Warren Metals Ltd v Grant - [2015] NZHC 2462

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1090 [2015] NZHC 2462

BETWEEN
WARREN METALS LIMITED

Appellant

AND

DAMIEN GRANT AND STEVEN KHOV Respondents

Hearing: 30 September 2015

Appearances:

S S Khan & R L White for the Appellant
R M Dillon for the Respondents

Judgment:

8 October 2015

JUDGMENT OF NATION J

[1] This is an appeal against a judgment of District Court Judge Harvey declining to award costs in favour of the appellant after it succeeded on a claim for $45,000 in the District Court.1 He ordered that costs should lie where they fell.

Background

[2] The appellant (Warren Metals) had for a number of years been purchasing scrap metal from businesses run by Mr William Conway. One of those businesses was associated with the company 123 Metals Limited. The principal of Warren Metals was Mr Halloran. Mr Conway and Mr Halloran had done business together for some 50 years. They operated on a high degree of mutual trust, usually on a cash basis, with little documentation and with little regard for Mr Halloran’s need to
account to different companies for what they were doing together.

1 Warren Metals Ltd v Grant [2015] NZDC 6073.

WARREN METALS LTD v GRANT & KHOV [2015] NZHC 2462 [8 October 2015]

[3] Mr Grant and Mr Khan (the liquidators) were appointed liquidators of 123

Metals Limited in May 2008 and as liquidators or administrators of two associated companies soon afterwards.

[4] At the time 123 Metals Limited went into liquidation, at its premises was a metal press. Warren Metals claimed it was the owner of the press. The liquidators, partly because of where the press was located and partly because of information which they believed they had been given by certain people, treated the press as belonging to 123 Metals Limited. At a time when Warren Metals was still asserting that it owned the press, the liquidators arranged for the press to be sold for scrap.

[5] Mr Halloran and Mr Conway had an arrangement whereby Warren Metals would on occasions provide Mr Conway or his companies with cash as a credit against the cost of scrap metal which one of those companies would supply to Warren Metals. Not long before the various companies went into liquidation, Mr Halloran provided $40,000 in cash to Mr Conway pursuant to such an arrangement. At the time, in accordance with their usual arrangements, they understood that scrap metal of approximately that value would be supplied to Warren Metals. It would be put in containers which would be weighed. The cost of that metal, based on the weight, would then be calculated with Warren Metals being debited or credited accordingly.

[6] The liquidators were appointed before the supply of metal had taken place. Warren Metals had to obtain the metal to fulfil a valuable order from a major overseas client. The liquidators claimed that the $40,000 had to be treated simply as an advance to the company and that Warren Metals was in the…

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 Warren Metals Ltd v Grant

Details

AGLC: Warren Metals Ltd v Grant [2015] NZHC 2462
Case: [2015] NZHC 2462
Decision Date: 8 October 2015

CaseChat Overview and Summary

Warren Metals Ltd appealed against a decision of the District Court declining to award costs in favour of the appellant after it succeeded on a claim for $45,000. The District Court Judge had ordered that costs should lie where they fell. The appeal was against the exercise of that discretion. The Court was required to decide whether the District Court Judge had made an error in principle in not having sufficient regard to the settlement offer which had been made and in failing to give adequate reasons for not taking the settlement offer into account. The Court considered that the Judge had made an error in principle in giving inadequate weight to the settlement offer which had been made and in reaching a decision as to what he considered "fair" rather than on a principled basis with due regard to the rules. The appeal was allowed, and the orders made by the District Court Judge were set aside. In substitution, the Court made an order that Warren Metals was entitled to costs in respect of the District Court proceedings in the sum of $22,475 together with disbursements as fixed by the Registrar of the District Court. The Court indicated provisionally that Warren Metals was entitled to costs in respect of this appeal. If there was no agreement over this, a memorandum as to costs for Warren Metals was to be filed by 24 October 2015. A memorandum in response was to be filed by 6 November 2015. Each memorandum was to be no longer than two pages.

Orders