Sharrock v Wedd

[2018] NZHC 661

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2016-441-107

[2018] NZHC 661

UNDER

the Companies Act 1993

BETWEEN

GERALD ERRINGTON SHARROCK

Plaintiff

AND

STEPHEN CHARLES WEDD

First Defendant

AND

JOHN BRIAN KIPPING

Second Defendant

AND

BRENTON JOHN HUNT

Third Defendant

AND

AFFORDABLE RESIDENTIAL LIMITED

Fourth Defendant

AND

REGISTRAR OF COMPANIES

Fifth Defendant

Hearing:

On the papers

Counsel:

R B Hucker for the Plaintiff

First and Second Defendants in Person

Judgment:

12 April 2018

COSTS JUDGMENT (2) OF ASSOCIATE JUDGE SMITH

This judgment was delivered by Associate Judge Smith On 12 April 2018 at 10.15 am at Auckland, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

SHARROCK v WEDD [2018] NZHC 661 [12 April 2018]

[1]                 On 5 April 2018, I gave judgment awarding costs to the plaintiff against the second defendant, following the entry of summary judgment for the plaintiff on     26 July 2017.

[2]                 The plaintiff also sought costs against the first defendant. The first defendant had been adjudicated bankrupt after the summary judgment hearing but before delivery of the reserved judgment.

[3]                 In my costs judgment dated 5 April 2018, I adjourned the application for costs against the first defendant, to allow the Official Assignee to file a memorandum indicating whether there was any objection to an order being made under s 76(2) of the Insolvency Act 2006 (the Act) allowing the plaintiff’s proceeding to be continued against Mr Wedd for the purposes of costs being awarded against him.

[4]Section 76 of the Act provides:

76       Effect of adjudication on court proceedings

(1)On adjudication, all proceedings to recover any debt provable in the bankruptcy are halted.

(2)However, on the application by any creditor or other person interested in the bankruptcy, the court may allow proceedings that had already begun before the date of adjudication to continue on the terms and conditions that the court thinks appropriate.

[5]                 I noted in my judgment of 5 April 2018 that there might conceivably be reasons concerned with Mr Wedd’s bankrupt estate for declining to make an order under s 76(2), leaving the plaintiff’s costs claim to be dealt with by the Official Assignee on receipt of an appropriate proof of debt form from the plaintiff.

[6]                 The Official Assignee has now filed a short memorandum, advising that she has no objection to the order sought by the plaintiff under s 76(2).

[7]                 I am satisfied that it is appropriate to make the order sought under s 76(2). The opposition to the plaintiff’s summary judgment application was run by the first and second defendants effectively together (for example, the first defendant adopted the second defendant’s submissions at the hearing), and a costs award has now been made

against the second defendant. In those circumstances it is appropriate for the Court to fix the costs payable by the first defendant, rather than leaving the costs claim to be addressed separately by the  Official Assignee.  Accordingly, I make an order under s 76(2) of the Act allowing the proceeding to continue for the purpose of the Court giving judgment on the plaintiff’s claim for costs and disbursements against the first defendant.

[8]                 I do not think the factors that justified a modest increase above scale in the costs award made against the second defendant apply in respect of the first defendant. The main justification for the 10 percent increase above 2B costs awarded against the second defendant was that the second defendant had made the conduct of the proceeding difficult, inter alia, by refusing to make arrangements for service of documents, threatening to take steps to issue a trespass notice against process servers, and eventually requiring an application for substituted service to be made. Those considerations were personal to the second defendant, and do not apply in respect of the first defendant. Secondly, the first defendant was in the end a relatively minor player in the proceeding. His documents generally mirrored those filed by the second defendant, and he adopted the second defendant’s submissions at the hearing.

[9]                 I accordingly award costs to the plaintiff against the first defendant on a 2B basis, with no uplift. Those costs are calculated in accordance with the tables set out at paragraphs [7] and [9] of my judgment of 5 April 2018, less the costs and disbursements associated with the substituted service (which related only to the second defendant). Costs are accordingly awarded to the plaintiff against the first defendant in the sum of $16,056 (costs) and $2,507.75 (disbursements). As between themselves, the first and second defendants are to be jointly and severally liable for those sums.

Associate Judge Smith

Solicitors: Hucker and Associates, Auckland