Chesterfields Preschools Limited (in liquidation) v Sisson

[2019] NZHC 3069

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2017-409-000125

[2019] NZHC 3069

BETWEEN

CHESTERFIELDS PRESCHOOLS

LIMITED (In Liquidation) Judgment Creditor

AND

THERESE ANNE SISSON

Judgment Debtor

Hearing:	On the papers
Appearances:	B M Russell and J C Wedlake for Judgment Creditor Judgment debtor in person
Judgment:	25 November 2019

JUDGMENT OF DUNNINGHAM J RE: COSTS DECISION

This judgment was delivered by me on 25 November 2019 at

11.00 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: 25 November 2019

[1]                  The applicant, Ms Therese Sisson, sought a stay of the proceeding and execution of the judgment of Osborne J, delivered on 23 June 2017, which adjudicated Ms Sisson bankrupt (the stay application).1 The stay was sought pending the

1      Chesterfields Preschools Ltd (in liquidation) v Sisson [2017] NZHC 1410.

CHESTERFIELDS PRESCHOOLS LIMITED (In Liquidation) v THERESE ANNE SISSON [2019] NZHC

3069 [25 November 2019]

determination of a claim alleging misfeasance against the Commissioner of Inland Revenue in other High Court proceedings.2

[2]                  The respondent, Chesterfields Preschools Ltd, opposed the stay application on the grounds that it was frivolous, vexatious and misconceived, and there was no jurisdictional basis for the order the applicant was seeking.

[3]                  On 16 September 2019, Ms Sisson filed a memorandum seeking an adjournment of her stay application in order to await the outcome of an appeal of a decision in related proceedings where Osborne J had ruled there was no jurisdiction to seek a stay of an adjudication order under High Court r 17.29 (the jurisdiction decision).3

[4]                  In the jurisdiction decision Osborne J ruled that reliance upon r 17.29 to seek stay of an order of adjudication was “misconceived” because such an order determines an individual’s status and is not a judgment creating a civil debt or other liability, saying:4

Part 17 of the High Court Rules is concerned with the enforcement of judgment debts where one party (the “liable party”) is liable to another party (“the entitled party”). This is not such a case.

[5]                  This appeal of the jurisdiction decision has been set down for hearing in the Court of Appeal on 25 February 2020.

[6]                  I declined the application for an adjournment of the stay application, at which point Ms Sisson filed a notice of discontinuance. However, costs was not addressed and I made directions as to the filing of memoranda on the costs issue.

The respondent’s position on costs

[7]                  Memoranda have now been filed and the respondent seeks costs on a 2B basis calculated as follows:

2      CIV-2008-409-995.

3      Commissioner of Inland Revenue v Chesterfields Preschools Ltd (in interim liq)

[2019] NZHC 1774.

4 At [20].

Item	Description	Daily Rate	Days	Total
23	Filing opposition to interlocutory application	$2,390	0.6	$1,434.00
12	Appearance at mentions hearing or call-over on 23 September 2019	$2,390	0.2	$478.00
24	Preparation of written submissions (reduced by 50% to reflect the submissions were not finalised).	$2,390	1.5 reduced to 0.75	$1,792.50
Total	$3,704.50

[8]                  In addition, the respondent seeks the disbursement of $110.00 for filing a notice of opposition.

[9]                  Counsel for the respondent submits that the Court should make an order for costs and disbursements as sought for the following reasons:

(a)Counsel for the respondent was not served with the notice of discontinuance until 3.54 pm on 23 October 2019, shortly before the scheduled hearing date and at a point in time when its submissions had been drafted, but not filed or served.

(b)Rule 15.23 of the High Court Rules states that unless the defendant otherwise agrees or the Court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance. This rule applies to interlocutory applications.5

(c)The costs and disbursements sought are reasonable.

The applicant’s position on costs

[10]              Ms Sisson has filed what she describes as an “updating memorandum” which submits that the issue of costs should be reserved until the outcome of the appeal of

5      MV Celebre Ltd v Airwork Flight Operations Ltd [2015] NZHC 1400 at [8]-[9].

the jurisdiction decision. She says the outcome of that appeal will determine to a significant extent the future course of her stay application. She notes that she filed and attempted to serve the notice of discontinuance by email on 26 September 2019. However, due to an error in attaching all email addresses, it was not sent to counsel for the respondent. She also provides further updates. She says that the Court of Appeal is considering the application for “stay of the liquidator [sic] order in a three day fixture in April 2020”, and says a further extension of time has also been granted on her application for stay of the proceedings referred to in the judgment of Chesterfields Preschools Ltd (in liquidation) v Commissioner of Inland Revenue.6

Discussion

[11]              In my view, I do not need to engage in the convoluted history of this matter, nor in the merits of Ms Sisson’s application, leaving aside the jurisdictional problem. Suffice to say, Ms Sisson’s application for a stay was filed two years after the adjudication order was made. It was entirely contradictory to file an application for stay of enforcement of that decision (if jurisdiction is available) so far down the track and then seek to have it adjourned while other litigation which she considers was relevant, and which would support the application for a stay, was determined. The application for a stay must be tenable on the facts and law as at the time the application is made.

[12]              Although Osborne J’s jurisdiction decision was given only days after the stay application was made, it did not preclude Ms Sisson from arguing that he was wrong in law and either urging me to depart from his decision on jurisdiction, or appealing my decision if I, too, declined the stay application on the jurisdictional issue.

[13]              Instead she chose to discontinue and she must face the usual consequences of making an application and then withdrawing it. Those consequences are a requirement to pay costs.

6      Chesterfields Preschools Ltd (in liquidation) v Commissioner of Inland Revenue [2019] NZCA 213.

[14]              The amount sought is entirely reasonable in the circumstances and I am not prepared to defer making a decision on the issue. The applicant is ordered to pay the respondent $3,704.50 in costs and $110.00 in disbursements.

Solicitors:
Lane Neave, Christchurch