PRESTIGE MOTORS LTD v MY TRUSTEE COMPANY (NIK and PET) LTD [2022] NZHC 3571

PRESTIGE MOTORS LTD v MY TRUSTEE COMPANY (NIK and PET) LTD [2022] NZHC 3571 [20December 2022]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-619[2022] NZHC 3571BETWEEN PRESTIGE MOTORS LIMITEDPlaintiffAND MY TRUSTEE COMPANY (NIK and PET)LIMITED (formerly named My TrusteeCompany (Nikolas and Petra) Limited)DefendantHearing: On the papersCounsel: G Morrison for Prestige Motors LtdRB Hucker for My Trustee Company (Nik and Pet) LimitedJudgment: 20 December 2022COSTS JUDGMENT OF ASSOCIATE JUDGE SUSSOCKThis judgment was delivered by me on 20 December 2022 at 4pmpursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors/Counsel:G Morrison, Shortland Chambers, AucklandHucker & Associates, AucklandIntroduction[1] The application by Prestige Motors Limited to liquidate the defendantcompany was withdrawn by leave on 27 October 2022 with costs reserved. I nowissue this judgment determining costs.[2] A memorandum of counsel for Prestige had been filed prior to the call in theLiquidation List on 27 October 2022 seeking 2B costs and disbursements on:(a) Prestige's successful opposition of the defendant company'sapplication for leave to file a defence out of time totalling $9,964.80;and(b) Prestige's application for orders liquidating the defendant companytotalling a further $10,218.12.[3] Counsel for My Trustee Company (Nik and Pet) Limited (MTC) accepts that2B costs are payable but challenges several of the items claimed. I set out the relevantcosts principles and then determine the appropriate costs award firstly for theunsuccessful application for leave to file a statement of defence out of time and thenfor the liquidation proceedings themselves.Relevant costs principles[4] The starting point is that costs are at the discretion of the Court.1 Although thediscretion is wide, it is not unfettered. Rule 14.2 of the High Court Rules 2016 setsout the general principles as follows:(a) the party who fails with respect to a proceeding or an interlocutoryapplication should pay costs to the party who succeeds:(b) an award of costs should reflect the complexity and significance ofthe proceeding:(c) costs should be assessed by applying the appropriate daily recoveryrate to the time considered reasonable for each step reasonablyrequired in relation to the proceeding or interlocutory application:(d) an appropriate daily recovery rate should normally be two-thirds ofthe daily rate considered reasonable in relation to the proceeding orinterlocutory application:1 High Court Rules 2016, r 14.1.(e) what is an appropriate daily recovery rate and what is a reasonabletime should not depend on the skill or experience of the solicitor orcounsel involved or on the time actually spent by the solicitor orcounsel involved or on the costs actually incurred by the partyclaiming costs:(f) an award of costs should not exceed the costs incurred by the partyclaiming costs:(g) so far as possible the determination of costs should be predictable andexpeditious.[5] Rule 14.5 provides that a reasonable time for each step is as set out in Schedule3 of the High Court Rules by reference to three bands, A, B or C, depending on whethera comparatively small, normal or large amount of time is considered reasonable foreach step.Application for leave to file a statement of defence out of time[6] On 18 October 2022, I declined MTC's application for leave to file a defenceout of time and held that Prestige was entitled to 2B costs.2 Prestige subsequently setout in its memorandum dated 26 October 2022 the items claimed on a 2B basis.Counsel for the defendant company, Mr Hucker, challenges the claim to 0.4 of a dayfor the appearance on 22 July 2022 at the List hearing, the claim to costs forpreparation of the bundle, the claim for 0.4 of a day for the filing of supplementarysubmissions following the hearing of the application and the claims in respect offurther memoranda filed.[7] Mr Hucker submits that the claim for the hearing on 22 July 2022 ought to befor 0.2 of a day as provided for in Item 12 of Schedule 3 of the High Court Rules,rather than 0.4 as claimed.[8] Item 50, however, is a specific item for hearings for company liquidationproceedings and provides for the appearance on a 2B basis to be 0.4 of a day. As itturned out, a defended hearing was allocated as a result of the hearing on 22 July 2022.This does not, however, diminish the preparation that would have had to be undertakenfor the hearing on 22 July 2022. I, therefore, consider the claim under Item 50 for 0.4of a day by the plaintiff is appropriate.2 Kupe Trustee Co Ltd v My Trustee Co (Beach) Ltd [2022] NZHC 2700.[9] The second matter Mr Hucker challenged in respect of the application for leaveis the costs sought for preparation of the "respondent's bundle of documents".[10] Item 25 expressly provides for the applicant to prepare the bundle for thehearing. In this case, the applicant, MTC, did prepare a bundle of documents for thehearing, filed two days prior to the respondent's bundle. Although the respondent,Prestige, included additional documents in its bundle that does not justify costs. Suchan award may encourage respondents to prepare bundles with additional documentswhen the intention is that there is a common bundle prepared by the applicant. Onthat basis, the respondent is not able to claim for preparation of the bundle, either forthe costs ($717) or the disbursements ($111.60). I, therefore, deduct the amountsclaimed in respect of this item.[11] Counsel for the defendant company further challenges the claim for 0.4 of aday for the filing of supplementary submissions following the hearing on 5 August2022.[12] I directed the filing of supplementary submissions as the hearing time allowedwas inadequate for a fair hearing of the issue between the parties. The claim for 0.4of a day is an appropriate claim in the circumstances. Otherwise, the parties wouldhave been entitled to claim for greater hearing time. For completeness, I record thatthis approach has resulted in costs being greater than the usual hearing time of 0.5 ofa day, as adding 0.4 to the hearing time of 0.25 results in 0.65 of a day. I haveconsidered whether to reduce the time claimed to 0.25 for the supplementarysubmissions so that it adds to the time that would otherwise have been allowed.However, I do not consider that is appropriate where the half hour hearing allocatedwas inadequate largely as a result of the length of MTC's oral submissions.[13] Finally, Mr Hucker challenges the claims for 0.4 of a day for the filing of threefurther memoranda updating the Court on the mortgagee sale of MTC's property, inadvance of the originally scheduled list hearing on 7 October 2022 and as to thedischarge of charging orders. Mr Hucker submits that none of the memoranda claimedwere directed to be filed and, further, they were filed without seeking leave in advanceas should have been done. In counsel's submission they were effectively evidencefrom the bar and ought more appropriately to have been dealt with by updatingaffidavit evidence.[14] Each of the memoranda filed, however, contained relevant information for theCourt in respect of the leave application. Furthermore, MTC had not responded toPrestige's memorandum updating the Court on the mortgagee sale of the defendant'sproperty dated 31 August 2022. In these circumstances, I consider that the claims inrespect of the three further memoranda filed are appropriate.[15] The costs allowed in respect of the unsuccessful leave application are,therefore, as set out in the table below.Item Step Time AmountCosts (2B)50 Appearance at 22 July 2022 list hearing, timetabling defendant'sapplication for leave to file statement of defence out of time0.4 $95624 Preparation of written submissions dated 3 August 2022 opposingdefendant's interlocutory application for leave to file statement ofdefence out of time1.5 $3,58526 Appearance of sole counsel at 5 August 2022 hearing of defendant'sinterlocutory application for leave to file statement of defence outof time0.25 $597.50Item Step Time Amount11 Filing memorandum of counsel dated 10 August 2022(supplementary submissions)0.4 $95611 Filing memorandum of counsel dated 30 August 2022 updatingCourt as to mortgagee sale of defendant's property0.4 $95611 Filing memorandum of counsel dated 5 October 2022 updating Courtahead of 7 October 2022 list hearing0.4 $95611 Filing memorandum of counsel dated 17 October 2022 updatingCourt as to discharge of charging orders0.4 $956Subtotal (costs): $8,962.50Liquidation proceedings[16] Mr Hucker for MTC again challenges the claim under Item 50, to 0.4 of a dayfor the hearing at the List call on 3 June 2022, submitting that it ought to be 0.2 of aday under Item 11 as a mentions hearing, rather than the hearing of the application.As I said above, Item 50 specifically relates to company liquidation applications andI consider it is appropriate in the circumstances of this case.[17] Mr Hucker further challenges the claims for 0.4 of a day for each of the twomemoranda filed on 20 July 2022, firstly in relation to the filing of a statement ofdefence out of time and, secondly, in relation to MTC's name change.[18] The second memorandum in relation to MTC's name change is relatively short.To ensure costs fairly reflect the time spent, I consider it is appropriate to reduce theclaim for the second memorandum on 20 July 2022 to 0.2 of a day rather than 0.4.However, a claim is appropriate because the steps taken by MTC simply added to thecosts for the Prestige.[19] The final memorandum filed following my judgment and prior to the Listhearing on 27 October 2022 was necessary because counsel for Prestige had not heardfrom counsel for MTC since August 2022 and no memorandum had been filed onbehalf of MTC. Again, I consider that the claim is appropriately made.[20] The defendant company did not raise any issues with the disbursementsclaimed in respect of the liquidation proceedings. Therefore, I award costs on theliquidation proceedings as sought, with the exception of the second memorandum on20 July 2022 reduced from 0.4 to 0.2 of a day.DisbursementsPrinting: Respondent's bundle of authorities (193 pages x 3 copies @ 30 cents per page) $173.70Subtotal (disbursements): $173.70TOTAL COSTS AND DISBURSEMENTS: $9,136.20Item Step Time AmountCosts (2B)48 Issuing statutory demand 0.2 $47849 Filing a statement of claim and other documents 0.6 $1,43411 Filing memorandum of counsel dated 1 June 2022 prior to listhearing on 3 June 20220.4 $95611 Filing second memorandum of counsel dated 2 June 2022 priorto list hearing on 3 June 20220.4 $95650 Appearance at list hearing on 3 June 2022 0.4 $95611 Filing memorandum of counsel dated 20 July 2022 prior to listhearing on 22 July 2022 (and prior to defendant's applicationfor leave to file a statement of defence out of time dated 21July 2022)0.4 $95611 Filing second memorandum of counsel dated 20 July 2022updating Court as to defendant's company name change0.2 $47811 Filing memorandum of counsel dated 25 October 2022 prior tolist hearing on 27 October 20220.4 $95650 Appearance at list hearing on 27 October 2022 0.4 $956Subtotal (costs): $8,126.00DisbursementsItem Supplier AmountService of statutory demand Translegal Services NZ Ltd $241.50Filing an application to put a company intoliquidationMinistry of Justice $540Service of liquidation notice of proceeding Translegal Services NZ Ltd $247.25Advertising in New Zealand Herald New Zealand Herald $381.37Advertising in New Zealand Gazette Department of Internal Affairs $154Sealing of orders Ministry of Justice $50Subtotal (disbursements): $1,614.12TOTAL COSTS AND DISBURSEMENTS: $9,740.12Result[21] The defendant company is to pay Prestige Motors Limited costs on a 2B basisin the amount of $18,876.32 comprising:(a) costs for the unsuccessful application for leave to file a statement ofdefence out of time in the amount of $8,962.50 plus disbursements of$173.70 for a total of $9,136.20; and(b) costs for the liquidation proceeding in the amount of $8,126.00 plusdisbursements of $1,614.12 for a total of $9,740.12._________________________Associate Judge Sussock