THE COMMISSIONER OF INLAND REVENUE V FANTAIL MANAGEMENT LIMITED HC AK CIV-2012-404-939

THE COMMISSIONER OF INLAND REVENUE V FANTAIL MANAGEMENT LIMITED HC AK CIV-2012- 404-939 [9 November 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2012-404-939[2012] NZHC 2973UNDER the Companies Act 1993BETWEEN THE COMMISSIONER OF INLANDREVENUEPlaintiffAND FANTAIL MANAGEMENT LIMITEDDefendant(On the papers)Counsel: FF Nizam for plaintiffSR Houliston for defendantJudgment: 9 November 2012JUDGMENT OF ASSOCIATE JUDGE FAIRE[on costs]Solicitors: Meredith Connell, PO Box 2213, Auckland 1140McVeagh Fleming, PO Box 300 844, Albany 0752[1] Applications for costs have been made by both the defendant and the plaintiff in this proceeding.[2] The plaintiff issued this proceeding and sought an order placing the defendant into liquidation and appointing a liquidator. The proceeding followed non- compliance with a statutory demand served on the defendant on the plaintiff'sbehalf.[3] At issue in this case was income tax penalties and interest for the financial years ended 31 March 2009 and 31 March 2010. The debt arose from self- assessment of tax made on behalf of the defendant.[4] The statement of claim pleaded that the defendant owed $38,885.60.[5] The application was ultimately struck out by me on 14 September 2012 whenI was given advice that the sum of $42,804.80 had been paid to the plaintiff's solicitor's trust account in satisfaction of the debt. I called a telephone conference with counsel and had their confirmation that this figure represented the amount demanded plus subsequent interest and penalties.[6] It is important to note, so far as the life of this case is concerned, that it was an opposed application up until the time of the payment. What has in fact been paid is what was demanded plus interest and costs. The reason for the striking out of the proceeding was the payment. In essence and in every way, the plaintiff has been the successful party in this proceeding. The plaintiff was entitled to issue the proceedings when the statutory demand went unanswered.The Court's approach to applications for costs[7] Rule 14.1 gives the Court a discretion to order costs in relation to a step taken in a proceeding. That discretion is generally to be exercised in accordance with thespecific Rules contained in rr 14.2-14.10: Glaister v Amalgamated Dairies Ltd.1 InMansfield Drycleaners Ltd v Quinny's Drycleaning (Dentice Drycleaning Upper Hutt) Ltd it was said of the costs regime contained in what is now rr 14.2-14.10 that:2there is a strong implication that a Court is to apply the regime in the absence of some reason to the contraryThe test to be applied is entirely an objective and not a subjective one. The only reference which it is necessary to make towards actual costs is to be found in r 14.2(f), namely that an award of costs should not exceed the costs incurred by the party claiming the costs: Glaister v Amalgamated Dairies Ltd.3[8] Rule 4.2 lists the principles applying to determination of costs. Subrule (a) affirms the principle that the losing party should pay the costs of the successful party. Subrule (c) requires a consideration of each step for which costs are sought and an application of the daily rate having regard to the appropriate Band that is to be applied after a consideration of r 14.5(2) and the Third Schedule of the High Court Rules.[9] When I consider the position when this proceeding started, the steps subsequently taken and the payment which led to the conclusion of the proceeding I am led to the conclusion that there has been one successful party in this proceeding only, and this is the plaintiff. I further consider that there is no reason to depart from the general rule that as the successful party the plaintiff is entitled to costs.[10] One further matter should briefly be referred to before I analyse the precise sums that are due for costs in this case. It relates to the fact that the Second Schedule to the High Court Rules, which sets out the daily rate, was amended by r 4 of the High Court Amendment Rules 2012, SR2012/93. When I apply ss 7, 17 and 18 of the Interpretation Act 1999 it is clear that the amendment introduced on 14 June 2012 applies for steps taken on or after 14 June 2012. For steps taken before that date I must apply the previous Schedule 2 daily rate. Although the position was not1 Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 at [19].2 Mansfield Drycleaners Ltd v Quinny's Drycleaning (Dentice Drycleaning Upper Hutt) Ltd(2002) 16 PRNZ 662 (CA) at 668.3 Glaister v Amalgamated Dairies Ltd, above n 1 at 610[14].originally clear from counsel's submissions I understood both counsel, when Isought clarification of the matter, accepted the position as I have just outlined. Certainly, I proceed on that basis.[11] Applying the daily rate applicable to each step at the time the steps were taken produces the following position:Item Description Allocateddays or partdaysAmount$48 Issuing statutory demand .2 376.0049 Filing statement of claim and other documents.6 1,128.0012 Appearance at first call on 17 April 2012.2 376.0024 Preparation of written submissions for hearing on 18 June 20121.5 2,820.0025 Preparation of bundle of documents .6 1,128.0026 Appearance at hearing on 18 June 2012 .5 995.0012 Appearance at review hearing on 9 July 2012.2 398.0012 Appearance at review hearing on 15 August 2012.2 398.0050 Appearance at hearing on 14 September 2012.4 796.00Totals 4.4 $8,415.00[12] Although the plaintiff sought an allowance for sealing an order, I do not allow it because, in this case, no final order was made and accordingly no order is required to be sealed. No disbursement in respect of the filing and sealing of the order is appropriate.[13] The plaintiff has also provided details of disbursements incurred as follows:Description Amount$Service fee on statutory demand 54.05Filing fee on statement of claim 483.40Service fee 54.05Advertisement – NZ Gazette 93.00Advertisement – NZ Hearald 341.70Total disbursements $ 1,026.20[14] Accordingly, I order that the defendant pay costs of $ 8,415.00 plus disbursements of $1,026.20._____________________JA FaireAssociate Judge