Fuati v Jin - [2023] NZCA 281

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA219/2022
[2023] NZCA 281

BETWEEN	MUSABAYOUFU FUATI Appellant
AND	ZUORU JIN First Respondent OFFICIAL ASSIGNEE Second Respondent

Counsel:	P C Murray for Appellant D Z Zhang and E T Tie for First Respondent No appearance for Second Respondent
Judgment: (On the papers)	6 July 2023 at 9.30 am

JUDGMENT OF GILBERT J
[Costs]

A The appellant must pay costs to the first respondent in the sum of $8,365.

B The Registrar is to pay the sum of $7,060 held as security for costs to the first respondent in part satisfaction of the appellant’s costs liability.

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REASONS

Mr Fuati was adjudicated bankrupt on 11 April 2022 for non-payment of costs that were awarded against him by the High Court in favour of Mr Jin. Mr Fuati’s appeal against the order for adjudication was dismissed by this Court on 11 May 2023.[1] Mr Jin now seeks an award of costs for successfully resisting the appeal.
[1]Fuati v Jin [2023] NZCA 165.
Mr Fuati opposes the application. He says that because no award of costs was made in the judgment, costs should lie where they fall. However, if costs are to be awarded, he challenges various aspects of Mr Jin’s calculation. He contends that costs should be calculated in the sum $8,365, not $11,113.50 as claimed. Mr Fuati also seeks a direction that the amount he paid as security for costs should be refunded to him on the basis that any costs award is a debt provable in his bankruptcy under s 232(1)(b) of the Insolvency Act 2006.

Should costs lie where they fall?

The issue of costs was not dealt with in the judgment. I can see no reason why costs should not follow the event in the usual way.

Calculation of costs

Mr Murray, for Mr Fuati, challenges Mr Jin’s claim for costs in respect of the following items: (a) filing a memorandum setting out additional grounds to support the judgment; (b) a joint memorandum seeking the allocation of a hearing; (c) a joint memorandum seeking a timetable for the exchange of submissions; (d) filing a list of issues; and (e) an allowance for second counsel. I consider these objections are well made. Mr Murray advises that the joint memoranda (items (b) and (c)) were prepared by counsel for Mr Fuati. In these circumstances, Mr Jin can hardly claim costs for these memoranda, which are not allowed for in sch 2 of the Court of Appeal (Civil) Rules 2005 in any case. Items (a) and (d) are also not allowed for separately in sch 2. I consider the costs of these steps are adequately covered in this case as part of the allowance for preparing for the hearing of the appeal. On balance, I am not persuaded that an allowance for second counsel should be made.
With these adjustments, the amount that should be awarded for costs is $8,365.

Should security for costs be…

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 Fuati v Jin

Details

AGLC: Fuati v Jin [2023] NZCA 281
Case: [2023] NZCA 281
Decision Date: 6 July 2023 at 9.30 am

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, the appellant, Musabayoufu Fuati, appealed against the costs awarded to Zuoru Jin for successfully resisting Fuati's appeal against his bankruptcy adjudication. The appeal was dismissed, and Jin sought an award of costs for successfully resisting the appeal. Fuati opposed the application, arguing that costs should lie where they fall because no award of costs was made in the judgment. Alternatively, Fuati challenged various aspects of Jin's calculation, contending that the costs should be calculated in the sum of $8,365, not $11,113.50 as claimed. Fuati also sought a direction that the amount he paid as security for costs should be refunded to him on the basis that any costs award is a debt provable in his bankruptcy under s 232(1)(b) of the Insolvency Act 2006.

The court considered the issue of costs and whether they should follow the event in the usual way. The court found that the objections raised by Fuati's counsel were well made and that the costs claimed by Jin in respect of certain items were not allowed for in sch 2 of the Court of Appeal (Civil) Rules 2005. The court also considered whether an allowance for second counsel should be made and concluded that it should not. After making the necessary adjustments, the court determined that the amount that should be awarded for costs was $8,365. The court also considered whether the amount paid as security for costs should be refunded to Fuati and concluded that it was not a provable debt because it was an obligation incurred by Fuati after adjudication. The court held that the costs award was not a debt that would be payable from the proceeds of Fuati's estate in bankruptcy.

The court held that Fuati must pay costs to Jin in the sum of $8,365. The Registrar is to pay the sum of $7,060 held as security for costs to Jin in part satisfaction of Fuati's costs liability.

Orders