Jackson v Kerr - [2022] NZHC 29

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2021-404-000812

[2022] NZHC 29

UNDER Sections 12 & 34 of the Receiverships Act 1993

BETWEEN

NEALE JACKSON and NATALIE GYTHA

BURRETT, insolvency practitioners, as receivers of PYNE HOLDINGS LIMITED (in receivership)

Applicants

AND

GEORGE CHARLES DESMOND KERR

Respondent

Hearing: On the papers

Appearances:

J Marcetic for the Applicants

G P Blanchard QC & S J Nicolson for the Respondent

Judgment:

19 January 2022

JUDGMENT OF VAN BOHEMEN J

[costs]

This judgment was delivered by me on 19 January 2022 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:
G Blanchard QC, Auckland Chapman Tripp, Auckland Lowndes Jordan, Auckland

JACKSON v KERR (costs) [2022] NZHC 29 [19 January 2022]

Introduction

[1] The applicants, the receivers for Pyne Holdings Ltd (in receivership) (PHL), seek indemnity costs of $102,459.91 (incl GST), plus disbursements of $929.99, against Mr Kerr, the sole director of PHL, for costs incurred in enforcing Court orders requiring Mr Kerr to provide documents and information about PHL and its interests in related entities following PHL’s default on a loan of $67.7 million from the Bank of New Zealand Ltd (BNZ). The receivers also seek costs of $487.00, on a 2B basis, for preparing their costs memorandum.

[2] The respondent, Mr Kerr does not dispute his liability for costs. However, he says that, if the Court is minded to award costs in excess of scale, it should award increased costs rather than indemnity costs. Mr Kerr also says the indemnity costs sought by the receivers are excessive and, if indemnity costs are awarded, should be reduced by 20 per cent. Mr Kerr also disputes the receivers’ claim for the costs of preparing their costs memorandum.

Relevant background

[3] As recorded in my judgment dated 12 November 2021,1 the receivers have been seeking documents and information concerning the assets of PHL and its interests in related entities since May 2021. The receivers say Mr Kerr’s failure to provide the documents and information seriously impeded their ability to discharge their responsibilities.

[4] Despite Court orders requiring Mr Kerr to provide the documents and information, and despite undertakings by Mr Kerr to comply with those orders, Mr Kerr had not provided all the documents and information ordered by the Court, prior to the hearing on 12 November 2021.

[5] Accordingly, the receivers applied for further orders requiring Mr Kerr’s compliance with the earlier Court orders. The receivers also foreshadowed an intention to seek an order against Mr Kerr under s 16 of the Contempt of Court Act

1 Jackson v Kerr [2021] NZHC 3067.

2019 if he did not comply with the further orders sought. The receivers also asked for indemnity costs on their application.

[6]In my judgment of 12 November 2021, I:2

(a)declared that Mr Kerr had not complied with Court orders made by Lang J on 12 May 2021, by Walker J on 15 June 2021…

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 Jackson v Kerr

Details

AGLC: Jackson v Kerr [2022] NZHC 29
Case: [2022] NZHC 29
Decision Date: 19 January 2022

CaseChat Overview and Summary

The case of Jackson v Kerr involved a dispute between the receivers of Pyne Holdings Ltd (in receivership) and George Charles Desmond Kerr, the sole director of Pyne Holdings Ltd. The receivers sought indemnity costs and disbursements from Mr Kerr for costs incurred in enforcing Court orders requiring him to provide documents and information about Pyne Holdings Ltd and its interests in related entities. The receivers also sought costs of preparing their costs memorandum. The primary legal issue before the Court was whether an award of indemnity costs was appropriate, given Mr Kerr's failure to comply with Court orders over a period of six months, necessitating the application brought by the receivers and the associated costs. The Court considered the submissions of both parties and the relevant background of the case. The receivers argued that Mr Kerr's conduct warranted indemnity costs, as he had behaved either badly or very unreasonably. They submitted that an order for indemnity costs would be consistent with the approach of courts in similar situations. In contrast, Mr Kerr argued that while there was a delay in providing the documents and information, his non-compliance was not a case of deliberate intention to disobey the Court orders, but rather a consequence of factors such as related summary judgment proceedings, failure by the Bank of New Zealand to provide bank records, and the size of the task involved. The Court found that indemnity costs were appropriate in this case, as Mr Kerr's serial non-compliance with Court orders had put the receivers to unnecessary expense, even though he had ultimately complied with the substance of those orders. The Court also found that the costs and disbursements claimed by the receivers were reasonably incurred. As a result, Mr Kerr was ordered to pay the receivers costs of $103,389.90, comprising indemnity costs of $102,459.91 (including GST) and disbursements of $929.99, as well as $487.00 for the costs of preparing the receivers' costs memorandum.

Orders