Harbour City Construction 2012 Limited v Memelink
[2017] NZHC 2727
•7 November 2017
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE WHANGANUI-Ā-TARA ROHE
CIV-2017-485-446 [2017] NZHC 2727
UNDER the Insolvency Act 2006 AND
IN THE MATTER
of the bankruptcy of Harry Memelink
BETWEEN
HARBOUR CITY CONSTRUCTION
2012 LIMITED Judgment creditor
AND
HARRY MEMELINK Judgment debtor
on the papers Counsel:
M Freeman for the Judgment creditor
Q S Haines for the Judgment debtorJudgment:
7 November 2017
JUDGMENT OF ASSOCIATE JUDGE SMITH
[1] On 16 March 2017 I entered summary judgment for the judgment creditor against Link Technology 2000 Limited, Mr Harry Memelink, and Mr Ian Hamilton. I made a declaration that the judgment creditor was not bound by the terms of a certain deed of lease entered into between the trustees of the Link Trust No 1 (one of whom was Mr Memelink) as lessor and Link Technology 2000 Limited as lessee. I further declared that the continued occupancy of the relevant property by the defendants (including Mr Memelink) constituted a trespass on the property. I ordered the defendants to pay the judgment creditor the total sum of $17,424 for
costs and disbursements.
HARBOUR CITY CONSTRUCTION 2012 LIMITED v MEMELINK [2017] NZHC 2727 [7 November 2017]
[2] The judgment creditor issued a bankruptcy notice against Mr Memelink to enforce the costs award, on 26 May 2017. Mr Memelink applied to set aside the bankruptcy notice, and the judgment creditor filed a notice of opposition.
[3] Mr Memelink’s application to set aside the bankruptcy notice was called on
18 July 2017. I gave directions for the filing of written submissions, and allocated a half day fixture for the hearing of the setting aside application on 21 September
2017.
[4] When the case was called on 21 September 2017, Mr Haines advised me on behalf of Mr Memelink that the full amount claimed in the bankruptcy notice had been paid earlier in the week. In those circumstances Mr Haines was content for the application to set aside the bankruptcy notice to be dismissed by consent, with issues of costs to be resolved by the Court. I made an order dismissing the application to set aside the bankruptcy notice accordingly, and directed that any application by the judgment creditor for costs should be filed within five working days. Mr Memelink was allowed five working days from his receipt of the judgment creditor’s memorandum to file submissions in reply.
[5] The judgment creditor’s costs memorandum was duly filed within the five working day period allowed, but no memorandum has been received from Mr Memelink.
[6] I now give judgment on the judgment creditor’s costs application.
Costs payable when an applicant fails to proceed with his or her application
[7] Rule 15.23 of the High Court Rules 2016 provides:
15.23 Costs
Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.
[8] The Courts have applied the following principles to costs applications under r 15.23:1
2.1Rule 15.23 of the High Court Rules (formerly r 476C) creates a presumption that a plaintiff who discontinues will pay costs to the defendant.
2.2The presumption may be displaced if the Court finds there are circumstances which make it just and equitable that it should not apply.
2.3The Court is not limited in the factors that can be taken into account when considering whether the presumption is displaced, but the following are matters which are taken into consideration:
2.3.1As a general rule the Court will not consider the merits of the respective cases (unless they are so obvious that they should influence the costs issue).
2.3.2The Court will consider the reasonableness of the stance of both parties in the proceeding (whether it was reasonable for the plaintiff to bring and continue the proceeding, and for the defendant to oppose and continue to oppose it, up to the point of discontinuance).
2.3.3Conduct prior to the commencement of the proceeding may be relevant (for example, if any conduct by a defendant has precipitated the litigation), as may be the reason for discontinuing (for example, where a change of circumstances has made the proceedings unnecessary).
Application of the principles in this case
[9] I accept Mr Freeman’s submission that there is no basis for departing from the presumption that costs should follow the event. Mr Memelink elected to pay the amount demanded and abandon his setting aside application, and he did so at the
11th hour, after the judgment creditor had been put to the expense of filing a notice of opposition and an affidavit in opposition, appearing at the first call of the application on 18 July 2017, and preparing full written submissions for the defended hearing.
[10] The judgment creditor seeks costs on a 2B basis, and I am satisfied that is appropriate. The amount claimed is $9,700.50, together with disbursements of $110.
1 FM Custodian Ltd v Pati [2012] NZHC 1902, applying Kroma Colour Prints Ltd v Tridonicatco
NZ Ltd (2008) 18 PRNZ 973(CA).
[11] The claim for $9,700.50 is made up as follows (with item numbers from the
third schedule to the High Court Rules set out on the left-hand side of the table).
38. Notice of opposition and affidavits: 2 days 11.
Filing memorandum for call on 18 July 2017:
0.4 days
12.
Appearance at call on 18 July 2017:
0.2 days
40.
Written submissions:
1.5 days
42. Appearance at hearing (in quarter days): 0.25 days
4.35 days
4.35 days at rate of $2,230 per day: $9,700.50
Disbursement (filing fee) $110.00
Total costs and disbursements: $9,810.50
[12] I am satisfied that those amounts have been properly claimed.
[13] Judgment is accordingly entered against Mr Memelink for the sum of
$9,700.50 for costs, and $110 for disbursements (total sum $9,810.50).
Associate Judge Smith
Solicitors:
Thomas Dewar Sziranyi Letts, Lower Hutt for the Judgment creditor
Q H Law, Otaki for the Judgment debtor
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