Haines v Memelink - [2022] NZHC 2966

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-315

[2022] NZHC 2966

IN THE MATTER OF Part 14 High Court Rules 2016

BETWEEN

QUENTIN STOBART HAINES

First Applicant

BPE TRUSTEES (NO 1) LIMITED
Second Applicant

QUENTIN HAINES PROPERTIES LIMITED
Third Applicant

AND

HARRY MEMELINK and LYNX TRUSTEES LIMITED

First Respondents

ROY WILLIAM BASSETT-BURR

Second Respondent

Hearing: 10 November 2022

Counsel:

Q S Haines in person

J D Dallas for Applicants
D G O Livingston for Respondents

Judgment:

11 November 2022

JUDGMENT OF CHURCHMAN J

[Non-party costs]

[1] The applicants have applied on notice for a costs award against Mr Bassett-Burr, a non-party to litigation between interests associated with Q S Haines and Harry Memelink, Lynx Trustees Limited and the Link No.1 Trust.

HAINES & ORS v MEMELINK and LYNX TRUSTEES LIMITED & ANOR [2022] NZHC 2966
[11 November 2022]

[2] The matter has a long and somewhat convoluted history. As long ago as May 2019, Mr Bassett-Burr caused five notices of statutory demand for various sums ranging from $140,816.78 to $421,327.05 to be served on the applicants.

[3] The first two of the notices of demand were signed by Mr Bassett-Burr solely, representing that he was signing on behalf of Lynx Trustees Limited. The other three notices were signed by Mr Bassett-Burr and his brother-in-law, Mr Memelink.

[4] Mr Bassett-Burr was the sole shareholder and director of Lynx Trustees Limited which, in turn, was (along with Mr Memelink) a trustee of Link Trust No.1.

[5] Promptly upon receipt of the notices of demand, Mr Haines advised Mr Bassett-Burr of an intention to apply to have them set aside and seek an uplift of costs to reflect the abuse of the statutory demand process. Mr Bassett-Burr was given an opportunity to withdraw the notices. He chose not to do so. The applicants were therefore left with no option but to formally apply to set the notices aside. In a decision dated 30 August 2019,1 I set aside the notices and awarded costs against Mr Bassett-Burr personally.

[6] Mr Memelink and Lynx Trustees Limited appealed the non-party costs award to the Court of Appeal. The Court of Appeal removed Mr Memelink and Lynx Trustees Limited as parties to the appeal and substituted Mr Bassett-Burr as the appellant.2 The Court of Appeal declined to strike the appeal out but did note that its merits were weak.3

[7] In the subsequent substantive decision, the Court of Appeal, on a narrow procedural point, allowed the appeal and set aside the order for costs against Mr Bassett-Burr holding that, before costs were awarded against a non-party, an application on-notice should be made against that party. The Court found insufficient notice had been provided to Mr Bassett-Burr.4

1      Haines v Memelink [2019] NZHC 2169.
2      Memelink v Haines [2020] NZCA 205 at [13].
3 At [19].
4      Bassett-Burr v BPE Trustees (No 1) Limited [2020] NZCA 457 at [12].

[8] The Supreme Court granted an extension…

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 Haines v Memelink

Details

AGLC: Haines v Memelink [2022] NZHC 2966
Case: [2022] NZHC 2966
Decision Date: 11 November 2022

CaseChat Overview and Summary

Quentin Stobart Haines and associated entities have applied for a costs award against Mr Roy Bassett-Burr, a non-party to the litigation, for his role in the improper serving of statutory demands. The application follows the Court of Appeal's decision to set aside a previous costs order against Mr Bassett-Burr on the basis that he had not been given sufficient notice of the application. The Supreme Court declined to grant leave to appeal the Court of Appeal's decision but indicated that the applicants had the option of making a formal application for non-party costs against Mr Bassett-Burr.

The primary issue before the Court was whether Mr Bassett-Burr should be held personally liable for the costs incurred by the applicants in setting aside the statutory demands and pursuing the costs application. The Court considered whether Mr Bassett-Burr had acted appropriately in serving the demands, whether he was likely to be able to recover costs from the entity on whose behalf he acted, and whether there were any circumstances that would justify an award of costs against a non-party.

The Court found that Mr Bassett-Burr had acted improperly in serving the unlawful statutory demands and failing to withdraw them when notified of the intention to apply to set them aside. The Court held that it was appropriate to make an award of non-party costs against Mr Bassett-Burr given the evidence that neither the entity on whose behalf he acted nor the associated trust had any prospect of meeting any costs award. The Court also found that the costs incurred were in relation to a discrete transaction and did not need to await the conclusion of other related litigation. The Court ordered Mr Bassett-Burr to pay the costs of $21,689.25 and disbursements of $1,230 personally.

The Court ordered that the parties attempt to settle the costs of the hearing within 14 days. If settlement is not achieved, the applicants are to file a memorandum of no greater than three pages in length, to which Mr Bassett-Burr is to respond within seven days. The Court will then determine the matter on the papers.

Orders