Smartpay Limited v Kumar - [2024] NZHC 3578

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-001015

[2024] NZHC 3578

BETWEEN
SMARTPAY LIMITED

Judgment Creditor

AND

MANAS DHARMENDRA KUMAR

Judgment Debtor

Hearing: On the papers

Counsel:

D Chisholm KC for the Judgment Creditor Judgment Debtor in Person

Judgment:

28 November 2024

COSTS JUDGMENT OF GARDINER J

This judgment was delivered by me on 28 November 2024 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date.......................................

Solicitors:

Claymore Partners Ltd, Auckland D Chisholm KC, Auckland

SMARTPAY LTD v KUMAR [2024] NZHC 3578 [28 November 2024]

Introduction

[1] In a judgment delivered on 30 July 2024, I dismissed an application by Smartpay Ltd (Smartpay) for an order adjudicating Mr Kumar bankrupt.1 I concluded that Smartpay had not properly served Mr Kumar with the bankruptcy notice, and therefore Mr Kumar had not committed an act of bankruptcy. I ordered Smartpay to pay Mr Kumar, who was self-represented, his reasonable disbursements.

[2] Mr Kumar seeks an order that he is paid disbursements of $20,707.43 comprising:

(a)a filing fee of $65;

(b)printing costs of $342.86;

(c)the cost of having affidavits attested of $138.78;

(d)subscription fees for the LexisNexis database of $2,925.60;

(e)subscription fees for document collation and analysis software of
$1,112.22;

(f)subscription fees for a law research tool of $1,741.81;

(g)legal consultant fees of $12,244.90; and

(h)subscription fees for an online legal advice chat called “JustAnswer.com” of $2,136.26.

[3] Smartpay opposes such an order, saying that almost none of the expenses claimed by Mr Kumar fall within the definition of a “disbursement” under the High Court Rules 2016, and furthermore, Mr Kumar has failed to provide any invoices to support the expenses claimed. Smartpay seeks that no order be made other than

1 Smartpay Ltd v Kumar [2024] NZHC 2088.

reimbursement of Mr Kumar’s filing fee of $65; and that such amount be set off against his judgment indebtedness to Smartpay.2

Legal principles

[4] There is no dispute that litigants in person may receive an award of reasonable disbursements at the discretion of the Court,3 including any sums paid to a solicitor for helping them to prepare their case.4

[5]Relevantly, r 14.12 of the High Court Rules provides:

(1)In this rule,—

disbursement, in relation to a proceeding,—

(a)means an expense paid or incurred for the purposes of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor’s bill of costs; and

(b)includes—

(i)fees of court for the proceeding:

(ii)expenses of serving documents for the purposes of the proceeding:

(iii)expenses of photocopying documents required by these rules or by a direction of the court:

(iv)expenses of conducting a conference by telephone or video link; but

(c)does not include counsel’s fee.

(2)A disbursement must, if claimed and verified, be included in the costs awarded for a proceeding to the extent that it is—

(a)of a class that is either—

(i)approved by the court for the purposes of the proceeding;…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Smartpay Limited v Kumar

Details

AGLC: Smartpay Limited v Kumar [2024] NZHC 3578
Case: [2024] NZHC 3578
Decision Date: 28 November 2024

CaseChat Overview and Summary

In Smartpay Limited v Kumar, the High Court of New Zealand was asked to determine what, if any, costs Mr Kumar was entitled to recover from Smartpay Limited, the judgment creditor, for his representation in a bankruptcy proceeding. The case arose from an earlier decision in which the Court dismissed Smartpay's application to adjudge Mr Kumar bankrupt, finding that the bankruptcy notice had not been properly served on Mr Kumar. Following this dismissal, Mr Kumar claimed reimbursement of certain expenses he incurred in connection with the proceeding.

The primary legal issue before the Court was whether the expenses claimed by Mr Kumar qualified as "disbursements" under the High Court Rules 2016. The Court was also required to determine if these expenses were reasonable and necessary for the conduct of the proceeding. Smartpay argued that most of the claimed expenses did not fit within the definition of a disbursement and, even if they did, they were not reasonable or necessary. They further contended that Mr Kumar had not provided invoices to substantiate the claimed expenses.

The Court examined each of the claimed expenses in detail. It found that Mr Kumar was entitled to reimbursement of the filing fee and document printing costs, provided he could verify the latter and demonstrate they were incurred pursuant to a court direction. However, the Court ruled that expenses such as subscription fees for legal research databases, document collation and analysis software, and online legal advice services were not recoverable as they did not meet the definition of a disbursement and were disproportionate. The Court also declined to consider setting off the costs against Mr Kumar's existing judgment debt, as the relevant costs order had already been sealed.

The Court ordered Smartpay to pay Mr Kumar the filing fee of $65, document printing costs of $342.86 (subject to verification), and affidavit attestation costs of $138.78 (also subject to verification). The Court declined to award any other claimed expenses, finding them to be either not recoverable as disbursements or disproportionate.

Orders