GOWER v FTG SECURITIES LIMITED [2020] NZHC 1603

GOWER v FTG SECURITIES LIMITED [2020] NZHC 1603 [7 July 2020]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV–2018–409–229[2020] NZHC 1603UNDER s 34 of the Receiverships Act 1993IN THE MATTER of the receivership of Tuam VenturesLimited (in rec and in liq)BETWEEN COLIN ANTHONY GOWER andSTEPHEN JOHN TUBBS as receivers ofTuam Ventures Limited (in rec and in liq)ApplicantsAND FTG SECURITIES LIMITEDFirst RespondentAND ROBERT BRUCE WALKER as liquidatorof Tuam Ventures Limited (in rec and in liq)Second RespondentAND BANK OF NEW ZEALANDThird RespondentAND CROWN ASSET MANAGEMENTFourth RespondentAND B J HUNTFifth RespondentRepresentation: A J Forbes QC and H Weston for FTG Securities LtdR B Walker in personJudgment: 7 July 2020(Determined on the papers)JUDGMENT OF OSBORNE J(costs)[1] Robert Walker, the second respondent in this proceeding, was unsuccessful onan application for an order disqualifying the lawyers representing the first respondent,FTG Securities Ltd (FTG).1[2] Mr Walker was ordered to pay FTG's costs in opposing the application, withthe quantum of costs and disbursements reserved.2 In reserving costs, I recorded thetentative view that this was appropriately a case for increased costs underr 14.6(3)(b)(ii) High Court Rules 2016 on the basis that Mr Walker's application hadlacked merit.Submissions on quantum[3] For FTG, Mr Forbes QC submits that this is appropriately a case for increasedcosts. He submits that, for the reasons identified in the interlocutory judgment, MrWalker's application lacked merit and was inherently unlikely to succeed. Thissubmission is clearly correct – the application was dismissed for abuse of process. Theapplication had been made very close to trial long after Mr Walker's solicitors hadraised issues in relation to FTG's representation, which had been responded to at thetime. The application involved a plain misuse of the Court's processes.3[4] Mr Forbes submitted that the following represented the appropriate steps forthe calculation of costs:(a) a 2B calculation, the proceeding appropriately being a category 2proceeding: $5,497;4 and(b) a 50 per cent uplift (on all items): $2,748.50.51 Gower v FTG Securities Ltd [2020] NZHC 1105.2 At [25].3 At [19].4 High Court Rules 2016, rr 14.3 and 14.5.5 Applying NR v MR [2014] NZCA 623, (2014) 22 PRNZ 636 at [52] – all of the steps being takenby FTG to oppose the application being steps that should not have been necessary.[5] Mr Walker, in his submissions, while recognising that there had been an orderof costs made, submitted that a 50 per cent uplift as claimed by FTG wasinappropriately high.[6] Mr Walker recorded that by his application he had sought to ensure that theCourt was addressed for FTG by lawyers who were in a position to discharge fullytheir duties as officers of the Court. Mr Walker emphasised that he had throughoutsought to pursue his duties as liquidator under the Companies Act 1993 and as anofficer of the Court. He submitted that his disqualification application should beviewed in that light.[7] Mr Walker referred to this Court's decision in other litigation involving FTG –100 Investments Ltd v Walker.6 With other defendants in that proceeding, Mr Walkersuccessfully applied for orders to restrain the same law firm as here (Canterbury Legal)acting for FTG (and other "Henderson" companies)7 in that proceeding.[8] As I read the judgment of Venning J in 100 Investments Ltd v Walker, thecircumstances relied on in that case were markedly different to those in this case. Inparticular, the Court there found a reasonable likelihood that one or both of theparticular solicitors involved would be required to give evidence.8 As the heading toVenning J's relevant discussion indicates, the ruling arose from the likelihood ofcontentious evidence being given in the proceeding. There was no such likelihood inthis case at the time of my interlocutory ruling (25 May 2020). As it transpired, thesubstantive hearing in this case proceeded entirely on the affidavit evidence filedwithout any oral evidence from witnesses, let alone cross-examination.Outcome[9] I find this to be an appropriate case for increased costs for the reasons I havepreviously identified. To some extent, the sincerity with which Mr Walker made hisapplication is already reflected in the fact that he faces an order for increased costs6 100 Investments Ltd v Walker [2020] NZHC 165.7 FTG is one of numerous companies associated with David Ian Henderson, many of which(including FTG) were affected by the collapse of Property Ventures Ltd (in rec and in liq).8 100 Investments Ltd v Walker, above n 6, at [42].rather than indemnity costs. In not considering an award based on indemnity costs, Ihave rejected any suggestion that Mr Walker acted either very badly or veryunreasonably as identified by the Court of Appeal in Bradbury v Westpac BankingCorp.9[10] I accept that the uplift of 50 per cent advocated by Mr Forbes is appropriate inthe circumstances.10[11] The sum of $8,245.50 as a costs award is just.[12] Additionally, FTG incurred a filing fee of $110, which is recoverable.Order[13] I fix the quantum of costs and disbursements to be paid by the secondrespondent to the first respondent in the sums of $8,245.50 and $110 respectively.Osborne JSolicitors:Canterbury Legal, ChristchurchCopy to: R B Walker9 Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27]–[28].10 Holdfast NZ Ltd v Selleys Pty Ltd [2005] 17 PRNZ 897 (CA).