Xiangtan County Xintian Micro Mortgage Company Limited v Narea Investments Limited

[2021] NZHC 2910

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-256

[2021] NZHC 2910

IN THE MATTER

of an application to sustain Caveat No. 11891412.1

BETWEEN

XIANGTAN COUNTY XINTIAN MICRO MORTGAGE COMPANY LIMITED

Applicant

AND

NAREA INVESTMENTS LIMITED

Respondent

CIV-2021-404-254

BETWEEN

XIANGTAN COUNTY XINTIAN MICRO MORTGAGE COMPANY LIMITED
Applicant

AND

VATAR INVESTMENTS LIMITED

Respondent

Hearing:	On the papers
Counsel:	H McDermott for the Respondents
Judgment:	29 October 2021

COSTS JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 29 October 2021 at 3.30pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

JC Legal, Auckland

Righteous Law, Auckland

XIANGTAN COUNTY XINTIAN MICRO MORTGAGE COMPANY LTD v NAREA INVESTMENTS LTD [2021] NZHC 2910 [29 October 2021]

Introduction

[1]    This is an application for the setting of costs in favour of the respondents, Narea Investments Ltd (“Narea”) and Vatar Investments Ltd (“Vatar”).

Background

[2]    In my judgment dated 30 July 2021 I found in favour of the respondents, Narea and Vatar, striking out applications by Xiangtan County Xintian Micro Mortgage Company Ltd (“Xiangtan”) that the caveats that they had lodged over Narea and Vatar’s properties not lapse.

[3]    I further found that if I had erred in my decision to strike out the applications, Xiangtan’s applications that the caveat not lapse would have been dismissed as Xiangtan had not established that it had a reasonably arguable case for an interest in Vatar and Narea’s properties sufficient to support the caveats.

[4]    As the respondents succeeded I held that Narea and Vatar were entitled to costs. Counsel for the respondents submitted that an uplift of 20 per cent was fair and reasonable on the basis that the applicant, through a related company, already had a caveat lapse on the same factual basis. I determined, however, that the basis for the claims in these proceedings appeared to be different from the basis for the caveat in the earlier proceedings.

[5]    I therefore held that 2B costs were appropriate. I asked the parties to confer on quantum but said that if agreement could not be reached, brief memoranda could be filed. I further directed that if memoranda were required to be filed, evidence of actual costs was to be provided by the respondents as the two proceedings were essentially mirror proceedings. Rule 14.2(1)(f) of the High Court Rules 2016 provides that an award of costs should not exceed costs incurred and I was concerned that actual costs may not exceed scale costs on a 2B basis.

[6]    Agreement has not been able to be reached and so counsel for the respondents filed memoranda for each of the proceedings setting out the total actual costs incurred of $34,100.84. Copies of invoices and receipts are attached to the memoranda to provide evidence of these amounts.

[7]    No memorandum has been filed on behalf of the applicant. The correspondence between counsel for the respondents and applicant filed together with the respondents’ memorandum includes an email from counsel for the applicant advising that she would take instructions. Other than this email there was no response to the schedule of 2B costs proposed by the respondents. The time by which the applicant was to file any memorandum in response is well past and so I now consider the appropriate costs award in the absence of any memorandum on Xiangtan’s behalf.

Consideration of appropriate award

[8]    I have considered the 2B costs schedule set out in counsel for the respondents’ correspondence and consider that there are two entries that are not claimable:

(a)the appearance at the List mention on 23 February 2021 as the Minute issued following that mention records that there was no appearance;

(b)the claim for two days for preparing for the hearing under item 32 in Schedule 3 which is not claimable for these applications.

[9]    Furthermore, the steps involving hearings can only be claimed once across both proceedings as there was just one List mention and one hearing in each case. I set out below a schedule calculating 2B costs for both proceedings with an extra column recording whether the step is claimable in respect of each proceeding (x 2) or just once across both.

2B Costs Calculation for Both Proceedings
Item	Task	Claimed once or twice	Allocated Days on 2B basis	Rate
38	Filing    note    of    opposition    and supporting affidavit	2	2
22	Filing an interlocutory application for the strike out of the application	2	0.6
11	Filing memorandum for call in the List on 23.2.2021	2	0.4
11	Filing memorandum for call in the List on 8.3.2021	2	0.4
12	Appearance at List on 9.3.2021	1	0.2
11	Filing memorandum for call in the List on 22.3.2021	2	0.4
12	Appearance at List on 22.3.2021	1	0.2
9	Pleading in response to amended pleading	2	0.6
40	Preparation of written submissions	2	1.5
41	Preparation of bundles	2	0.6
42	Appearance at hearing	1	0.5
29	Sealing judgment	2	0.2
Total hours	14.3
Daily rate $2,390 x 14.3	$34,177.00	$34,177.00
Disbursements
Notice of opposition fee	2	$110.00
Interlocutory filing fee	2	$200.00
Sealing Order	2	$50.00
Translation    response    to   original claim	1	$2,645.00
Translation response to amended claim	1	$460.00
Total Disbursements	$3,825.00
Total 2B scale costs plus disbursements		$38,002.00

[10]   With the adjustments made, the total on a 2B basis plus disbursements still exceeds the actual costs incurred. I consider that the appropriate costs award is therefore as proposed in the memorandum filed on behalf of Vatar and Narea, the sum of $17,050.42 for each proceeding, being 50 per cent of the actual costs of $34,100.84 incurred.

Result

[11]   I award costs of $17,050.42 in favour of Narea in CIV-2021-404-256 and costs of $17,050.42 in favour of Vatar in CIV-2021-404-254.

Associate Judge Sussock