Bank of New Zealand v Crisford

[2013] NZHC 1012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-006874 [2013] NZHC 1012

IN THE MATTER OF     the Insolvency Act 2006

AND IN THE MATTER OF the bankruptcy of John Anthony Crisford

BETWEEN  BANK OF NEW ZEALAND Judgment Creditor

ANDJOHN ANTHONY CRISFORD Judgment Debtor

Hearing:         8 May 2013

Appearances: B White for judgment creditor

J A Crisford, judgment debtor in person

Judgment:      8 May 2013

(ORAL) JUDGMENT OF ASSOCIATE JUDGE ABBOTT

Solicitors:

B White, Buddle Findlay, PO Box 2694, Auckland
R S Pidgeon, Pidgeon Law, PO Box 6535, Wellesley Street, Auckland 1141

Counsel:

C R Pidgeon QC, PO Box 105924, Auckland

Also to:

J A Crisford, North Cove, Kawau Island, Warkworth

BANK OF NEW ZEALAND V JOHN ANTHONY CRISFORD HC AK CIV 2012-404-006874 [8 May 2013]

[1]      Bank of New Zealand has applied for an order for adjudication of John Anthony Crisford. The application was brought on the basis of an unmet demand for payment of costs ordered by this court.  BNZ issued a bankruptcy notice, which Mr Crisford did not meet.

[2]      Mr Crisford opposed the application on three broad grounds:

(a)      BNZ was holding monies as mortgagee, representing proceeds of sale of a security property (formerly owned by Mr Crisford’s family trust). Mr Crisford maintained that he had given BNZ authority to pay the outstanding costs from that amount.

(b)Mr Crisford maintained that he had a valid claim against BNZ for selling the mortgaged property at undervalue.

(c)      Mr  Crisford  maintained  that  he  was  not  insolvent  as  his  assets exceeded his liabilities.

[3]      In addition, in submissions prepared for Mr Crisford, he contended that an order for adjudication should not be made as the BNZ was pursuing the claim against him for improper reasons, including to prevent him from bringing the claim against BNZ.

[4]      BNZ said that there was no basis for opposition in any of these points.  It said that the costs order was made against Mr Crisford personally.  It was made in a proceeding in which BNZ sought to restore a company, Crisford Trustee Ltd, to the companies register (which company at material times was trustee of Mr Crisford’s family trust, the borrower under a loan made by BNZ, and the owner of the mortgaged property that was subsequently sold). BNZ said further:

(a)      The balance of the proceeds of sale (after clearing the money then due under the mortgage) could not be used to meet the personal debt of Mr Crisford, but should go to subsequent mortgagees.

(b)The alleged claim by Mr Crisford had been dismissed as being of little substance, in a decision on an injunction application brought by Mr Crisford ahead of the mortgagee sale, but in any event any claim lay with the trust rather than Mr Crisford personally.

(c)      Mr Crisford had given no evidence to support his claim that his assets exceeded his liabilities, or that he was in any other way able to meet the costs order.

[5]      At  the  start  of  the  hearing  today,  BNZ  sought  leave  to  withdraw  its application.  Counsel said that the reason for doing so was the relatively low amount of the debt, notwithstanding the matters set out in BNZ’s submissions in support of its application (outlined above), and its decision took into account that there were no other creditors with an interest.  In the circumstances, she submitted that an order for costs would be inappropriate (I took that to be a submission that costs should lie where they fall).  When I invited comment on the usual outcome on discontinuance, that costs should follow the event, counsel advised that BNZ would leave the matter in the Court’s hands.

[6]      Shortly  before  the  hearing,  Mr  Crisford  filed  a  further  affidavit,  which essentially traverses the same matters that had been in evidence before the Court on prior occasions, and in this application.  His primary point on the question of costs, however, was that BNZ has at all times been holding money from the proceeds of sale (although the exact amount is unclear, in Mr Crisford’s view, as he contends that BNZ is still to provide a statement showing the application of the proceeds of sale).

[7]     The general rule following discontinuance of a proceeding is that the discontinuing party should pay the costs of the other.  The Court will not go into the merits of the application, and will not take them into account unless they are clear from the material before the Court.   I do not regard this as one of those cases. Equally, however, I see no reason to depart from the usual approach.  The position that BNZ faces has not changed since the start of the proceeding (in other words the amount at issue is still the modest sum of the costs award, there have never been any other creditors taking a position, and the Bank has always known the grounds of

opposition).  Although I can understand the possible commercial justification in electing not to pursue the matter, and cannot discount the possibility that the decision is based on some embarrassment about the way in which this matter has developed and reached this point, those are matters that are appropriately addressed under a standard award of costs.

[8]      I make the following orders:

(a)       The application is withdrawn by leave.

(b)BNZ is to pay costs to Mr Crisford (personally) on a scale 2B basis together with disbursements as fixed by the Registrar.

[9]      In  making  the  above  costs  award,  I  note  that  Mr  Crisford  has  been represented by solicitors and counsel up to this point, and should be awarded costs on that basis.  However, he is not represented by counsel at Court today, and there

can be no basis for an award of costs for his appearance in person.

Associate Judge Abbott