Kim v Oh - [2024] NZHC 2374

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-675

[2024] NZHC 2374

UNDER

AND
the law of contract and tort

IN THE MATTER

of breach of contract and tort of deceit or negligent misstatement

BETWEEN

CHONG CHU KIM and IN SUK KIM

Plaintiffs

AND

TAE LIM OH

First Defendant

YONG SU CHOI

Second Defendant

Hearing: On the papers

Counsel:

S Kang for the Plaintiffs

P Murray for the Defendants

Judgment:

23 August 2024

JUDGMENT OF GORDON J

[As to costs]

This judgment was delivered by me on 23 August 2024 at 3 pm, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors/Counsel:
Fairbrother Family Law, Napier CL Law, Auckland
P Murray, Auckland

KIM v OH [2024] NZHC 2374 [23 August 2024]

[1] On 13 May 2020, the plaintiffs Chong Chu Kim and In Suk Kim commenced a proceeding against the first and second defendants, Tae Lim Oh and Yong Su Choi, respectively. The plaintiffs claimed: breach of contract against the defendants jointly; and tort of deceit or alternatively negligent misstatement against the first defendant only.

[2] On 23 May 2024, I gave judgment in favour of the plaintiffs on all claims (the judgment).1 I reserved the issue of costs.

[3] Following the delivery of the judgment, on 30 May 2024, the defendants were adjudicated bankrupt on their own application.

[4] The plaintiffs make an interlocutory application under s 76(2) of the Insolvency Act 2006 for this proceeding to continue despite the defendants’ adjudication of bankruptcy for the sole purpose of seeking costs.

[5] Given the defendants were in receipt of a grant of legal aid throughout the proceeding, the plaintiffs also seek an order under s 45(5) of the Legal Services Act 2011 for an order specifying what the order for costs would have been if the defendants’ liability had not been limited by reason of being legally aided. Specifically, the plaintiffs says costs on a 2B basis with increased costs to reflect the making of a settlement offer without prejudice as to costs would have been the appropriate order.

[6] The defendants, through their counsel Mr Murray, have advised that they do not intend to take any steps to oppose the orders sought by the plaintiffs.

Should leave be granted under s 76(2) of the Insolvency Act?

[7]Section 76 of the Insolvency Act provides:

76 Effect of adjudication on court proceedings

(1)On adjudication, all proceedings to recover any debt provable in the bankruptcy are halted.

1 Kim v Oh [2024] NZHC 1299.

(2)However, on the application by any creditor or other person interested in the bankruptcy, the court may allow proceedings that had already begun before the date of adjudication to continue on the terms and conditions that the court thinks appropriate.

[8] In Saimei v McKay, Paterson J set out a list of principles applicable to exercising the discretion under the predecessor to s 76(2).2 From those, the following principles are relevant…

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 Oh

Details

AGLC: Kim v Oh [2024] NZHC 2374
Case: [2024] NZHC 2374
Decision Date: 23 August 2024

CaseChat Overview and Summary

Chong Chu Kim and In Suk Kim initiated proceedings against Tae Lim Oh and Yong Su Choi, claiming breach of contract jointly against both defendants and tort of deceit or negligent misstatement against Tae Lim Oh alone. The defendants, who had been in receipt of legal aid, were adjudicated bankrupt during the proceedings. The plaintiffs sought leave to continue the proceedings to determine costs, and an order under the Legal Services Act 2011 to determine what order for costs would have been made if the defendants were not legally aided. The defendants did not oppose the plaintiffs' application.

The court considered whether leave should be granted under the Insolvency Act 2006 to continue the proceedings to determine costs, and whether an order should be made under the Legal Services Act 2011 to determine what order for costs would have been made if the defendants were not legally aided. The court determined that the plaintiffs were not seeking an award of costs against the defendants personally or through the Official Assignee, but rather an order under the Legal Services Act. Granting leave to seek such an order would not prejudice the Official Assignee’s duty to other creditors. The Official Assignee stated that leave was not required as the plaintiffs’ costs application was not a provable debt in the bankruptcy. The court considered it appropriate to exercise its discretion to grant leave for the proceedings to continue for the purpose of determining the issue of costs.

Regarding the order under the Legal Services Act, the court noted that it is the usual course to make such an order. Given the absence of opposition from the defendants, Legal Aid Services or the Official Assignee, there was no basis for departure from this usual course. The plaintiffs submitted that the appropriate award of costs would have been on a 2B basis, with a five per cent increase for the defendants' failure to accept a settlement offer without prejudice save as to costs. The court found that increased costs were appropriate and ordered a five per cent increase to the claimed costs occurring after the date of the offer. The total amount of a costs order that would have been made is $70,218.20, plus $24,051.71 for disbursements, totalling $94,269.91.

The court granted leave under the Insolvency Act for the proceedings to continue for the purpose of determining the issue of costs and made an order under the Legal Services Act that if the defendants had not been legally aided, an order for costs would have been made against them in the sum of $70,218.20 and $24,051.71 for disbursements, together totalling $94,269.91.

Orders