Adams v Sun

[2014] NZHC 982

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

COMMERCIAL LIST

CIV 2013-404-4168 [2014] NZHC 982

UNDER

THE COMPANIES ACT 1993

IN THE MATTER OF

STARPLUS HOMES LTD (IN LIQUIDATION)

BETWEEN

SHAUN NEIL ADAMS AND JOHN ROBERT BUCHANAN (AS LIQUIDATORS OF STARPLUS HOMES LTD (IN LIQUIDATION)) Applicants

AND

DAVID WEI SUN First Respondent

MAGSONS HARDWARE LTD Second Respondent

HAMILTON HARDWARE RETAIL LTD Third Respondent

UNITED TIMBER MERCHANTS LTD Fourth Respondent

DALE KING BUILDING SUPPLIES LTD Fifth Respondent

RD 1 LTD

Sixth Respondent

Hearing:

(on the papers)

Counsel:

M J Tingey for Applicants
N W Ingram QC and C J R Baird for First Respondent
M D Arthur for Second Respondent

M D Branch for Third Respondent

P R Cogswell for Fourth Respondent

K A Lomas for Sixth Respondent

No appearance by or on behalf of Fifth Respondent

Judgment:

13 May 2014

JUDGMENT (NO. 3) OF HEATH J

This judgment was delivered by me on 13 May 2014 at 11.00am pursuant to Rule

11.5 of the High Court Rules

Registrar/Deputy Registrar

ADAMS AND BUCHANAN (AS LIQUIDATORS OF STARPLUS HOMES LTD (IN LIQUIDATION)) v SUN [2014] NZHC 982 [13 May 2014]

[1]      On 6 May 2014, I gave two judgments in this proceeding.  One dealt with a substantive question of distribution of a fund currently held in Court, primarily being the proceeds of mortgagee sales.1    The second concerned an application for costs made by the liquidators of Starplus Homes Ltd (in liquidation); specifically, whether the liquidators were entitled to indemnity costs, in respect of this proceeding, to be paid out of the fund.2

[2]      Having determined rights of participation in the fund and the extent to which the liquidators could draw their costs from it, I adjourned the proceeding for further submissions on remaining questions of quantum and costs.3   Counsel have helpfully conferred.  I am now able to make provisional declarations on the quantum of each successful party’s entitlement, all of which are subject to the resolution of the remaining questions of costs.4

[3]      To give effect to my judgment on the liquidators’ costs application, I direct the Registrar to pay to the liquidators the sum of $25,858.82,5 out of the fund held in Court. That order is made by consent.

[4]      The balance of the fund ($1,721,370.40, exclusive of interest) shall continue to be held in Court pending resolution of the remaining costs applications.  Subject only to the outcome of those applications, the amounts payable to each successful claimant are agreed to be:

(a)       $331,430.69 to Mr Sun

(b)      $1,389,939.77 to Magsons Hardware Ltd, Hamilton Hardware Retail

Ltd and RD 1 Ltd (the successful building supply companies);

The interest accumulated on the fund while held in Court shall be paid to Mr Sun and to the successful building supply companies in the same proportion that the

amounts payable bear to each other.

1      Re Starplus Homes Ltd (in liq) [2014] NZHC 912.

2      Re Starplus Homes Ltd (in liq) (No 2) [2014] NZHC 913.

3      Re Starplus Homes Ltd (in liq) [2014] NZHC 912 at paras [95]–[97]..

4      See paras [4] and [5] below.

5      Re Starplus Homes Ltd (in liq) (No 2) [2014] NZHC 913 at para [26].

[5]      I am advised by counsel that there are a number of issues to be addressed when I determine remaining questions of costs. They are:

(a)      The successful building supply companies will ask that Mr Sun and an unsuccessful  party,  United Timber  Merchant  Ltd  (United Timber), bear the ultimate burden of that part of the liquidators’ costs that are to be met from the proportion of the fund payable to the successful building supply companies ($20,879.99), and that such amount be paid from the funds (provisionally) held by the Court for Mr Sun;

(b)Each of the successful building supply companies will ask that Mr Sun and United Timber pay costs to them, and that such costs be paid to them from the funds held by the Court for Mr Sun;

(c)      Mr Sun and United Timber will resist those applications and, in the alternative, may seek contribution from each other or otherwise argue for apportionment as between themselves;

[6]      Given the nature of those issues, it is unnecessary for the liquidators to be involved in any further hearing.

[7]      In light of counsel’s consent memorandum, I vacate the timetabling directions set out in my substantive judgment6 and substitute the following:

(a)      Parties seeking costs shall file and serve submissions in support on or before 14 May 2014

(b)Parties opposing costs applications shall file and serve submissions in opposition on or before 30 May 2014.   Those submissions shall incorporate the opponents’ views on how costs should be apportioned.

[8]      The Registrar shall fix a hearing date, of not more than one hour, for counsel to speak to their written submissions and respond to any arising out of oppositions to

6      Re Starplus Homes Ltd (in liq) [2014] NZHC 912 at para [96]

which they had not previously had the opportunity to reply.   The Registrar shall liaise with counsel as to a suitable date, at 9am one morning during June 2014.  The hearing will be conducted by video-link from Timaru, where I am currently presiding over a lengthy trial.

[9]      I thank counsel for their helpful and timely response to the issues that were deferred for further consideration.

P R Heath J

Delivered at 11.00am on 13 May 2014

Solicitors:

Bell Gully, Auckland Harkness Henry, Hamilton Chapman Tripp, Auckland Cogswell Law, Auckland Quinn Law, Auckland Counsel:

N W Ingram QC, Auckland
C J R Baird, Auckland