Commercial Vehicle Holdings Limited v CAABS5 Holdings Limited [2016] NZHC 65 (3 February 2016)

High Court of New Zealand

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Commercial Vehicle Holdings Limited v CAABS5 Holdings Limited [2016] NZHC 65 (3 February 2016)

Last Updated: 5 February 2016

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000479 [2016] NZHC 65

BETWEEN	COMMERCIAL VEHICLE HOLDINGS LIMITED Applicant
AND	CAABS5 HOLDINGS LIMITED Respondent

Hearing:	Dealt with on the papers
Counsel:	D J Ballantyne for Applicant H T Shaw for Respondent
Judgment:	3 February 2016

JUDGMENT OF GENDALL J (As to Costs)

[1] This proceeding was set down for a one day hearing to commence at 10 a.m. on 2 December 2015.

[2] Earlier that day, 2 December 2015, the applicant filed a Notice of

Discontinuance of the proceeding.

[3] The respondent now seeks costs with respect to the proceeding consequent upon the discontinuance.

[4] Rule 15.23 High Court Rules addresses this situation and states:

15.23 Costs

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

COMMERCIAL VEHICLE HOLDINGS LIMITED v CAABS5 HOLDINGS LIMITED [2016] NZHC 65 [3 February 2016]

[5] Pursuant to directions I have made earlier in this proceeding, counsel for the respondent has filed a detailed memorandum seeking costs dated 10 December 2015. Counsel for the applicant has responded by way of memorandum dated 20 January

2016.

[6] I have now had an opportunity to consider those memoranda and give my decision on the costs issue.

[7] In seeking costs on the discontinuance, the respondent applies for costs on an indemnity or increased basis alleging that the applicant here has acted unreasonably, improperly and indecisively in this proceeding to the serious prejudice of the respondent.

[8] This contention is opposed by the applicant who nevertheless accepts that r 15.23 High Court Rules applies here and there is a presumption that the applicant will be liable for costs unless the Court otherwise orders.

[9] On all of this, the applicant submits that it acted reasonably in pursuing this proceeding and in discontinuing it. The applicant says it is owed large sums of money by the Brix Group of companies related to the respondent. It anticipated the Brix Group providing security for its debts using the vehicle in question as collateral and thus it says it registered the financing statement in question.

[10] The applicant contends it cannot be criticised for registering the financing statement in anticipation of it perfecting a security interest by subsequently entering into a security agreement.

[11] The applicant states that, despite the respondent’s suggestion to the contrary, its decision to discontinue these proceedings was not “strategic” and did not reflect the merits of its application which it notes obviously remain untested.

[12] Further, the applicant maintains it has not caused the Court or the respondent any real loss of time through “misconduct”, nor it says did it commence or continue this proceeding with “wilful disregard” of known facts or clearly established law.

[13] The respondent, however, takes strong issue with these matters.

[14] At the outset I need to make clear that I am satisfied in terms of r 15.23 that, given the discontinuance here is tantamount to judgment for the respondent, the presumption that costs to the respondent will follow discontinuance will apply in this case. The only issue here is whether those costs should be calculated on a standard category 2B scale basis or on an indemnity or increased costs basis.

[15] On all of this I have had the opportunity of considering at length the detailed submissions advanced by counsel for the respondent in support of the respondent’s contention that costs in excess of a 2B scale should be allowed.

[16] On balance, however, I take the view that this is a situation where standard

2B scale costs should be awarded. Although the applicant’s notice of discontinuance here was filed extremely late in the piece, nevertheless I am of the view, noting also that the applicant is bringing new and separate proceedings against the respondent claiming there has been a breach of the security agreement, that this is simply a case where category 2B scale costs are appropriate.

[17] In that regard, counsel for the respondent has set out at para [39] of his memorandum dated 10 December 2015 a calculation of category 2B scale costs totalling $13,826 plus a disbursement of $110.

[18] Counsel for the applicant in his subsequent memorandum dated 20 January

2016 does not address in any real way this $13,826 costs claim despite at para 11 of his memorandum suggesting without real explanation that category 2B costs should total only $8251.

[19] I am satisfied that in all the circumstances here category 2B costs do amount to $13,826. An order is now made that the applicant is to pay to the respondent costs on this proceeding and the discontinuance amounting to $13,826 together with disbursements totalling $110.

...................................................

Gendall J

Solicitors:

Canterbury Legal, Christchurch

Wynn Williams, Christchurch