Jefferies v Pagan - [2025] NZHC 2441

IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE

CIV-2023-406-006 [2025] NZHC 2441

UNDER the Insolvency Act 2006
IN THE MATTER of the bankruptcy of Walter Richard Pagan BETWEEN CLAIRE BRIDGET JEFFERIES
Judgment Creditor

AND WALTER RICHARD PAGAN
Judgment Debtor

Hearing: On the papers

Counsel: S E England for Judgment Creditor
D G Dewar and T A Moore for Judgment Debtor

Judgment: 26 August 2025

JUDGMENT OF ASSOCIATE JUDGE PAULSEN (COSTS)

This judgment was delivered by me on 26 August 2025 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

JEFFERIES v PAGAN [2025] NZHC 2441 [26 August 2025]

[1] Ms Jefferies obtained a judgment against Mr Pagan in the District Court and is now pursuing bankruptcy proceedings against him. The creditor’s application has been before the Court for a very long time. Mr Pagan has been represented by counsel throughout.1

[2] The creditor’s application filed in April 2023 has been adjourned successively on the basis Mr Pagan would sell his property and pay Ms Jefferies from the proceeds of sale. However, in February 2025 Mr Pagan gave notice of his intention to apply to halt the creditor’s application on the basis that the District Court judgment had been stayed, as a result of that Court having made an order on 20 June 2023 under s 153 of the District Court Act 2016 for payment of the judgment debt by instalments.

[3] The circumstances under which the instalment payment order was made are set out in in my judgment of 27 June 2025.2 In that judgment I dismissed Mr Pagan’s application to halt the creditor’s application. I also directed that if any orders were sought in respect of costs, memoranda could be filed.3

[4] Ms Jefferies has applied for costs against Mr Pagan in respect to the application to halt the creditor’s application. Both parties are in receipt of legal aid. Mr Pagan opposes that application, arguing that there are no exceptional circumstances justifying the making of a costs award against him when he is legally aided.

The law

[5] For present purposes, the relevant statutory provision is s 45 of the Legal Services Act 2011 (the Act) which provides:

45 Liability of aided person for costs

(1)If an aided person receives legal aid for civil proceedings, that person’s liability under an order for costs made against him or her with respect to the proceedings must not exceed an amount (if any) that is reasonable for the aided person to pay having regard to all the

1 Mr Pagan had a change of counsel in around February 2025.
2 Jefferies v Pagan [2025] NZHC 1738.
3 At [52].

circumstances, including the means of all the parties and their conduct in connection with the dispute.

(2)No order for costs may be made against an aided person in a civil proceeding unless the court is satisfied that there are exceptional circumstances.

(3)In determining whether there are…

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 Jefferies v Pagan

Details

AGLC: Jefferies v Pagan [2025] NZHC 2441
Case: [2025] NZHC 2441
Decision Date: 26 August 2025

CaseChat Overview and Summary

The case of Jefferies v Pagan involved a bankruptcy proceeding initiated by Claire Bridget Jefferies against Walter Richard Pagan. The dispute originated from a judgment obtained by Ms Jefferies against Mr Pagan in the District Court, which was pursued further through bankruptcy proceedings. The matter reached the High Court of New Zealand, Blenheim Registry, where Associate Judge Paulsen delivered the judgment on August 26, 2025. The primary legal issue in this case was whether exceptional circumstances existed to justify an award of costs against Mr Pagan, who was receiving legal aid, in respect of his unsuccessful application to halt the creditor’s application. The court had to balance the objectives of the Legal Services Act 2011, which aims to promote access to justice while preventing abuse of court processes by those with limited means.

The court found that, although Mr Pagan’s application to halt the creditor’s application had little prospect of success and involved some procedural lapses, these alone did not constitute exceptional circumstances. However, the court determined that there were exceptional circumstances justifying the making of a costs award. The court found it unjust that Ms Jefferies had agreed to successive adjournments based on promises by Mr Pagan that he would sell his property and pay her from the proceeds, only for Mr Pagan to change his position at a late stage. The court concluded that Mr Pagan should have applied to halt the proceeding at the outset and that his actions were unreasonable and improper, entitling Ms Jefferies to an award of costs. The court ordered Mr Pagan to pay Ms Jefferies scale costs on a 2B basis in respect of the application to halt the creditor’s application, with the amount limited to the costs actually paid by Legal Services to Ms Jefferies’ counsel.

Orders