SB Properties Limited (In Liq) v Holdgate & Official Assignee

[2008] NZCA 583

IN THE COURT OF APPEAL OF NEW ZEALAND

CA453/2008
[2008] NZCA 583

BETWEENSB PROPERTIES LIMITED (IN LIQUIDATION)

Appellant

ANDANDREW NICHOLAS HOLDGATE

First Respondent

ANDTHE OFFICIAL ASSIGNEE

Second Respondent

Counsel:R B Hucker for Appellant

P Rice for First Respondent
G Caro for Second Respondent

Judgment:22 December 2008 at 4.30 pm 

JUDGMENT OF ARNOLD J

AThe application to review the decision of the Registrar declining to dispense with security for costs is dismissed, but the amount of security to be provided is reduced.

BThe amount of security for costs is fixed at $4,740.00, which is to be paid on or before 4 pm on Friday 20 February 2009.

REASONS

[1]       The Registrar set security for costs in the amount of $9,480.00 on this appeal.  The appellant applied for a dispensation.  Its counsel, Mr Hucker, argued that, as the first respondent, Mr Holdgate, had been adjudicated bankrupt, the only possible recipient of a costs award in his favour was the Official Assignee.  Mr Hucker indicated that the Official Assignee agreed to a waiver being granted, and provided a letter from the Official Assignee to that effect. 

[2]       Mr Holdgate, through his counsel Mr Rice, objected, however.  Mr Rice argued that Mr Holdgate would be discharged from bankruptcy before the substantive appeal was heard.  Further, he argued that Mr Holdgate had applied to have his bankruptcy annulled.  If that application was ultimately successful, Mr Holdgate would suffer as a result of any dispensation because any surplus which he would be entitled to receive from the Official Assignee would be reduced by the amount of any unrecovered costs.  Finally, he noted that, although costs in the High Court had not been fixed, it was possible that Mr Holdgate would not be able to recover those costs, so that it would be unjust to place him at similar risk in the relation to costs on the appeal.  (Mr Rice also disputed that the appeal had been brought in time, but I do not propose to address that issue here.)

[3]       In reply, Mr Hucker noted that there could be no annulment of Mr Holdgate’s bankruptcy until after the appeal is resolved, so that all costs incurred in respect of the appeal would be incurred prior to any annulment.  Hence the Official Assignee’s position remained important.  Mr Hucker acknowledged that the appellant’s liquidators were unlikely to be in a position to meet any order for costs against the appellant in relation to the High Court hearing.  As an alternative to an order for dispensation, Mr Hucker argued that the quantum of the security required should be reduced to reflect the fact that the hearing is set down for only half a day. 

[4]       The Registrar declined to grant a dispensation because she considered that the risk that the appellant could not meet an order for costs was greater than usual.  In light of the points made by Mr Rice, I am satisfied that the Registrar was entitled to refuse dispensation. 

[5]       However, the Registrar did not deal specifically with the request to reduce the amount of security required.  Given that the Official Assignee has confirmed that he does not seek security for costs, and given also that the hearing will not exceed half a day, I consider it appropriate to reduce the amount to be paid.  Accordingly I order that security for costs be fixed at $4,740.00, which amount is to be paid on or before 4 pm on Friday 20 February 2009.

Solicitors:

Hucker and Associates, Auckland for Appellant
Hornabrook MacDonald, Auckland for Respondents
Official Assignee, Wellington