Body Corporate 324525 v Butcher - [2016] NZHC 887

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2016-488-30 [2016] NZHC 887

UNDER the Insolvency Act 2006

IN THE MATTER OF

the bankruptcy of ANTHONY JOHN BUTCHER

BETWEEN

BODY CORPORATE 324525
Judgment Creditor

AND

ANTHONY JOHN BUTCHER Judgment Debtor

Hearing: 26 April 2016 at 3:00pm

Appearances:

B Brill for Judgment Debtor
G Coutts for Judgment Creditor

Judgment:

26 April 2016

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
Barry E Brill Ltd, Paihia, for Judgment Debtor
Grove Darlow, Auckland, for Judgment Creditor

BODY CORPORATE 324525 v BUTCHER [2016] NZHC 887 [26 April 2016]

[1] On 14 March 2016 Body Corporate 342525 served a bankruptcy notice on Mr Butcher. On 16 March 2016, Mr Butcher applied to set aside the notice. This is the decision on that application.

[2] Body Corporate 342525 is the body corporate for the Bridgewater Bay Apartments at 2 Paihia Road, Paihia. Mr Butcher is one of the owners of the apartments. There is ongoing litigation between the body corporate and some of the owners of the apartments. The body corporate and the majority of the owners want to deal with what they understand to be water ingress problems in the apartments. A minority of the owners, including Mr Butcher, disagree with the course that the majority is taking. These differences have led to litigation in proceedings CIV-2014-
488-122 and CIV-2015-488-86. In those proceedings, Muir J made a costs order in favour of the body corporate and against the other owners including Mr Butcher. He made the order on 24 July 2015, when the other owners withdrew an application to re-call a judgment that Muir J had given on 30 April 2015. Apparently the minority owners had appealed against Muir J’s decision, and that appeal barred them from applying for re-call. The minority owners apparently accepted that, and withdrew their re-call application. With that, the body corporate sought costs which Muir J ordered. In his minute of 24 July 2015, he said:

[3] I do, however, award costs on a 2B basis. That is against all plaintiffs jointly and severally and payable immediately. In the event the parties are unable to settle the quantum of costs, memoranda can be filed.

[3] While this does not appear in the evidence, Mr Brill, who is acting for the minority owners in the other proceeding as well as acting for Mr Butcher in this matter, advised that during August 2015 costs were agreed between the parties. As Muir J made clear, costs were payable jointly and severally. That means that each of the plaintiffs in the proceeding in which the costs were awarded, was responsible for payment of those costs.

[4] While the amount of costs was agreed in August 2015, none of the minority owners paid the costs and the body corporate did not take any steps to enforce the

order for costs until March 2016. The body corporate’s lawyers had the order for costs sealed, and sent the sealed order for costs to Mr Brill…

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: [2016] NZHC 887
Decision Date: 26 April 2016

CaseChat Overview and Summary

Body Corporate 324525, representing the Bridgewater Bay Apartments, served a bankruptcy notice on Mr. Anthony John Butcher, a property owner, to enforce a costs order from earlier litigation. Mr. Butcher applied to set aside the bankruptcy notice on the grounds that it was issued too soon and that the sealed order for costs was not served with the notice. The court considered the reasonableness of the three-day notice period for payment and whether the failure to serve the sealed order invalidated the notice. The court found that the time for payment was reasonable and that the failure to serve the sealed order did not invalidate the notice as Mr. Butcher had not been prejudiced by this omission. The court also determined that the costs claimed in the notice were excessive and ordered that the matter be adjourned to fix the final costs. As a result, the time for complying with the notice remained running.

The court concluded that Mr. Butcher had partly complied with the notice by making a partial payment, but full compliance could not be achieved until the costs were properly fixed. The court awarded Mr. Butcher costs for the hearing, as his offer to settle was more favorable to the Body Corporate than the court's potential order. The final orders included setting aside the bankruptcy notice until costs were fixed and awarding Mr. Butcher costs of $1,115.00 for the hearing.

Orders