BAYCITY NEW ZEALAND LTD V UTTINGER HC AK CIV-2004-404-3404

BAYCITY NEW ZEALAND LTD V UTTINGER HC AK CIV-2004-404-3404 4 May 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2004-404-3404UNDER the Patents Act 1953 IN THE MATTER OF an application for revocation under s 41 New Zealand Letters Patent No. 272754 in the name of MICHAEL JOSEPH UTTINGER BETWEEN BAYCITY NEW ZEALAND LTD Plaintiff AND MICHAEL JOSEPH UTTINGER Defendant Hearing: 4 May 2007 Appearances: Kim McLeod for Plaintiff David Marriott for Defendant Judgment: 4 May 2007JUDGMENT OF HARRISON J_________________________________________________________________________________ SOLICITORS AJ Park (Auckland) for Plaintiff James & Wells (Auckland) for Defendant[1] On 11 May 2006 the plaintiff, Baycity New Zealand Ltd, filed a notice of discontinuance of the proceeding against Mr Michael Uttinger. The document stated 'there are no issues as to costs'. [2] This step followed execution of a deed between the parties signed on 31 August 2005. These provisions are particularly relevant:E The parties have engaged in a legal dispute with Baycity pursuing an application for revocation (Section 41, The Patents Act 1953) of the patent and such proceedings are before the High Court of New Zealand (Auckland Registry CIV No. 2004-404-3404) ('the proceedings'). F The parties seek to settle their dispute as set out in this deed. 1. Upon execution of this deed, Baycity will withdraw its opposition to Uttinger's patent amendment application and discontinue the proceedings. 2. Baycity will pay to Uttinger: a. Within 7 days of the date of this deed, the sum of $15,000. b. Four further annual payments of $10,000 each, such payments to be made on the first business day subsequent to each anniversary of the date of this deed.[3] The delay of some eight months between signing the deed and filing the notice of discontinuance is explained by memoranda tendered by counsel for the parties in the interim. [4] On 16 January 2007 counsel for Mr Uttinger, Mr Ian Finch, filed a memorandum in support of an application for costs. He recorded:1. On 11 May 2006 the Plaintiff discontinued this proceeding against the Defendant. The Notice of Discontinuance stated that there was no issue as to costs. At the time of receiving the Notice of Discontinuance, Counsel was not in a position to take instructions from the Defendant. We have recently been placed in such a position and now would like to address the issue of costs. 2. The Defendant considers the Notice of Discontinuance was erroneous as regards the issue of costs. There has never been any agreement between the Plaintiff and Defendant in respect of the costs payable in relation to this proceeding. Although a Deed ofSettlement was entered into between the parties on 8 August 2005, that Deed is silent as to the issue of costs.The schedule annexed to Mr Finch's memorandum seeks costs and disbursements totalling $18,965. Mr Kim McLeod for Baycity advises that a number of the items are already the subject of express awards of costs. Accordingly, the final amount of Mr Uttinger's claim would require substantial reduction. [5] In support of Mr Uttinger's argument today, Mr David Marriott relies on R476A(2), which provides that discontinuance does not affect the determination of costs, and R476C which states:Unless the defendant otherwise agrees or the Court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.[6] Mr Marriott has also tactfully referred me to the decision of the Court of Appeal in Holdfast NZ Ltd v Selleys Pty Ltd 17 PRNZ 897. However, in the short adjournment between argument and delivering this decision, I have re-acquainted myself with Holdfast. The decision is not relevant to the discrete question arising for determination here. [7] In my judgment Mr Uttinger's application must fail on both grounds postulated in R476C. Like Button J in Emslie v Buchanan and Buxton (1907) 26 NZLR 1308, I have no difficulty in inferring Mr Uttinger's agreement that execution of the deed of settlement constituted a compromise of all issues outstanding in this litigation including costs. Its terms are specific. Its primary purpose was to settle this proceeding. One of the issues for resolution was liability for costs. [8] Whether or not either or both parties subjectively turned their minds to the question, the deed objectively construed gives rise to an inference of settlement on costs. The document, after all, provides for payments of sums of money totalling $55,000. The amount of costs at issue was very small. In the circumstances it can hardly be inferred that the parties would agree to defer resolution of a relatively insignificant question for a later date given that the application for costs would itself generate further expense.[9] Alternatively, I would exercise my discretion to order 'otherwise' than a payment of costs by Baycity to Mr Uttinger. I agree with Mr McLeod that Mr Uttinger's delays are decisive. He did not dispute the advice contained in the notice of discontinuance that there was no issue as to costs upon receipt of the document. Instead he waited, as I have noted, some eight months before filing an application. Mr McLeod has portrayed this conduct as opportunistic. Mr Marriott explains that it arose from what might euphemistically be described as an absence of instructions. Whatever is the case, the delay is decisive against the application. [10] I dismiss Mr Uttinger's application. Baycity is entitled to costs to be fixed on a 2B basis. ______________________________________ Rhys Harrison J