Valmar Trustee Ltd v Smart Water Technology - [2016] NZHC 1583

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-001269 [2016] NZHC 1583

BETWEEN
VALMAR TRUSTEE LIMITED

First Applicant

EMBAY TRUSTEE LIMITED Second Applicant

AND

SMART WATER TECHNOLOGY LIMITED

First Respondent

CHRISTOPHER STEPHEN HARRIS Second Respondent

TIMOTHY JAMES STONE Third Respondent

On the papers

Judgment:

13 July 2016

COSTS JUDGMENT OF HINTON J

This judgment was delivered by me on 13 July 2016 at 9.00 am pursuant to Rule 11.5 of the High Court Rules

……………………………………………………………………
Registrar/Deputy Registrar

Counsel/Solicitors:
K F Gould, Barrister, Auckland
B Upton and D J Tillett, Simpson Grierson, Auckland

VALMAR TRUSTEE LIMITED v SMART WATER TECHNOLOGY LIMITED [2016] NZHC 1583 [13 July 2016]

[1] This is an application for costs following an unsuccessful application to have a liquidator appointed to Smart Water Technology Ltd (Smart Water) on the grounds of oppression under s 174 of the Companies Act 1993.

[2] The applicants accept that the respondents are entitled to 2B scale costs. The nub of this decision is whether the Court should make an order increasing scale costs under r 14.6 of the High Court Rules, which relevantly provides:

(3) The court may order a party to pay increased costs if— ….

(b) the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i) failing to comply with these rules or with a direction of the court; or

(ii) taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii) failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

(iv) failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or

(v) failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or

….

(d) some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.

(Emphasis added)

Submissions

[3] The respondents seek a 50 per cent increase on scale costs, on the basis that the applicants have contributed unnecessarily to the time and expense of the proceedings (or steps required in it) or alternatively, that the matter proceeded as if it were a trial, rather than an originating application.

[4] Alternatively, the respondents seek a band C allocation in relation to certain steps. I decline at the outset to award band C costs on any steps, as I do not consider

there was increased complexity in respect of them, nor do the respondents strongly contend there was.

[5] 2B scale costs are calculated by the respondents at $19,178. In respect of this calculation, the respondents highlight that:

(a) the matter was called a number of times due to issues being raised by the applicants (for which costs are included) and;

(b)they have…

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.

Keep reading for free

Create a free CaseChat account to read Valmar Trustee Ltd v Smart Water Technology and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2016] NZHC 1583
Decision Date: 13 July 2016

CaseChat Overview and Summary

The case of Valmar Trustee Limited and Embay Trustee Limited v Smart Water Technology Limited and others is an application for costs following an unsuccessful application to have a liquidator appointed to Smart Water Technology Ltd on the grounds of oppression under s 174 of the Companies Act 1993. The applicants accept the respondents are entitled to 2B scale costs, but the key issue is whether the Court should make an order increasing scale costs under r 14.6 of the High Court Rules. The respondents seek a 50 per cent increase on scale costs, on the basis that the applicants have contributed unnecessarily to the time and expense of the proceedings or that the matter proceeded as if it were a trial, rather than an originating application. The applicants oppose any increased costs award.

The Court considered the submissions of the parties and found that while the applicants' case was not devoid of merit, it was to a significant degree remedied or materially addressed either before or during the proceedings. The Court did not find that the applicants' case was devoid of merit overall. The Court found that while there were instances of non-compliance with court directions and steps taken in the proceedings which ultimately created unnecessary expense, the circumstances did not warrant an uplift. The Court also found that the applicants' failure to accept a pre-action offer did not justify increased costs, particularly given the respondents' breach of statutory obligations and the applicants' suspicion as to the state of the accounts. The Court also found that the proceeding should not be treated as if it were a trial for purposes of determining costs.

The Court declined to award increased costs and ordered that the applicants are liable to pay the respondents costs in the sum of $19,178, together with disbursements of $220. The applicants' liability to pay costs is joint and several.

Orders