CLARENCE HOLDINGS LIMITED v MAURICE JAMES HALL & ORS [2001] NZCA 177 (14 June 2001)

IN THE court of appeal of new zealand

ca176/00

	between	CLARENCE HOLDINGS LIMITED
		Appellant

	and	MAURICE James HALL
		First Respondent

	AND	mount albert tv 1993 limited (In Receivership and In Liquidation)
		Second Respondent
	AND	STEPHEN ALEXANDER BAGNALL
		Third Respondent

Hearing:	22 February 2001
Coram:	Richardson P Thomas J McGrath J
Appearances:	B O'Callahan for the Appellant G J Kohler for the First Respondent
Judgment:	14 June 2001

judgment (No 2) of the court delivered by Mcgrath j

[1] In the judgment of the Court delivered on 14 May 2001 we dismissed the appeal by Clarence Holdings Ltd against the High Court judgment of Laurenson J.Mr Hall, the successful first respondent, was the sole party appearing in this Court to oppose the appeal.We omitted in our judgment to deal with the cross-appeal brought by Mr Hall against the decision of Laurenson J to make no order as to the costs of the High Court hearing at which Mr Hall had also been successful.That matter had been argued by both parties who appeared before us at the hearing on 22 February 2001.In this judgment we accordingly address that cross-appeal.

[2] In the High Court judgment Laurenson J dismissed the claims brought by the appellant as plaintiff against Mr Hall as second defendant and a Mr Bagnall as third defendant.He entered judgment against the first defendant, a company owned by the second and third defendants, which by that time was in liquidation.His Honour took the view that although he had found Mr Hall and Mr Bagnall were not personally liable under s116(2)(d) of the Companies Act 1955 for misdescription of the Company on contractual documents "the fact remains that the dealings between them were to say the least confused and unsatisfactory."He found there had been a careless approach by all parties to their dealing.In the case of Mr Hall and Mr Bagnall he clearly attached some responsibility for their failure to seek consent to assignment of the lease to the new company, and to take steps to resolve matters later said to be in dispute.He was also critical of delays in addressing the dispute by all parties.It was for these reasons that Mr Hall and Mr Bagnall did not receive an award of costs.

[3] On behalf of Mr Hall, Mr Kohler relied on Rule 47(a), which states a general principle that the party who fails with respect to a proceeding should pay costs to the party who succeeds.That rule is however subject to an overriding discretion expressed in Rule 46 whereby all matters relating to the costs of a proceeding are at the discretion of the Court.(See Rule 46(2)). This discretion is reflected in Rule 48D(f) under which the Court may refuse to make an order for costs if some reason exists which justifies the Court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.

[4] It appears that the High Court Judge considered that Mr Hall and Mr Bagnall acted in a way which was careless and that in a broad sense they were responsible for the unsatisfactory situation which gave rise to the litigation. In the end Mr Hall successfully invoked in the High Court a defence based on principles of justice and equity which excused his liability.He did so despite a finding against his contention in his evidence that he had not personally signed the document of 24 September 1995 misdescribing the name of the company.In these unusual circumstances, where liability has been excused on the basis of principles of justice and equity, it was open to the trial Judge, consistent with the principles of the Rules as to costs, to conclude that the interests of justice would not be served by making an award of costs to the successful defendants.There is no basis on which we could properly interfere with that decision which turned on the Judge's impression of the conduct of the parties formed at a trial at which they gave evidence and were cross-examined.

[5] The cross-appeal is accordingly dismissed without any further order for costs beyond that made in the first judgment.

Solicitors:

Carter & Partners, Auckland, for Appellant

Friedlander & Co, Auckland for Respondent