Norris Ward McKinnon Limited v Halse

[2025] NZHC 2435

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2023-419-317

[2025] NZHC 2435

IN THE MATTER

AND

of the Insolvency Act 2006

IN THE MATTER

of the Bankruptcy of ALLAN GEOFFREY HALSE

BETWEEN

NORRIS WARD MCKINNON LIMITED, SAMUEL WALLACE HOOD and ERIN REBEKAH ANDERSON

Substituted Judgment Creditors

AND

ALLAN GEOFFREY HALSE

Judgment Debtor

Hearing:	On the papers
Appearances:	V Wethey for the Substituted Judgment Creditors AG Halse, Judgment Debtor in Person
Judgment:	29 August 2025

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 29 August 2025 pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Fee Langstone, Auckland

NORRIS WARD MCKINNON LTD v HALSE [2025] NZHC 2435 [29 August 2025]

Introduction

[1]    In my judgment of 13 March 2025, I made an order for adjudication of the judgment debtor, Mr Halse, in bankruptcy but on the basis that the order was to lie in Court to allow payment by Mr Halse by 19 March 2025 (First Judgment).1 If the amount claimed was not paid, Mr Halse was to be adjudicated bankrupt. The full amount was paid and so I confirmed by judgment dated 18 March 2025 that the bankruptcy order was not to take effect (Second Judgment).2 Costs submissions have been filed on behalf of the substituted judgment creditors and in response by Mr Halse, so I now determine costs.

Relevant costs principles

[2]    The starting point in any costs decision is that costs are at the discretion of the Court.3 Although the discretion is wide, it is not unfettered. Rule 14.2 of the High Court Rules 2016 sets out the general principles and includes:

(a)the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:

(b)an award of costs should reflect the complexity and significance of the proceeding:

…

(g)so far as possible the determination of costs should be predictable and expeditious.

[3]    Rules 14.3 to 14.5 provide for the categorisation of proceedings, appropriate daily recovery rate and the determination of a reasonable time for each step. These proceedings have previously been categorised as Category 2 but r 14.3(2) permits re-categorisation if there are special reasons.

[4]    Mr Halse points to the conduct of the parties as justifying costs lying where they fall or at least being reduced in accordance with r 14.7 of the High Court Rules 2016. Rule 14.7 relevantly provides:

1      Norris Ward McKinnon Limited v Halse [2025] NZHC 490 (First Judgment).

2      Norris Ward McKinnon Limited v Halse [2025] NZHC 569 (Second Judgment).

3      High Court Rules 2016, r 14.1.

Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—

(f)if the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in it by –

…

(ii) taking or pursuing an unnecessary step or  an argument  that lacks merit or;

…

(v) failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or

(g)some other reason exists, which justifies the court refusing costs or reducing costs, despite the principle that the term determination of costs should be predictable and expeditious.

[5]    Mr Halse further refers to s 68 of the Employment Court Regulations 2000, which provides that in exercising the Court's discretion under that Act to make costs orders, the Court may have regard to any conduct of the parties tending to increase or contain costs.

Costs claimed

[6]    In the First Judgment I set out a schedule of the 2B costs that I considered on a preliminary basis to be appropriately claimed. This schedule was based on the schedule of costs sought by the judgment creditors as handed up at the hearing of their bankruptcy application, but with a number of adjustments as discussed in the First Judgment.4

[7]The schedule of costs set out in the judgment was as follows:5

Schedule of 2B Costs – Daily rate of $2,390
Item	Particulars	Time Allocation	2B Costs ($)
46	Appearance at hearing of 26 November 2024	0.4	$478.00
45	Filing application for adjudication by creditor	0.6	$1,434.00

4      First Judgment at [51] and [52].

5 First Judgment at [54].

23	Filing opposition to interlocutory application	0.2	$478.00
24	Preparation of written submissions	1.5	$3,585.00
26	Appearance at hearing of 12 March 2025	0.25	$597.50
Subtotal			$6,572.50
Schedule of disbursements and filing fee
Item	Particulars		Amount ($)
48	Filing fee for creditors application for adjudication order		$565.22
14	Filing fee for Notice of Opposition		$124.35
50	Sealing fee for bankruptcy order (if bankruptcy order made)		$56.52
Subtotal			$746.09
Preliminary Total			$7318.59

[8]    Before filing costs submissions, Mr Halse sought evidence that the costs claimed by the substituted judgment creditors exceeded the costs incurred and that the costs were not being paid by the substituted judgment creditors’ insurers.

[9]    By memorandum dated 4 April 2025, counsel for the substituted judgment creditors confirmed the scale costs claimed do not exceed the costs incurred and annexed a redacted invoice as evidence in support of this.

[10]   In response to the confirmation sought by Mr Halse that legal fees were not being paid by the substituted judgment creditors’ insurers, counsel submits that is irrelevant.

[11]   Mr Halse filed submissions in response seeking orders that costs lie where they fall on the basis that r 14.2(1)(f) of the High Court Rules provides that an award of costs should not “exceed the costs incurred by the party claiming costs”. Mr Halse contends that the substituted judgment creditors have redacted the invoice’s recipient to conceal that it is the insurer who incurred the costs rather than the substituted judgment creditors.

[12]   The principle set out in r 14.2(1)(f) is not intended to prevent parties who are insured from recovering costs. Otherwise, whenever an insurer, or in fact any other party, pays the legal fees of a party then they would not be entitled to a costs award. I do not interpret the principle in r 14.2(f) as requiring that. Therefore, even if the insurer

of the substituted judgment creditors paid the invoice, that does not prevent a costs award being made in the judgment creditors’ favour.

[13]   In addition, Mr Halse refers to the conduct of the party as being relevant and submits that the Court ought to take into account reg 68 of the Employment Court Regulations 2000 when exercising its discretion to award costs. This regulation provides that in exercising the Employment Court’s discretion to make costs awards under that Act, the Employment Court may have regard to any conduct of the parties tending to increase or contain costs and so forth. This is similar to rr 14.6 and 14.7 of the HCR.

[14]   Mr Halse submits that the substituted judgment creditors did not take any steps to recover the debt initially other than send a letter of demand in December 2023. The next attempt to obtain payment was through the substituted judgment creditors making the application to become substituted judgment creditors. Instead, Mr Halse submits the judgment creditors could have approached him and arranged “time payment” which Mr Halse says he attempted to do with the original judgment creditor. Mr Halse submits this has resulted in the substituted judgment creditors taking costly steps increasing Mr Halse’s potential liability from the underlying debt of $21,688.50 to

$27,408.18 if the costs award set out on a preliminary basis in the judgment is awarded.

[15]   I do not accept that the substituted judgment creditors have taken steps that tend to increase or fail to contain costs. They served a letter of demand on Mr Halse, as Mr Halse acknowledges, without response. When orders for substitution were made conditional on filing of a new application by the substituted judgment creditors, as required by s 44(2) of the Insolvency Act 2006, Mr Halse could have arranged for payment of the debt before the filing of that new application to avoid incurring the costs associated with filing those documents, but he did not.

[16]   In these circumstances, I do not consider it is appropriate to reduce the costs awarded because of the conduct of the substituted judgment creditors.

[17]   Mr Halse does not otherwise challenge the appropriateness of any of the items included in the schedule set out in the First Judgment and reproduced above. On this basis, I make orders as set out in the schedule, except not including the sealing fee. The substituted judgment creditors accept this is no longer appropriate in light of the judgment debt being paid.

Result

[18]   The judgment debtor is to pay costs and disbursements on a 2B basis to the substituted judgment creditors of $6,572.50 plus disbursements of $689.57 for a total of $7,262.07.

Associate Judge Sussock