Dalton v Hong - [2020] NZHC 311

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2018-404-0957

[2020] NZHC 311

UNDER THE Companies Act 1993, Part 16 (Liquidations)

IN THE MATTER OF

an application pursuant to s 261 and s 266 by applicants for order to produce AND a cross- application for directions declaratory orders against the Applicant Liquidators

BETWEEN

SIMON DALTON and MATTHEW KEMP

as liquidators of CHARMING GROUP (NZ) LIMITED (in liquidation)
Applicants

AND

BOON GUNN HONG

Respondent

Hearing: On the papers

Appearances:

A Ho for the Applicants Respondent in person

Judgment:

27 February 2020

RESERVED JUDGMENT (NO.4) OF ASSOCIATE JUDGE SMITH - COSTS

This judgment was delivered by me on 27 February 2020 at 4.30pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors / Counsel:
Martelli McKegg, Auckland, A Ho (ah@martellimckegg.co.nz)

Copy to:
B G Hong, Auckland (bghong@hotmail.com)

Case Officer:
Josh Lesa

Dalton v Hong NZHC 311 [27 February 2020]

[1] The liquidators’ application for an order under s 266 of the Companies Act 1993 (the Act) has now been dealt with in my three earlier judgments.1 The only outstanding issue is that of costs.

[2]Both sides have filed submissions on costs. The liquidators asked for a total of

$12,428 for costs, as set out in the table annexed as Schedule 1 to this judgment.

[3] Mr Hong says that he should be entitled to costs. He seeks an award of costs of $10,516, as set out in the table at Schedule 2 to this judgment.

The liquidators’ costs submissions

[4] The liquidators submitted that Mr Hong’s initial position was a total opposition to the application. After a defended hearing, the Court ordered the production of some documents and further enquiry as to documents that might be the subject of privilege or confidentiality. Some of the further documents have been found to be protected from disclosure, but a substantial number were not. In those circumstances, the liquidators submitted that they were substantially successful in their application, and are accordingly entitled to costs.

Mr Hong’s costs submissions

[5] Mr Hong accused the liquidators of having acted improperly, both in filing and pursuing the application against him and in pursuing a complaint against him to the Law Society. He provided in support a copy of a determination given by Auckland Standards Committee 5 on 13 November 2018, in which the liquidators’ complaint against Mr Hong resulted in the Standards Committee determining to take no further action.

[6] Mr Hong referred in his submissions to certain issues which he described as “public and practice issues”, including the matter of the complaint to the Law Society.

1 Dalton & Kemp v Hong [2018] NZHC 2266, Dalton & Kemp v Hong [2019] NZHC 1473, and
Dalton & Kemp v Hong [2019] NZHC 2321.

[7] Mr Hong submitted that additional work was required as the clients had intermingled private and confidential affairs with the affairs of Charming Group.

[8] Mr Hong raised the…

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.

Continue reading Dalton v Hong

Details

AGLC: Dalton v Hong [2020] NZHC 311
Case: [2020] NZHC 311
Decision Date: 27 February 2020

CaseChat Overview and Summary

The case of Dalton v Hong before the Auckland Registry of the High Court of New Zealand involved an application by the liquidators, Simon Dalton and Matthew Kemp, under sections 261 and 266 of the Companies Act 1993. They sought an order for Boon Gunn Hong to produce documents related to the business, accounts, or affairs of Charming Group (NZ) Limited, which was in liquidation. The primary legal issues before the court were whether Hong had in his possession or control any relevant documents and, if so, whether he was entitled to refuse to produce them on the basis of privilege or confidentiality.

The court found that Hong had indeed possessed documents that were relevant to the liquidators' investigation. However, Hong had not adequately identified the documents that he claimed were privileged or confidential, nor had he provided sufficient justification for these claims. The court concluded that it was reasonable for the liquidators to seek the production of these documents to reconstruct the directors' knowledge and that Hong's refusal to produce them was unjustified. Consequently, the court ordered Hong to produce certain documents to the liquidators.

Regarding costs, the liquidators submitted that they were substantially successful in their application and, therefore, entitled to costs. Hong, on the other hand, argued that he should be awarded costs based on the additional work required due to the intermingling of private and company affairs and the complaint made to the Law Society. The court held that the liquidators were substantially successful in their application and thus entitled to costs. However, it also found that Hong should receive some credit for the time he spent complying with the court orders, which did not directly concern him. The court awarded the liquidators $8,472 in costs, less a credit of $3,000 to Hong for his compliance efforts. Hong's claim for costs was dismissed.

In conclusion, the court ordered Hong to pay the liquidators $8,472 in costs plus disbursements, as fixed by the Registrar. Hong's claim for costs was dismissed, and he was not awarded any costs.

Orders