GREEN ACRES FRANCHISE GROUP LTD v RUEBE [2014] NZHC 942

GREEN ACRES FRANCHISE GROUP LTD v RUEBE [2014] NZHC 942 [7 May 2014]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2014-404-000200[2014] NZHC 942BETWEEN GREEN ACRES FRANCHISE GROUPLIMITEDApplicantAND GARTH RUEBE and GWYNETHRUEBERespondentsHearing: On the papersAppearances: D J Chisholm QC and J D Ryan for applicantL Ponniah for respondentsJudgment: 7 May 2014JUDGMENT OF LANG J[on costs]This judgment was delivered by me on 7 May 2013 at 2 pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate[1] On 7 March 2014, I delivered a judgment declining an application by GreenAcres Franchise Group Limited ("Green Acres") for an interim injunction preventingMr and Mrs Ruebe from continuing to service the existing customers of their lawnmowing and garden maintenance business.1 Although I held that Green Acres had established a serious issue to be tried, I determined that the balance of convenience firmly favoured the status quo.[2] The substantive dispute between the parties, which relates to the fact that Mr and Mrs Ruebe have continued to service their existing customers following the expiration of their sub-franchise agreement with Green Acres, will be determined at an arbitration scheduled to be held next week.[3] Counsel have been unable to reach agreement regarding the issue of costs. As a result, I am now required to fix costs based on the memoranda that counsel have filed.[4] At the conclusion of my judgment, I observed that the Ruebes had technically been the successful parties in relation to the application for interim relief. I also observed, however, that this may be an appropriate case for costs to follow the outcome of the arbitration. Not surprisingly, counsel for Mr and Mrs Ruebe submits that his clients are entitled to costs as the successful parties whilst counsel for Green Acres contends that costs should await the outcome of the arbitration.[5] Having reflected further on the matter, I consider that the issue of costs should be determined in accordance with orthodox principles. These include theprinciple that the party who fails with respect to an interlocutory application shouldpay costs to the party who succeeds,2 and that, as far as possible, the determinationof costs should be predictable and expeditious.31 Green Acres Franchise Group Ltd v Ruebe [2014] NZHC 402.2 High Court Rules, r 14.2(a).3 Ibid, r 14.2(g).[6] I take the view that, although I ultimately determined the application on the basis of the balance of convenience, Mr and Mrs Ruebe were nevertheless the successful parties in relation to the application for interim relief. The outcome of the arbitration will not affect that fact. They also incurred the expense of defending the application.[7] Counsel for Green Acres submits that my decision was not final, in the sense that I reserved leave to Green Acres to renew its application for interim relief if it believed Mr and Mrs Ruebe were not co-operating in having the substantive dispute resolved in an expeditious manner. I do not consider, however, that this factor undermines my ultimate conclusion that, as matters then stood, the balance of convenience firmly favoured the retention of the status quo.[8] I therefore make an award of costs on a Category 2B basis in favour of Mr and Mrs Ruebe, together with disbursements as fixed by the Registrar.[9] I note, however, that counsel for Mr and Mrs Ruebe has included in his calculation of costs the filing of an appearance under protest to jurisdiction. I make no award of costs in relation to that step, because Mr and Mrs Ruebe did not succeed on the basis that the Court lacked jurisdiction to make the orders that Green Acres sought. The existence of an arbitration clause in the sub-franchise agreement did not prevent Green Acres from filing its application for urgent interim relief.4Lang JSolicitors:Claymore Partners Ltd, AucklandCorban Revell, AucklandCounsel:D J Chisholm QC, Auckland4 By virtue of Article 9 of Schedule 1 to the Arbitration Act 1996.