WORLDCLAIM NEW ZEALAND LIMITED v GUY EDWARD SAYERS [2020] NZHC 2573

WORLDCLAIM NEW ZEALAND LIMITED v GUY EDWARD SAYERS [2020] NZHC 2573 [8 October2020]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2017-409-000319CIV-2018-409-000192[2020] NZHC 2573BETWEEN WORLDCLAIM NEW ZEALANDLIMITEDPlaintiffAND GUY EDWARD SAYERSDefendantHearing: On the papersAppearances: A V Foote and S Caradus for PlaintiffJ Moss for DefendantJudgment: 8 October 2020JUDGMENT OF DUNNINGHAM JRE: COSTS JUDGMENTThis judgment was delivered by me on 8 October 2020 at 3.30 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate: 8 October 2020[1] The defendant has applied for costs in these two proceedings.[2] Both proceedings involve claims by the plaintiff against a former director whowas managing the plaintiff company in New Zealand. The plaintiff carried on businessas a claims resolution service, assisting individuals and companies with outstandinginsurance claims. The gist of the allegations made against the defendant was that hewrongly diverted customers, and therefore profits, for his own benefit, rather thanworking in the interests of the plaintiff in accordance with the arrangements he hadentered into with the plaintiff.[3] The first proceeding, (CIV-2017-409-000319), was issued by the plaintiffseeking an injunction, search order and freezing order without notice. Orders weregranted by me on 18 May 2017.1 Those orders were carried out by the parties, butwithout the plaintiff filing a statement of claim. In a minute dated 20 February 2018,I ordered the plaintiff to issue the substantive proceedings within six weeks or thefreezing orders would lift. Costs were reserved in this proceeding.[4] The plaintiff filed its statement of claim within the timeframe directed and thesecond proceeding was given the proceeding number CIV-2018-409-000192.[5] On 6 May 2019, the plaintiff's claims in the second proceeding were struck outon the grounds that the plaintiff had failed to prosecute its claim.2 The plaintiff saysthis is because, having acquired the relevant documentation as a result of the search,the plaintiff elected to take no further steps in the New Zealand proceedings but topursue the defendant (through the plaintiff's parent company) in New York. Costswere granted in favour of the defendant on the strike-out application, but costs of othersteps in the proceeding remain undetermined.[6] The defendant now seeks costs on the first and second proceedings in respectof the steps where he says costs have not been determined.[7] When the application for costs was made, I directed that any submissions inresponse were to be filed by 28 September 2020. The plaintiff belatedly sought a shortextension of time to file its submissions and submissions were received on1 October 2020, with submissions in reply filed by the defendant on the same date.1 Worldclaim New Zealand Ltd v Sayers [2017] NZHC 1053.2 Worldclaim New Zealand Ltd v Sayers [2019] NZHC 973.CIV-2017-409-000319 (the freezing order proceeding)The defendant's costs claim[8] On 17 May 2017 the plaintiff applied without notice for an injunction, searchorder, and freezing order. I granted those orders on 18 May 2017 and issued ajudgment giving my reasons for making the orders on 19 May 2017.3[9] Mr Moss explains that after the orders were granted, attendances wererequired. The orders were varied, first on the joint memorandum of the parties dated19 June 2017, and then on the application of the defendant dated 29 September 2017,as recorded in the minutes of 20 November 2017 and 20 February 2018. Costs werereserved on all steps.[10] The defendant now seeks his costs on the steps that he was obliged to takeunder the freezing order proceedings. Given the substantive claim was struck out, thedefendant submits that his defence has been wholly successful and costs should followthe event in the normal course.[11] The defendant seeks costs on a 2B basis and disbursements as fixed by theRegistrar. Those costs are set out in a schedule attached to the defendant's costsmemorandum, which itemises each event where costs are sought. The total sum beingsought is $6,704.50, comprising legal costs of $6,094.50 and $610 for disbursements.The plaintiff's response[12] The plaintiff accepts that $2,509.50 plus $110 for disbursements are payableon the first proceeding. Where the plaintiff differs from the defendant is as follows:(a) The plaintiff rejects the defendant's claim for filing of a notice ofopposition and affidavits in support saying those were not filed andtherefore should not be claimed.3 WorldClaim New Zealand Ltd v Sayers, above n 1.(b) The plaintiff also rejects the defendant's claim for costs for filing aninterlocutory application to vary the freezing orders on 29 September2017. The plaintiff notes the application was resolved by consent asrecorded in the minute of Mander J dated 6 November 2017. WhileMander J reserved discrete matters for a hearing if required, thoseissues were not pursued. The matters which were resolved on6 November 2017 were resolved by consent without any issue as tocosts. Accordingly, counsel for the plaintiff submits that costs shouldnot be awarded now.The defendant's response[13] Counsel for the defendant responds to these points saying:(a) that the affidavits of Mr Dwyer and Mr Sayers were filed just nine daysafter the application for a freezing order was made and counsel "hadassumed they were in opposition to the freezing order claim" becausetheir timing shortly after the application was filed. If that is the case,then the amount claimed is "entirely reasonable".(b) In respect of the application to vary the freezing orders, Mr Moss pointsout that Mander J's minute and the joint memorandum are silent oncosts and says "the usual practice is that if costs are agreed, that will berecorded". He submits costs on those matters are fairly claimed as, bydefault, they are reserved if not determined or resolved at the time.Discussion[14] There was no notice of opposition filed to the application for freezing ordersand other related orders. The affidavits were filed in compliance with the terms of theorder. Mr Dwyer's affidavit is four sentences long simply confirming that the law firmClark Boyce does not hold funds to the credit of Mr Sayers or any other entityassociated with him. Mr Sayers' affidavit is three pages of text confirming his bankaccount numbers and other matters pertaining to his financial arrangements. The claimfor filing a notice of opposition and affidavits in support is therefore rejected.[15] The next issue is whether the application by the defendant to vary the orders,which was resolved by consent as recorded in Mander J's minute dated6 November 2017, means the associated claim for costs was also resolved. However,I do not consider that is the practical effect of the consent orders made by Mander J.He recorded consent on some issues but not others, and it was anticipated that theunresolved issues may go to a hearing.[16] The unsigned joint memorandum of counsel dated 20 November 2017 does notappear on the Court file. In any event, I accept that neither it nor any other documentfiled by the parties appears to record complete agreement, including on costs. For thisreason, I accept Mr Moss's submission that the issue of costs remains unresolved andan application for costs can be considered by this Court.CIV-2018-409-000192 (the second proceeding)The defendant's costs claim[17] On the second proceeding the defendant states there have already beentwo costs orders in favour of the defendant. Those were:(a) the orders dated 23 October 2018 arising out of the minute ofDavidson J of 15 October 2018; and(b) the orders dated 7 May 2019 arising out of the judgment of Gendall Jdated 6 May 2019.[18] The defendant says this leaves unresolved costs on the balance of the stepstaken in this proceeding, in respect of which he seeks costs on a 2B basis, plusdisbursements as fixed by the Registrar.[19] Again, there is a schedule attached to the costs memorandum itemising eachevent where costs are sought. The defendant claims these costs on the basis he waswholly successful in his defence given the plaintiff's claim was struck out. The sumsought under the second proceeding is a total of $14,145 being legal costs of $13,145and $1,000 for disbursements.The plaintiff's response[20] The plaintiff accepts it is liable for $11,711 for legal costs plus $500 fordisbursements on the second proceeding. However, it rejects the defendant's claimfor costs in relation to filing an interlocutory application that the plaintiff file and servea more explicit statement of claim. The plaintiff says that application was resolvedbefore Associate Judge Matthews on 7 June 2018 and the defendant was awarded costson a 2B basis. That item should therefore be removed, along with the associated filingfee.The defendant's response[21] Mr Moss, in his reply memorandum, accepts if that sum had been awarded thenit could not be claimed again. However, he says the decision does not determine costs,nor is there a record of a sealed order on the register of documents in respect of costs.That contrasts with those applications where costs were determined, and the defendantsealed the orders. For this reason, Mr Moss maintains that the costs claimed are asinitially sought.Discussion[22] I, too, have reviewed the High Court file and, while the reasons decision dated7 June 2018 does not record it, there is a handwritten order from Associate JudgeMatthews which awards costs to the plaintiff on a 2B basis plus disbursements fixedby the Registrar. There is also an order fixing these costs, including for the appearanceat the case management conference on 7 June 2018. I accept, therefore, that costs onthis application were resolved at the time and no further claim can be made.Costs on this application[23] Finally, the defendant seeks costs on this application calculated on a 2B basis,in the sum of $956. I accept those costs are properly claimable.Costs order[24] For the reasons set out above, I order:(a) the plaintiff is to pay the defendant's costs and disbursements onCIV-2017-409-000319, as set out in the schedule to the defendant'scosts memorandum, less the costs and the disbursements claimed forfiling a notice of opposition and affidavits in support (item 23). Thetotal awarded is therefore $5,060.50 (comprising $4,660.50 in costs and$400 in disbursements);(b) the plaintiff is to pay the defendant's costs and disbursements onCIV-2018-409-000192 as set out in the schedule to the defendant'scosts memorandum, less the costs and disbursements claimed for theinterlocutory application for orders that the plaintiff file a more explicitstatement of claim (item 22) and for appearance at the casemanagement conference on 7 June 2018 (item 13). The total awardedis therefore $11,494 (comprising $10,994 in costs and $500 indisbursements; and(c) the plaintiff is to pay the defendant's costs for the preparation of thecosts memorandum, again on a 2B basis, in the sum of $956.00.Solicitors:Duncan Cotterill, ChristchurchShaun Cottrell Law, Christchurch