Little v Little

[2015] NZHC 2778

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2015-404-001200 [2015] NZHC 2778

BETWEEN

DEIDRE ANN LITTLE

Judgment Creditor

AND

JOHN LAWSON LITTLE Judgment Debtor

Hearing:	On the papers
Counsel:	V M Ammundsen for the Judgment Creditor P J Dale for the Judgment Debtor
Judgment:	10 November 2015

JUDGMENT AS TO COSTS

OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

10.11.15 at 4:30pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

D A LITTLE v J L LITTLE [2015] NZHC 2778 [10 November 2015]

[1]      This  matter  has  been  referred  to  me  to  consider  the  judgment  debtor’s application for costs in the outcome where the judgment creditor’s debt was paid by the judgment debtor before the adjudication application was heard.

[2]      The judgment creditor and judgment debtor are former wife and husband.  A dispute  arose  between  them  regarding  the  judgment  debtor’s  management  of  a family trust.   In the outcome of the hearing before the High Court the judgment debtor was on 30 September 2014 ordered to pay costs of $16,270.15.

[3]      A bankruptcy notice was served on the judgment debtor on 8 June 2015 in respect of that debt.  In his notice of opposition to the adjudication application that was subsequently filed the judgment debtor pleaded he was not insolvent and that the use of the bankruptcy procedure was oppressive in the circumstances because the judgment creditor was aware the judgment debtor had substantial assets available which were the subject of relationship property and trust disputes, inter alia in the outcome of which the costs debt order would be paid.

[4]      A one day fixture was allocated on 16 October 2015 to hear the adjudication application.  On 5 October 2015 counsel filed a joint memorandum confirming the debt was paid.

[5]      The judgment debtor wants an order as to costs.  In that regard it is noted that the fixture was vacated prior to any requirement for the filing of submissions upon the adjudication application.

[6]      The civil list Judge has directed the matter be dealt with on the papers.  I have had no previous involvement with the file.  This decision is formed by my having read the brief memoranda filed by counsel in relation to the issue of costs.

The judgment creditor’s case

[7]      It is that the costs order was not appealed nor was there any application to set aside the bankruptcy notice.  The judgment debtor is said to have had ample time to pay the costs but declined to do so.

[8]      Counsel submits the issuing of the bankruptcy notice was not an abuse of process and no evidence of solvency was provided in the judgment debtor’s affidavit in reply.

The judgment debtor’s case

[9]      It is submitted the judgment debtor was always aware the costs debt would be paid once relationship and trust property issues were resolved; that in any event there was no prospect of an order for adjudication being made.  In the outcome of the High Court decision in respect of which the costs order was made issues arose between the parties concerning the sale of trust property in the outcome of which the judgment creditor has issued proceedings against the new trustee appointed following the High Court decision.

[10]     That outcome has affected the judgment debtor’s access to funds to meet his

costs liability.

[11]     Also the judgment debtor continues to occupy the other major trust asset i.e. the former family home.  Apparently that factor and other issues affecting the sale of the former relationship business is the subject of other proceedings scheduled for call on 10 November 2015.

Conclusion

[12]     The debt was payable but a reasonable explanation is available as to why it was not paid before it was.  Those reasons are intimately connected to other issues between the parties still before the Court.

[13]     The adjudication application was withdrawn after the debt was  paid  and before submissions upon the application were required to be filed.

[14]     It was always probable in any event that the Court would have exercised its discretion not to grant the adjudication application.

[15]     In  the circumstances the Court considers the bankruptcy proceedings  are

inappropriate.  Costs are directed to lie where they fall.

Associate Judge Christiansen