ALLIED INVESTMENTS LTD v RECON PROFESSIONAL SERVICES LTD [2023] NZHC 2618 [20 September 2023]

ALLIED INVESTMENTS LTD v RECON PROFESSIONAL SERVICES LTD [2023] NZHC 2618[20 September 2023]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2023-485-396[2023] NZHC 2618UNDER the Companies Act 1993IN THE MATTER of an application to set aside a statutorydemandBETWEEN ALLIED INVESTMENTS LIMITEDApplicantAND RECON PROFESSIONAL SERVICESLIMITEDRespondentHearing: On the papersAppearances: D R Tobin for ApplicantM R C Wolff for RespondentJudgment: 20 September 2023JUDGMENT OF ASSOCIATE JUDGE SKELTON[Costs][1] In this proceeding, the applicant sought an order setting aside a statutorydemand for the sum of $81,080.73 served on it by the respondent on 5 July 2023. On1 August 2023, the respondent's statutory demand was withdrawn.[2] The matter was called in the banco list on 29 August 2023 and adjourned until19 September 2023 for the parties to attempt to reach agreement on costs.[3] The parties have been unable to agree on costs and memoranda have been filed.[4] The applicant seeks costs on a 2B basis in the sum of $6,453 made up asfollows:(a) Preparation of application (2 days) $4,780(b) Attendance at first call (0.3 days) $717(c) Preparation of costs memorandum (0.4 days) $956[5] In addition, the applicant seeks the filing fee for the application to set aside of$540, adding to a total of $6,993.[6] The respondent does not oppose (a) above. Nor does the respondent opposethe filing fee.[7] The respondent opposes item (b) above. The respondent's memorandumsuggests that it also opposes item (c) above.Legal principles[8] Costs are ultimately a matter for the Court's discretion, the overall objectivebeing to achieve an outcome that best meets the interest of justice.1 That discretion isqualified by the applicable costs rules, contained in pt 14 of the High Court Rules2016. The primary principle applying to the determination of costs is that costs followthe event – meaning that a party who is unsuccessful pays costs to the party who issuccessful.2Discussion[9] The respondent gave notice to the applicant of the withdrawal of the statutorydemand on 1 August 2023.1 High Court Rules 2016, r 14.1; Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109,[2013] 1 NZLR 305 at [7] and [16]; Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606(CA) at [21]–[24] and [28]; and Mansfield Drycleaners Ltd v Quinny's Drycleaning(Dentice Drycleaning Upper Hutt Ltd) (2002) 16 PRNZ 662 (CA) at [27].2 High Court Rules, r 14.2(1)(a).[10] The respondent contends that it should have no liability for costs incurred bythe applicant once the statutory demand had been resolved because the applicantshould then have withdrawn its application to set aside, and no further costs wouldhave been incurred.[11] However, while the respondent advised the applicant on 1 August 2023 that thestatutory demand would be withdrawn and it would not take any further steps inrespect of the statutory demand, the respondent also advised at that stage that it wouldnot agree to pay 2B scale costs for the setting aside application.[12] In its reply memorandum, the applicant submits that the matter was called inthe banco list on 29 August 2023 because the issue of costs was unresolved.[13] As noted above, the respondent does not now oppose the 2B costs claimed bythe applicant for preparation of the setting aside application (based on a time allocationof two days).[14] In my view, if the respondent had agreed to pay costs on a 2B basis as at1 August 2023, then it is likely that the issue of costs would have been resolvedbetween the parties, and it would not have been necessary for the matter to be calledin the banco list on 29 August 2023. Nor would it have been necessary for theapplicant to file a memorandum on costs.[15] The respondent refers to Bew Properties 2021 Ltd v Rosco Ice Cream Ltd3 asa case supporting its position. However, the costs award in that case is based on adifferent fact scenario. In the present case, the matter was called in the banco list on29 August 2023 only because the issue of costs was not resolved.[16] In the circumstances, I consider that the applicant is entitled to items (b) and(c) of its cost claim referred to above in addition to item (a) and the filing fee, beingthe items the respondent does not oppose.3 Bew Properties 2021 Ltd v Rosco Ice Cream Ltd [2023] NZHC 1310.Result[17] The applicant is entitled to costs in the sum of $6,453.00 and disbursements inthe sum of $540.00.Associate Judge SkeltonSolicitors:Anja Klinkert, Dunedin for ApplicantMorrison Kent, Wellington for Respondent