Arena Alceon NZ Credit Partners, LLC v Grant
[2025] NZHC 2956
•7 October 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-2214
[2025] NZHC 2956
IN THE MATTER of Ormiston Rise Limited (in receivership and liquidation) AND
IN THE MATTER
of Ormiston Rise Development Limited (in receivership and liquidation)
BETWEEN
ARENA ALCEON NZ CREDIT PARTNERS, LLC
Plaintiff
AND
DAMIEN MITCHELL GRANT
First Defendant
ADAM STEVENSON BOTTERILL
Second Defendant
Hearing: (On the papers) Appearances:
S L Hawksworth and S J Knott for Plaintiff
R J Hollyman KC and A J Peat for First and Second Defendants
Judgment:
7 October 2025
JUDGMENT OF ASSOCIATE JUDGE LESTER
(costs)
This judgment was delivered by me on 7 October 2025 at 4.30 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
………………………………………..
ARENA ALCEON NZ CREDIT PARTNERS, LLC v GRANT [2025] NZHC 2956 [7 October 2025]
Background
[1] Arena Alceon NZ Credit Partners, LLC (Arena) was the successful party in a proceeding heard in March 2025 which resulted in a judgment released 28 May 2025.1 I recorded that Arena could make submissions as to costs and certified for second and third counsel, given the complexity of the case, noting that both parties were represented by multiple counsel. In default of costs memoranda being filed, the award of costs would be on a 2B basis.
[2] There are two outstanding costs issues. The first is whether the appropriate scale item is 2B and/or whether there should be an uplift. The second is the level of disbursements claimed by Arena.
Party and party costs
[3] Arena seeks costs on a category 3B basis with a 50 per cent uplift. That would result in a scale costs award of $150,378.
[4] Mr Hollyman KC, counsel for the Liquidators, opposes a category 3 allocation, saying there was nothing particularly complex about the proceeding or hearing. He maintains that costs on a 2B basis, which would be $61,901, are appropriate.
[5] To some extent, the horse has bolted on whether the case was complex given I certified for second and third counsel “given the complexity of the case”.2
[6] Mr Hollyman submits the proceeding does not bear any of the hallmarks of a category 3 proceeding given it was a short hearing with few witnesses (dealt with in
3.5 days), “[t]he factual matrix was confined” and he submits the key events were not contested and the legal issues were not complicated.
[7] There is some truth in those observations. However, the three day hearing resulted in a judgment of more than 280 paragraphs. While the “factual matrix was confined”, that did not lead the Liquidators to make any concessions in respect of the
1 Arena Alceon NZ Credit Partners, LLC v Grant [2025] NZHC 1360.
2 At [286].
allegations by Arena that they had in many respects breached the Companies Act 1993, even though under cross-examination Mr Grant acknowledged, for example, not properly assessing the status of creditors for the first creditors’ meeting in the administration.
[8] Most 2B cases do not have three counsel, including senior counsel, on each side. Mr Hollyman’s submission that Arena only achieved mixed success was an optimistic one. There is little, if anything, in the judgment that is positive for the Liquidators.
[9] The decision contains a review of ten sections in the Companies Act dealing with the duties of administrators or Liquidators and concluded that Mr Grant failed to comply with all but one of them. Generally, the analysis of whether Mr Grant complied with the Act was relatively straightforward. Each of the areas of breach asserted by Arena were disputed by the Liquidators.
[10] While I do not intend to recite all of the findings I made against Mr Grant and Mr Botterill, in my view, Mr Grant maintaining he was correct to accept creditors claiming under reservation of titles in the first creditors’ meeting was untenable given Mr Botterill could not articulate a jurisdictional basis for those claimants being valid creditors.
[11] Mr Hollyman submits that conduct warranting increased costs must be in relation to the proceeding. He refers to the principles for an uplift in Holdfast NZ Zealand Ltd v Selleys Pty Ltd.3 He submits Arena seeks an increase on two grounds; lack of merit and failing to admit legal argument. Mr Hollyman submits it is only the former (lack of merit) where a global approach to an increase across all scale items is appropriate.
[12] Upon my re-reading the judgment, I am again struck by the Liquidators not having acknowledged any of the areas of non-compliance when such were evident essentially on the face of the record.
3 Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897.
[13] An uplift of 50 per cent on 2B would result in a costs award of $92,851,50. Costs on 3B, without an uplift, is $100,252 (subject to minor adjustments to the scale items as identified by Mr Hollyman). Approaching the level of costs on the basis of complexity (which I have already accepted) or, on the basis of an uplift, achieves more or less the same result. At the end of the day, I consider the figure arrived at by awarding 3B costs without an uplift, to be a reasonable contribution to Arena’s costs. I take that view having already accepted the case was complex and having certified for second and third counsel.
Adjustments to Arena’s scale items
[14] The claim for scale costs for an application to have the matter dealt with on the Commercial Panel and a memorandum in that regard are disallowed. That application did not proceed and so it cannot be said that Arena had success on that point.
[15] Item 30, preparation of affidavits, list of authorities and agreeing common bundle, and item 32, preparation for hearing, are fixed by reference to the hearing days. The hearing was concluded within 3.5 days. I note the claim for appearance for principal counsel is 3.25 days. The claim for five days for items 30 and 32 should be reduced to 4.5 days by virtue of the formula in the schedule (as the fourth hearing day was not a full day and only half a day is claimable for that day). That takes two days out of Arena’s calculation,4 that is, two days at $3,530 per day ($7,060) reducing the claim of $100,252 to $93,192. I order that the Liquidators are to pay Arena’s costs of
$93,192.00.
Disbursements
[16] Arena’s total disbursements are $178,856.96. No issue is taken with the hearing fees, other filing fees and so on. The disputed amount is a claim for
$170,625.96 (excluding GST) being the fee for Arena’s expert, Ms Kare Johnstone. Given the amount of that fee, there was a short hearing on the afternoon of
4 Being item 22 commercial panel interlocutory application .6 of a day, first case management memorandum re commercial panel .4 of a day, a deduction of .5 of a day from the five days claimed for each of items 30 and 32.
11 September 2025, for which I had directed further information be filed by Arena in respect of the fee, in particular, the instructions given to Ms Johnstone.
[17] Ms Johnstone received two instructions from Arena’s instructing solicitors. The first is dated 18 April 2024. That instruction was in relation to a strike-out application brought by the Liquidators. Ms Johnstone was provided with the pleadings. Appendix 3 to the letter of instructions, set out the particular issues upon which Ms Johnstone’s opinion was sought. Ms Johnstone was requested to provide a report commenting on each of the matters in Appendix 3. The instructions contemplated that once Ms Johnstone had provided her report, the instructing solicitors would then prepare a draft affidavit incorporating the contents of that report for Ms Johnstone’s review and comment.
[18] Appendix 3 headed “Issues on which Arena requires your expert advice and evidence” covered five broad categories. Each category was prefaced with a request that Ms Johnstone consider whether Mr Grant, and where relevant also Mr Botterill, acted “in accordance with the Companies Act 1993 (Companies Act), the NZICA Code, NZICA Insolvency Services Standard, the RITANZ Code, and reasonable industry standards, (as applicable)”, there then appear a series of sub-questions. For example, in respect of how Mr Grant, as administrator of Ormiston Rise Limited (Ormiston), conducted the first meeting of creditors there are a series of questions asking if Mr Grant’s conduct was consistent with various sections of the Companies Act that govern how creditors’ meetings are to be conducted.
[19] I accept that not all questions were framed around whether Messrs Grant or Botterill’s conduct met the requirements of the Companies Act or the other codes or standards but for a significant proportion of the questions that was their focus.
[20] In addition, Ms Johnstone was asked to offer her opinion as to whether Mr Botterill had acted “in good faith” in respect of one matter and, in another matter, whether Messrs Grant and Botterill “acted with integrity”.
The proper scope of expert evidence
[21] In Commissioner of Inland Revenue v BNZ Investments Ltd, the Court of Appeal agreed with an earlier dictum of Simon France J that:5
How a commentator thinks the case should be decided seems to me to be a classic example of irrelevant evidence. I consider there are considerable dangers and potentially a great deal of wasted cost, in accepting the proposition that it is open to a party to file opinion evidence on the domestic law applicable to a case, let along how that law should be applied to the case.
[22] To the extent that Ms Johnstone was asked to provide her opinion on whether Mr Grant’s conduct complied with the Companies Act or the RITANZ Code, they were ultimately matters for me to determine. As to whether Messrs Grant and Botterill acted in good faith and/or with integrity, again, that was a matter for me.
[23] As my judgment of 28 May 2025 shows, much of the hearing concerned assessing Messrs Grant and Botterill’s conduct—the majority of which were matters of record against the requirements of the Act and/or the Code.6
[24] On 25 November 2024, Ms Johnstone was asked to provide a further draft report, which again was to be drafted into an affidavit for the hearing held in March 2025. The letter of instruction noted:
The issues have not materially changed since your prior engagement to provide an affidavit in relation to the Defendants’ interlocutory application to strike-out …
[25] Ms Johnstone was provided with further information to consider, including the defendants statement of defence and counterclaim, Arena’s reply to that defence and counterclaim, a further affidavit from Mr Grant sworn 19 July 2024, and documents obtained on discovery. The instruction followed the same format as set out at [18] and
[19] with there being substantial overlap between the 18 April 2024 and 25 November 2024 instructions.
5 Commissioner of Inland Revenue v BNZ Investments Ltd [2009] NZCA 47, (2009) 19 PRNZ 553 at [32]—[33]; citing Commissioner of Inland Revenue v Rabobank New Zealand (2008) 19 PRNZ 137 at [28]. I recognise that s 25(2) of the Evidence Act 2006 does not make expert evidence inadmissible because it is about “an ultimate issue to be determined in a proceeding” but as per the above passage, evidence as to how the law should be applied is not relevant.
6 Arena Alceon NZ Credit Partners, LLC v Grant, above n 1.
[26] Ms Johnstone’s affidavit of 18 December 2024 was expressly written as a standalone piece of evidence so that reference to her earlier affidavit was not necessary. The affidavit contained Ms Johnstone’s opinion on a number of matters that were ultimately for me to decide, consistent with my judgment containing very little reference to the views of the experts.
[27] While Ms Johnstone’s evidence is carefully written and thorough, ultimately much of it was not strictly admissible. I acknowledge there was no objection to the admissibility of the evidence, but that decision may have been influenced by a number of factors including wanting to avoid an admissibility argument and the fact that whether the various breaches of statute alleged by Arena were made out would be a matter for submission based on the evidence, the documentary record and legal submissions.
[28] The other challenge to the amount claimed for Ms Johnstone’s affidavit is based on timesheet records. Ms Johnstone delegated some of the preliminary/preparatory work to other members in her team. Ms Johnstone’s hourly rate is $680 and the other members in her team have an hourly rate of $600. Accordingly, the saving on the hourly rate is not significant. However, this delegation meant there was significant duplication of work arising from support staff reading the same materials to get up to speed. I accept the submission of Ms Hawksworth, counsel for Arena, that it is not simply a matter of deducting that preparation time but it is doubtful whether the use of support staff resulted in significant efficiencies, given the extent of duplication referred to in the timesheets.
[29] How then to reflect these concerns in the level of expert fee to be approved. Mr Hollyman suggested a fee of $40,000 be adopted based on his expert’s fee of approximately $25,650 with an uplift to recognise Ms Johnstone’s hourly rate.
[30] Arena submits that the general approach is that expert costs are recoverable in their entirety but that is not an absolute. The costs must still have been reasonably incurred. Requesting an expert provide what is ultimately irrelevant/inadmissible evidence does not in my view, represent the incurring of reasonable disbursements. Such evidence falls squarely within the dictum of Simon France J set out above.
[31] However, Ms Johnstone’s evidence may have created efficiencies in the preparation of Arena’s legal submissions given, in a sense, that is what much of her evidence amounted to. But for Ms Johnstone’s work, the legal costs may have been higher in respect of the preparation for the hearing.
[32] It is not possible to undertake a line-by-line assessment of the time records to try and extract that time spent on producing inadmissible evidence. Nor is it possible to adjust for the duplication factor discussed above.
[33] The fee for the first affidavit was contained in an invoice of 11 July 2024 and was for $43,470. The invoice for the second affidavit is dated 17 February 2025 and was for $59,976.18. The final fee dated 31 March 2025 for $67,179.78 included the third affidavit of Ms Johnstone sworn 7 March 2025, the joint expert report, and the oral evidence at hearing. Ms Johnstone’s third affidavit is in reply to the affidavit of Mr Francis, the expert instructed by the Liquidators.
[34] To the extent the Liquidators put matters in issue through including them in Mr Francis’ evidence, they cannot be heard to complain that Ms Johnstone responded to them. It is in this regard that the failure to take the admissibility issue bites against the Liquidators. Ms Johnstone was required for cross examination and attended Court accordingly. However, it is not easy to understand how the second affidavit, which was essentially a consolidation of the first affidavit with some further matters, cost nearly $60,000 to prepare.
[35] Mr Francis’ fee of $25,650 is not directly comparable but does give a flavour of the time incurred by someone who was recognised as an expert for the hearing.
[36] The figure that I reach for a reasonable allowance for Ms Johnstone’s fee can only be a round sum estimate, given the factors I have outlined.
[37] Doing the best that I can in the circumstances, I fix the disbursement payable by the Liquidators for Ms Johnstone’s fee, by accepting 50 per cent of the third invoice of $67,179.78 which involved preparing the reply to Mr Francis’ affidavit, attending the hearing and preparing the joint expert report with all necessary steps or steps the
Liquidators actively engaged in. That allowance is made even though of the third invoice only $27,148 was Ms Johnstone’s time. As to the remaining two invoices given the duplication between the first and second affidavits, the duplication of time arising from Ms Johnstone delegating work to her team, and the extent of inadmissible evidence, I fix that total disbursement payable for Ms Johnstone’s evidence at $75,000 (which, for the avoidance of doubt, includes the amount allowed for in the third invoice).
[38] The additional disbursements which are not in dispute total $8,231. Accordingly, the Liquidators are ordered to pay disbursements of $83,231.
[39]The total payable by the Liquidators for costs and disbursements is therefore
$176,423.00.
[40] Leave is reserved to address any mathematical errors I have made. There is no order as to costs in respect of the fixing costs and disbursements.
Associate Judge Lester
Solicitors:
Simpson Grierson, Auckland (for the Plaintiff)
Wynn Williams, Auckland (for First and Second Defendants)
Copy to counsel:
D J Chisholm KC, Barrister, Auckland (for Plaintiff)
R J Hollyman KC, Barrister, Auckland (for First and Second Defendants)
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