NZ ECE Branding Limited v MA

[2022] NZHC 754

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1893

[2022] NZHC 754

IN THE MATTER AND

IN THE MATTER

of the Insolvency Act 2005

of the bankruptcy of TINGZHEN MA

BETWEEN

NZ ECE BRANDING LIMITED

Judgment Creditor

AND

TINGZHEN MA

Judgment Debtor

Cont/…

Hearing:	On the papers
Appearances:	H McDermott for the Judgment Creditor No appearance for the Judgment Debtors
Judgment:	12 April 2022
Reissued:	2 May 2022

COSTS JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 12 April 2022 at 4pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Righteous Law, Auckland

Copy to:
Tingzhen Ma and Tingyu Ma

NZ ECE BRANDING LTD v MA [2022] NZHC 754 [12 April 2022]

CIV-2020-404-1894

IN THE MATTER

of the Insolvency Act 2005

AND

IN THE MATTER

of the bankruptcy of TINGYU MA

BETWEEN

NZ ECE BRANDING LIMITED

Judgment Creditor

AND

TINGYU MA

Judgment Debtor

Introduction

[1]    The judgment debtors in each of these proceedings were adjudicated bankrupt on 3 March 2022. Counsel for the judgment creditor sought costs on a 2B basis. A draft order adjudicating the judgment debtors bankrupt attaching a schedule of 2B costs had been filed but no separate memorandum of costs. The schedule of costs attached to the draft order calculated 2B costs of $13,694 including disbursements for each of these proceedings.

[2]    I directed that a memorandum of costs was to be filed as the costs appeared to be relatively high, although I did accept that there had been a number of complicating factors. I was also concerned to ensure that the costs orders sought were not greater than actual costs and that any duplication across the two files was taken into account.

[3]    Memoranda have now been filed recording that actual costs for both matters total $22,691.80 excluding disbursements. The memoranda attach invoices and a schedule  of  the  actual  costs.    The  judgment  creditor  now  seeks  actual  costs of

$11,345.90 plus disbursements of $1,266 for a total of $12,611.90 for each proceeding.

Costs principles

[4]    Rule 14.1 of the High Court Rules 2016 provides that costs are a matter of discretion.

[5]    Rule 14.2 sets out the principles applying to the determination of costs and includes:

(a)the party who fails with respect to a proceeding should pay costs to the party who succeeds;

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

(c)costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding;

(d)an appropriate daily recovery rate should normally be two-thirds of the daily rate considered reasonable in relation to the proceeding;

(e)what is an appropriate daily recovery rate and what is a reasonable time should not depend on the skill or experience of the solicitor or counsel involved or on the time actually spent by the solicitor or counsel involved or on the costs actually incurred by the party claiming costs;

(f)an award of costs should not exceed the costs incurred by the party claiming costs;

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

[6]    The overall objective is to achieve an outcome that best meets the interests of justice in the given case in accordance with any applicable costs rules and consistent with established principles.

[7]    Costs in bankruptcy proceedings are usually awarded on a category 2 basis, band B for determining the reasonable time for each step.

Consideration of appropriate award

[8]    I have considered the memoranda filed, the 2B costs schedule attached to the judgment creditor’s memorandum and steps taken against the principles above.

[9]    Many of the documents filed in the two proceedings are identical except for the intitulement. Furthermore, there only appears to be one memorandum filed on 13 April 2021 and 20 May 2021, rather than one for each file.

[10]   Where the documents are identical other than the intitulement, I consider it is appropriate to allow only category A rather than category B for the second document. For each step claimed, the allocated time for category A is half of the allowance for category B so I have allowed 1.5 rather than 2 times the allocated amount for each of those steps.

[11]   Furthermore, the files were case managed together and so only one appearance could be claimed for each list date for both files.

[12]   I set out below an updated schedule of 2B costs adjusting the amounts for the reasons outlined above.

Calculation of scale costs for both proceedings
Item	Task	Claimable once, once and a half or twice	Allocated Days on a 2B basis	Total days on a 2B basis for both proceedings
44	Filing a serving bankruptcy notice	1.5	0.2	0.3
23	Filing an opposition to the application to set aside the bankruptcy notice 17/11/2020	1.5	0.6	0.9
11	Filing memorandum for list on 2 December 2020	1.5	0.4	0.6
12	Appearance in the list on 2 December 2020	1	0.2	0.2
11	Filing memorandum for list on 4 March 2021	1.5	0.4	0.6
11	Filing memorandum for list on 13 April 2021	1	0.4	0.4
11	Filing memorandum for list on 20 May 2021	1	0.4	0.4
12	Appearance in the list on 20 May 2021	1	0.2	0.2
45	Filing application for adjudication by creditor	1.5	0.6	0.9
11	Filing memorandum for list on 25 November 2021	1.5	0.4	0.6
22	Interlocutory application for substituted service 22 December 2021	1.5	0.6	0.9
11	Filing memorandum for list on the 3 March 2022	1.5	0.4	0.6
12	Appearance in the list on the 3 March 2022	1	0.2	0.2
29	Sealing the order	2	0.2	0.4
Total days			7.2
Total = daily rate $2,390 x 7.2			$17,208

[13]   The total scale costs calculated on a combined 2A and 2B basis for both proceedings is therefore $17,208.

[14]   Counsel for the judgment creditor does not submit in the costs memoranda filed that actual costs ought to be awarded rather than scale costs if actual costs are higher than scale costs. This is presumably because on counsel’s calculation of 2B costs, they were higher than the actual costs sought. I did raise the issue of duplication and the impact it may have on scale costs at the bankruptcy hearing and so I consider there was clearly a prospect that the calculation of scale costs by the Court may not arrive at the same result as the calculation by counsel.

[15]   Considering the principles above, there does not appear to be any basis for awarding greater than scale costs in the circumstances of this case. I therefore award scale costs, dividing the scale costs of $17,208 as calculated above into two, for a total of $8,604 for each file plus actual disbursements for each file of $1,266.

Result

[16]   I award scale costs calculated on a combined 2A and 2B basis of $8,604 plus disbursements of $1,266 to NZ ECE Branding Limited in CIV-2020-404-1893 and of

$8,604 plus disbursements of $1,266 to NZ ECE Branding Limited in CIV-2020-404- 1894.

Associate Judge Sussock