Walker v Gibbston Water Services Ltd - [2014] NZHC 2250

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2012-409-2834 [2014] NZHC 2250

BETWEEN
ROBERT BRUCE WALKER as liquidator

of Gibbston Holdings Limited
Applicant

AND

GIBBSTON WATER SERVICES LTD First Respondent

CASTLEREAGH PROPERTIES LTD Second Respondent

KRISTINA LOUISE BUXTON Third Respondent

CANTERBURY LEGAL SERVICES LIMITED

Fourth Respondent

Hearing:
15 September 2014

(On the papers)

Counsel:

K Sullivan for Applicant
J Moss for Respondents

Judgment:

17 September 2014

JUDGMENT OF MANDER J AS TO COSTS

[1] The applicant, Robert Walker, sought orders confirming decisions he made as the liquidator of Gibbston Water Holdings Ltd (Holdings). Central to the dispute between the parties was the liquidator’s decision to void a sale and purchase agreement of shares in Gibbston Water Services Ltd (Services) to Castlereagh Properties Ltd (Castlereagh). After a three day hearing, I delivered a reserved
decision making orders in favour of the applicant.1

1 Walker v Gibbston Water Services Ltd [2014] NZHC 1638.

WALKER v GIBBSTON WATER SERVICES LTD [2014] NZHC 2250 [17 September 2014]

[2] At the conclusion of my judgment of 11 July 2014, I noted that the applicant was entitled to costs on a 2B basis and that, in the absence of agreement, counsel were to file memorandum.2 There are a number of areas of dispute arising between the parties.

Costs issues

[3] There is no dispute that the applicant is entitled to costs on a 2B basis. However, the following issues remain in dispute:

(a) Legal costs sought by the applicant of 1.5 days relating to the preparation of affidavits.

(b) The following disbursements:

· Witness fees for the applicant in the sum of $11,200.

· Witness fees for Mr Simon Thorn in the sum of $2,466.03.

· Witness fees for Mr Marshall in the sum of $50. (c) Which of the respondents should bear the costs.

Legal costs

[4] The applicant seeks an additional 1.5 days which is said to be for the volume of affidavit evidence required to be prepared.3 It is observed that originating applications usually proceed by way of affidavit evidence, and it is submitted that in this proceeding it was necessary to prepare witnesses for cross-examination as if for a full trial.

[5] The additional 1.5 days is opposed. The respondents submit that it is not uncommon for originating application proceedings to have a number of affidavits prepared, and that normally they would have been filed with the original application.
There is criticism by the respondents that the liquidator did not attempt to value the

2 At [139].
3 Associate Judge Osborne had already allowed the award of one day for this item in his costs judgment of 24 March 2014: Walker v Gibbston Water Services Ltd [2014] NZHC 549.

shares himself, choosing instead to rely upon the statutory onus on the respondents to prove value. The subsequent preparation of affidavits in respect of that issue, it is said, is a reflection on the original standard of preparation of the application. There is no opposition to the other extra steps…

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.

Continue reading Walker v Gibbston Water Services Ltd

Details

AGLC: Walker v Gibbston Water Services Ltd [2014] NZHC 2250
Case: [2014] NZHC 2250
Decision Date: 17 September 2014

CaseChat Overview and Summary

The High Court of New Zealand, Christchurch Registry, was called upon to determine the costs and disbursements associated with a complex litigation process involving multiple parties. The primary applicant was Robert Bruce Walker, acting as the liquidator of Gibbston Holdings Limited, who sought orders to confirm his decisions regarding the nullification of a sale and purchase agreement for shares in Gibbston Water Services Ltd to Castlereagh Properties Ltd. The first respondent, Gibbston Water Services Ltd, along with the second and third respondents, Castlereagh Properties Ltd and Kristina Louise Buxton, respectively, were involved in the dispute. The fourth respondent, Canterbury Legal Services Limited, although mentioned, played a more peripheral role in the proceedings.

The court was tasked with resolving several contentious issues regarding costs and disbursements. These included the applicant's request for an additional 1.5 days for the preparation of affidavits, the legitimacy of specific disbursements such as witness fees for the applicant and others, and the apportionment of costs among the respondents. The central dispute was whether the additional time and costs claimed by the applicant were justified, and if so, who should bear the financial burden of these costs.

In its judgment, the court first addressed the request for additional legal costs. The court acknowledged that while originating applications typically rely on affidavits, the extensive nature of the evidence in this case warranted the additional time claimed by the applicant for preparing affidavits. Consequently, the court allowed the additional 1.5 days for the preparation of supporting affidavits. Regarding disbursements, the court denied the applicant's claim for witness fees, finding that Mr. Walker did not act as an expert witness but rather as a witness of fact. However, the court did award a nominal sum for the professional costs of Mr. Simon Thorn, recognizing his inconvenience and the limited advancement his cross-examination provided. The claim for witness fees for Mr. Marshall was dismissed outright.

Finally, the court turned to the issue of cost apportionment among the respondents. The court decided that the costs should be split between the respondents, with Castlereagh Properties Ltd and Ms. Kristina Buxton jointly and severally liable for 90% of the costs and Gibbston Water Services Ltd responsible for the remaining 10%. Canterbury Legal Services Limited was excluded from the costs order due to its limited involvement in the proceeding.

The court concluded by making specific orders regarding the payment of costs and disbursements, detailing the proportions in which each respondent was to bear the financial burden. This comprehensive ruling provided clarity and resolution to the contentious cost issues arising from the complex litigation process.

Orders