SILVERPOINT INTERNATIONAL LIMITED AND ORS V WEDDING EARTHMOVERS LIMITED HC AK CIV 2007-404-104 [2007] NZHC 807 (17 August 2007)

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV 2007-404-104

UNDER The Companies Act 1993

IN THE MATTER OF an application under Section 290 to set

aside a statutory demand

BETWEEN SILVERPOINT INTERNATIONAL LIMITED

AND CIV 2007-404-105

MCLAUGHLIN PARK LIMITED

AND CIV 2007-404-106

FAVONA DEVELOPMENTS LIMITED

AND CIV-2007-404-107

PACIFIC BRIDGE LIMITED

Applicants

AND WEDDING EARTHMOVERS LIMITED

Respondent

Hearing: 14 August 2007

Appearances: A Barker for Applicants

C Andrews for Respondent

Judgment: 17 August 2007 at 12 noon

JUDGMENT OF ASSOCIATE JUDGE DOOGUE

[on costs]

This judgment was delivered by me on 17.08.07 at 12 NOON, pursuant to

Rule 540(4) of the High Court Rules.

Registrar/Deputy Registrar

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

Counsel

A Barker, - by email -

barker@xtra.co.nz

McVeigh Fleming, P O Box 4099, Auckland

SILVERPOINT INTERNATIONAL LIMITED AND ORS V WEDDING EARTHMOVERS LIMITED

HC AK

CIV 2007-404-104 17 August 2007

[1] I gave my judgment in this proceeding on 30 May 2007. In paragraph 149 of that judgment I said that I would make orders as to costs with if the parties were unable to resolve that issue by agreement. The parties were not able to agree and I heard argument on 14 August 2007.

[2] The first relevant matter is that costs are at the discretion of the Court. In exercising that discretion there are certain principles which set out in Rule 47 that provide guidance. The first concerns the matter of which party should pay costs. R47(a) says that the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds. That principle has relevance in this case. However the parties did not seem to be able to agree on the extent to which the applicant had been successful and the respondent unsuccessful. There was argument about whether the judgment that I gave should be regarded as one proceeding or whether it was a composite judgment affecting four

different proceedings.

[3] The correct approach is to look at the matter on a proceeding by proceeding basis. The rules mandate such an approach. Rule 46 speaks of:

Costs of and incidental to a proceeding or a step in a proceeding.

[4] Rule 47(a), which I have already mentioned, refers to "a proceeding or an

interlocutory application". The fact that matters are heard together would not seem

to be any ground for approaching the fixing of costs on other than a proceeding by

proceeding basis. The fact that common affidavits were provided and that a

composite judgment was given may be a factor which is to be taken into account as

part of the Courts overall discretion in fixing costs, though.

[5] Approaching the matter on a proceeding by proceeding basis, the question I

pose is which party was successful on each of the applications before me. The

applications were applications to set aside statutory demands.

[6] I granted the application of Favona Developments, Pacific Bridge Limited

and Silverpoint International Limited. I dismissed the application of McLaughlin

Park Limited ("MPL"). I dismissed MPL's application because there was no

reasonably arguably basis upon which MPL could dispute part of the claim by

Wedding Earthmovers Limited ("WEL") - the approximate amount owing being

$222,000. Nor would I accept the argument for MPL that it was entitled to set off

against that debt another debt that it claimed WEL owed to a related company, Favona.

[7] The starting point is that the applicants, with the exception of MPL, should

have costs. I accept Mr Barker's submission that the fact that I commented that at

least one of the applications succeeded only by a narrow margin, does not justify

the conclusion that the applicant should not have costs.

[8] The respondent should have costs on the MPL proceeding.

[9] The next matter concerns the correct categorisation of the costs award. The

parties accept, and correctly in my view, that the proceeding is a category 2

proceeding. They also accept, again correctly, that Band B should apply.

[10] The next issue concerns the time allocation for phases 30 and 31 in schedule

three to the Rules. Those two phases concern the time that should be allocated for

preparing for hearing and appearance at the hearing.

[11] The hearing took 1.75 days. Obviously, at various stages of the proceeding,

attention was focused on one or other of the applications. It was not the case that

1.75 days was spent on all of the applications. The parties were not able to agree as

to how much time was spent on each application.

[12] I do not consider that minute calculations can helpfully be attempted. I am of

the view that the matter should be viewed in the round and that the proper approach

is to break the time down as follows:

a) Favona Developments Limited ("FDL") 1 day

b) MPL 0.5 day

c) Silverpoint International Limited and Pacific Bridge Ltd

between them 0.25 day

[13] Because time is measured for the purposes of Schedule 3 in ¼ day lots, it will

be possible for the parties to calculate the costs entitlements on the basis of the

determination I have just set out.

[14] It is not feasible to further split the ¼ day time allocation between Silverpoint

and Pacific Bridge. I do not intend to attempt that exercise. The parties can either

approach matters on the basis that an order for costs for the ¼ day appearance and

preparation should be allocated to one proceeding or the other. Or, if they cannot

agree, I will split the sum arrived at by a 2B calculation equally between the two

proceedings. I hope that this indication is sufficient to enable the parties to resolve

that issue without further recourse to the Court.

[15] In each case, the determination of the appropriate hearing time also resolves

the question of proper allowances for preparation time.

[16] The effect of the time allocations that I allow will be that for preparation and

hearing costs, the applicant will have costs calculated on a 2B basis for 1 ¼ days and

the respondent costs on the same basis for one ½ day. In addition disbursements are

allowed to each side as fixed by the Registrar.

[17] If there are any matters I have overlooked, counsel should ask the Registrar

to list the matter in my next Chambers List.

J.P. Doogue

Associate Judge