Action Media Limited (in liquidation) v Mitchell

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-1314 [2016] NZHC 2555

UNDER

the Companies Act 1993

IN THE MATTER

of Action Media Limited (In Liquidation)

BETWEEN

ACTION MEDIA LIMITED (IN LIQUIDATION)

First Plaintiff

AND

HENRY DAVID LEVIN AND VIVIEN JUDITH MADSEN-RIES AS LIQUIDATORS OF ACTION MEDIA LIMITED (IN LIQUIDATION)

Second Plaintiffs

AND

SEAN WESLEY MITCHELL First Defendant

AND

FARRY & CO TRUSTEES LIMITED Second Defendant

On the papers
Appearances:	P Murray and P Shackleton for the Plaintiffs P R Cogswell for the Defendants
Judgment:	26 October 2016

JUDGMENT AS TO COSTS OF THOMAS J

This judgment was delivered by me on 26 October 2016 at 3pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Solicitors:

Meredith Connell, Auckland. Cogswell Law, Auckland.

ACTION MEDIA LIMITED (IN LIQUIDATION) v LEVIN AND MADSEN-RIES AS LIQUIDATORS OF ACTION MEDIA LIMITED (IN LIQUIDATION) [2016] NZHC 2555 [26 October 2016]

Introduction

[1]      The parties have filed applications for costs following judgments I issued on

9 December 2015, regarding the defendants’ omnibus interlocutory application; and

28 January 2016, regarding the defendants’ application for an adjournment.  There are eight matters which might give rise to costs’ liability:

Judgment date	Matter	“Successful” parties
Discontinued	Defendants’ application for strike- out	Plaintiffs
9 December 2015	Discovery of s 261 notices	Plaintiffs
9 December 2015	Discovery     of     correspondence regarding creditor’s compromise	Defendants
9 December 2015	Discovery of correspondence regarding Mr Mitchell’s personal compromise	Plaintiffs
9 December 2015	Discovery of IRD case notes	Plaintiffs
9 December 2015	Directions under s 286 of the Act	Plaintiffs
9 December 2015	Mode of discovery and inspection	Defendants
28 January 2015	Adjournment	Defendants

Factual background

[2]      The  following  summary  of  the  factual  background  is  taken  from  my

December judgment:

[1]       The first plaintiff, Action Media Ltd (in liquidation) (the Company), was incorporated in 2006.  It carried on business as a publisher.  It ceased trading on 4 May 2010 and was placed into liquidation by special resolution of its shareholders the same day.  The second plaintiffs are the liquidators of the Company (the Liquidators).

[2]       The first defendant, Sean Mitchell, was a director of the Company and its sole director from 3 January 2007.   Together with the second defendant, Farry & Co Trustees Ltd, which is a solicitor’s trustee company, he jointly held shares in the Company.

[3]       Unsecured creditors’ claims in the liquidation total $1,172,802.93. There are five creditors, the Inland Revenue (the IRD) being by far the largest creditor. All other creditors are related in some way to the Company.

[4]       The amounts owed to the IRD include sums for PAYE, goods and services tax (GST), Kiwisaver employee deductions, Kiwisaver employer contributions, student loan employer deductions and interest and penalties.

[5]       The Liquidators say that the Company was unable to pay its due debts from at least 31 July 2007 and was balance sheet insolvent from at least 31 March 2008.

[6]       The  Company  pleads  three  causes  of  action,  in  the  alternative, against  Mr  Mitchell,  in  respect  of  recovery  of…