Grant as receiver of Bassett 43 Limited (in receivership) v Montgomerie

[2021] NZHC 3183

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-759

[2021] NZHC 3183

BETWEEN

DAMIEN MITCHELL GRANT AS RECEIVER OF BASSETT 43 LIMITED (In

Receivership) Applicant

AND

ANDREW LAURIE MONTGOMERIE

Respondent

On the papers:	At Auckland
Date of Judgment:	26 November 2021

JUDGMENT OF POWELL J

[Costs]

This judgment was delivered by me on 26 November 2021 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:

Douglas M A Burgess, Auckland

Counsel:
W van Roosmalen, Auckland
S R J Hamilton, Southern Cross Chambers, Auckland

GRANT AS RECEIVER OF BASSETT 43 LIMITED (In Receivership) v MONTGOMERIE [2021] NZHC

3183 [26 November 2021]

[1]                 On 13 September 2021, I dismissed an application by Damien Grant (as receiver of Bassett 43 Ltd (in receivership) under ss 12 and 34 of the Receiverships Act 1993) against the respondent Andrew Montgomerie.1

[2]                 I concluded that the Court did not have jurisdiction to make the orders sought. This was because in relation to s 12, Mr Montgomerie as an undischarged bankrupt was no longer a director of the company of which Mr Grant was the receiver.2 Having reached that conclusion, there was nothing in s 34 which provided me with jurisdiction to make the orders sought.3

[3]Mr Montgomerie now seeks costs against Mr Grant personally in the sum of

$9,200.00, together with disbursements of $160. Mr Montgomerie notes that while the Courts are generally reluctant to award costs against receivers suing in their role as receiver, costs have been awarded when a receiver persists in the claim when put on notice that costs are in issue.4 The costs claimed are the actual costs incurred by Mr  Montgomerie,  being  less  than  costs  on   a  2B   basis   ($12,308.50)  which Mr Montgomerie submitted were otherwise appropriate.

The position of Mr Grant

[4]                 Mr Grant submits that no costs should be awarded or alternatively, in the event that costs are awarded, those should be reduced and not be made against Mr Grant personally.

[5]                 Mr van Roosmalen submitted on behalf of Mr Grant that Mr Grant had been acting in the best interests of his appointer in attempting to obtain orders in line with his statutory obligations. Mr van Roosmalen noted that Mr Montgomerie did not raise the  issue  of  jurisdiction   until   after   the   hearing   and   questioned   whether   Mr Montgomerie  could   incur   costs   as   an   undischarged   bankrupt.   Finally, Mr van Roosmalen submitted that it would not be “predictable and expeditious” in

1      Grant v Montgomerie [2021] NZHC 2389.

2 At [11].

3      At [12]-[13].

4      Love v Aurburn Apartments Ltd (in rec and in liq) [2013] NZHC 851 at [45].

terms of r 14.2(g) of the High Court Rules 2016, nor established case law, if Mr Grant was to be found personally liable for costs.

Discussion

[6]                 Having considered the submissions of both parties, I am satisfied that while costs are properly payable upon the application to Mr Montgomerie as the successful party, these are appropriately reduced by 50 per cent on the costs actually incurred by Mr Montgomerie. Those costs are payable by Mr Grant in his capacity as receiver of Bassett 43 Ltd (in receivership), not personally.

[7]                 The quantum is reduced because the key issue in the substantive judgment, the jurisdiction of the Court to make orders under ss 12 and 34 of the Receiverships Act, was not raised on behalf of Mr Montgomerie until after the hearing had taken place, and thus the entire hearing was effectively wasted.

[8]                 Likewise, while the application is made in Mr Grant’s name, it is done so not in his personal capacity but as receiver of Bassett 43 Ltd (in receivership). There is no basis to depart from the established position that this Court will not lightly hold receivers personally liable for applications made in the course of their function as receivers.5 In that  vein,  the  submissions  made  by  Mr  Hamilton  on  behalf  of  Mr Montgomerie that the application was flawed from the beginning ring somewhat hollow given the jurisdictional issue was not raised after the hearing, and up until that point Mr Montgomerie had neither challenged the Court’s jurisdiction to make the orders sought by Mr Grant nor sought costs against Mr Grant personally.

Decision

[9]                 Mr Montgomerie is entitled to costs in the sum of $4,600 plus disbursements of $160, a total of $4,760.00, from Mr Grant in his capacity as receiver of Bassett 43 Ltd (in receivership).

5      See for example Poh v Cousins & Anor HC Christchurch CIV 2010-409-2654, 4 February 2011 at [42].

Powell J