Connolly v Keung
[2025] NZHC 2297
•13 August 2025
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2024-409-510 [2025] NZHC 2297
IN THE MATTER of the Insolvency Act 2006 AND
IN THE MATTER of the bankruptcy of SENG BOU (PAUL)
KEUNG
BETWEEN LEISHA MAUD CONNOLLY
Judgment Creditor
AND SENG BOU (PAUL) KEUNG
Judgment Debtor
Hearing: On the papers
Appearances: W J Palmer and L C Elliott for Judgment Creditor Judgment Debtor appears in person
Judgment: 13 August 2025
JUDGMENT OF ASSOCIATE JUDGE PAULSEN (COSTS)
This judgment was delivered by me on 13 August 2025 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:
CONNOLLY v KEUNG [2025] NZHC 2297 [13 August 2025]
[1] In a judgment of 24 June 2025, I dismissed Mr Keung’s application to set aside a bankruptcy notice issued by Ms Connolly.1 I held that Ms Connolly was entitled to costs, and as to the quantum of such costs Ms Connolly was to file a memorandum within 10 working days of the date of the judgment and Mr Keung had five working days to respond. Ms Connolly filed a memorandum in compliance with my judgment; Mr Keung did not. As a result, I must fix the quantum of costs without Mr Keung’s input.
[2] Ms Connolly seeks scale costs on a part 2B and part 2C basis, plus a 50 per cent uplift along with reasonable disbursements.
[3] There is no doubt that all steps in the proceeding justify an award on at least a 2B basis. The issues are whether:
(a)some steps should be assessed on a 2C basis; and
(b)there should be an uplift on scale costs.
Costs principles
[4] All issues of costs are discretionary but the discretion must be exercised having regard to the principles in the High Court Rules 2016 (the Rules). Rule 14.2 sets out the general principles applying to the determination of costs. In the present context, I note the following are relevant:
(a)an award of costs should reflect the complexity and significance of the proceeding;2
(b)costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding;3
1 Connolly v Keung [2025] NZHC 1689.
2 High Court Rules 2016, r 14.2(1)(b).
3 Rule 14.2(1)(c).
(c)an appropriate daily recovery rate should normally be two-thirds of the daily rate considered reasonable in relation to the proceeding or interlocutory application;4 and
(d)so far as possible the determination of costs should be predictable and expeditious.5
[5] A party seeking increased costs bears the onus of demonstrating that such an award is justified.6
[6] Rule 14.6(3) of the Rules relevantly provides that increased costs may be claimed as follows:
14.6 Increased costs and indemnity costs
...
(3)The court may order a party to pay increased costs if—
...
(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
(i)failing to comply with these rules or with a direction of the court; or
(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or
(iii)failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or
(iv)failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or
(v)failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or
4 Rule 14.2(1)(d).
5 Rule 14.2(1)(g).
6 Strachan v Denbeigh Property Ltd HC Palmerston North CIV-2010-454-232, 3 June 2011 at [27].
...
[7] This rule is concerned with improper or unreasonable conduct on the part of the party against whom increased costs are sought and will not be appropriate where there is some reasonable explanation for the losing party’s conduct.
[8] I note also that an uplift on scale costs is only justified to the extent that a party’s failure to act reasonably contributed to the time and expense of the proceeding or a step in it. The party applying for increased costs will be expected to identify particular steps in respect to which the other party’s unreasonable conduct contributed to increased costs.7 Where the losing party’s position as a whole lacked merit it may, however, be appropriate for increased costs to apply to all steps in the proceeding.8
Analysis
Appropriate bands
[9] Ms Connolly argues that two steps in the proceeding should appropriately be categorised as Band C because of the comparatively large amount of time required to undertake them.9 The two steps are the preparation of written submissions for the hearing and filing a memorandum in response to a memorandum “addressing further evidence” filed by Mr Keung after the hearing.
[10] In respect to the preparation of written submissions, while Mr Keung’s primary submissions were not unduly lengthy, they were accompanied by several unnecessarily large bundles of documents. Mr Keung’s submissions did not conveniently reference documents in the bundle. I accept that in preparing Ms Connolly’s submissions her counsel had to go through the bundles and would have expended significant time in doing so, well beyond what could be considered reasonable for this particular step in the proceeding. In addition, to assist the Court, Ms Connolly’s counsel prepared an index of the documents to locate the relevant material and to provide a path to the key documents at issue in the bundle.
7 Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [44]–[47].
8 NR v MR [2014] NZCA 623, (2014) 22 PRNZ 636 at [50]–[53].
9 Rule 14.5(2).
[11] I referred to the amount of material that Mr Keung put before the Court in my judgment when I said:10
[17] As he did previously, Mr Keung has flooded the Court with documents, affidavits and memoranda running to many hundreds of pages, the great majority of which are not relevant to the issues I must decide. For this hearing alone, Mr Keung submitted five large bound volumes of documents. Since then he has filed more documents, including a series of memoranda and affidavits, which I have considered. The failure to refer to such material simply reflects that it does not assist me.
[12] In respect to Mr Keung’s memorandum of 27 May 2025, after the hearing and without leave Mr Keung filed a lengthy memorandum of “further evidence” extending to 11 densely typed pages with annexures. Ms Connolly’s lawyers were directed to respond, which they did by memorandum of 30 May 2025. I accept that Ms Connolly should not have been put to the expense of having to respond to Mr Keung’s memorandum but, having said that, the memorandum filed on her behalf was just over two pages long and directed to the discrete issue of whether Mr Keung should be granted leave to file further reply evidence.
[13] Mr Keung is an experienced litigant and has a history of filing large numbers of unnecessary and unhelpful documents in proceedings with Ms Connolly and thereby adding to the complexity and expense of the proceedings. He is also well aware that this approach will have costs consequences for him. I note that in awarding indemnity costs against Mr Keung in related proceedings, Osborne J referred to Gendall J’s observation that Mr Keung had provided “a barrage of material ... which was entirely irrelevant or of marginal relevance to the issues to be decided”.11 The same applies in this case. Looking at the matter objectively, I award costs in respect to the preparation of Ms Connolly’s submissions on a Band C basis. I do not, however, consider that approach justified in respect of the 30 May 2025 memorandum.
10 Connolly v Keung, above n 1.
11 Keung v Connolly [2023] NZHC 2858 at [33], citing Keung v Connolly [2023] NZHC 2381.
Increased costs
[14] Ms Connolly submits that the conduct of Mr Keung which contributed unnecessarily to the time and expense of the proceeding and justifying a 50 per cent uplift on scale costs was that he:
(a)Failed to comply with rules and directions of the Court, including filing material late and after the hearing.
(b)Filed evidence in a non-compliant manner. In this respect reference is made to a memorandum of 6 March 2025 filed by Mr Keung following a list appearance.
(c)Sought adjournments on assurances of counsel being engaged when this was incorrect.
(d)Revoked requests for adjournments/extensions shortly after seeking them. As an example, in a memorandum of 14 March 2025 Mr Keung sought an adjournment of the hearing on 16 May 2025 that was not then pursued during the hearing. In addition, in Mr Keung’s final submissions dated 19 May 2025 he sought an extension of two weeks, which was rescinded the following day in a document titled “further final submissions” dated 20 May 2025.
(e)Took or pursued arguments that were unnecessary or lacking in merit, including:
(i)continuing to maintain as an issue that he disputed substituted service of the bankruptcy notice had occurred, notwithstanding that issue had previously been resolved;12
12 Connolly v Keung, above n 1, at [14].
(ii)persistently arguing that District Court and High Court decisions holding that Ms Connolly was entitled to summary judgment were wrong; and
(iii)continuing to pursue the application to set aside the bankruptcy notice on the basis that he had cross-claims against Ms Connolly which he could not have raised in opposition to her judgment, despite acknowledging that he was aware of all the cross-claims at the time the summary judgment proceeding was before the District Court.13
(f)Repeatedly filed onerous volumes of documents, notwithstanding being on notice that the approach warrants an increase in costs.
(g)Refused to pay the sums due under the bankruptcy notice as a matter of principle as opposed to being a justifiable position.14
(h)Failed without reasonable justification to accept an offer of settlement.15
[15] I accept that some criticisms of Mr Keung’s conduct have merit but to justify an increase on scale costs Ms Connolly must also show that Mr Keung’s conduct contributed to the time and expense of some step in the proceeding or the proceeding generally. I do not consider it is appropriate to award increased costs for matters such as revoking requests for adjournments or extensions of time when that would not have contributed to Ms Connolly’s costs. I accept that Mr Keung’s approach of flooding the Court (and Ms Connolly) with documents did have the effect of increasing Ms Connolly’s costs, but an allowance has been made for that by awarding Band C costs in respect to the step in the proceeding where that was the case.
[16] The grounds Mr Keung relied upon in support of his application to set aside the bankruptcy notice were not strong and ultimately failed, but I do not consider they
13 At [27].
14 At [18].
15 High Court Rules, r 14.6(3)(b)(v).
were so weak that there was not the possibility (unlikely as that may have been) that the Court may have taken a different view.
[17] Likewise, I do not consider that increased costs should be awarded because Mr Keung unreasonably failed to accept settlement offers made by Ms Connolly in circumstances where Ms Connolly was offering little by way of compromise but requiring full payment of the bankruptcy notice.
[18] In the exercise of the discretion I consider it would not be appropriate to award increased costs against Mr Keung. I am fortified in my view because I consider the award of scale costs is entirely appropriate and reasonable in all the circumstances of this case.
Quantum
[19] Ms Connolly’s counsel has submitted a schedule of scale costs calculated on a 2B basis, except in respect to the two steps where she asked that Band C apply. I have considered that schedule which appears in order, save for the fact that I award Band C costs only in respect to one step in the proceeding.
Result
[20] Ms Connolly is awarded costs in this proceeding of $22,705 and disbursements of $208.
O G Paulsen Associate Judge
Solicitors:
Buddle Findlay, Christchurch
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