Bhana v Ranolf Company Limited [2014] NZHC 1528 (2 July 2014)

Last Updated: 24 July 2014

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV 2014-463-000036 [2014] NZHC 1528

BETWEEN	SHEPHEN CHIMAN BHANA First Plaintiff
	JASU MATI BHANA Second Plaintiff
AND	RANOLF COMPANY LIMITED First Defendant
AND	JAAFAR HOLDINGS LIMITED Second Defendant

	On the papers
Counsel:	G C McArthur for the Plaintiffs/Applicants D Chisholm QC for the Second Defendant/Respondent
Judgment:	2 July 2014

_{COSTS JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN}

This judgment was delivered by me on

02.07.14 at 4:30pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

_{Date...............}

S C BHANA and J M BHANA v RANOLF COMPANY LIMITED AND JAAFAR HOLDINGS LIMITED [2014] NZHC 1528 [2 July 2014]

[1] The Court has received memoranda from counsel regarding costs. It is the Court’s decision that the first and second plaintiffs jointly and severally be ordered to pay costs to the second defendant on an indemnity basis and in the amount of

$22,085 inclusive of disbursements.

[2] Mr McArthur for the plaintiffs submitted that 2B costs of $11,940 were appropriate for order.

[3] Mr McArthur submitted the defendants’ claim for costs cannot rely upon r

14.6(4)(e) because any contractual obligations entered into by the plaintiffs were in their capacity as trustees.

[4] Regarding the quantum of Mr Chisholm’s calculation of costs on behalf of the second defendant Mr McArthur says his own costs came to $21,023.62 because he started from scratch in respect of the matter which has a considerable background. By contrast, he submits, Mr Chisholm was familiar with the background from his previous involvement. Mr McArthur considers a ballpark figure for reasonable indemnity costs would be around $15,000.

[5] Putting aside any claim for indemnity costs on a contract basis Mr McArthur submits the Court ought to be persuaded by authority such as in RPD Produce v ASB Bank¹. In that case a caveat was lodged some years after the bank’s mortgage had been registered and the caveator failed to agree to a withdrawal of the caveat in consideration of an offer that funds be held pending resolution of the caveator’s issues.

[6] In this case there are a number of reasons compelling of an indemnity order.

[7] Whether the first plaintiff was a trustee or not does not affect his personal contractual liability for costs. This is not a claim on a contract where the trustees

_{have limited their liability.}

¹ 2013 [NZHC] 3426.

[8] Claims that the second plaintiff was a “bit player” in the dispute between the first plaintiff and the defendants overlooks that she did nevertheless swear an affidavit to support those separate caveats of hers. Also and by the terms of the loan agreement she is deemed to be a principle debtor and accordingly liable for any costs incurred by reason of her own conduct. In the circumstances of this case there appears no reason why the second defendant could not separately sue on the loan agreement to recover indemnity costs against both the plaintiffs.

[9] Notwithstanding Mr McArthur’s reasons given for the level of his own costs,

those are in fact not much different than those of Mr Chisholm.

[10] The Court agrees with Mr Chisholm that the facts of the present case are even more extreme than those faced by Venning J in RPD Produce Holdings v ASB Bank (supra). In this case the plaintiffs had been parties to the granting of a first mortgage to the second defendant but belatedly sought to claim priority as first mortgagee. As in the RPD Produce case, so too in this case the second defendant put the plaintiffs on notice of its rights on discovering the caveats but the plaintiffs still refused to discharge them.

[11] Respectfully the Court agrees with Mr Chisholm’s assessment that the

plaintiffs attempt to sustain the caveats was always hopeless.

[12] In the Court’s assessment the plaintiffs have a contractual obligation to pay indemnity costs. Nevertheless and those obligations aside, the circumstances of this case warrant an award of costs in the amount claimed.

Judgment

_{[13] Indemnity costs are awarded as claimed.}

Associate Judge Christiansen