Commissioner of Inland Revenue v Livingspace Properties Limited (in rec and in liq)

[2020] NZHC 2143

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2010-409-002323

[2020] NZHC 2143

UNDER

the Companies Act 1993

IN THE MATTER

the liquidation of Livingspace Properties Limited (in rec and in liq)

BETWEEN

COMMISSIONER OF INLAND REVENUE

Plaintiff

AND

LIVINGSPACE PROPERTIES LIMITED

(in rec and in liq) Defendant

Representation:	J Moss and H Weston for K L Buxton and D I Henderson (applicants for leave) R B Walker (liquidator) in person
Judgment:	24 August 2020
(Determined on the papers)

JUDGMENT OF OSBORNE J

(costs)

This judgment was delivered by me on 24 August 2020 at 12 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

COMMISSIONER OF INLAND REVENUE v LIVINGSPACE PROPERTIES LIMITED (in rec and in liq) [2020] NZHC 2143 [24 August 2020]

[1]    Self-evidently this proceeding relates to the liquidation of Livingspace Properties Ltd (in rec and in liq) (Livingspace).

[2]In September 2019, Associate Judge Johnston made orders:

(a)directing that named persons be served with documents associated with an application made by the liquidator, Robert Walker (the service directions); and

(b)declaring that the Court has inherent jurisdiction to remove a liquidator and to entertain applications for leave to apply for such removal (the inherent jurisdiction declaration).1

[3]    The liquidator sought review by a Judge. I heard the review application and gave a judgment rescinding the service directions but confirming the inherent jurisdiction declaration.2

[4]    By a supplementary judgment, I ruled by consent that the previous judgment made by the Associate Judge as to costs would remain undisturbed.3

[5]    By this judgment, I determine matters of costs and disbursements relating to the review application.

Costs application of respondents (Kristina Buxton and David Ian Henderson)

[6]    For the respondents, Mr Moss seeks an award of costs on a 2B basis together with disbursements.4 He has correctly calculated a 2B award at $11,233 and has verified reasonable disbursements of $160.

[7]Mr Moss submits that the liquidator’s review was entirely unsuccessful.

1      Commissioner of Inland Revenue v Livingspace Properties Ltd [2019] NZHC 2213.

2      Commissioner of Inland Revenue v Livingspace Properties Ltd [2020] NZHC 1434.

3      Commissioner of Inland Revenue v Livingspace Properties Ltd [2020] NZHC 1664.

4      High Court Rules 2016, category 2 under r 14.3(1) and band B under r 14.5(2).

[8]    On the second aspect — the inherent jurisdiction declaration — that is plainly correct. The liquidator was unsuccessful in seeking to have the inherent jurisdiction declaration rescinded.

[9]    The situation in relation to the first aspect of the review — the service directions — is a little more complicated. At one level it might be argued that the liquidator was successful in that the service directions were rescinded. But that arose, not for reasons developed by the liquidator in support of the review application but rather, because the Court found that the service directions had arisen out of a misconceived process commenced by Mr Walker when previously seeking further directions from the Court. I explained the flawed background under a heading “A supplementing procedure goes off the rails” in my review judgment.5 Ms Buxton had consistently argued from the outset that the liquidator’s request for further directions should have been treated as a fresh application.6 In the review judgment, I upheld that submission. That led me to conclude that the service directions had been unnecessary and to rescind them. The substantive outcome was that, in the event the liquidator wished to pursue the documents of persons other than Ms Buxton and RFD Finance Ltd, the liquidator would need to make separate application.

[10]   In these circumstances, it is correct to view the liquidator as having been the unsuccessful party on the review application as a whole.

Liquidator’s position on costs

[11]Mr Walker elected to file no submissions in relation to costs and disbursements.

Outcome

[12]   This becomes a straightforward case for application of the principle that costs should generally follow the event. A 2B award is appropriate.

5      Commissioner of Inland Revenue v Livingspace Properties Ltd, above n 2, at [85]–[93].

6 At [88].

[13]   It is just that the liquidator pay the respondents’ costs as calculated by Mr Moss, together with the sum of $956 in relation to the memorandum filed in support of the costs application.

Orders

[14]I order:

(a)Robert Bruce Walker is to pay to Kristina Buxton and David Ian Henderson (jointly) costs which I fix in the sum of $12,189; and

(b)Robert Bruce Walker is to pay to Kristina Buxton and David Ian Henderson (jointly) their reasonable disbursements which I fix in the sum of $160.

Osborne J

Solicitors:

Canterbury Legal, Christchurch

Counsel: J Moss, Barrister, Christchurch Copy to: R B Walker