Pure Elite Holdings Limited v Bodco Limited [2018] NZHC 156 (15 February 2018)

Last Updated: 25 September 2018

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2016-419-000261 [2018] NZHC 156

BETWEEN	PURE ELITE HOLDINGS LIMITED First Plaintiff PEH NEW ZEALAND LIMITED Second Plaintiff EVER HEALTH NEW ZEALAND LIMITED Third Plaintiff
AND	BODCO LIMITED First Defendant BRIAN NOEL WAGSTAFF Second Defendant RICHARD CHEW YOUNG Third Defendant RANDOLPH EDWARD CASIMIR VAN DER BURGH Fourth Counterclaim Defendant GEOFFREY IAN POLLARD Fifth Counterclaim Defendant

Hearing:	(On the papers)
Judgment:	15 February 2018

COSTS JUDGMENT OF VENNING J

This judgment was delivered by me on 15 February 2018 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date...............

Solicitors: Glaister Ennor, Auckland

Norris Ward McKinnon, Hamilton Tompkins Wake, Hamilton

Counsel: A S Ross QC, Auckland

PURE ELITE HOLDINGS LIMITED v BODCO LIMITED [2018] NZHC 156 [15 February 2018]

[1] In a judgment dated 25 September 2017 Associate Judge Doogue dismissed the defendants’ summary judgment application.¹ Later, on 9 November 2017 the Judge dismissed the defendants’ recall application.² The Judge invited the parties to exchange costs memoranda.

[2] Associate Judge Doogue has retired. High Court Rule 14.9 applies. The issue of costs has been referred to me as Duty Judge.

[3] The plaintiffs seek scale costs and disbursements of $10,432.22 (including a petrol charge of $64.22 for travel to Hamilton for the hearing).

[4] The defendants are now separately represented. Mr Hood has entered on record as solicitor for the First Defendant. Mr MacGillivray has joined Mr Hood in filing a costs memorandum on behalf of all defendants. The defendants’ position is that costs should be reserved but that if costs are to be awarded the defendants should be entitled to costs on this application for security of costs which was made in the same application as the application for summary judgment and which was resolved prior to hearing.

[5] Having reviewed the judgments and the material referred to by counsel I am satisfied it is appropriate that a modest award of costs in the plaintiffs’ favour be made at this stage of the proceeding.

[6] While costs on a plaintiff’s unsuccessful summary judgment are often reserved the general position in relation to an application for summary judgment by the defendant is that costs will follow the event. As noted in the Commentary to McGechan at 12.12.08(6):

... the courts have tended in many cases to approach the question of costs [on a defendant’s unsuccessful application for summary judgment] in the same way as in strike-out applications. If the application fails, there will normally be a good argument to award costs to the plaintiff.

¹ Pure Elite Holdings Ltd v Bodco Ltd [2017] NZHC 2317.

² Pure Elite Holdings Ltd v Bodco Ltd [2017] NZHC 2746.

[7] Each case of course must be dealt with on its own merits and in an appropriate case costs may be reserved: Schmidt v Registrar-General of Land.³ On my review of this case, there is no reason in this case to depart from the general approach to costs on an unsuccessful application.

[8] The defendants note that the plaintiffs filed an amended statement of claim prior to the application for summary judgment. However, I accept Mr Ross’ submission that while the material amendment introduced an action in contract, the amendment did not feature large in the substantive decision of the Judge. As the Judge observed, the amendment was a minor complication, but both parties argued the application on the basis the application extended to the amendment. Importantly, the Judge recorded that the application was based on the defendants’ reliance on an implied term. The Judge ultimately rejected that, finding the plaintiffs had a good argument that no implied term of the kind the defendants relied on was part of the contractual arrangements.

[9] I also agree that the issue of costs on the fourth and fifth plaintiffs’ discontinuance should be dealt with once the counterclaim against them is resolved.

[10] In my assessment the only issue is whether the costs payable should be reduced by a set-off to take account of the defendants’ success on their application for security for costs which was resolved in advance of hearing.

[11] Counsel for the defendants submit they prepared for the security for costs’ application and that the only differences between the two applications should be in relation to the hearing time for the summary judgment application. They submit the defendants should be entitled to recovery of the filing fee and there should be an allowance for the conference at which the security for costs order was made and also an allowance for “defamatory and baseless claims” made in the plaintiffs’ affidavit which were removed.

[12] In response Mr Ross QC for the plaintiffs submits that only three paragraphs in the defendants’ two affidavits related to security for costs application. Further, only

³ Schmidt v Registrar-General of Land [2015] NZHC 2438.

a small portion of submissions related to security for costs. A joint memorandum was prepared and filed seeking security for costs orders by consent. The matters for retraction in the paragraphs of the relevant affidavit were withdrawn on a practical basis without any concession.

[13] While I acknowledge that the application for security was expressed as an alternative to the summary judgment application, some allowance is appropriate to recognise the defendants’ success on the issue of security for costs. I allow the defendants’ 50 per cent of their claim for the limited costs associated with that application and 50 per cent of the filing fee. Application of HCR 14.17 leads to a reduction of the plaintiffs’ costs accordingly.

[14] The plaintiffs are entitled to costs in the sum of $10,432.22 (including disbursements). The defendants are entitled to costs of $3,345 plus a 50 per cent contribution towards disbursements of $250, in total $3,595.

[15] I decline to award costs for the memoranda in relation to costs.

[16] I reserve all other issue of costs to be determined at trial.

Result/order

[17] Applying HCR 14.17 the defendants are jointly and severally liable to pay costs to the first to third plaintiffs in the sum of $6,837.22.






Venning J