MACEY v J K TRADING LIMITED [2020] NZHC 1591

MACEY v J K TRADING LIMITED [2020] NZHC 1591 [7 July 2020]IN THE HIGH COURT OF NEW ZEALANDNEW PLYMOUTH REGISTRYI TE KŌTI MATUA O AOTEAROANGĀMOTU ROHECIV-2019-443-076[2020] NZHC 1591UNDER part 19 of the High Court Rules 2016 ands 284 of the Companies Act 1993IN THE MATTER of an application concerning Rimpro-Tec Ltd(in liquidation)BETWEEN PHILIP CRAIG MACEY andJAMES GREGORY EDENApplicantsAND J K TRADING LIMITEDRespondentCounsel: T Wano for applicantsE St John for respondentJudgment: 7 July 2020COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON[On the papers][1] This is an application for costs by the respondent following the applicant'sfiling of a notice of discontinuance. Rule 15.23 provides that when a plaintiff orapplicant files such a notice in the absence of any arrangement in relation to costs thenthe defendant or respondent is entitled to scale costs in respect of matters up to thedate of the discontinuance. However, costs are of course always a matter for theCourt's discretion so that is not an absolute entitlement.[2] Mr Wano for the applicants and Mr St John for the respondent have filedmemoranda in relation to costs, for which I thank them.[3] The essential issue seems to be whether the applicants were justified incommencing their proceeding in the first place.[4] For reasons that it is not necessary to go into here, on 20 May 2020 I hadoccasion to issue a minute in this proceeding. In that minute I indicated that mypreliminary view was that the applicants, who were the liquidators of Rimpro-Tec Ltd(in liq) were not entitled to the first order sought by them in their proceeding, that isto say an order effectively approving their actions to date in the liquidation, but that Iexpected that it would be appropriate to make the second order sought by them, anorder removing them as liquidators and appointing alternative liquidators (thatapplication being supported by the respondent).[5] I do not accept the submission made on behalf of the respondent that theliquidators should not have commenced this proceeding. Even although I wasunsympathetic to the first component of their application, I can see why they thoughtit appropriate to seek the Court's assistance with their own removal and replacement.Essentially, as I commented in my minute, this company is deadlocked, with therespondent and the other creditors unable to agree on the appointment of alternativeliquidators if the applicants were to be replaced.[6] To that extent, I accept Mr Wano's submission that it was necessary for theliquidators to commence this proceeding.[7] In my view, the appropriate course here is to award costs on a 2B basis againstthe liquidators on the basis that those costs are to be paid from the assets of thecompany in liquidation, and that is the order that I make.Associate Judge JohnstonSolicitors:Govett Quilliam, New Plymouth for applicantsEwart & Ewart, Auckland for respondent