Sandfield Associates Limited v Monnery

[2021] NZHC 2908

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-505

[2021] NZHC 2908

IN THE MATTER OF

the liquidation of Convendium Limited

BETWEEN

SANDFIELD ASSOCIATES LIMITED
First Plaintiff

CONVENDIUM LIMITED (in liquidation) Second Plaintiff

AND

PAUL MARK MONNERY, JULIE ANN MONNERY and DAVID GRIFFITHS

Defendants

Cont/…

Hearing:

On the papers

Counsel:

CR Carruthers QC for Applicants/Defendants/ Judgment Debtors (Monnerys)

DJ Chisholm QC and JD Ryan for Respondents/Plaintiffs/ Judgment Creditor (Convendium)

Judgment:

29 October 2021

COSTS JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 29 October 2021 at 3pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors/Counsel:

Oakley Moran, Wellington Claymore Partners, Auckland

CR Carruthers QC, Auckland DJ Chisholm QC, Auckland

SANDFIELD ASSOCIATES LTD v MONNERY [2021] NZHC 2908 [29 October 2021]

CIV-2019-404-1906

IN THE MATTER OF           the bankruptcy of JULIE ANN

MONNERY

BETWEEN  CONVENDIUM LIMITED (in

liquidation) Judgment Creditor

AND  JULIE ANN MONNERY

Judgment Debtor

CIV-2019-404-1907

IN THE MATTER OF           the bankruptcy of PAUL MARK

MONNERY

BETWEEN  CONVENDIUM LIMITED (in

liquidation) Judgment Creditor

AND  PAUL MARK MONNERY

Judgment Debtor

Introduction

[1]    Applications were made by Mr Paul and Mrs Julie Monnery in two proceedings:

(a)for a stay of execution of a summary judgment entered against them in favour of Convendium Ltd (“Convendium”) pending the final determination of proceedings brought in the Wellington High Court by the Monnerys, CIV-2018-485-482; and

(b)for halts of bankruptcy proceedings brought against each of Mr and Mrs Monnery, CIV-2019-404-1906 and CIV-2019-404-1907, also pending determination of the Wellington proceedings, CIV-2018-485-482.

[2]    I granted the applications and held that the Monnerys were entitled to costs having succeeded in their applications.1

[3]    I asked the parties to confer but directed that memoranda could be filed if costs were unable to be agreed. The parties were unable to agree and so memoranda have now been filed.

[4]    The memorandum filed on behalf of the Monnerys seeks costs on a 2B basis in the amount of $8,126 plus disbursements of $1,637 including filing fees, airfares for counsel for the hearing between Wellington and Auckland and taxi fares.

[5]    The memorandum filed in response on behalf of Convendium opposes the costs sought and seeks a recall of my judgment in respect of the costs award on the basis that Convendium had not been given an opportunity to be heard on costs and the Monnerys had been granted an indulgence. In the circumstances, it is submitted that either costs ought to be awarded in favour of Convendium or no order for costs ought to be made.

1      Sandfield Associates Ltd v Monnery [2020] NZHC 1003 at [109]–[110].

Costs principles

[6]    Rule 14.1 of the High Court Rules 2016 provides that costs are a matter of discretion with the overall objective being 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]    Rule 14.2(1)(a) provides that generally a party who fails with respect to an interlocutory application should pay costs to the party who succeeds.

[8]Rule 14.8 provides:

Costs on interlocutory applications

(1)Costs on an opposed interlocutory application, unless there are special reasons to the contrary,—

(a)must be fixed in accordance with these rules when the application is determined; and

(b)become payable when they are fixed.

(2)Despite subclause (1), the court may reverse, discharge, or vary an order for costs on an interlocutory application if satisfied subsequently that the original order should not have been made.

(3)This rule does not apply to an application for summary judgment.

Reconsideration of costs

[9]    Pursuant to r 14.8(2) as set out above, I am able to reconsider my costs award and vary it if necessary. I do so on the basis of the memoranda filed as both memoranda set out their respective parties’ positions on costs and it is not in either party’s interest to require further submissions to be filed given the amount in issue.

[10]   The starting position is that generally the party that fails in respect of an application ought to pay costs to the party that succeeds.

[11]   I accept however, as submitted on behalf of Convendium, that by granting the applications made by the Monnerys I was granting an indulgence. Although doing so, I record that Convendium risked a costs award being made against it when deciding to oppose the applications.

[12]   In the balancing exercise that I undertook in respect of both applications, there were factors for and against a stay. In the end, the factors in favour of the stay outweighed those against but that does not detract from the fact that summary judgment was granted against the Monnerys in the amount of $441,042.70 (excluding accruing interest) together with costs in both the High Court (in the sum of $17,819.39) and the Court of Appeal (in the sum of $5,743.13).

[13]   The fact that there are costs awards outstanding against the Monnerys in favour of Convendium which are stayed as a result of my decision is a relevant factor in determining where the interests of justice lie.

[14]   Counsel for the Monnerys, in addition to seeking costs on a 2B basis, seeks a further order requiring payment and disallowing set-off.

[15]   Counsel for Convendium in response submits there is clearly mutuality between the amounts owed by the Monnerys to Convendium and any costs consequences resulting from these applications and that Convendium is entitled to a set-off. Convendium’s memorandum confirms that any enforcement by the Monnerys would be opposed on that basis or on the basis that Convendium has a cross-demand.

[16]   It is further submitted for Convendium that nothing would be gained by the Monnerys in seeking to enforce a costs award against Convendium as it is in liquidation. The Monnerys will simply be unsecured creditors in the liquidation.

[17]   In my view it would not be appropriate to make orders in respect of set-off without hearing further from the parties. As I said above, with the likely size of any costs award however it is not in anyone’s interests to require further submissions at this stage.

[18]   In all of the circumstances I conclude that it is in the interests of justice for the costs award to be varied and costs to lie where they fall.

Result

[19]   I vary the costs order made at [110] of my judgment dated 6 May 20212 and replace it with an order that costs on the successful applications brought by the Monnerys to stay the execution of the summary judgment and halt the two sets of bankruptcy proceedings are to lie where they fall.

Associate Judge Sussock

2      Sandfield Associates Ltd v Monnery, above n 1.