Sector One Limited v Ayers [2018] NZHC 2857 (6 November 2018)

Last Updated: 12 November 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-001251 [2018] NZHC 2857

BETWEEN	SECTOR ONE LIMITED Plaintiff
AND	DANIEL FRANCIS AYERS First Defendant SPECIAL TACTICS LIMITED Second Defendant

Judgment:

6 November 2018

JUDGMENT OF COURTNEY J

[Costs]

This judgment was delivered by Justice Courtney on 6 November 2018 at 2.30 pm

pursuant to R 11.5 of the High Court Rules Registrar / Deputy Registrar

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

SECTOR ONE LTD v AYERS [2018] NZHC 2857 [6 November 2018]

[1] In August 2017, I heard an injunction application by the plaintiff, Sector One Limited (SOL) against the defendants, Daniel Ayers and Special Tactics Ltd (STL). Ultimately, the parties reached agreement and I made consent orders.¹ The substantive claim in which the injunction application had been made was resolved prior to trial. SOL sought costs on the injunction by way of memorandum dated 28 August 2017. The defendants opposed the costs application, setting out their position at some length in a memorandum dated 8 September 2017. The plaintiff’s counsel responded with a memorandum dated 14 September 2017. Unfortunately, it appears that these memoranda were not referred to me for determination of the costs issue.

[2] Now that the matter has been referred to me, subsequent events have complicated the situation. STL was placed in liquidation on 6 December 2017 and Mr Ayers was bankrupted on 28 April 2018. SOL wishes to discontinue the proceeding subject to resolving the issue of costs. Although payment of any award seems unlikely, an order is required to prove in Mr Ayers’ bankruptcy. SOL is also mindful that if it discontinues the proceedings without resolution of the costs issue, r 15.23 would require it to pay costs to the defendants (though since neither was represented it is unlikely that this would lead to anything).

[3] In his minute of 3 July 2018, Woodhouse J directed that the memorandum filed on behalf of SOL in relation to costs be served on the defendants and that any response from either defendant was to be filed and served by 19 July 2018, following which the matter was to be referred to me for the determination. I am advised that no response has been filed by either of the defendants. Mr Ayers apparently called the Registry on 5 October 2018 to request an extension (which was not referred to me). Still no response has been filed. In the circumstances I proceed to deal with the matter.

[4] SOL’s costs application was contained in its costs memorandum dated 28 August 2017. It sought costs of $28,678.30 (including GST) with disbursements of
$710. These costs related to the interim injunction application which was ultimately resolved, though there were subsequent difficulties in securing Mr Ayers’ compliance with the consent orders. Costs on a 3B basis (which I accept would have been

¹ Minute of Courtney J, 21 August 2017.

appropriate given the complexity and unusualness of the situation) would have totalled
$11,261.50. However, SOL’s actual costs were over $40,000 and it seeks either increased or indemnity costs were sought. This claim was on the basis of Mr Ayers’ unreasonable refusal to accept the obvious situation; he was a former expert witness who refused to hand over data obtained during the course of a search order. It was plain that there was no basis on which to resist the interim injunction application. I am not satisfied that indemnity costs are justified but increased costs are justified. I consider that an uplift of 50 per cent is appropriate.

[5] I make an order for costs of $24,970.50, together with disbursements of $710.









P Courtney J