NZVPAS.COM LIMITED v RURAL BUILDERS LIMITED [2019] NZHC 1578

NZVPAS.COM LIMITED v RURAL BUILDERS LIMITED [2019] NZHC 1578 [8 July 2019]IN THE HIGH COURT OF NEW ZEALANDPALMERSTON NORTH REGISTRYI TE KŌTI MATUA O AOTEAROATE PAPAIOEA ROHECIV-2019-454-21[2019] NZHC 1578BETWEEN NZVPAS.COM LIMITEDApplicantAND RURAL BUILDERS LIMITEDRespondentCounsel: D Sheppard for applicantA Swan for respondentJudgment: 8 July 2019COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON[On the papers][1] This is a costs application by the respondent, Rural Builders Ltd, following thesetting aside of a statutory demand issued against it by the applicant, NZVPAS.ComLtd. The background is adequately described by Mr Swan for Rural Builders inparagraph [1] of his memorandum of 18 June 2019:On 21 March 2019 the respondent issued a statutory demand against theapplicant for a debt. At the time the respondent had a judgment against MrJeremy Sinclair, a director of the applicant, for the same debt. The respondenthad in error issued the demand against the applicant when in fact it shouldhave been pursuing Mr Sinclair.[2] Rural Builders' statutory demand was dated 20 March 2019 and was served onNZVPAS on 21 March 2019. On 3 April 2019 Rural Builders commenced thisproceeding seeking an order setting aside the statutory demand. Its application wasaccompanied by affidavit evidence outlining the position. The application was setdown to be called on 13 June 2019. On 10 June 2019 counsel by then instructed forRural Builders filed and served a memorandum saying that Rural Builders did " notintend to oppose the application to set aside the demand. Orders can be made in thatregard". Accordingly, when the matter was called on 13 June 2019 the statutorydemand was set aside by consent.[3] NZVPAS now seeks costs on a 2B basis.[4] As Mr Sheppard submits, the starting point is that costs follow the event and itis only in unusual circumstances falling into the categories identified in r 14.7 of theHigh Court Rules that the Court generally departs from that starting point.[5] In opposition to NZVPAS' application for costs Mr Swan says that beforeRural Builders commenced this proceeding NZVPAS' debt collection agent hadwritten as many as four letters of demand. So, the argument goes, NZVPAS hadnumerous opportunities to point out to Rural Builders its error in pursuing thecompany. He says that NZVPAS' failure to do so in the light of what he refers to as"the obvious mistake" resulted in both parties incurring "totally unnecessary andwasted costs".[6] I do not accept that contention. The error which led to the parties incurringcosts was that of Rural Builders, presumably on the advice of its debt collection agent,Law Debt Collection. It is Rural Builders which must assume responsibility for that.[7] Having been served with a statutory demand the applicant sought legal adviceand Rural Builders' error was pointed out to it. At that stage, it took the proper courseand made an application to set the statutory demand aside.[8] NZVPAS is entitled to its costs. Had it sought increased costs I would have atleast given that application serious consideration. As it happens, Mr Sheppard seeksonly scale costs on its behalf which he calculates at $5,798 together withdisbursements totalling $643.50. NZVPAS will have costs and disbursements in thoseamounts.Associate Judge JohnstonSolicitors:Fitzherbert Rowe, Palmerston North for applicantAuckland Property Legal Service, Auckland for respondent