Bell v BDO Spicers Manawatu Limited - [2014] NZHC 1078

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2013-485-6845 [2014] NZHC 1078

IN THE MATTER OF The Insolvency Act 2006

BETWEEN

ROBERT ARTHUR BELL Applicant

AND

BDO SPICERS MANAWATU LIMITED Respondent

Hearing: 19 May 2014

Counsel:

A B Darroch for Respondent
Applicant in person

Judgment:

19 May 2014

ORAL JUDGMENT OF MACKENZIE J

[1] This is an application for stay of a judgment and to set aside a bankruptcy notice.

[2] The matter has a history which is already quite extensive. The judgment creditor, BDO Spicers Manawatu Limited (BDO), was engaged by the judgment debtor (Mr Bell) to provide professional services to him, particularly in relation to some matrimonial proceedings. Mr Bell disputed the fees and the right of BDO to recover fees and the matter was heard in the District Court at Porirua. In a reserved judgment delivered on 9 December 2011, Judge Tuohy gave judgment for
$10,793.71 plus interest at two per cent per month until the date of judgment, plus actual and reasonable legal costs. The award of actual and reasonable legal costs was based on a provision in BDO’s letter of engagement to the effect that BDO was
entitled to indemnity costs.1

1 BDO Spicers Manawatu Ltd v Bell DC Porirua CIV-2009-091-365, 9 December 2011 at [35].

[3] Judgment was sealed in the sum of $10,793.71 for the fees claim, plus interest in accordance with two per cent per month. The sum claimed, and for which judgment was entered, in relation to costs was $38,877.58. Mr Darroch had filed a memorandum advising that the costs claimed were invoices for E C Credit Control totalling $1,231.25 and from Duncan Cotterill totalling $37,646.33.

[4] Mr Bell appealed to this Court against that judgment. The appeal was heard by Williams J who delivered a judgment dated 11 July 2012. In that judgment Williams J reduced the interest payable from two per cent per month to 15 per cent per annum. He directed that the figure was to be recalculated. As to the costs
awarded in the District Court Williams J said:2

[62] BDO’s right to reasonable solicitor-client costs stems from clause
11(a) and (c) in the appendix to the letter of engagement of 20 June. Mr Bell submits that this clause cannot apply because the triggering requirement of a
“breach of or default under” the agreement (set out in para (a)) was not met.
This was because Mr Bell had valid grounds for disputing his invoice – so
there was really no “breach” or “dispute” at all.

[63] This argument must also fail. As I have concluded, Mr Bell clearly breached the 20 June agreement, and the subsequent oral agreement on the same material terms. Mr Bell’s defences to BDO’s claims had no merit except in relation to interest. The fact BDO conceded on the comparatively minor issue of overcharging cannot change that fact.

[5] So the outcome was that, except for the adjustment in respect of interest, the appeal was dismissed.

[6] Mr Bell applied for a…

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 1078
Decision Date: 19 May 2014

CaseChat Overview and Summary

The case of Bell v BDO Spicers Manawatu Limited involved an application by Mr Bell to stay a judgment and to set aside a bankruptcy notice. The case had a long history, beginning with a judgment in the District Court for BDO, the respondent, against Mr Bell, the applicant, for fees and costs. Mr Bell had appealed to the High Court, which upheld the original judgment except for the interest rate. Following a recall application, the High Court reduced the fee component of the judgment. Mr Bell subsequently applied to set aside the bankruptcy notice issued by BDO to enforce the judgment.

The legal issues before the court included whether to grant a stay of execution of the judgment and whether to set aside the bankruptcy notice. The court had to consider the appropriate steps to ensure that Mr Bell could challenge the judgment while minimizing the risk of the case becoming one of those in which a solvent individual refuses to pay a judgment, leading to bankruptcy. The court also had to consider whether to allow Mr Bell to adduce fresh evidence on appeal.

The court decided that the appropriate steps were for Williams J to finally determine the application for leave to appeal against his judgment of 11 July 2012, and for Mr Bell to apply for leave to adduce further evidence on appeal. Regarding the stay of execution, the court decided that a different approach was justified in this case, as both parties had the means to pay or repay the judgment amount. The court ordered a stay of execution on terms that Mr Bell was to pay one half of the amount of the judgment, rounded to $27,500, to the judgment creditor within seven days. The application to set aside the bankruptcy notice was adjourned sine die.

The final orders of the court were that execution of the judgment obtained by BDO against Mr Bell is stayed on condition that, on or before 26 May 2014, payment of $27,500 is made to BDO by Mr Bell. The stay will cease to apply if that payment is not made within that time. Otherwise, the stay will remain in place pending a further order of this Court, or of the Court of Appeal. Mr Bell’s application dated 28 March 2014 to set aside the bankruptcy notice dated 4 October 2013 is adjourned sine die, and may be brought on for further hearing by not less than 21 days notice by either party. The application for leave to appeal against the judgment of Williams J dated 11 July 2012 is to be set down for further hearing before Williams J, as is Mr Bell’s oral application for leave to adduce his affidavit dated 19 May 2014. The Registrar is directed to obtain a transcript of the hearing before Judge Tuohy in the District Court on 30 August and 3 October 2011. Any costs involved are to be met equally by the parties in the first instance. There will be no order as to costs of the present hearing.

Orders