Cameron v Coleman HC Wellington CIV-2010-485-2151 [2011] NZHC 1190 (5 October 2011)

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This judgment was delivered by Associate Judge Gendall on 5 October 2011 at 4.00 pm under r 11.5 of the High Court Rules.

[1] On 22 June 2011 the applicant’s application for an order granting leave to bring proceedings in the name of Allied Tours and Transfers Limited against the respondents under s 165 of the Companies Act 1993 succeeded. The application for leave was brought by way of an originating application. As the High Court Rules do not provide specifically for the bringing of an application under s 165 of the Companies Act 1993, the applicant initially applied under r 19.5 for leave to commence the proceedings by way of originating application. On 9 November 2010

[2] At [63] of my 22 June judgment noted above, I awarded costs and disbursements on the application to the successful applicant on a 2B basis.

[3] The applicant has since obtained a sealed order from this Court for costs. The respondents now claim however that some of the items certified by the Registrar were not justified.

1	Commencement of proceeding by plaintiff (receiving instructions, researching facts and law, and preparing, filing and serving originating application) (3.0)	$5,640.00
4.12	Preparing and filing interlocutory application (excluding summary judgment application) and supporting affidavits	$1,128.00
4.10	Filing memorandum for mentions hearing (0.4) – 6 December 2010	$752.00
4.17	Appearance at mentions hearing or callover (0.2) – 6 December 2010 (callover)	$376.00
13	Preparation for pretrial conference (0.2) – 8 February 2011 (teleconference)	$376.00
14	Appearance at preliminary-trial conference (0.2) – 8 February 2011	$376.00
4.18	Sealing Order or Judgment (0.2)	_$376.00

8	Preparation for hearing if case proceeds to hearing (1.0)	$1,880.00
9.1	Appearance at hearing for principal counsel (0.5)	$940.00
	Sub total	_$11,844.00

1(a) Filing the original document commencing the proceeding in the case of a concession rate proceeding

2(a) Filing an interlocutory application if made in a concession rate proceeding

295, 16 September 2010 at [18]. The first is in a situation where an applicant does not receive an opportunity to be heard and therefore the costs order is a nullity. The second is where the costs order contains an error, which could be corrected pursuant to the slip rule in r 11.10.

[6] As to when the slip rule has been employed in remedying a costs order made by a Registrar, in Gairloch Holdings Ltd at [19] the following cases were summarised in this way:

In Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd CA79/00, 3 September 2001, the Court of Appeal had mistakenly ordered costs on the basis of a one day hearing, when the hearing had in fact been argued over two days. The Court accepted that the error should be corrected and the costs order was accordingly amended. In Brankin v MacLean HC Christchurch M191/01, 29 March 2004, Hansen J had accidentally omitted experts’ fees and other costs from his costs judgment and considered that he had jurisdiction under the slip rule to deal with these omissions. Similarly, in Nash v Nash (1995) 8 PRNZ 575, the Court of Appeal rectified a costs judgment on the basis

that disbursements as fixed by the Registrar omitted court fees and the costs of preparing the case.

[7] In the present case, Ms Harley, for the respondents, maintains that the respondents were not provided with a draft order prior to its sealing. I am satisfied that there is a reasonable argument here that this fact alone is sufficient to render the Registrar’s order a nullity. An adversely affected party must be given an opportunity to be heard: Steel v Bruce County Council HC Dunedin M237/83, 26 February 1986; Crewe v Crewe [1921] NZLR 769 (SC). I now turn to consider whether, in light of the parties’ arguments the costs order was nevertheless correct.

[8] Ms Harley argues that an application under s 165 is not a substantive proceeding. She contends that the application is an interlocutory application and no more. Indeed, she relies on a Minute issued by me on 8 February 2011 where I directed that r 7.39 of the High Court Rules was to apply to this application.

[9] She further suggests that certain of the items claimed (4.10, 4.17 as well as fees 2(a) and 10 and the service fees) do not fall under the scope of para [63] of my

[10] In response, Mr Parry, for the applicant, contends that the procedure under s

165 is a standalone procedure which is distinct from interlocutory applications under the High Court Rules. Mr Parry mustered two points in support of that argument. First, he noted that applications under s 165 are heard in open court (r 7.34 does not apply to originating applications: Sim’s Court Practice (online looseleaf ed, LexisNexis) at [HCR Part 19.1]) and secondly that the application had the effect of a final decision.

[11] The Court’s discretion, with regard to costs, is guided by Part 14 of the High

proceeding means any application to the court for the exercise of the civil jurisdiction of the court other than an interlocutory application

interlocutory application means an application made in accordance with rule 7.19 or

[14] It is true that the originating application process resembles an interlocutory application. Indeed, there is little distinguishing the procedure to be followed which the Court has mandated for applications under s 165, as compared with that envisaged by r 19.6. In the end, the question as to whether costs should stand in the form that they were certified must depend on the application as a matter of form. The application, for the order under s 165, was not made in accordance with r 7.19 or

7.41. It was made in accordance with r 19.5 as a ―proceeding‖ not otherwise mentioned in Rules 19.2 to 19.4. Therefore the application was not an interlocutory application. Nor was the order made an interlocutory order. Rule 1.3 defines an interlocutory order as:

(i) is made or given for the purposes of a proceeding or an intended proceeding; and

(ii) concerns a matter of procedure or grants some relief ancillary to that claimed in a pleading; and

pleading includes a statement of claim, a statement of defence, a reply, and a counterclaim.

[16] Pleading also includes an originating application: Group Rentals NZ Ltd v

[17] Here, the relief granted was not ancillary to that claimed in the originating application. That relief was precisely that contained in the application.

[18] The effect of my conclusion above, that this was not an interlocutory application, means that the application under s 165 was a proceeding. That, coupled with the fact that Part 14 discusses costs in terms of a proceeding, matters incidental to a proceeding or a step in a proceeding means that the respondents’ arguments here must fail. While I appreciate that at least some of the product of the time spent commencing the proceeding (that is the application under s 165) will be used for the applicant’s later proceeding (commencing proceedings on behalf of the company) this does not mean that the applicant should not be able to claim costs for this work at this stage. In particular, I refer to the fact that a statement of claim for the proceeding to be brought on behalf of the company was annexed to the originating application. If the applicant is ultimately successful in bringing proceedings on behalf of the company, whomever considers the final application for costs should bear in mind the fact that some of those costs may have already been met by the respondents. That effect does not, however, mean that the applicant ought not to be entitled to an award of costs reasonably incurred in accordance with Part 14 at this point in time.

[19] Turning now to the specific matters claimed, I am satisfied that items 1, 4.12,

4.10, 4.17, 13, 4.18, 8 and 9.1 are able to be claimed in relation to the present proceeding. It being a proceeding and all of those being reasonable steps in the proceeding or costs incidental to the proceeding. As for item 14, the applicant concedes that this was recorded in error and it should be recorded as 4.11. I alter that accordingly and substitute the appropriate part day (0.3).

[20] With regard to the court fees claimed, I am satisfied that they ought to be recovered. While the applicant has not provided an ―invoice‖ as such, it is clear from the court file that those costs were incurred by the applicant.

[21] The final matter relates to the recovery of fees for service by two Process

Servers. Mrs Harley argues that two service fees cannot be authorised by the limited

scope referred to at [63] of my 22 June 2011 judgment. That para [63] records that the applicant is entitled to ―any disbursements approved by the Registrar‖. Mr Parry recalls that at the time that the order was sealed, the invoices of the Process Servers were sighted by the Registrar. I have no such invoices before me.

(a) means an expense paid or incurred for the purposes of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor's bill of costs; and

(iii) expenses of photocopying documents required by these rules or by a direction of the court:

[23] Those expenses clearly fall within paragraph (b)(ii) of that definition. Accordingly, there is no reasonable basis on which the respondents can claim that the cost of the process servers is not recoverable as a disbursement in this proceeding.

[24] I am also comfortable accepting Mr Parry’s assurance that the Registrar did sight the invoices at the time that the orders were sealed.

[25] For the reasons discussed above, I set aside the costs order of this Court and substitute an award for $12,032 costs and disbursements of $819.35. That figure is itemised thus:

Service fee – T Neil	$73.13
Service fee – R Callahan	$92.00
TOTAL	$12,663.35

High Court of New Zealand Decisions

Cameron v Coleman HC Wellington CIV-2010-485-2151 [2011] NZHC 1190 (5 October 2011)