DEEP v AUCKLAND GOLD LINE CO-OPERATIVE TAXI SOCIETY LTD [2019] NZHC 1494

DEEP v AUCKLAND GOLD LINE CO-OPERATIVE TAXI SOCIETY LTD [2019] NZHC 1494 [28 June 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2017-404-1516[2019] NZHC 1494BETWEEN RAMAL DEEPFirst PlaintiffSATNAM SINGHSecond PlaintiffSURINDER KUMARThird PlaintiffAND AUCKLAND GOLD LINE CO-OPERATIVE TAXI SOCIETY LIMITEDDefendantHearing: On the papersAppearances: L T Keys for PlaintiffsS Khan and M Orange for DefendantJudgment: 28 June 2019JUDGMENT OF LANG J[as to costs[This judgment was delivered by me on 28 June 2019 at 3.30 pmRegistrar/Deputy RegistrarDate[1] On 22 February 2019, I issued a substantive judgment determining theplaintiffs' application for judicial review against the defendant.1 Counsel have beenunable to reach agreement regarding the issue of costs. I am therefore required todetermine that issue based on the submissions filed by counsel for both parties.Background[2] The plaintiffs owned, or claimed to own, shares in the defendant, a taxi societyincorporated under the Industrial and Provident Societies Act 1908 (the Society).They sought to judicially review eight separate decisions made by the Society's Board.They contended the Board had made the decisions in a manner demonstrating biasagainst the plaintiffs and other shareholders, or that it had acted for other improperpurposes.[3] I upheld the plaintiffs' claim in relation to two decisions. These were decisionsdeclining to hold any Annual General Meeting of the Society between 2016 and 2018and declining to allow the plaintiffs to have access to the Society's share register. Igranted relief in relation to these decisions but dismissed the remainder of theplaintiffs' claims.The arguments[4] The plaintiffs contend they were the successful parties overall. They accept,however, that any award of costs needs to reflect the fact that they were not whollysuccessful in their claims. The plaintiffs therefore contend they should receive anaward of costs on a Category 2B basis, but reduced by 50 per cent to reflect thedefendant's partial success in defending the claims.[5] The Society takes a different view. It contends it was the successful partyoverall and that it should receive an award of costs on a Category 2B basis with areduction of 20 per cent to reflect the plaintiffs' partial success.1 Deep v Auckland Gold Line Co-Operative Taxi Society Ltd [2019] NZHC 217.Approach[6] Although costs are at the discretion of the Court,2 the Court is guided in theexercise of that discretion by the principles set out in r 14.2 of the High Court Rules2016. To the forefront of these is the principle that the party who fails with respect toa proceeding shall pay the costs of the party who succeeds.3[7] In assessing who should pay costs the courts regard limited success as stillbeing success.4 For that reason costs will not generally be awarded against a claimantwho has enjoyed a measure of success. Instead, and where appropriate, the costsawarded to the successful party may be reduced to reflect partial success or costs maybe directed to lie where they fall.[8] In his memorandum filed in support of the plaintiffs' application for costsMr Meys has referred to events that occurred subsequent to my judgment. He shouldnot have done so because those events are irrelevant to my decision on costs. I putthose issues to one side in determining that issue.Decision[9] The plaintiffs enjoyed a measure of success in the present case because theyestablished two of their six causes of action and obtained relief in relation to both. Itis important to bear in mind, however, that the case began as a challenge to thedecisions on the basis that the Board had deliberately made them to disadvantage theplaintiffs or for other improper purposes. It ended with wholesale rejection of thoseallegations.[10] Although two decisions were held to be in breach of the Society's rules, I foundthat the Board made one of those decisions to give effect to a resolution passed by aclear majority of those present at a lawfully constituted general meeting of theSociety's shareholders.5 This was a decision not to hold any further annual general2 High Court Rules 2016, r 14.1.3 High Court Rules 2016, r 14.2(1)(a).4 Water Guard NZ Ltd v Midgen Enterprises Ltd [2017] NZCA 36; Weaver v Auckland Council[2017] NZCA 330.5 Deep v Auckland Gold Line Co-operative Taxi Society Ltd, above n 1, at [38].meetings during the term of a contract the Society had entered into with the AucklandAirport. The Board therefore made that decision not for its own purposes but to ensurea commercial decision made by the Society's shareholders was implemented.[11] The second successful challenge related to the Board's decision not to providetwo of the plaintiffs with access to the Society's register of shareholders and financialinformation. The Board was aware that disciplinary proceedings were in train againstthose two shareholders but had been halted as a result of proceedings issued in theDistrict Court by another of the plaintiffs. Counsel for the Society advised me duringthe trial that the Board would provide the two plaintiffs with access to the informationthey seek if and when the disciplinary proceedings against them resume. I found thatin failing to provide the plaintiffs with access to the share register the Board had actedin a manner that was contrary to the requirements of the Society's rules.6 I also found,however, that the decision was not made on grounds tainted by bias or any impropermotive.[12] The factual situation in the present case bears some similarities to that in Millsv Far North District Council, a case cited to me by the plaintiffs.7 In that case, alsoan application for judicial review, the plaintiffs succeeded in establishing two causesof action out of six. The Court had exercised its discretion, however, not to grantrelief. Fitzgerald J considered the two causes of action on which the plaintiffs hadsucceeded were the more important of those pleaded, and did not consider the fact thatrelief had not been granted was material for the purpose of fixing costs. She awardedcosts to the plaintiffs on a category 2B basis but reduced by 50 per cent.[13] The exercise of the discretion is obviously not a mathematical exercise basedon the number or proportion of successful causes of action because the ultimateobjective is to do justice between the parties having regard to the circumstances of thecase. Where unsuccessful causes of action or arguments have occupied a considerableproportion of the evidence and submissions, however, a significant reduction in costswill often be warranted.6 Deep v Auckland Gold Line Co-operative Taxi Society Ltd, above n 1, at [49].7 Mills v Far North District Council [2018] NZHC 3091.[14] I consider the argument for the Society to be more compelling than appears tohave been the case for the respondents in Mills. Taking into account the factors I haveidentified I consider the interests of justice will be met if the Society is required to paycosts to the plaintiffs calculated on a Category 2B basis but reduced by 70 per cent.The plaintiffs will also be entitled to disbursements as fixed by the Registrar.Lang JSolicitors:Neilsons Lawyers, AucklandFortune Manning, Auckland