ROBBIES BAR AND BISTRO LIMITED v ROBBIES BAR AND BISTRO FRANCHISING LIMITED [2019] NZHC 868 .

ROBBIES BAR AND BISTRO LIMITED v ROBBIES BAR AND BISTRO FRANCHISING LIMITED [2019]NZHC 868 [17 April 2019].IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2018-409-245[2019] NZHC 868BETWEEN ROBBIES BAR AND BISTRO LIMITEDPlaintiffAND ROBBIES BAR AND BISTROFRANCHISING LIMITEDDefendantHearing: (Determined on the Papers)Counsel: J Shingleton for PlaintiffM S Henderson for DefendantJudgment: 17 April 2019JUDGMENT OF ASSOCIATE JUDGE LESTER(Costs)Background[1] By an application dated 14 December 2018, the defendant, Robbies Bar andBistro Franchising Ltd, applied for an order that the plaintiff give security for costs.[2] In support of the proposition that there was reason to believe that the plaintiffwould be unable to pay the costs of the defendant, the defendant referred to the factthat the plaintiff company had been removed from the Companies Register between2009 and 2016.[3] On 26 November 2018, the defendant's counsel raised the issue of security forcosts with the plaintiff and referred to the plaintiff having been removed from theCompanies Register. It proposed that security be granted on a staged basis. The emailconcluded:Should your client not be agreeable, then it should provide real evidence ofthe Plaintiff company's ability to enter an award of costs in this litigationfailing that an Application for Security for Costs will be made.[4] The response sent only 30 minutes later by the plaintiff's solicitor was that nosecurity was on offer.[5] Prior to the first call of the application for security on 5 February 2019, an offerof security was made by the plaintiff. Ultimately, the terms upon which security wouldbe given were agreed and those arrangements put in place.[6] An order for security was made by consent on 21 March 2019, apparently anorder being a precondition to allow the Registry to hold money to be paid in to Court.[7] The defendant now seeks an award of costs in respect of that application.Submissions in support of costs[8] Mr Henderson for the defendant, refers to the approach of 26 November 2018requesting that security for costs be agreed, and the rebuffing of that approach. Hesays the interlocutory application was successful given that security was offeredfollowing the application being made, and he relies on r 14.8 of the High CourtRules 2016 which provides that costs on interlocutory applications should be fixedwhen the application is determined and there are no special circumstances justifyingotherwise. An increase over 2B costs was also sought. Further, costs on theapplication for costs are also sought.Plaintiff's submissions[9] Mr Shingleton for the plaintiff submitted that it cannot be said the plaintifffailed in respect of the interlocutory application and he submits that there was nodetermination of the application with the parties negotiating the outcome. If thatsubmission is not accepted an increase over scale costs is opposed. In particular, thereis opposition to any increase in costs being justified on time spent on negotiating theterms of security which included the provision of personal guarantees which neededto be prepared.Discussion[10] McGechan on Procedure provides for:1An interlocutory application may be "determined" either by decision of theCourt or by another mechanism such as agreement of the parties or withdrawnby leave.[11] What Mr Singleton's submissions do not address is why, given the pre-emptorydismissal of the approach about security there was an about face by the plaintiff tooffer security after the application was filed and served.[12] The fact that the plaintiff company had been removed from the CompaniesRegister for so many years did suggest the plaintiff would be unable to meet costs if itwas unsuccessful. If that was not the case, then the first defendant's invitation to theplaintiff to show that the plaintiff could meet the costs award should have been takenup.[13] Accordingly, in my view there is no reason why costs should not follow theevent. In a practical sense the defendant has been successful. It had a proper basis forraising the issue of security for costs. That request was rebuffed. When the applicationwas made the plaintiff offered security, the terms of which were then negotiated. Inthe absence of any attempt to explain why the initial request that the plaintiff providesecurity was unreasonable, in my view it is appropriate that there be an order of costson a 2B basis in the defendant's favour in terms of the schedule set out at para 11 ofthe defendant's memorandum for costs dated 4 April 2019.[14] As to the request for an uplift in costs, the reality is that if the basis upon whichthe issue of security for costs was settled had been offered by the plaintiff before theapplication, the defendant would have incurred the costs of negotiating anddocumenting the terms of the guarantees that were eventually offered.1 McGechan on Procedure (online loose-leaf ed, Thomson Reuters) at [HR 14.8.01], citing Ip v Ip[2016] NZHC 528 at [12]; Winton v Winton [2018] NZHC 486 at [16] - [17].[15] The defendant seeks costs on the basis that the offer of security was not madeearlier. I have accepted that submission. Had the offer of security been made after theletter of 26 November 2018 in terms that were ultimately acceptable to the firstdefendant, then as I have said, it would have incurred the costs which it now saysjustify an uplift. I note the defendant's counsel in an email responding to the offer ofsecurity, noted the offer was silent on costs and said that costs involved "need to bepaid on say a 2B basis". This was at a time when the terms of the guarantee offeredby the plaintiff were still to be worked through. In my view, counsel's instincts as tothe basis upon which costs should be paid were correct.[16] The uplift is declined.[17] I agree an award of costs in respect of the application for costs in the sum of$500 is also appropriate. There is no suggestion that the plaintiff made an offer inrespect of costs on the security for costs application other than that they be reserved.It does not reflect the requirements of r 14.8 and the allowance of $500 for the issueof costs as sought by the defendant is confirmed.____________________________________Associate Judge LesterSolicitors:First Law Limited, ChristchurchCorcoran French, Christchurch