Valasay Holdings Limited v Lyttelton Supermarket Limited

Valasay Holdings Limited initiated proceedings against Lyttelton Supermarket Limited in the High Court of New Zealand Christchurch Registry to set aside a statutory demand for $100,000. The dispute arose from a contract for the sale and purchase of a business. Valasay Holdings contested the statutory demand and filed a cross-claim for damages amounting to $90,345. The case was heard on the papers on 26 January 2012, with K T Dalziel representing the applicant and D M Lester representing the respondent.

The central legal issue before the court was whether costs should be awarded to either party and, if so, to what extent. The court had to determine whether one party had a significantly greater degree of success than the other, as well as the time spent on each transaction and other relevant factors. The Court of Appeal's guidance in Packing In Ltd (In Liquidation) formerly known as Bond Cargo Ltd v Chilcott was applied, which emphasised that costs should reflect the approximate equality of success and failure of both parties.

The court found that both parties had achieved approximately equal success and failure. Although the figures were slightly weighted in favor of the respondent, the difference was moderate. The issue that occupied the most time was the condition of the various items of refrigeration equipment, which Valasay Holdings successfully contested to the extent of just under $20,000. Other issues on which Valasay Holdings succeeded occupied relatively little time. The court considered it appropriate to proceed with its consideration of the costs issue based on the time spent on the transactions in issue. The court concluded that the costs should lie where they fall and declined to make an order for costs in favor of either party.

The final order of the court was that costs should lie where they fall, and no order for costs was made in favor of either party.