Dalton v Osmond - [2023] NZHC 2257

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-1382

[2023] NZHC 2257

UNDER the Companies Act 1993

IN THE MATTER OF

the liquidation of DELTA SHARED

SERVICES LIMITED (IN LIQUIDATION)

BETWEEN

SIMON DALTON

and

BENJAMIN FRANCIS as liquidators of DELTA SHARED SERVICESLIMITED (IN LIQUIDATION)

Applicants

AND

MURRAY ATHOL OSMOND

Respondent

Hearing: On the papers

Appearances:

James Cochrane/Amelia McLuskie for the Applicants Respondent is self-represented (in person)

Judgment:

21 August 2023

COSTS JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 21 August 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:
Lane Neave (JRF Cochrane/A McLuskie), Auckland, for the Applicants

Copy for:
Murray Athol Osmond

DALTON v OSMOND [2023] NZHC 2257 [21 August 2023]

Introduction

[1] On 24 February 2023 the Court issued a judgment granting the applicants’ application for orders in respect of the respondent under s 266 of the Companies Act 1993 (the Act) (the Judgment).1

[2] Included in the Judgment was a direction that if costs could not be agreed within 20 working days of the date of the Judgment, counsel for the applicants would file a memorandum as to costs within five working days of the expiry of the 15 day period referred to above. It is noted that there was an ambiguity in whether the period to agree costs was 15 or 20 working days and counsel for the applicants took a conservative approach by treating the 15 working days period as applicable. During the 15 working days period, counsel for the applicants engaged with the respondent in relation to costs by:

(a)an open letter to the respondent dated 15 March 20233 inviting him to make a costs proposal; and

(b)a “without prejudice”, except as to costs, email dated 17 March 2023 offering to settle the matter of costs for increased costs and disbursements.

[3] Counsel for the applicants advise that no response regarding costs was received from the respondent. The respondent filed an appeal against the Judgment with the Court of Appeal but this appeal has been abandoned as at 21 June 2023 pursuant to r 43 of the Court of Appeal (Civil) Rules 2005.

Indemnity costs sought by the applicants

[4] The applicants seek indemnity costs or, in the alternative, increased costs in relation to the originating application, for orders in respect of the respondent under s 266 of the Act (the originating application). As at the date of counsel’s

1 Dalton v Osmond [2023] NZHC 282.

memorandum of 24 March 2023, the costs and disbursements were quantified by the applicants as follows:

(a)indemnity costs of $39,497.07 (inclusive of GST);

(b)increased costs, being 2B costs with 100 per cent uplift, calculated as
$31,070.00;

(c)disbursements of $476.00.

Applicable law

[5] The general rule is that costs in proceedings follow the event, and ordinarily a successful party is entitled to a reasonable contribution towards costs. Rule 14.6 of 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 Osmond

Details

AGLC: Dalton v Osmond [2023] NZHC 2257
Case: [2023] NZHC 2257
Decision Date: 21 August 2023

CaseChat Overview and Summary

The High Court of New Zealand, Auckland Registry, delivered a judgment on 21 August 2023 in the case of Dalton v Osmond, which concerns the liquidation of Delta Shared Services Limited. The applicants, Simon Dalton and Benjamin Francis as liquidators of Delta Shared Services Limited, sought orders against Murray Athol Osmond under section 266 of the Companies Act 1993. The primary issue before the court was whether the respondent was entitled to indemnity or increased costs following the applicants' successful application for orders against him.

The court found that while the respondent's conduct did not justify the imposition of indemnity costs, his failure to comply with statutory obligations and his continued defence of the originating application on meritless grounds warranted increased costs. The court considered that the respondent's actions unnecessarily prolonged the proceedings, thus contributing to the time and expense of the case. The court also noted the broader importance of the proceedings to the creditors of the liquidated company, justifying the applicants' need to bring the case.

Consequently, the court ordered the respondent to pay the applicants increased costs, calculated on a 2B basis with a 100 per cent uplift, totalling $31,070, plus disbursements of $476, making a grand total of $31,546. The court granted the applicants leave to apply for further costs related to the enforcement of the earlier orders if necessary. The court also noted that if the respondent had been granted legal aid, the exceptional circumstances surrounding the case would apply, potentially affecting his eligibility under the Legal Services Act 2011.

Orders