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Husheer v Campbell

Husheer v Campbell

Case [2025] NZHC 222 20 February 2025

Civil Litigation & Procedure

Insolvency Law

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IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2024-441-028

[2025] NZHC 222

BETWEEN
ELIZABETH ANN HUSHEER

Judgment Creditor

AND

KEVIN MURRAY CAMPBELL

Judgment Debtor

Hearing: On the papers

Appearances:

D O’Connor for Judgment Creditor P Ross for Judgment Debtor

Judgment:

20 February 2025

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[Costs]

[1] In my judgment dated 3 December 2024 (Judgment),1 I declined to exercise my discretion to refuse an order for adjudication under s 37 of the Insolvency Act 2006 (the Act) or to halt the application for adjudication under s 38. However, I granted a temporary halt of the judgment creditor’s application for adjudication for ten working days to give the judgment debtor a final opportunity to pay the outstanding debt. The judgment debtor paid the debt in full, within ten working days, and the costs and disbursements claimed in the summons.

[2] The judgment creditor has now advised by way of a memorandum dated 15 January 2025 that she no longer seeks an order for adjudication as the debt has been paid. Accordingly, leave is granted to withdraw the application for adjudication under s 15 of the Act.

1 Husheer v Campbell [2024] NZHC 3643.

HUSHEER v CAMPBELL [2025] NZHC 222 [20 February 2025]

[3]However, the judgment creditor now seeks indemnity costs in the sum of

$27,386.15 and disbursements in the sum of $1,471.22.2 The judgment debtor opposes the application for costs, submitting that they should lie where they fall or in the alternative, be reduced.

Legal principles — costs

[4] Costs are ultimately a matter of the court’s discretion, the overall objective being to achieve an outcome that best meets the interests of justice.3 However, that discretion is qualified by the applicable costs rules, contained in pt 14 of the High Court Rules 2016 (the Rules). The primary principle applying to the determination of costs is that costs follow the event, meaning that a party who is unsuccessful pays costs to a party who is successful.4 Costs are usually assessed against the schedule by applying the appropriate daily recovery rate to the time considered reasonable for each reasonably required step in relation to the proceeding or interlocutory application.5

[5] Rule 14.7 sets out the bases on which the court can decline or reduce costs, including:

14.7 Refusal of, or reduction in, costs

Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—

…

(f)the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

…

(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or

…

2 See Smith and Partners (a firm) v Laurenson [2014] NZHC 389 at [16].
3 High Court Rules 2016, r 14.1; Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7]; Glaister v Amalgamated Dairies Ltd [2004]…

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 Husheer v Campbell

Details

AGLC: Husheer v Campbell [2025] NZHC 222
Case: [2025] NZHC 222
Decision Date: 20 February 2025

CaseChat Overview and Summary

In Husheer v Campbell, Elizabeth Ann Husheer, the judgment creditor, sought indemnity costs from Kevin Murray Campbell, the judgment debtor, after Campbell had paid off the outstanding debt following a temporary halt in the enforcement of the judgment. The case initially involved a dispute over the enforcement of a judgment debt, which culminated in a hearing regarding the application for adjudication under the Insolvency Act 2006. The judgment debtor had paid the debt within the specified ten working days, leading to the withdrawal of the application for adjudication. However, the judgment creditor subsequently sought indemnity costs amounting to $27,386.15 and disbursements of $1,471.22. The judgment debtor opposed the claim for costs, arguing that they should lie where they fell or be reduced.

The court considered the legal principles governing costs, emphasizing that costs follow the event, and that the primary objective is to achieve an outcome that best meets the interests of justice. The court also noted that it may refuse or reduce costs if a party has contributed unnecessarily to the time or expense of the proceeding, including by taking or pursuing an unnecessary step or an argument that lacks merit. Conversely, increased costs may be awarded where there is a failure by the paying party to act reasonably.

In this case, the judgment creditor was the successful party, and the court found that the judgment debtor had contributed unnecessarily to the time and expense of the proceedings by taking or pursuing an unnecessary step or an argument that lacked merit. For instance, the judgment debtor had filed a 23-page affidavit with irrelevant material and failed to disclose key emails. Additionally, the judgment debtor's allegation of tortious interference was belatedly raised and lacked substance. Despite the judgment debtor's legitimate concerns about the creditor's ability to repay the judgment debt, the court found that it was open to him to pay the outstanding amount into a trust account prior to the hearing and to put forward evidence of the funds held on trust, but he did not do so. The court also found that the judgment debtor had not pursued the appeals of the underlying judgments as he had sworn to do, which contributed to the unnecessary prolongation of the proceedings.

The court granted leave to withdraw the application for adjudication and awarded the judgment creditor costs in the sum of $9,560 and disbursements in the sum of $1,471.22. The court did not find the circumstances warranted indemnity costs, as the judgment debtor had not made any false or irrelevant allegations of fraud, and there had not been particular misconduct causing material loss of time. The court, however, did find that an award of increased costs was appropriate due to the judgment debtor's unnecessary contribution to the time and expense of the proceeding.

Orders