Shephard v Rabson

[2014] NZHC 1160

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-36 [2014] NZHC 1160

BETWEEN

IAIN BRUCE SHEPHARD AND

CHRISTINE MARGARET DUNPHY Plaintiffs

AND

MALCOLM EDWARD RABSON First Defendant

MALCOLM EDWARD RABSON AND RICHARD JOHN CRESER

Second Defendants

WAYNE SEYMOUR CHAPMAN Third Defendant

Hearing:	On the paper
Judgment:	28 May 2014

JUDGMENT OF WILLIAMS J

[1]      The plaintiffs are Mr Shephard and Ms Dunphy, insolvency practitioners acting  as  liquidators  of Vision  Limited  (in  liq)  and  Double  Zero  Holdings  Ltd (in liq).  The first defendant is Mr Rabson, as trustee of the Malcolm Rabson Family Trust (MRFT).  The second defendants are Mr Rabson and Mr Creser as trustees of MRFT.   The third defendant, Mr Chapman, is the court appointed trustee of the Gallagher Rabson Family Trust (GRFT).

[2]      On 11 December 2013, the plaintiffs filed a statement of claim against the first,  second  and  third  defendants.    The  details  of  the  claim  are  as  follows. Mr Rabson is a bankrupt.  The MRFT owes Mr Rabson a debt.  The plaintiffs have taken an assignment of Mr Rabson’s rights against the MRFT from the Official

Assignee. The GRFT owes a debt to the MRFT. The GRFT’s sole remaining asset is

SHEPHARD & ANOR v MALCOLM EDWARD RABSON & ORS [2014] NZHC 1160 [28 May 2014]

a  fund  which,  minus  Mr  Chapman’s  trustee  costs,  is  to  be  paid  to  the  second

defendants in partial satisfaction of that debt.

[3]      The plaintiffs seek an order that Mr Chapman pay the fund directly to the plaintiffs.

[4]      The statement of claim was accompanied by an application for summary judgment.  On 1 April 2014, the second defendants filed their statement of defence, which was accompanied by an application for summary judgment.  On 3 April, the third defendant and the plaintiffs filed a joint memorandum withdrawing its application for summary judgment and asking that the costs of that application be reserved.

[5]      In a minute issued on 14 May 2014, Associate Judge Smith recorded that counsel for the plaintiffs acknowledged the second defendants are entitled to have their summary judgment application heard.  His Honour made directions for filing and allocated a one day fixture for the hearing of the application on 17 July 2014.

[6]      Regulation 9 of the High Court Fees Regulations 2013 requires an applicant in respect of a specified proceeding (the definition of which includes an interlocutory application) to pay the scheduling fee and the estimated hearing fee for the specified proceeding.   Accordingly, the Registrar requested payment from the second defendants.  The second defendants have declined to make payment, submitting that because they are involuntarily caught in this proceeding and should not be required to pay to defend it.   They argue that, in effect, they remain the defendants in the proceeding even though this is their application.

[7]      An application for summary judgment is an interlocutory application.   It requires a separate hearing from the substantive proceeding, which would otherwise proceed if not for the second defendants’ application.  There is no scheduling fee for an interlocutory application.1   There is however a hearing fee, as prescribed by r 7 of

the High Court Fees Regulations 2013.  Regulation 7 provides:

1      High Court Fees Regulations 2013, fees table, item 17.

7        Application for fees for items 18 to 20 (hearings)

The  fees  for  items  18  to  20  apply  in  respect  of  the  hearing  of  every application or proceeding, including—

…

(c)       the   hearing   of   every   interlocutory   application   (including   an interlocutory application for summary judgment in respect of which a notice of opposition and an affidavit in answer have been filed).

[8]      Items 18 and 19 do not apply to the second defendants’ application.   The second defendants’ application for summary judgment is therefore captured by the wording in item 20, which prescribes the cost of hearing any other application or proceeding.

[9]      Regulation  9  is  clear  that  the  applicant  in  respect  of  an  interlocutory application  must  pay  the  scheduling  fee  and  the  estimated  hearing  fee.    I  am therefore satisfied that the Registrar was correct to require payment from the second defendants.  If the defendants do not wish to pay, they must allow the plaintiffs to

take the next step.

Williams J