IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE	
CIV-2017-409-000319
CIV-2018-409-000192 [2020] NZHC 2573	

BETWEEN	WORLDCLAIM NEW ZEALAND LIMITED
Plaintiff	
AND	GUY EDWARD SAYERS
Defendant	

Hearing:	On the papers	
Appearances:	A V Foote and S Caradus for Plaintiff J Moss for Defendant	
Judgment:	8 October 2020	

JUDGMENT OF DUNNINGHAM J RE: COSTS JUDGMENT

This judgment was delivered by me on 8 October 2020 at 3.30 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: 8 October 2020

[1]	The defendant has applied for costs in these two proceedings.

[2]	Both proceedings involve claims by the plaintiff against a former director who was managing the plaintiff company in New Zealand. The plaintiff carried on business as a claims resolution service, assisting individuals and companies with outstanding insurance claims. The gist of the allegations made against the defendant was that he

WORLDCLAIM NEW ZEALAND LIMITED v GUY EDWARD SAYERS [2020] NZHC 2573 [8 October 2020]

wrongly diverted customers, and therefore profits, for his own benefit, rather than working in the interests of the plaintiff in accordance with the arrangements he had entered into with the plaintiff.

[3]	The first proceeding, (CIV-2017-409-000319), was issued by the plaintiff seeking an injunction, search order and freezing order without notice. Orders were granted by me on 18 May 2017.1 Those orders were carried out by the parties, but without the plaintiff filing a statement of claim. In a minute dated 20 February 2018, I ordered the plaintiff to issue the substantive proceedings within six weeks or the freezing orders would lift. Costs were reserved in this proceeding.

[4]	The plaintiff filed its statement of claim within the timeframe directed and the second proceeding was given the proceeding number CIV-2018-409-000192.

[5]	On 6 May 2019, the plaintiff’s claims in the second proceeding were struck out on the grounds that the plaintiff had failed to prosecute its claim.2 The plaintiff says this is because, having acquired the relevant documentation as a result of the search, the plaintiff elected to take no further steps in the New Zealand proceedings but to pursue the defendant (through the plaintiff’s parent company) in New York. Costs were granted in favour of the defendant on the strike-out application, but costs of other steps in the proceeding remain undetermined.

[6]	The defendant now seeks costs on the first and second proceedings in respect of the steps where he says costs have not been determined.

[7]	When the application for costs was made, I directed that any submissions in response were to be filed by 28 September 2020. The plaintiff belatedly sought a short extension  of  time  to  file  its  submissions  and  submissions  were  received  on     1 October 2020, with submissions in reply filed by the defendant on the same date.

1	Worldclaim New Zealand Ltd v Sayers [2017] NZHC 1053.
2	Worldclaim New Zealand Ltd v Sayers [2019] NZHC 973.

CIV-2017-409-000319 (the freezing order proceeding)

The defendant’s costs claim

[8]	On 17 May 2017 the plaintiff applied without notice for an injunction, search order, and freezing order. I granted those orders on 18 May 2017 and issued a judgment giving my reasons for making the orders on 19 May 2017.3

[9]	Mr Moss explains that after the orders were granted, attendances were required. The orders were varied, first on the joint memorandum of the parties dated 19 June 2017, and then on the application of the defendant dated 29 September 2017, as recorded in the minutes of 20 November 2017 and 20 February 2018. Costs were reserved on all steps.

[10]	The defendant now seeks his costs on the steps that he was obliged to take under the freezing order proceedings. Given the substantive claim was struck out, the defendant submits that his defence has been wholly successful and costs should follow the event in the normal course.

[11]	The defendant seeks costs on a 2B basis and disbursements as fixed by the Registrar. Those costs are set out in a schedule attached to the defendant’s costs memorandum, which itemises each event where costs are sought. The total sum being sought is $6,704.50, comprising legal costs of $6,094.50 and $610 for disbursements.

The plaintiff’s response

[12]	The plaintiff accepts that $2,509.50 plus $110 for disbursements are payable on the first proceeding. Where the plaintiff differs from the defendant is as follows:

(a)	The plaintiff rejects the defendant’s claim for filing of a notice of opposition and affidavits in support saying those were not filed and therefore should not be claimed.

3	WorldClaim New Zealand Ltd v Sayers, above n 1.

(b)	The plaintiff also rejects the defendant’s claim for costs for filing an interlocutory application to vary the freezing orders on 29 September 2017. The plaintiff notes the application was resolved by consent as recorded in the minute of Mander J dated 6 November 2017. While Mander J reserved discrete matters for a hearing if required, those issues  were  not   pursued.   The  matters  which   were  resolved  on 6 November 2017 were resolved by consent without any issue as to costs. Accordingly, counsel for the plaintiff submits that costs should not be awarded now.

The defendant’s response

[13]	Counsel for the defendant responds to these points saying:

(a)	that the affidavits of Mr Dwyer and Mr Sayers were filed just nine days after the application for a freezing order was made and counsel “had assumed they were in opposition to the freezing order claim” because their timing shortly after the application was filed. If that is the case, then the amount claimed is “entirely reasonable”.

(b)	In respect of the application to vary the freezing orders, Mr Moss points out that Mander J’s minute and the joint memorandum are silent on costs and says “the usual practice is that if costs are agreed, that will be recorded”. He submits costs on those matters are fairly claimed as, by default, they are reserved if not determined or resolved at the time.

Discussion

[14]	There was no notice of opposition filed to the application for freezing orders and other related orders. The affidavits were filed in compliance with the terms of the order. Mr Dwyer’s affidavit is four sentences long simply confirming that the law firm Clark Boyce does not hold funds to the credit of Mr Sayers or any other entity associated with him. Mr Sayers’ affidavit is three pages of text confirming his bank account numbers and other matters pertaining to his financial arrangements. The claim for filing a notice of opposition and affidavits in support is therefore rejected.

[15]	The next issue is whether the application by the defendant to vary the orders, which  was  resolved   by   consent   as   recorded   in   Mander   J’s   minute   dated 6 November 2017, means the associated claim for costs was also resolved. However, I do not consider that is the practical effect of the consent orders made by Mander J. He recorded consent on some issues but not others, and it was anticipated that the unresolved issues may go to a hearing.

[16]	The unsigned joint memorandum of counsel dated 20 November 2017 does not appear on the Court file. In any event, I accept that neither it nor any other document filed by the parties appears to record complete agreement, including on costs. For this reason, I accept Mr Moss’s submission that the issue of costs remains unresolved and an application for costs can be considered by this Court.

CIV-2018-409-000192 (the second proceeding)

The defendant’s costs claim

[17]	On the second proceeding the defendant states  there  have  already  been  two costs orders in favour of the defendant. Those were:

(a)	the orders dated 23 October 2018 arising out of the minute of Davidson J of 15 October 2018; and

(b)	the orders dated 7 May 2019 arising out of the judgment of Gendall J dated 6 May 2019.

[18]	The defendant says this leaves unresolved costs on the balance of the steps taken in this proceeding, in respect of which he seeks costs on a 2B basis, plus disbursements as fixed by the Registrar.

[19]	Again, there is a schedule attached to the costs memorandum itemising each event where costs are sought. The defendant claims these costs on the basis he was wholly successful in his defence given the plaintiff’s claim was struck out. The sum sought under the second proceeding is a total of $14,145 being legal costs of $13,145 and $1,000 for disbursements.

The plaintiff’s response

[20]	The plaintiff accepts it is liable for $11,711 for legal costs plus $500 for disbursements on the second proceeding. However, it rejects the defendant’s claim for costs in relation to filing an interlocutory application that the plaintiff file and serve a more explicit statement of claim. The plaintiff says that application was resolved before Associate Judge Matthews on 7 June 2018 and the defendant was awarded costs on a 2B basis. That item should therefore be removed, along with the associated filing fee.

The defendant’s response

[21]	Mr Moss, in his reply memorandum, accepts if that sum had been awarded then it could not be claimed again. However, he says the decision does not determine costs, nor is there a record of a sealed order on the register of documents in respect of costs. That contrasts with those applications where costs were determined, and the defendant sealed the orders. For this reason, Mr Moss maintains that the costs claimed are as initially sought.

Discussion

[22]	I, too, have reviewed the High Court file and, while the reasons decision dated 7 June 2018 does not record it, there is a handwritten order from Associate Judge Matthews which awards costs to the plaintiff on a 2B basis plus disbursements fixed by the Registrar. There is also an order fixing these costs, including for the appearance at the case management conference on 7 June 2018. I accept, therefore, that costs on this application were resolved at the time and no further claim can be made.

Costs on this application

[23]	Finally, the defendant seeks costs on this application calculated on a 2B basis, in the sum of $956. I accept those costs are properly claimable.

Costs order

[24]	For the reasons set out above, I order:

(a)	the plaintiff is to pay the defendant’s costs and disbursements on CIV-2017-409-000319, as set out in the schedule to the defendant’s costs memorandum, less the costs and the disbursements claimed for filing a notice of opposition and affidavits in support (item 23). The total awarded is therefore $5,060.50 (comprising $4,660.50 in costs and
$400 in disbursements);

(b)	the plaintiff is to pay the defendant’s costs and disbursements on CIV-2018-409-000192 as set out in the schedule to the defendant’s costs memorandum, less the costs and disbursements claimed for the interlocutory application for orders that the plaintiff file a more explicit statement of claim (item 22) and for appearance at the case management conference on 7 June 2018 (item 13). The total awarded is therefore $11,494 (comprising $10,994 in costs and $500 in disbursements; and

(c)	the plaintiff is to pay the defendant’s costs for the preparation of the costs memorandum, again on a 2B basis, in the sum of $956.00.

Solicitors:
Duncan Cotterill, Christchurch Shaun Cottrell Law, Christchurch