AUCKLAND TROTTING CLUB INC v CANAM GROUP LTD [2023] NZHC 3009

AUCKLAND TROTTING CLUB INC v CANAM GROUP LTD [2023] NZHC 3009 [27 October 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-001110[2023] NZHC 3009BETWEEN AUCKLAND TROTTING CLUBINCORPORATEDPlaintiffAND CANAM GROUP LIMITED (a/k/a MedwayLimited)First DefendantCANAM VENTURES LIMITED, CANAMINDUSTRIAL LIMITEDSecond DefendantsLOUKAS SOTERI PETROU, NICHOLASARTHUR PAGE and ANDREW CROSBIECLARKThird DefendantsCABINETRY INVESTMENTS LIMITED,CANAM BUILDING LIMITED (now1962Trees Limited), CANAMMANAGEMENT SERVICES LIMITED,and CANAM BUILDING SOLUTIONSLIMITEDFourth DefendantsHearing: On the papersAppearances: M C Black for the PlaintiffD J Chisholm KC for the First-Named Third DefendantJudgment: 27 October 2023COSTS JUDGMENT OF ASSOCIATE JUDGE GARDINERThis judgment was delivered by me on 27 October 2023 at 11.30 a.m.pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate.......................................Introduction[1] In a judgment delivered on 13 July 2023 I determined Mr Petrou's applicationto strike out the second, third, fourth and sixth causes of action in ATC's statement ofclaim as they relate to him, on the basis that none of them can succeed.1 I made ordersstriking out ATC's claim to declarations in the second and third causes of action, andstriking out the sixth cause of action entirely. Otherwise, Mr Petrou's application tostrike out was dismissed. Consequently, Mr Petrou's application for summaryjudgment was dismissed.[2] I indicated my preliminary view that ATC should pay Mr Petrou's costs, on a2B basis, because despite my decision not to strike out the second, third and fourthcauses of action, Mr Petrou had identified significant issues with the statement ofclaim requiring attention. I invited the parties to agree costs.[3] ATC and Mr Petrou have been unable to agree costs. Mr Petrou has filed amemorandum asking for an order for costs on a 2B basis, against ATC. Additionally,Mr Petrou and the first, second and fourth defendants seek a variation of the currenttimetable for discovery orders, in light of the judgment.[4] ATC has filed a memorandum in response opposing an order for costs inMr Petrou's favour, or asking the Court to, in its discretion, reduce any costs order inMr Petrou's favour from 2B. ATC submits that it was primarily successful overall inopposing the application, and therefore Mr Petrou should pay ATC 2B costs, adjusteddownwards in the exercise of the Court's discretion, to reflect the issues identifiedwith the statement of claim in the judgment.1 Auckland Trotting Club Inc v Canam Group Ltd [2023] NZHC 1685 [13 July 2023].[5] Having considered the respective arguments made in the costs memoranda, andhaving reflected on the judgment outcome, I consider that costs should lie where theyfall. I am persuaded that while Mr Petrou identified significant issues with thestatement of claim, there is merit to ATC's argument that it successfully defended theapplication on at least half of the substantial issues.[6] To expand, Mr Petrou's attack on the second and third causes of action had fiveelements to it. These are set out at [8](a)(i) to (v) of the judgment. The real battle wasover the two issues identified at [8](a)(i) and (ii). The first issue was that the secondand third causes of action are untenable because they are based on director's dutiesunder ss 135 and 136 being owed to ATC, rather than to CCL, and on ATC's ratherthan CCL's loss. The second issue was that the relief sought under s 301 is notavailable.[7] The judgment found that Mr Petrou was correct on the first issue. However,rather than striking out the causes of action, I gave ATC the opportunity to replead.[8] The judgment found against Mr Petrou and for ATC on the second issue,concluding that the relief claimed by ATC under s 301 was not inarguable.[9] Mr Petrou was successful in relation to the two issues identified at [8](a)(iii)and (iv). However, ATC was successful in relation to the issue identified at [8](a)(v).These three issues were relatively minor compared to the first two issues.[10] Mr Petrou sought to strike-out the fourth cause of action on the basis that it istime-barred. ATC was successful on this issue. Mr Petrou did identify a valid issuewith ATC's claim to expectation damages that ATC was directed to rectify. Havingsaid that, the time bar issue was the more significant issue in relation to the fourthcause of action, and was the basis that Mr Petrou sought an order for strike-out.[11] Mr Petrou was successful in having the sixth cause of action, for recovery ofthe arbitration costs, struck out.[12] Analysed in this way, both ATC and Mr Petrou achieved a broadly evenmeasure of success. If anything, ATC was more successful, but only because I grantedthem the opportunity to replead the second and third causes of action. Countingagainst an order in ATC's favour is the fact that the statement of claim was repetitive,unclear, and in parts difficult to follow. This added to the time and cost involved inthe hearing.[13] Weighing these considerations, I reach the conclusion that costs in relation tothe application should lie where they fall.[14] Mr Petrou's request for an amendment to the timetable for discovery will beaddressed in a separate minute to the parties._______________________________Associate Judge GardinerSolicitors:Dawson Harford, AucklandLindsay & Francis, AucklandM Black, AucklandD Chisholm KC, Auckland