MAITAI LIMITED V ZENECA INVESTMENTS LIMITED HC AK CIV 2006-404-2809

MAITAI LIMITED V ZENECA INVESTMENTS LIMITED HC AK CIV 2006-404-2809 17 December 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2006-404-2809BETWEEN MAITAI LIMITED Plaintiff AND ZENECA INVESTMENTS LIMITED Defendant Hearing: Determined on the papers Appearances: D Smith and H Sorenson for Plaintiff P Stevenson for Defendant Judgment: 17 December 2007JUDGMENT OF ASHER J [COSTS]This judgment was delivered by me on 17 December 2007 at 5:00 pm pursuant to Rule 540(4) of the High Court Rules .. Registrar/Deputy Registrar .. DateSolicitors: Cairns Slane, Solicitors, PO Box 6849 Auckland (R Berry) Stafford Klaasen, Solicitors, PO Box 29185 Market Road Auckland Copy: D Smith, Barrister, PO Box 3799 Auckland P Stevenson, Barrister, PO Box 5444 Wellesley Street Auckland[1] On 20 November 2007 I delivered a judgment holding that the plaintiff had failed to prove its causes of action, and entering judgment for the defendant. [2] I have now received memoranda seeking costs. The successful defendant, Zeneca Investments Limited ("Zeneca"), seeks costs on a 2B basis in accordance with r 48B(2)(b) of the High Court Rules. It also seeks an order that those costs be payable directly to Mrs Frances Wilson-Fitzgerald, who it has said has funded the litigation for Zeneca. [3] The essence of the findings in the judgment was that Maitai Limited ("Maitai") was the wrong plaintiff. However, I rejected the position taken, purportedly on behalf of Zeneca, by Mr Fitzgerald the director of Zeneca, and his wife Mrs Wilson-Fitzgerald, that Zeneca held its assets as a trustee at least in part for them both individually. I found that Zeneca was a trustee of the Zeneca Investment Trust, whose beneficiaries are a Mr Costello and his family. Mr Costello is the accountant for Mr David Williams whose family interests provided the funding for both Maitai and Zeneca. [4] Despite the fact that I concluded that Maitai could not succeed in its claim, I found the positions adopted by Mr Fitzgerald and Mrs Wilson-Fitzgerald to be without merit. The evidence and related cross-examination focussing on their unmeritorious and unsuccessful claims occupied a considerable portion of the hearing. I agree with Mr Smith's submission that although expressed as a defence, Mr Fitzgerald and Mrs Wilson-Fitzgerald's claims were akin to a counterclaim in terms of how they affected the process of the hearing. [5] There was also a considerable period of time spent on the exact nature of the relationship between Ms Hambrook, who appeared as a witness for Maitai, and Mr Wilson, who is Mrs Wilson-Fitzgerald's brother. I formed the clear view, which I expressed on a number of occasions during the evidence, that questions in that area were irrelevant to the issues I had to determine. They seem to have more relevance to proceedings that are in train in Australia between Ms Hambrook and Mr Wilson.[6] I stated in my judgment that I regarded the outcome as unsatisfactory on the merits, as Mr Fitzgerald had wrongly made a beneficial claim for himself and his wife, and because there did appear to have been a breach of fiduciary duty of the fiduciary owed by Zeneca to the beneficiaries of the Zeneca Investment Trust. [7] Nevertheless, the fact that Zeneca's defence was without intrinsic merit does not disentitle it to costs. Its arguments as to Maitai's failure to prove its pleaded causes of actions were correct and were successful. The task of awarding costs does not, except perhaps in very extreme cases, involve a weighing of the moral rights and wrongs of the positions of the various parties. [8] I conclude that Zeneca is entitled to an award of costs. I do not overlook the fact that any assets of Zeneca are to be held for the Zeneca Investment Trust. [9] For the reasons mentioned, approximately half the hearing time in my estimate was spent in pursuing Mr Fitzgerald and Mrs Wilson-Fitzgerald's unsuccessful claim to a fiduciary interest in Zeneca and on the irrelevant issue of the exact nature of the Hambrook/Wilson relationship. Therefore, I consider it just in my discretion to halve the costs that would normally be paid. [10] I decline to order costs in favour of Mrs Wilson-Fitzgerald. I express no view on whether or not there is jurisdiction to order costs in favour of a non-party. Assuming such jurisdiction, I make no order here, as Mrs Wilson-Fitzgerald's interest was to secure the assets of the Zeneca Investment Trust to repay debts owed to her and her husband. This part of the defence was unsuccessful. [11] I therefore make an order that Zeneca is entitled to costs against Maitai on a 2B basis. Those costs should be half the costs that would be normally payable. The exact amounts will be fixed by the Registrar in the usual way. The defendant is also entitled to its reasonable disbursements in full.. Asher J