Greenbaum v Lockwood

[2020] NZHC 203

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV 2019-419-273

[2020] NZHC 203

IN THE MATTER OF

the Insolvency Act 2006

IN THE MATTER OF

the Bankruptcy of BARBARA KAY LOCKWOOD

BETWEEN

ADAM RAPHAEL GREENBAUM

Judgment Creditor

AND

BARBARA KAY LOCKWOOD

Judgment Debtor

Hearing:	On the papers
Appearances:	RG Ewen for the Judgment Creditor SRG Hamilton for the Judgment Debtor
Judgment:	18 February 2020

RESERVED JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on 18 February 2020 at 4pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Counsel / Solicitors:

RG Ewen, Auckland, [email protected]

SRG Hamilton, Auckland, [email protected] D Burgess, Auckland, [email protected]

Case Officer:
Sunaina Chand

Greenbaum v Lockwood [2020] NZHC 203 [18 February 2020]

[1]                 Following my judgment delivered on 17 January 2020,1 in which I struck out the judgment debtor’s application to set aside the creditor’s bankruptcy notice, counsel have now filed memoranda on costs.

[2]                 The judgment creditor seeks costs on a 2B basis, in the total sum of $1,434. Mr Ewen submitted that the substance of the work undertaken for the creditor was analogous to that which would have been required on an interlocutory application. On that basis, the creditor (as the successful party) would have been entitled to 0.6 of a day at a daily rate of $2,390 under Schedules 2 and 3 to the High Court Rules 2016. He asked for an award of costs of $1,434 accordingly.

[3]                 Mr Hamilton submitted that the judgment debtor could not be described as a party who has failed with respect to a proceeding, as the proceeding has not yet been completed. The judgment creditor has now filed an application for adjudication, and costs in any proceeding are properly determined once the Court has finally dealt with that proceeding.

[4]                 I deal with that submission immediately. Costs are routinely awarded on a debtor’s unsuccessful application to set aside the bankruptcy notice, regardless of whether the creditor has since filed an adjudication application.

[5]                 Next, Mr Hamilton submitted that the judgment creditor filed no notice of application or affidavit evidence, other than a process server’s affidavit proving service of the bankruptcy notice. That affidavit had to be filed in any event in the subsequent adjudication proceeding, and should not be the subject of any separate costs award on the application to set aside the bankruptcy notice.

[6]                 Mr Hamilton submitted that all the judgment creditor did was file a two-page memorandum on 27 November 2019, and a one-page memorandum on 10 December 2019. The memoranda filed by the creditor could have been prepared by junior counsel, and that if any costs are to be awarded, they should be awarded on a 1A basis. On Mr Hamilton’s calculation, that would justify a costs award of $318.

1      Greenbaum v Lockwood [2020] NZHC 18.

Analysis

[7]                 I accept Mr Ewen’s submission that the situation here was analogous to the situation where a party has made a successful interlocutory application. Although there was no formal application, submissions were filed on both sides, and in a 2B case a successful party filing submissions on an interlocutory application would be entitled to costs calculated on the basis of 1.5 days at the Category 2 rate. In fact, the judgment creditor’s application has been dealt with on a basis which has ensured that the losing party’s liability for costs is substantially less than it would have been if there had been a formal strike-out application plus written submissions.

[8]                 I accept that nothing should be claimed for the process server’s affidavit – that will be part of the costs sought in the adjudication proceeding. I also accept that the judgment creditor did not file a lengthy memorandum in reply, although that does not mean that the judgment creditor was not required to consider and take appropriate legal advice on the arguments raised by the debtor.

[9]                 Mr Ewen correctly pointed out that the memoranda filed by the creditor are not directly provided for in the various steps for which time allocations are prescribed in Schedule 3 to the High Court Rules. The memoranda were not filed for case management purposes or a mentions hearing, and nor were they formal submissions prepared in advance of a scheduled hearing. However, they did deal with substantial issues going to the validity of the setting aside application, and I think they are properly dealt with under the “written submissions” heading, albeit with some reduction to reflect their relative brevity. I do not think there is any basis for an uplift for complexity, as Mr Ewen suggested.

[10]              Looking at the situation in the round, I think the justice of the case2 will be met by an award of costs to the creditor in the sum of $1,000, reflecting the fact that the creditor effectively filed two sets of written submissions, albeit the second (reply) submissions were brief. I make an order for costs in the sum of $1,000 accordingly.

2      Under r 14.1 of the High Court Rules 2016, all matters are at the discretion of the Court if they relate to costs incidental to a proceeding, or costs of any step taken in a proceeding.

[11]              The judgment debtor has informally asked for an order recalling the judgment issued on 17 January 2020, and that request has not yet been determined. In those circumstances, I direct that this costs judgment is not to be sealed pending further order of the Court.

Associate Judge Smith