Kim v Mao - [2022] NZHC 3500

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1039

[2022] NZHC 3500

IN THE MATTER

AND
of the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of LIANSEN MAO

BETWEEN

HYUN BIN KIM and DUK YOUNG LEE

Judgment Creditors

AND

LIANSEN MAO

Judgment Debtor

Hearing: On the papers

Appearances:

C Fourie for the Judgment Creditors L Mao, Judgment Debtor in person

Judgment:

16 December 2022

COSTS JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 16 December 2022 at 4pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Hesketh Henry, Auckland

Copy to:
Liansen Mao

KIM & Anor v MAO [2022] NZHC 3500 [16 December 2022]

Introduction

[1]The judgment creditors are seeking the following orders:

(a)indemnity costs in the amount of $16,079.37 in respect of their successful opposition to the judgment debtor’s interlocutory application to set aside the bankruptcy notice by the respondents, Mao v Kim & Lee (Original Judgment);1 and
(b)indemnity costs in the amount of $6,440.16 in respect of the successful opposition to the judgment debtor’s applications to stay and to set aside the Original Judgment and to disqualify Hesketh Henry from acting for the judgment creditors, Kim & Lee v Mao (Strike Out Judgment).2

Background

[2] In my Minute dated 3 August 2022, I directed that the judgment debtor was to file and serve any response to the judgment creditors’ memorandum on costs in respect of the Original Judgment by 12 August 2022.

[3] A memorandum was filed on 5 September 2022 by the judgment debtor recording that he had filed an application to set aside the District Court judgment on which the bankruptcy notice that was the subject of the Original Judgment was based. Mr Mao further submits that the “judgment debtors” (presumably judgment creditors) purposely created “lots of costs in litigation” against Mr Mao in order to create costs and charge interest at 20 per cent per annum. Mr Mao goes on to say that he had only agreed on $5,000 including GST for costs matters and would like the costs matter to be stayed until determination of the application to set aside the District Court judgment.

[4] Mr Mao attaches a copy of an application to set aside the District Court judgment to his memorandum.

1 Mao v Kim [2021] NZHC 3253 [Original Judgment].
2 Kim v Mao [2022] NZHC 1959 [Strike Out Judgment].

[5] In my Minute of 3 August 2022, in addition to a response from Mr Mao on costs, I directed Mr Mao’s applications to stay and to set aside the Original Judgment and to disqualify Hesketh Henry from acting to the Duty Judge. This was because the judgment creditors had made applications pursuant to rr 5.35A and 5.35B of the High Court Rules 2016 for the applications to be struck out before service. Associate Judges do not have jurisdiction to determine such applications.

[6] Lang J issued a decision on 9 August…

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 Kim v Mao

Details

AGLC: Kim v Mao [2022] NZHC 3500
Case: [2022] NZHC 3500
Decision Date: 16 December 2022

CaseChat Overview and Summary

In the High Court of New Zealand, Hyun Bin Kim and Duk Young Lee, as judgment creditors, sought indemnity costs against Liansen Mao, the judgment debtor, in relation to a bankruptcy notice. The creditors claimed costs from two unsuccessful applications made by Mao: one to set aside a bankruptcy notice, and the other to stay and set aside a previous judgment and to disqualify the creditors' legal representatives. The court found that Mao's applications were made without reasonable prospects of success and were vexatious, frivolous, or improper. The court relied on contractual indemnity clauses in a Development Loan Agreement and a Deed of Guarantee and Indemnity, which provided for the judgment debtor to cover all costs and expenses incurred by the judgment creditors in obtaining payment of monies owed.

The court awarded indemnity costs to the judgment creditors for both sets of applications. For the application to set aside the bankruptcy notice, the court awarded $16,079.37, finding that the costs reflected fees for tasks reasonably necessary and covered by the guarantee. For the unsuccessful applications to stay and set aside the judgment and disqualify the creditors' legal representatives, the court awarded $6,440.16, concluding that these costs also fell within the guarantee. The court ordered Mao to pay the total indemnity costs of $22,537.53 to the judgment creditors.

Orders