DE ALWIS & ORS V LUVIT FOODS INTL LTD & ORS HC AK CIV-2002-404-1944

DE ALWIS & ORS V LUVIT FOODS INTL LTD & ORS HC AK CIV-2002-404-1944 27 November 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2002-404-1944BETWEEN VICTOR DE ALWIS First Plaintiff AND M E & H V DE ALWIS Second Plaintiff AND JOHN WAH KUM Third Plaintiff AND CONNIE FAY LING KUM Fourth Plaintiff AND TENNET INTERNATIONAL LIMITED Third Defendant (intituling cont'd over) Judgment: 27 November 2007 at 2:30 pmRESERVED JUDGMENT OF COURTNEY J AS TO COSTSThis judgment was delivered by Justice Courtney on 27 November 2007 at 2:30 pm pursuant to Rule 540(4) of the High Court Rules Registrar / Deputy Registrar Date Solicitors: Morton Tee & Co, P O Box 331-133, Takapuna Fax: (09) 489-7117Counsel: G J Kohler, P O Box 4338 Shortland Street, Auckland Fax: (09) 307-1572AND MARSHA ADRIENNE TAI PING TAN Fifth Plaintiff AND PETER THUTT PITT WEE Sixth Plaintiff AND PAUL SENG POH KHOR Seventh Plaintiff AND LUVIT FOODS INTERNATIONAL LIMITED First Defendant AND CHEAN FOOK SEONG AKA JAMES CHEAN Second Defendant cont'd..[1] On 23 May 2007 I gave judgment in favour of the plaintiffs against the first and second defendants jointly and severally in varying amounts. That decision followed an undefended hearing, there being no appearance for the defendants and the second defendant having declared himself bankrupt only a few days before the hearing. The plaintiffs seek costs and interest.Interest[2] In my judgment I had indicated that the plaintiffs would be entitled to interest at the relevant Judicature Act 1908 rates in respect of their claim under the Fair Trading Act 1986. These rates were 11% from the various dates of payment down to 31 July 2002 and 7.5% thereafter. Interest in respect of the Securities Act 1978 claim runs at 10% pursuant to the Securities Regulations 1983. [3] Mr Kohler has filed a calculation seeking interest only under the Securities Act 1978 and I therefore direct that interest be paid in accordance with that calculation being: a) Victor de Alwis - $242,346 b) M E and H V de Alwis - $59,449 c) J W Kum - $121,408 d) C F L Kum - $117,359 e) Marsha Tan - $127,701 f) Peter Wee - $345,781 g) Paul Khor - $11,704Costs[4] In this case costs are to be awarded on the basis of the principles set out in Rules 46-48H High Court Rules. In particular, they should reflect the complexity and significance of the proceeding and assessed by the appropriate daily rate considered reasonable for each step reasonably required.[5] Mr Kohler seeks to have costs assessed on a basis of 2B categorisation and that is appropriate subject to what I say later in relation to pre-trial perparation. It appears that costs in relation to conferences and an earlier adjournment application were determined and paid at the time. So the only costs sought relate to trial preparation and attendance. [6] Mr Kohler explained in his memorandum the particular difficulties faced by the plaintiffs in completing the trial in this case. The trial involved allegations of misrepresentation and breaches of the Securities Act 1978 arising from the investment by the eight plaintiffs in one of the defendant companies. The case was fully prepared for trial by the Friday preceding the scheduled trial date when the corporate defendants advised that they did not intend appearing and the second defendant, Mr Chean, declared himself bankrupt. However, rather than reducing the amount of work required to proceed at trial the plaintiff was then required to consider the options available to it, in particular the need for leave if it wished to proceed against Mr Chean under the Insolvency Act 1967 and to prepare for a formal proof trial rather than a defended hearing. [7] I accept Mr Kohler's proposal that it would be unfair to award costs on the basis of the one-day hearing that was actually required. He has suggested awarding costs in respect of some of the pre-trial preparation on a Band C basis. I am prepared to make an award on that basis and award costs in total of $41,245 as set out in Schedule 2 to Mr Kohler's memorandum.Disbursements[8] Disbursements are being sought. These include accounting fees paid to Horwarth Porter Wigglesworth Limited of $66,796.89, being an analysis of the financial position of the corporate defendants and the accuracy of the representations made in respect of them. In the circumstances I consider that all of the disbursements should be reimbursed and accordingly direct that the disbursements be paid in the sum of $69,141.89 as shown in Schedule C of Mr Kohler's memorandum. ____________________ P Courtney J