Polymer Group Limited v South Vineyard Limited HC Wellington CIV-2009-485-1298 [2011] NZHC 17 (27 January 2011)

Last Updated: 7 February 2011

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

_{CIV-2009-485-1298}

BETWEEN POLYMER GROUP LIMITED Plaintiff

AND SOUTH VINEYARD LIMITED Defendant

Judgment: 27 January 2011 at 3.00 pm

_{JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL}

This judgment was delivered by Associate Judge Gendall on 27 January 2011 at

3.00 pm under r 11.5 of the High Court Rules.

Solicitors: Chris Walker, Solicitor, PO Box 38440, Howick

Stephen Brown, Solicitor, PO Box 12293, Wellington

POLYMER GROUP LIMITED V SOUTH VINEYARD LIMITED HC WN CIV-2009-485-1298 27 January

2011

Introduction

[1] In this substantive proceeding, the plaintiff, Polymer Group Limited, sought an order placing the defendant company, South Vineyard Limited, into liquidation. The proceeding was commenced in July 2009. It was the subject of a number of adjournments since that time. On 15 November 2010, the liquidation application was effectively dismissed as an order was made approving a part 15 Companies Act

1993 Proposal put forward by the defendant which had been accepted by a majority of the creditors, including the plaintiff.

[2] Costs in the proceeding were reserved. Mr Brown, counsel for the defendant, has filed a memorandum as to costs. It appears that the parties were largely able to resolve this matter between themselves, with the exception of three of the defendant’s creditors who had filed appearances in support of the liquidation application, Hertz New Zealand Limited, Holcim (New Zealand) Limited and Officemax New Zealand Limited. Those creditors, all of whom were represented by Kevin McDonald & Associates, Solicitors, Takapuna have submitted a total claim for costs of $7,896.00. Despite my direction at [21] of my 15 November 2010 judgment regarding the filing of memoranda on this costs issue, these creditors have not done so, although Mr Brown for the defendant did file his memorandum on 22

November 2010 which has now been referred to me.

[3] The costs claim from these three creditors of $7,896.00 (or $2,632.00 each), is based on Category 2B. Mr Brown, counsel for the defendant submits that this amount is excessive, because the three creditors were represented by the same counsel, and their appearances were almost identical. He suggests that the creditors should be treated as one, with a modest uplift for having to prepare three (slightly varying) appearances in support. He proposes that an amount of $1,650.00 would be appropriate. He says that this would be equivalent to indemnity costs.

[4] It seems that, as well as filing one appearance each as supporting creditors, the creditors were represented by counsel at five appearances involving adjournment of the plaintiff’s application by consent. It is appropriate in this context to remember that the Court should “exercise some caution before awarding costs, without more, in

favour of multiple parties, particularly when there is some overlap or community of interest in the litigation position of those parties’: McGechan on Procedure at HR

14.15.01, citing Norfolk Trustee Co Ltd v Tattersfield Securities Ltd HC Auckland, CIV-2004-404-3668, 30 March 2005 at [51]; see also Para Franchising Ltd v Laverty HC Napier, CIV-2005-441-652, 2 March 2007 at [18]-[22]. This observation was made in the context of r 14.15, which provides that the Court must not allow more than one set of costs if several defendants could have joined in their defence. Nevertheless, there is no reason why this principle should not also be applicable here. The Court may reduce costs otherwise payable if there is a reason which justifies such a reduction (r 14.7(g)). In the present case, I consider that the fact that the three creditors were, for the most part, effectively represented as one party, is sufficient reason to limit costs to only one set of costs, with perhaps a small uplift because the filed appearances were not exactly the same.

[5] For these reasons, I conclude that an appropriate award of costs would be one set of costs calculated in accordance with Category 2B, that is $2,700.00 for all three creditors, or $900.00 each. This figure is based on 1 x 0.4 days for item 24 ($752.00) and 5 x 0.2 days for item 4.17 ($1,880.00) plus a small rounding uplift ($68.00).

[6] I note here Mr Brown’s concern that the creditors’ actual costs would have amounted to only $1,650.00. An award of costs should not, of course, exceed the costs incurred by the party claiming costs (r 14.2(f)). The defendant is therefore ordered to pay one amount for total costs of $2,700.00 to the three creditors in support noted at [2] above, subject to confirmation by counsel for the creditors that this does not exceed the actual costs incurred.

‘Associate Judge D.I. Gendall’