Godfrey v Borley - [2017] NZHC 1380

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2017-485-123 [2017] NZHC 1380

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy (or proposal, as the case may be) of Rachel Borley

BETWEEN

BARRY GODFREY Judgment creditor

AND

RACHEL BORLEY Judgment debtor

On the papers

Judgment:

26 June 2017

COSTS JUDGMENT OF ASSOCIATE JUDGE SMITH

Introduction

[1] On 6 June 2017 I made an order, on Mr Godfrey’s application, adjudicating

Ms Borley bankrupt.

[2] Mr Godfrey represented himself at the hearings, but he advised me at the hearing on 6 June 2017 that he had incurred legal costs obtaining advice on the court papers he had filed, and he asked me to make an order for costs. Mr Godfrey seeks
$1,278.00 in costs, comprising $1,078.00 (including GST) in legal fees and the $200 fee for filing the bankruptcy notice.

[3] I invited Mr Godfrey to file a memorandum in support of his costs claim, and a memorandum has now been filed by Mr V Powell of A J Pietras & Co Ltd,

GODFREY v BORLEY [2017] NZHC 1380 [26 June 2017]

confirming that his firm invoiced Mr Godfrey for $1,078 for legal advice in relation to the proceeding.

Discussion

[4] The general practice of the courts in New Zealand is that lay litigants are not entitled to recover costs, although they will be awarded reasonable disbursements at the discretion of the Court.1 An unrepresented lay litigant may also claim a possible partial indemnity for any fees he pays for professional assistance.2

[5] The Court of Appeal in J v E has recently confirmed that the costs available under the costs regime set out in the High Court Rules are confined (aside from disbursements) to the legal costs billed by a lawyer retained by a litigant for legal services provided by the lawyer to that litigant.3 The Court observed that the function of an award of costs is a partial indemnity, not reward or (except in unusual circumstances) punishment.”4

[6] The application of these principles where a lay litigant represents himself or herself but incurs legal costs for professional assistance, was considered by Associate Judge Osborne in Re Working Capital Solutions Holdings Ltd, ex parte Pezaro. The Associate Judge concluded that “it may be appropriate to award a lay litigant a contribution to legal costs even where the litigant conducts the actual
litigation himself or herself”.5 The Associate Judge awarded the legal costs incurred

by the lay litigant, reduced under r 14.2(f) to confine the award of costs to those incurred by the litigant.6

Application of the principles to this case

[7] Mr Godfrey paid fees to his solicitors in respect of the filing and service of the bankruptcy notice, and subsequent filing of the application for adjudication. The
costs recoverable under the High Court Rules on a scale 2B approach for these steps

1 Re Collier (a bankrupt) [1996] 2 NZLR 438 (CA).
2 Lysnar v National Bank of New Zealand (No 2) [1935] NZLR 557 at…

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 Godfrey v Borley

Details

AGLC: Godfrey v Borley [2017] NZHC 1380
Case: [2017] NZHC 1380
Decision Date: 26 June 2017

CaseChat Overview and Summary

In the New Zealand High Court case of Godfrey v Borley, the applicant, Barry Godfrey, sought an order for costs against the judgment debtor, Rachel Borley, who had been adjudged bankrupt. Godfrey sought $1,278.00 in costs, comprising $1,078.00 for legal fees and $200 for the bankruptcy notice filing fee. Godfrey represented himself in the proceedings but had obtained legal advice in relation to the court papers he filed, which he sought to recover as costs.

The court considered whether Godfrey, as an unrepresented lay litigant, could recover the legal costs he had incurred for professional assistance. The general practice in New Zealand is that lay litigants are not entitled to recover costs, but they may be awarded reasonable disbursements at the court's discretion and potentially a partial indemnity for fees paid for professional assistance. The court observed that the function of an award of costs is a partial indemnity, not a reward or punishment, except in unusual circumstances. The court applied the principles from J v E and Re Working Capital Solutions Holdings Ltd, ex parte Pezaro, which suggested that it may be appropriate to award a lay litigant a contribution to legal costs even where the litigant conducts the actual litigation themselves.

The court assessed the fees charged by Godfrey's solicitors, which were lower than the scale 2B costs for the work done. It found it just to award Godfrey a partial but substantial contribution to the legal costs he had incurred. The court awarded Godfrey $720 in legal costs and $200 in disbursements, totaling $920.

The court made an order awarding Godfrey $920 in costs against Borley.

Orders