Memelink v Haines

[2019] NZHC 3154

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-586

[2019] NZHC 3154

UNDER

the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of Quentin Stobart Haines

BETWEEN

HARRY MEMELINK and CISCA JOHNETTE FORSTER

Judgment creditors

AND

QUENTIN STOBART HAINES

Judgment debtor

Counsel:	J McDougall for the judgment creditors J Dallas for judgment debtor
Judgment:	3 December 2019

COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[On the papers]

[1]    On 18 October 2019 this Court issued a bankruptcy notice addressed to the judgment debtor in the sum of $11,164.00, that being the sum of an earlier costs award. The bankruptcy notice was served on the judgment debtor on 5 November 2019. On 6 November 2019 the judgment debtor filed and served an application to set aside the bankruptcy notice, together with supporting affidavit evidence. Thereafter, negotiations took place between the parties. On 14 November 2019 counsel for the judgment creditor filed a memorandum confirming that the parties had agreed to an order setting aside the bankruptcy notice but could not resolve costs. In that same memorandum counsel expressly sought orders in these terms:

6.The judgment creditor seeks and/or consents to the following orders:

MEMELINK v HAINES [2019] NZHC 3154 [3 December 2019]

(a)That the bankruptcy notice dated 18 October 2019, issued against the judgment debtor, be set aside;

(b)That the judgment debtor be entitled to costs and disbursements on a 2B basis, of $5,508 comprising $5,258 for the filing of the originating application to set aside the bankruptcy notice, sealing an order and filing fees of $200 and

$50;

(c)That, if the judgment debtor opposes the above costs order and/or seeks further costs, the matter of costs to be dealt with on the papers with the filing of sequential costs memoranda no longer than 5 pages on dates as directed by the Court;

(d)That the matter be removed from the bankruptcy list on

[19] November 2019.

[2]    In reliance on that memorandum I directed that the call of this matter in the Associate Judge’s list on 19 November 2019 be vacated and that the parties file and serve sequential memoranda in relation to costs. I note that neither counsel was able to do so within the five page limit. Such limits are imposed for a purpose. I considered declining to read beyond the fifth page of either memorandum. In the end I concluded that as neither counsel had exceeded the page limit by a large margin, I would read both memoranda in their entirety.

[3]    Having expressly consented to a costs order on a 2B basis on behalf of the judgment creditor, it is difficult to see how counsel for the judgment creditor can now contend for a lesser order.

[4]    For his part, counsel for the judgment debtor contends for costs on a 2B basis but with an uplift of 50 per cent. The basis for this appears to relate primarily to the circumstances in which the original judgment was sealed. It is said that that was done by way of “covert action”. Various other criticisms are levelled at those acting for the judgment creditor.

[5]    I am not prepared to embark upon a minute analysis of the conduct of this litigation, in which it appears to me that both parties may be vulnerable to criticism.

[6]    In my view, the correct approach in this case is to award costs on a 2B basis to the judgment debtor. I accept Mr McDougall’s calculation of these at $5,508 plus

disbursements of $250. I see no compelling argument for an uplift as sought on behalf of the judgment debtor.

[7]    I do however remind counsel for the judgment debtor of the importance of     r 14.2(1)(f) which provides that a party may not recover costs that exceed the amount of his, her or its actual costs. In making the award I have I am relying on an implied assurance by the judgment debtor’s solicitors and counsel that the judgment debtor’s actual costs equal or exceed costs calculated on a 2B basis.

Associate Judge Johnston

Solicitors:

Holland Beckett, Tauranga for the judgment creditor J D Dallas Law, Wellington for judgment debtor