Vasundhara Enterprises Ltd v Shah Homes Ltd

[2012] NZHC 371

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-6403 [2012] NZHC 371

BETWEEN  VASUNDHARA ENTERPRISES LTD Plaintiff

ANDSHAH HOMES LTD Defendant

Hearing:         (On the papers)

Counsel:         A R Gilchrist for Plaintiff

E St John for Defendant

Judgment:      8 March 2012

JUDGMENT OF BREWER J

SOLICITORS

Patel Nand Legal (Auckland) for Plaintiff

Smith and Partners (Auckland) for Defendant

COUNSEL

Andrew Gilchrist; Eugene St John

VASUNDHARA ENTERPRISES LTD V SHAH HOMES LTD HC AK CIV-2011-404-6403 [8 March 2012]

[1]      The plaintiff seeks costs on its application for an interlocutory injunction. The defendant  opposes.   The issue arises  from  the plaintiff’s  withdrawal  of its application following the defendant voluntarily taking the action sought by the plaintiff to be ordered.

Background

[2]      On  11  October  2011  the  plaintiff  commenced  proceedings  against  the defendant by filing a Notice of Proceeding and Statement of Claim.

[3]      On the same day the plaintiff filed:

(a)       An application for a mandatory interlocutory injunction; (b)   An undertaking as to damages;

(c)       Affidavit in support.

[4]      On 14  October 2011  counsel  for both  parties filed a joint  memorandum seeking directions for a timetable.   Directions were given by Woodhouse J on the same day.

[5]      The  defendant  did  not  comply  with  the  directions.     The  plaintiff,  on

31 October 2011, filed:

(a)       A second affidavit in support of its application; (b)     A draft order; and

(c)       A memorandum of counsel.

[6]      The matter was called before Woolford J as Duty Judge on 3 November 2011. There  was  no  appearance  by  the  defendant.    Counsel  for  the  plaintiff  advised

Woolford J that the defendant had in part taken the action sought to be mandated and that there was a distinct possibility of an overall settlement.  At counsel’s request an adjournment to 10 November 2011 was granted.

[7]      A joint memorandum of counsel was filed on 10 November 2011.  It advised the Court that the defendant had taken the action which the plaintiff sought it to take. There was no longer a need for an interlocutory injunction.   In all probability the substantive proceeding would also be withdrawn.  The outstanding issue was costs. The memorandum suggested a timetable for the filing of submissions.  The parties agreed that the Court could determine the issue on the papers.

[8]      Counsel for both parties appeared before Toogood J on 10 November 2011. His Honour made timetable directions in accordance with counsel’s memorandum. Submissions were filed and it has fallen to me as Duty Judge to determine the issue.

Submissions

[9]      Counsel for the plaintiff submits that costs on the interlocutory application should be calculated on a 2C basis; band C because of the greater length of time commonly spent on interlocutory injunction applications than on “run of the mill” applications.   However, because of the actual time spent, and the conduct of the defendant, the plaintiff submits that increased costs or even indemnity costs are justified.

[10]     Counsel for the defendant, in two short paragraphs, submits that the plaintiff is  not  entitled  to  costs.    He  advises  that  the substantive  proceedings  are  to  be defended and that there will be a counterclaim.  Costs should be reserved.

[11]     I note that counsel for the defendant’s memorandum is dated 28 November

2011.   No Statement of Defence has yet been filed.   Nevertheless, while the proceeding is  extant,  costs  can  be  awarded  only in  respect  of the interlocutory application.

[12]     It is trite that costs are at the discretion of the Court.1   Here, the plaintiff took a step in the proceeding by way of interlocutory application.  It was opposed initially, but later the defendant took action which achieved the plaintiff’s purpose and so the application did not go to adjudication.   The plaintiff, in fairness and because it succeeded, should have costs for the steps it took on the interlocutory application.2

[13]     I do not consider that an uplift in costs or indemnity costs are warranted.  The application was not complex.   I accept that the application required the plaintiff’s lawyers to spend more time than will be reimbursed in a costs award, but that is anticipated in the costs regime.  The fact that the defendant put the plaintiff to the trouble of making the application and then capitulated without requiring adjudication is not relevant.  It is the conduct of a party during litigation which is relevant and here the defendant quite rapidly came to the decision that it would not defend the application. That decision actually saved the plaintiff further trouble and expense.

[14]     I agree with counsel for the plaintiff that this proceeding should be classified as category 2.3   In my view the reasonable time for a step in this proceeding should be determined by reference to band B in schedule 3.

Decision

[15]     I award costs to the plaintiff on its application for an interlocutory injunction on a 2B basis.

[16]     The steps or attendances for which the plaintiff is entitled to costs are those described in [3], [4], [5], [6], [7] and [8] above.

[17]     The plaintiff is entitled to his reasonable disbursements.

1      Rule 14.1.

2      Rules 14.2(a) and 14.8 apply in principle.

3      Rule 14.3.

[18]     I request the Registrar to fix costs and disbursements in accordance with my

decision in the event of disagreement between the parties.

Brewer J