Xing Seng Limited v Singh - [2023] NZHC 1990

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1095

[2023] NZHC 1990

BETWEEN
XING SENG LIMITED

Plaintiff

AND

TARA SINGH

Third Defendant

Hearing: On the papers

Appearances:

No representation for the Plaintiff

Mitch Singh/Paul Kim for the Third Defendant

Judgment:

27 July 2023

COSTS JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 27 July 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:
Glaister Ennor (M Singh/P S Kim), Auckland, for the Third Defendant

XING SENG LIMITED v TARA SINGH [2023] NZHC 1990 [27 July 2023]

Background

[1] The third defendant’s (Mr Singh’s) application for security for costs in this proceeding which was set down for a hearing on 11 November 2022, was granted by consent and recorded in the minute of Moore J dated 9 November 2022.

[2] As directed at [8] of Moore J’s minute, counsel for the plaintiff filed a memorandum as to costs dated 25 November 2022 and the plaintiff, which was represented by Mr Xing (Mr Xing), filed a memorandum in reply dated 9 December 2022.

[3] Mr Singh seeks an order of indemnity costs jointly against the plaintiff, Xing Seng Ltd (XSL) and Mr Xing personally.

Mr Singh’s submissions

Costs against Mr Xing

[4] In support of an order for costs against Mr Xing personally, Mr Singh, as counsel for Mr Singh, makes the following submissions:

(a)XSL has no assets and is no longer trading, and is insolvent and still owes Mr Singh an outstanding sum for costs from an earlier judgment of Lang J dated 12 January 2022. Accordingly, any costs order solely against XSL will not be paid.

(b)Mr Xing is, in any event, the real plaintiff in this case as he brought the first round of proceedings in his own name and only purchased the shares in XSL in order to bring these current proceedings, following Associate Judge Andrew’s dismissal of the earlier proceedings. Mr Singh also points to Lang J’s comment in his earlier judgment on costs.1

1 Xing v Bains Brothers Ltd [2022] NZHC 14.

(c)Mr Singh refers to three authorities, as supporting the proposition that costs can be awarded personally against a director as follows;

(i)Minister of Education v H Construction (North Island) Ltd (in rec and in liq):2
[43] Costs against non-parties are exceptional … if a non-party funds a case and controls or benefits from it, “justice will ordinarily require” they pay costs. This is because he, or she, or it is regarded as the real party.

(ii)The English Court of Appeal authority in Metalloy Supplies Ltd v MA UK Ltd,3 cited by Associate Judge Bell in Concrete Structures (New Zealand) Ltd v Smith:4

[18] The Court has a discretion to make a costs order against a non-party. Such an order is, however, exceptional, since it is rarely appropriate. It may also…

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 Xing Seng Limited v Singh

Details

AGLC: Xing Seng Limited v Singh [2023] NZHC 1990
Case: [2023] NZHC 1990
Decision Date: 27 July 2023

CaseChat Overview and Summary

Xing Seng Limited, a plaintiff, commenced proceedings against Tara Singh, the third defendant. The dispute involved an application for security for costs which was granted by consent and recorded in the minute of Moore J dated 9 November 2022. The court was required to decide on the legal issues surrounding the imposition of costs on the plaintiff and its director, Mr Xing. Mr Singh sought an order for indemnity costs against Xing Seng Limited and Mr Xing personally. The central legal issues were whether the plaintiff and its director could be held personally liable for costs and whether indemnity costs were justified.

The court held that costs should be awarded against Mr Xing and Xing Seng Limited jointly. The court accepted Mr Singh's assertion that Xing Seng Limited was not trading, had no assets, and was likely insolvent. It was unchallenged that any costs order against Xing Seng Limited alone would remain unpaid. The court also found that Mr Xing was the "real party" to the proceedings, given his history with the litigation. The court ruled that Mr Xing's conduct justified an order for costs against him personally. However, the court did not consider the circumstances sufficient to warrant an order for indemnity costs against Xing Seng Limited and Mr Xing. The court ordered Xing Seng Limited and Mr Xing to pay costs of $10,755.00, being 2B costs plus a 50 per cent uplift, together with disbursements of $642.50, totalling $11,397.50.

The court's decision balanced the need for a just outcome with the principle of separate legal personality of companies. It found that while Mr Xing's conduct warranted personal liability for costs, the circumstances did not justify the more severe penalty of indemnity costs. The court's ruling provided clarity on the circumstances under which personal liability for costs may be imposed on a company director and the threshold for indemnity costs.

Orders