Memelink v Official Assignee

[2020] NZHC 839

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2018-485-686

[2020] NZHC 839

UNDER

the Insolvency Act 2006

AND

IN THE MATTER OF

an originating application for annulment

BETWEEN

HARRY MEMELINK

Applicant

AND

OFFICIAL ASSIGNEE

Respondent

Hearing:

30 April 2020 (On the papers)

Counsel:

Mr Memelink in-person Plaintiff Mr Chisnall for Respondent

Mr Dewer for supporting creditors (Body Corporate 7378945, Body Corporate 81012, Jefffrey Raymond Fawcett and Gambitsis Crombie Limited)

Judgment:

30 April 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

This judgment was delivered by me on 30 April 2020 at 12.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 30 April 2020

MEMELINK v OFFICIAL ASSIGNEE [2020] NZHC 839 [30 April 2020]

[1]                 Mr Dewer, counsel for the abovenamed creditors, has applied for costs following the dismissal of Mr Memelink’s originating application to have his bankruptcy annulled. In a judgment dated 14 June 2019, that application was dismissed.1

[2]                 I apologise to the parties for the delay in this costs decision being released. Mr Memelink had sought, and was granted, a brief extension of time to file his submissions opposing costs. Those submissions were not referred to me.

[3]                 Mr Dewer  also  seeks  costs  in   respect   of  a  judgment   of  Osborne  J,   29 January 2019, in which his Honour granted an application made by Mr Dewer’s clients (the supporting creditors) and the Official Assignee to rescind an order staying the advertising of Mr Memelink’s bankruptcy which was made on a without notice basis.2

[4]                 In respect of both costs applications, Mr Dewer submits that costs should follow the event and he proposes costs on a 2B basis. An uplift is sought which I will deal with separately.

[5]                 Mr Memelink has filed submissions in respect of the costs applications which do not directly engage with the principles that govern costs, other than an assertion that the costs claimed are excessive.

[6]                 I see no reason to depart from the general principle that costs should follow the event in respect of each application. The parties Mr Dewer represents were successful in setting aside the stay obtained by Mr Memelink on a without notice basis and successfully resisted Mr Memelink’s application for annulment.   As I have said,   Mr Memelink does not address the primary principle that the unsuccessful party should pay costs.3

1      Memelink v Official Assignee [2019] NZHC 1357.

2      Collins & May Law v Memelink [2019] NZHC 36.

3      High Court Rules 2016, r 14.2(1).

[7]                 In his costs  memorandum,  Mr Memelink  accuses  Mr Dewer  of  acting  in a conflict of interest situation, of acting without the authority of one or more of the body corporates’ he represented and asserts he should not have acted.

[8]                 Similar allegations were made by Mr Memelink in the course of the hearing of his application for annulment and I did not consider that those matters, even if they were made out, (and I do not suggest that they were) would not have impacted on the dismissal of his application. I find the creditors for whom Mr Dewer acts are entitled to costs on each application, Mr Memelink having been the unsuccessful party in each matter.

Quantum

[9]                 Costs are sought on a 2B basis. I agree that 2B is the appropriate classification for each proceeding. Mr Dewer in his submissions says that five notices of opposition were filed; one on behalf of each of the creditors. Notices of opposition for four creditors were filed on 5 October 2018, and the fifth creditor’s notice of opposition was dated 4 October 2018. The notices of opposition filed on 5 October were substantially copies of the 4 October notice of opposition.

[10]              Mr Dewer has suggested an allowance of three notices of opposition and supporting affidavits for three creditors.

[11]              Given the notices of opposition were effectively pro forma and practically duplicates, I consider an allowance for two notices of oppositions and affidavits is appropriate. Save for that amendment, Mr Dewer’s 2B schedule of costs is approved. With the adjustment I have made, the allowance is:

9.5 days          @        $2,230 per day           =       $21,185 I confirm that I have allowed a half day for the application for costs.

[12]              As to the application to rescind the stay, the 2B costs application in that regard is unobjectionable and are approved being $4,683.

[13]              Mr Memelink in his costs submissions, says the costs claimed are excessive. He submits that the applicants spent more time than was necessary in preparation for the hearing. The difficulty with that submission is the claim made by the creditors  for preparation is as specified in the scale contained in the High Court Rules 2016. Mr Memelink says he does not believe Mr Dewer has spent the time stated, and again, the times claimed are set by the scale and not by reference to actual time spent.

[14]              Mr Dewer will be well aware that a claim for scale costs cannot exceed actual costs. Implicit in Mr Dewer seeking costs is confirmation from him that his actual costs are higher than scale. I note no claim is made for second counsel who appeared with Mr Dewer. I have no reason not to accept Mr Dewer’s implicit assurance that his actual costs do not exceed scale.

[15]              There is a strong expectation that the Court will apply the costs scale set out in the High Court Rules unless there is some reason to the contrary.4 Nothing raised by Mr Memelink represents a ground for departing from that expectation.

Uplift

[16]              Mr Dewer sought an uplift given the work required in preparing the affidavits in opposition to the annulment application. I am not prepared to order an uplift of costs in this case.

[17]              The scale allowance is intended to be a reasonable contribution towards the costs of affidavit preparation. I accept that I have only allowed for two notices of opposition and affidavits, but again that is because the notices of oppositions themselves were essentially duplicates.

4      Andrew Beck (ed) McGechan on Procedure (online looseleaf ed, Thomson Reuters) HR14.1.02(1)(c).

[18]              Finally, Mr Memelink submitted that the fixing of costs should await the outcome of an appeal he has made in respect of his original bankruptcy hearing. That issue has been overtaken by the delay in getting this judgment delivered.

Associate Judge Lester