BROTHER INTERNATIONAL (NZ) LIMITED v CALIDAD DISTRIBUTORS PTY LIMITED [2016] NZHC 1152

BROTHER INTERNATIONAL (NZ) LIMITED v CALIDAD DISTRIBUTORS PTY LIMITED [2016] NZHC1152 [31 May 2016]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV-2016-485-251[2016] NZHC 1152BETWEEN BROTHER INTERNATIONAL (NZ)LIMITEDPlaintiffAND CALIDAD DISTRIBUTORS PTYLIMITEDDefendantHearing: 30 May 2016Counsel: R J Gordon for PlaintiffH McIntosh for DefendantJudgment: 31 May 2016JUDGMENT OF CLARK J(Costs)[1] For reasons set out in counsel's memorandum dated 26 May 2016 the plaintiffno longer pursues its application for an interim injunction. The plaintiff does,however, seek costs on its interlocutory application and proposes a timetable towardsdetermination of costs "on the papers". In short, and as recorded in Mr Gordon'smemorandum, the plaintiff's position is that, to all intents and purposes, itsinterlocutory application has succeeded and costs should now follow the event.[2] The defendant opposes that course. Mr McIntosh, counsel for the defendant,submits that the substantive proceeding has not been discontinued and that mattersremaining at issue in the substantive proceeding also formed the basis for opposingthe interlocutory application. The appropriate course, Mr McIntosh submits, is toreserve costs pro tem.[3] I have reached the view that costs should be determined at the point when theoutcome in the substantive proceeding is known. Five particular considerationsinfluence me towards that view.(a) The reason it is no longer necessary to hear the interim injunctionapplication is because the Warehouse Group has removed from itsshelves the products whose promotion and sale the plaintiff sought torestrain. Mr McIntosh makes the point that the defendant took no steptowards this outcome. The fact that the interlocutory application doesnot now require determination is attributable to the actions of a thirdparty.(b) The interlocutory application has not been determined. Rule 14.8 ofthe High Court Rules governing costs on interlocutory applicationswhich have been determined is not therefore directly applicable.(c) Nor has any party "failed" in terms of the principle in r 14(2)(a) that theparty who fails should pay costs to the party who succeeds.(d) Rule 15.23 of the High Court Rules governing discontinuance may beanalogous to the present situation where an applicant has effectivelydiscontinued the application. If the r 15.23 presumption does apply theexpectation would be that the applicant should pay costs on withdrawalof the application. That presumption may be displaced if there arecircumstances which make it just and equitable that it should not apply.Making such an assessment requires the Court to engage in the merits.That engagement is yet to occur because the substantive claim is stillafoot.(e) Further, it seems that both parties may seek increased costs. Again, thatwill require the Court to assess merits and conduct. Those questionscannot be assessed and determined without hearing from the parties asto whether their claims are justified. The matters to be determinedoverlap in large measure with the grounds of opposition. Consequently,it can be expected that the trial Judge who will hear and determine thesubstantive issues will be well placed to reach a view on the merits ofthe interim injunction application.[4] For these reasons I conclude that the appropriate course is for costs to bedetermined by the trial Judge. My conclusion is similar to that which Duffy J reachedin similar circumstances. In Commercial Factors Limited v Veda Advantage (NZ)Limited a fixture for an interim injunction hearing was vacated at the request of theparties. The defendant sought costs including indemnity costs. Duffy J noted that theHigh Court Rules did not provide for such a situation and decided that thecircumstances before her warranted a departure from the general rule in r 14.8.1[5] I am of the view that the interests of justice are best served by reserving costspending the outcome of the substantive proceeding._____________________________Karen Clark JSolicitors:Wilson Harle, Auckland for DefendantMinter Ellison Rudd Watts, Wellington for Plaintiff1 Commercial Factors Limited v Veda Advantage (NZ) Ltd HC Auckland, CIV-2010-404-0046798,21 June 2011 at [9].