NGAI TAHU TOURISM LIMITED AND ANOR V QUEENSTOWN WATER TAXIS LIMITED HC INV CIV-2008-425-000624

NGAI TAHU TOURISM LIMITED AND ANOR V QUEENSTOWN WATER TAXIS LIMITED HC INV CIV-2008-425-000624 20 April 2009IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY CIV-2008-425-000624BETWEEN NGAI TAHU TOURISM LIMITED First Plaintiff AND SHOTOVER JET LIMITED Second Plaintiff AND QUEENSTOWN WATER TAXIS LIMITED Defendant Counsel: K Foley for Plaintiffs D M Lester for Defendant Judgment: 20 April 2009JUDGMENT OF HON. JUSTICE FRENCH As to Costs[1] On 16 December 2008, the plaintiffs filed an ex parte application for an interim injunction. The application sought an order restraining the defendant from using the colour red in its planned jetboat business. [2] That same day at 4.30pm, I convened a telephone conference call with the parties on a Pickwick basis. During the course of that conference call, I indicated that on the papers I considered the plaintiffs had a strong case at least in so far as the second order they were seeking was concerned. I stated I would be minded to grant the second order. This related to the colour of the boat itself, as distinct from the business generally. The matter was adjourned to the following day, when at a second conference call the defendant gave an undertaking to the Court it would not use the colour red as the predominant colour for its jetboat. I was also informed that the boat was currently being re-painted.[3] Although there was a further conference call on 22 December, the matter was effectively resolved for all practical purposes as at 17 December, with the plaintiffs reserving the right to apply for costs. [4] The plaintiffs have now filed an application for costs and disbursements in the sum of $9380 calculated on a 2B basis. The plaintiffs contend they gave the defendant ample opportunity to repaint the boat and should not have been put to the expense of filing Court proceedings. The plaintiffs first raised their concerns about the colour of the boat on 2 December 2008. [5] The defendant, however, opposes any award of costs, on the following grounds: i) It would be wrong in principle to award costs when the case never proceeded to a hearing and there has been no decision on the merits. The decision to repaint was influenced not only by the indication I gave during the 16 December conference call, but also by purely pragmatic commercial considerations, the cost of repainting being less than the cost of defending the proceedings. ii) The injunction application could have been filed in the District Court. iii) The defendant acted at all times in good faith. In particular, there was never any intention to pass off its boat as associated with the plaintiffs. It had simply purchased a red boat, without having any control over the colour. This is accepted by the plaintiffs. iv) The injunction application was filed before the expiry of a deadline imposed by the plaintiffs. Therefore, any costs were incurred at the plaintiffs' own risk.[6] The deadline in question was a deadline contained in a solicitor's letter dated 9 December 2008. The letter took issue with the colour of the defendant's jetboat, and gave the defendant until 4 p.m., 16 December 2008, to provide an undertaking to change the colour. The proceedings were filed at 1 p.m. on 16 December, and accordingly the defendant argues that the plaintiffs clearly jumped the gun. According to the defendant's affidavit evidence, its agreement to repaint had been communicated to the plaintiff before 4 p.m. on 16 December. This last point is disputed by the plaintiffs. The plaintiffs contend that any offer to repaint the boat made on the afternoon of 16 December was subject to unacceptable conditions, and that when they made it clear the conditions were rejected, the defendant said it would take its chances on the injunction. It was only after the 4.30pm conference call that the defendant capitulated. [7] In my view, the defendant is not able to rely on the deadline in the solicitor's letter. This is because the letter was superseded by subsequent events, most notably a discussion that took place between the parties on 12 December, followed up by an email of the same date. Although the email does not specifically say the previous deadline is being withdrawn, I am satisfied that anyone reading the email would be very clear that the plaintiffs were now definitely proceeding with their injunction, and filing was imminent. I am also satisfied there was an element of bluff-calling in the defendant's conduct. It chose to call the plaintiffs' bluff, and in my view did thereby put the plaintiffs to unnecessary expense. [8] Simply because a matter never proceeds to a hearing is not in itself an automatic impediment to costs. In this case, the fact the defendant only gave its undertaking after the proceedings had been filed, and after my indication during the conference call, strongly suggests the application was successful. Even if the defendant's undertaking was prompted by pragmatic considerations, it is difficult to see why it was not given earlier. On balance, having regard to all the circumstances, I am satisfied that this is a case where an award is appropriate, and that there were good reasons why the proceeding had to be filed in this Court rather than the District Court.[9] The costs sought are reasonable, and I accordingly award the plaintiffs costs and disbursements in the sum of $9380.Solicitors: Buddle Findlay, Christchurch D Lester, Christchurch