Dudfield v Krogh HC Wellington CIV-2010-485-2173
[2011] NZHC 839
•23 June 2011
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2010-485-2173
IN THE MATTER OF the Insolvency Act 2006
AND IN THE MATTER OF the bankruptcy of KAREN KROGH
BETWEEN CHRISTOPHER JOHN DUDFIELD Judgment Creditor
ANDKAREN KROGH Judgment Debtor
Hearing: CIV-2010-485-2173
Judgment: 23 June 2011 at 2:30 PM
JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL
This judgment was delivered by Associate Judge Gendall on 23 June 2011 at 2.30 pm under r 11.5 of the High Court Rules.
Solicitors: Peterson Law Limited, Solicitors, PO Box 342, Wellington
Jefferies Raizis, Solicitors, PO Box 10 641, Wellington
CJ DUDFIELD V K KROGH HC WN CIV-2010-485-2173 23 June 2011
Introduction
[1] On 4 April 2011 the judgment creditor’s application to have the judgment debtor adjudicated bankrupt came before me finally and was dismissed when payment of the sum of $7,110.28 claimed from the judgment debtor was paid. This amount related to a judgment debt originally of $4,276.75 owing by the judgment debtor to the judgment creditor for architectural fees which were incurred in around March 2007. These were the subject of an order of the Disputes Tribunal in Wellington dated 1 February 2010.
[2] Following the issue of an unsatisfied Bankruptcy Notice, on 7 February 2011 the judgment creditor brought the present bankruptcy proceedings claiming
$4,486.39 being the original judgment debt plus the costs of obtaining a Certificate of Judgment together with interest.
[3] That bankruptcy application was opposed by the judgment debtor who filed a
Notice of Opposition and affidavit in support on 9 March 2011.
[4] On 15 March 2011 the judgment creditor filed an affidavit in reply and the matter was then subject to calls in this Court on 7 March 2011, 21 March 2011 and 4
April 2011. As I have noted above, $7,110.28 was paid to the judgment debtor around 4 April 2011 and on that basis the present bankruptcy proceeding was dismissed.
[5] In doing so however, on 4 April 2011 I noted in a Minute that:
(a) Additional costs are sought by the judgment creditor and are opposed by the judgment debtor over and above the total $7,110.28. These costs are reserved. If counsel wish to reactivate that additional costs matter they may do so by memoranda filed sequentially.
[6] Prior to that time, counsel for the judgment debtor had filed a memorandum as to costs dated 4 April 2011. In addition, counsel for the judgment debtor filed a second memorandum as to costs dated 21 April 2011 and a further memorandum dated 6 May 2011.
[7] Counsel for the judgment creditor has filed memoranda as to costs dated 4
April 2011, 11 April 2011 and 2 May 2011.
[8] I have now had an opportunity to consider those memoranda and give this
decision on the judgment creditor’s claim for additional costs.
[9] The original payment in settlement to conclude a dismissal of this proceeding as noted above was $7,110.28. As I understand the position, this amount comprised the following:
(a) Judgment debt $4,276.75 (b) Interest from 1 April 2010 to 31 March 2011 $ 356.44 (c) Costs of the Bankruptcy Notice $ 526.00
(d) Costs of the Application for Adjudication $1,198.89
(e) Costs of the hearing of the Bankruptcy Application
Under Item 19 Third Schedule High Court Rules $ 752.00
$7,110.28
[10] As a preliminary matter, counsel for the judgment creditor in a memorandum submitted that this Court should consider only the 26 April 2011 memorandum from counsel for the judgment debtor and not the subsequent one page memorandum dated 6 May 2011.
[11] Having considered those respective memoranda I am of the view that the 6
May 2011 memorandum adds little to the position outlined in the 21 April 2011 memorandum. There is accordingly no prejudice to the judgment creditor in my considering all memoranda before the Court and I will proceed on this basis.
[12] According to the 4 April 2011 memorandum from counsel for the judgment creditor the total amount sought from the judgment debtor including all interest and costs amounts to $10,108.48 plus 98 cents per day interest from and including 22
March 2011 until payment (which I presume occurred on 4 April 2011). This
additional interest by my calculations totals $12.74 which leaves the total sum claimed by the judgment debtor as $10,121.22.
[13] As I have noted above, $7,110.28 has been paid by the judgment debtor. This leaves a balance claimed of $3,010.94.
[14] Essentially, as I understand the position, this represents a claim for the following additional costs approximately by the judgment creditor:
(a) Affidavit in Response $ 750.00
(b) Costs of the judgment creditor’s appearance
on the morning of 21 March 2011 $ 376.00
(c) ½ day appearance in the afternoon of 21 March 2011 $ 940.00 (d)
Costs of preparation for the 21 March 2011
afternoon’s hearing$ 940.00
Total
$3,008.00
[15] This amount, as I understand it, is in addition to the costs which have already been paid to the judgment creditor as part of the $7,110.28 payment made on 4 April
2011. These total:
(a) Costs on the issue of the Bankruptcy Notice $ 526.00 (b) Costs on the Bankruptcy Application $1,198.89
(including a filing fee of $408.89 and a fee of
$150.00 for serving the application, affidavit and summons)
(c) Costs of the hearing under Item 19 Third Schedule
High Court Rules $ 752.00
$2,476.89
[16] The issue before me, therefore, is whether the additional $3,008.00 (approx) claimed for costs by the judgment creditor but opposed by the judgment debtor should be awarded here. All claims are made on a Category 2B basis.
[17] The essential grounds upon which the judgment debtor opposes any application for further costs from the judgment creditor here are that costs on a bankruptcy hearing are set out in Items 17-20 of the Third Schedule to the High Court Rules and essentially exclude a claim for any other costs under the Third Schedule. It is noted that in the Third Schedule these Item 17-20 costs under the heading “Bankruptcy proceedings” are expressed to be payable instead of Item 1 (Commencement of Proceeding), Item 2 (Commencement of Defence), 4.10 (Filing Memorandum for Case Management Conference), 4.11 (Appearance at Case Management Conference), 8 (Preparation for Hearing if Case Proceeds to Hearing) and 9 (Appearance at Hearing).
[18] In my view, however, this contention is misplaced in a case such as the present where an active and concerted defence and opposition to the judgment creditor’s liquidation application is mounted. As I see the position, Items 17-20 of Schedule 3 to the High Court Rules are to cover a judgment creditor’s costs in a normal bankruptcy application where it is either unopposed or short argument in opposition needs to be countered at the hearing of the application.
[19] In a situation such as the present where there is a detailed opposition to the judgment creditor’s application and the need to provide a significant affidavit in reply to the judgment debtor’s contentions, in my view at the very least a costs award for a reply affidavit and a one-half day appearance by counsel for the judgment creditor on 21 March 2011 should be awarded. The total amounts sought by the judgment creditor for those matters is $1,690.00 and, in my view, this is appropriate here. The claim for $376.00 for appearance on the morning of 21 March 2011 is disallowed, however, on the basis that this is subsumed in the total $940.00 costs award for the entire one-half day appearance on that date. Similarly, the $940.00 claim for preparation costs for the 21 March 2011 hearing is not appropriate here. Costs for the hearing under Item 19 Third Schedule of $752.00 have already been allowed and in the circumstances here (and given the level of core debt at stake) as I see it they sufficiently cover preparation matters.
[20] For all these reasons, an order for a further costs award of $1,690.00 is now made in favour of the judgment creditor against the judgment debtor in this proceeding.
‘Associate Judge D.I. Gendall’
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