Auckland Transport v Prescott - [2014] NZHC 1674

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4100 [2014] NZHC 1674

IN THE MATTER The Insolvency Act 2006

and in the matter of

The Bankruptcy of Peter Richard Prescott

BETWEEN

AUCKLAND TRANSPORT Judgment Creditor

AND

PETER RICHARD PRESCOTT Judgment Debtor

Hearing: 16 July 2014

Appearances:

Mr D M Hughes for Auckland Transport
Mr P Prescott in person

Judgment:

16 July 2014

ORAL JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

AUCKLAND TRANSPORT v PRESCOTT [2014] NZHC 1674 [16 July 2014]

[1] This proceeding has reached the point where the judgment debtor has paid the original debt upon which the creditor’s application was supported. However, because of continuing litigation between the parties, further expenses have been incurred by Mr Prescott which the judgment creditor now wishes to add into the creditor’s application by way of amendment. Specifically, the judgment creditor seeks to amend the amount claimed to $2,540 which represents the amount of a costs order made by Cooper J in judicial review proceedings which were filed in this Court. It is unnecessary to go into the detail of those proceedings except to say that they were connected with the original circumstances which brought the judgment creditor and the judgment debtor before the Court in the first place.

[2] The judgment creditor in addition to claiming that the amount of the judicial review costs ought to be paid, also seeks to have costs fixed on its application. It seeks indemnity costs against Mr Prescott.

[3] I offered Mr Prescott the opportunity to comment upon the amendment however he did not make specific submissions on that but did raise other matters more connected with the overall merits of the dispute between the parties.

[4] In my view it is just and reasonable for the judgment creditor to be permitted

to amend the creditor’s application as indicated.

[5] Dealing with the matter of costs, the judgment creditor submitted that it should be entitled to indemnity costs in this proceeding. While for obvious reasons, which I will set out later in this judgment, I will not be able to finally dispose of the main part of the claim today, I can deal with the issue of costs and give a judgment which in principle will provide guidance to the parties about the basis upon which costs are to be issued.

[6] The judgment creditor says that in reliance on Bradbury v Westpac Banking
Corporation,1 indemnity costs may be ordered in circumstances which include the following:

1 Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400.

(i) Particular misconduct that causes loss of time to the Court and to other parties;

(ii) Unduly prolonging the case with groundless contentions.

[7] The basis upon which the judgment creditor puts forward its asserted entitlement to indemnity costs is that at an earlier stage in this proceeding and following a suggestion from Associate Judge Sargisson that Mr Prescott take steps to settle the amount of the claim against him, Mr Prescott…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NZHC 1674
Decision Date: 16 July 2014

CaseChat Overview and Summary

In the case of Auckland Transport v Prescott, the debtor, Peter Richard Prescott, has paid the original debt which led to the creditor, Auckland Transport, filing for bankruptcy proceedings. However, the creditor seeks to amend its application to include additional expenses incurred due to ongoing litigation between the parties. The creditor wishes to add a costs order of $2,540 made by Cooper J in judicial review proceedings, as well as seeking indemnity costs against Prescott. Prescott did not make specific submissions on the amendment, but raised other matters related to the overall dispute between the parties. The Court found it just and reasonable for the creditor to be permitted to amend the creditor's application as indicated.

The creditor argued that it should be entitled to indemnity costs based on Prescott's misconduct, which caused a loss of time to the Court and other parties, and unduly prolonged the case with groundless contentions. The basis for the creditor's claim was a letter written by Prescott to the creditor's counsel on a without prejudice basis, in which he made offers to discontinue other proceedings in return for having his debt forgiven. The Court found that the without prejudice rule did not apply in this case, as it would be contrary to public policy to protect a debtor offering to discontinue criminal proceedings in return for having a debt forgiven. The Court also noted that Prescott's submissions on the costs question did not warrant a change in the Court's decision.

The Court held that it was not possible to bring the matter to a final resolution at the time, but that Prescott needed time to reflect on the situation and make arrangements to pay the amount owing under the amended creditor's application. The proceeding was adjourned to the bankruptcy list at 10 a.m. on 21 August 2014. At the next hearing, the creditor was to provide an updated schedule of costs claimed in the proceeding, and the Court would decide whether or not to add the cost of any future appearance to the costs order.

Orders