants to debar Buddle Findlay from acting for Wilaci in this proceeding and in a related proceeding commenced under CIV-2014-404-002136. Although the application for leave to discontinue was not opposed, the plaintiffs seek costs against the first to third defendants on the basis that they did not consent to the discontinuance taking effect until after the hearing of the application to debar Buddle Findlay. This was because, by agreement, their application was brought in this proceeding and not in the related 2136 proceeding.
[2] Buddle Findlay wrote to the first to third defendants’ solicitors late on
6 October 2014 asking whether they would consent to the receivers discontinuing their claim against Wilaci. The response the following day was as follows:
We do not have any substantive issues with this. We have two procedural concerns. First, as already raised with you, the fact that Friday’s application has been brought in the receivers’ proceedings and on the basis that Wilaci is a party. Secondly, we think that the two proceedings should continue to be case-managed together.
Can we suggest that [the receivers’ solicitor] raise the discontinuance with the Judge on Friday. This will allow us to deal with any issues around the
procedure for dealing with the Buddle Findlay issue. We obviously do not
expect you to file a statement of defence to the receivers’ proceeding in the
meantime.
[3] I consider that this response was reasonable. At the time of this correspondence, the first to third defendants had filed their application seeking to debar Buddle Findlay from acting for Wilaci in this proceeding and in the related proceeding. The application was due to be heard on Friday, 10 October 2014. Buddle Findlay apparently perceived a tactical advantage in having the receivers discontinue the claim against Wilaci before this application could be heard. It seems that the receivers were prepared to support this approach. There appears to be no other explanation for expediting the discontinuance; none has been offered.
[4] In these circumstances, I do not consider that the plaintiffs are entitled to costs against the first to third defendants on the discontinuance.
[5] The first to third defendants seek costs in relation to their memorandum opposing costs. I am not prepared to award those costs either.
[6] Costs as between the plaintiffs and the first to third defendants in relation to the discontinuance against Wilaci are to lie where they fall. I understand that there is
no issue as to costs between the plaintiffs and Wilaci.
M A Gilbert J
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