Vasanthan & Company Limited v De Lage Landen Limited

[2025] NZHC 1726

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2215

[2025] NZHC 1726

UNDER

Section 290 of the Companies Act 1993 and Part 19 of the High Court Rules 2016

IN THE MATTER

of an application to set aside a statutory demand

BETWEEN

VASANTHAN & COMPANY LIMITED

Applicant

AND

DE LAGE LANDEN LIMITED

Respondent

Hearing:

(On the papers)

Counsel:

G J Thwaite for Applicant

J I Taylor and J B Fletcher for Respondent

Judgment:

27 June 2025

JUDGMENT OF ASSOCIATE JUDGE LESTER

(costs)

VASANTHAN & COMPANY LIMITED v DE LAGE LANDEN LIMITED [2025] NZHC 1726 [27 June 2025]

[1]    In a judgment released on 15 May 2025,1 I dismissed  Vasanthan  & Company Limited’s (VCL) application to set aside a statutory demand.

[2]    I concluded the judgment by stating there is no reason why costs should not follow the event. De Lage Landen Limited (DLL) also raised the possibility of claiming costs against VCL’s counsel personally.

[3]    In a memorandum dated 29 May 2025, DLL’s counsel sought indemnity costs on the basis that DLL’s contract with VCL contained an indemnity costs clause. Costs were also sought against Mr Thwaite, counsel for VCL.

[4]    DLL’s costs clause, which is in very wide terms, is set out in the 29 May 2025 memorandum. The clause entitles DLL to indemnity costs in respect of amounts it has had to pay arising from, or incurred in connection with, VCL’s breach of any term or condition of the agreement, or VCL’s exercising of rights or remedies under the agreement. DLL’s statutory demand arose from a breach by VCL of its agreement with DLL.

[5]    DLL issued a statutory  demand  for  the  amount  it  was  owed  pursuant  to a judgment it obtained against VCL in the District Court, which I will refer to below. DLL was successful in resisting the application to set aside that demand. Its solicitor-client costs fall squarely within its costs clause.

[6]    Counsel for DLL notes there is an overlap between the $32,955.13 incurred in respect of the statutory demand and costs incurred in respect of bankruptcy notices issued against guarantors of VCL’s debt. DLL suggest the above costs figure should be reduced to $26,000 (including GST). I accept that is a reasonable adjustment in the round.

[7]    Accordingly, there is an order that VCL is to pay DLL costs of $26,000 together with disbursements as fixed by the Registrar.

1      Vasanthan & Company Ltd v De Lage Landen Ltd [2025] NZHC 1177.

[8]    Mr Thwaite  resists the fixing of costs on the grounds that my judgment of  15 May 2025 is under appeal. The appeal does not operate as a stay and the fact of the appeal is not grounds for not fixing costs.

[9]    Mr Thwaite submits that the default judgment upon which the statutory demand is based, is “now recognised as deficient”. This is because in my judgment of 15 May 2025, I recorded at [41] a matter not addressed in the hearing was that the sale proceeds of the equipment repossessed by DLL from VCL had not been accounted for. I recorded my assumption that the piece of equipment had been re-sold and accordingly a credit would be due.

[10]   Mr Thwaite submits this means the District Court default judgment was not based on an “exact valid debt” in terms of r 15.7 of the District Court Rules 2014.

[11]   I do not accept that submission. DLL’s default judgment was obtained in the Manukau District Court on 16 September 2021. DLL has produced an invoice dated 1 October 2021 pursuant to which it sold the repossessed machine after the default judgment.

[12]   Accordingly, at the time of the default judgment, the amount in DLL’s claim was correct. DLL should have recognised in its statutory demand that a credit was due to VCL, but against a judgment sum of $334,161.73 the sale proceeds from repossessed machines of $38,063.33 would not have made a difference to the application to set the demand aside. I also note the issue of the repossessed machine was raised by me and not Mr Thwaite, so DLL’s treatment of the machine played no part in VCL’s approach to its application.

[13]   The other grounds raised in Mr Thwaite’s costs submissions are in substance a critique of the matters I determined in the 15 May 2025 judgment. Mr Thwaite refers to what he considers deficient procedures in the District Court in relation to the timing of the release of a decision declining VCL’s application to set aside DLL’s judgment, and the absence of reason in respect of a further application by VCL which was summarily dismissed. Mr Thwaite asserts these matters meant the plaintiff could not bring an appeal in respect of a rejection of the application to set aside the default

judgment. I do not accept that submission for the reasons given in the 15 May 2025 judgment.

[14]   Mr Thwaite’s “ground 3” in his opposition to costs is really an appeal ground and not relevant to the issue of costs.

[15]   Mr Thwaite characterises the request that there be an award of costs against him personally as designed to intimidate him and an attempt to impede VCL having access to counsel. Mr Thwaite suggests this “threat” disqualifies DLL from costs. I do not accept that submission. If costs are properly claimable against counsel then whether that leads counsel to reconsider their ability to represent their client is         a different matter. The claim for costs against counsel has been raised in a reasonable manner.

[16]   However, given VCL has appealed my judgment of 15 May 2025, I defer dealing with the claim for costs against counsel personally. Counsel for DLL are to inform me if VCL’s appeal is abandoned or once it is heard, the outcome of that appeal. In light of the appeal findings, I will deal with the application for costs against counsel personally.

Associate Judge Lester

Solicitors:

Wynn Williams, Christchurch Gregory J Thwaite, Auckland