O'Connell v Gemmell Contracting Limited HC Christchurch CIV 2010-409-748

[2010] NZHC 2013

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2010-409-000748

BETWEEN  JOSEPH THOMAS O'CONNELL Debtor

ANDGEMMELL CONTRACTING LIMITED Creditor

Judgment:      3 November 2010

JUDGMENT OF ASSOCIATE JUDGE DOHERTY

as to Costs

[1]      On 18 October 2010 I made an order adjudicating the debtor bankrupt.  The order was to lie in Court pending an agreed payment of the total amount at issue between the judgment creditor and one supporting creditor, Laing Contractors Limited.  The agreement between these parties had included a provision for costs. With the expectation of full payment, costs were not sought by either the creditor or the supporting creditor.  Another supporting creditor had not reached any agreement with the debtor, and that party sought, and was awarded, costs.

[2]      The repayment arrangement did not eventuate, and the bankruptcy order took effect at 5 p.m. on 22 October 2010.  Earlier that day the judgment creditor made application for costs to be awarded by way of memorandum.  I have only now been able to deal with the matter.

[3]      I am  not  aware  of the  attitude  of  the  bankrupt  to  this  application.    My recollection of his submission when he appeared on 21 October 2010 was that he fully expected to pay for costs, and confirmed that the arrangement he had made

with the creditor and the supporting creditor included provision for such.

O'CONNELL V GEMMELL CONTRACTING LIMITED HC CHCH CIV-2010-409-000748  3 November 2010

[4]      The question exercising my mind is whether or not by the making of the order the Court is functus officio.

[5]      However, having considered the judgment of Fogarty J in Wilson v Selwyn District Council (2004) 17 PRNZ 461, I adopt his reasoning (which related to a belated   application   for   costs   following   an   appeal)   that   this   application   is supplemental to the original adjudication because:

i)The creditor’s application for an adjudication order included an application for costs.

ii)The  application  by  memorandum  was  made  prior  to  the uplifting of the adjudication order on 21 October 2010.

iii)Ordinarily the judgment creditor would have been entitled to costs.

iv)The bankrupt impliedly consented to costs by advising that the anticipated repayment arrangement included costs.

[6]      I award costs to each of the creditor and Laing Contractors Limited, on a 2B

basis together with disbursements as set by the Registrar.

Solicitors:

Buddle Findlay, Christchurch

Gallaway Cook Alan, Dunedin