Vulcan Steel Ltd v McDermott - [2013] NZHC 3232

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-3254 [2013] NZHC 3232

BETWEEN VULCAN STEEL LIMITED Plaintiff

ANDPAUL THOMAS MCDERMOTT First Defendant

HJ ASMUSS & CO LIMITED Second Defendant

Hearing: On the papers

Counsel: CT Patterson for plaintiff
TP Mullins and ED Nilsson for first defendant

Judgment: 4 December 2013

JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application for costs]

Solicitors: Murdoch Price Ltd, Auckland 2016
LangtonHudsonButcher, Auckland 1140

VULCAN STEEL LIMITED v MCDERMOTT [2013] NZHC 3232 [4 December 2013]

[1] Applications for costs are made by both the plaintiff and the first defendant following the making of an order by me on 26 July 2011.

[2] The orders that I made on 26 July 2011 were by consent and were as follows:

(a) That leave be granted to the plaintiff to discontinue the proceeding against the first defendant with costs being reserved pending the outcome of its criminal complaint against the first defendant; and

(b)That the plaintiff be granted leave to use the evidence obtained in this proceeding in order to be able to refer a complaint to the New Zealand Police.

[3] Memoranda have been filed in relation to costs on the plaintiff’s behalf on

7 October 2013, the first defendant’s behalf on 4 November 2013 and by the plaintiff in reply to the first defendant on 12 November 2013. The Case Officer who has responsibility for this file has received an email from counsel for the first defendant advising that there will be no response to the plaintiff’s memorandum of
12 November 2013. On that basis, I now proceed to determine the question of costs.

The procedural history

[4] This proceeding was commenced with the filing of a statement of claim and a without notice application for a search order pursuant to r 33.2 on 31 May 2010.

[5] Harrison J convened a conference with counsel on 1 June 2010. That was without notice to the first defendant. He issued a minute that contained an order. The order required a report to the court by 15 June 2010 and required the proceeding to be listed for mention in the Duty Judge list at 10am on 21 June 2010.

[6] On 16 June 2010, the plaintiff filed a supplementary affidavit by Mr R Jones. Mr Jones is the executive director of the plaintiff. He filed one of the affidavits in support of the without notice application. The affidavit filed on 16 June 2010 exhibited a letter dated 17 May 2010 and undertaking. The letter was from the first defendant’s solicitor and was sent to a barrister acting for the plaintiff. This letter,

and the undertaking which is attached to it, is the subject of comment in the minute of Priestley J, which I shall next refer to.

[7] The proceeding was called in front of Priestley J on 21 June 2010. Appearances were entered on behalf of both the plaintiff and the first defendant and, at that stage, the intended defendant. His Honour’s minute of that day records…

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.

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Details

Case: [2013] NZHC 3232
Decision Date: 4 December 2013

CaseChat Overview and Summary

The case of Vulcan Steel Ltd v McDermott involved the plaintiff, Vulcan Steel Ltd, bringing proceedings against the first defendant, Paul Thomas McDermott, who was a former employee and shareholder of the plaintiff. The plaintiff sought relief for breaches of confidence and misappropriation of confidential information by McDermott, who had accepted employment with a second defendant, HJ Asmuss & Co Limited. The court was required to decide on the application for costs by both the plaintiff and the first defendant after the plaintiff had discontinued the proceeding against the first defendant. The legal issues included the presumption that a discontinuing plaintiff pays the defendant's costs and whether the presumption could be displaced in this case. The court found that the plaintiff was not entitled to an order for costs and that it would not be appropriate to order costs in favour of the first defendant due to his initial conduct. The court's reasoning was based on the fact that the plaintiff had achieved nothing more than what was offered in a letter and undertaking by the first defendant. The court also found that the search order was not regularly obtained as the plaintiff had not fully disclosed all material facts. The court dismissed the applications for costs by both the plaintiff and the first defendant.

Orders