Sparks v Olliver
[2022] NZHC 633
•31 March 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2015-404-2828
[2022] NZHC 633
UNDER the Property (Relationships) Act 1976 IN THE MATTER
of s 182 of the Family Proceedings Act 1980
BETWEEN
SARAH PATRICIA SPARKS
Plaintiff
AND
GREGORY MARTIN OLLIVER
First Defendant
(Continued next page)
Hearing: On the papers Judgment:
31 March 2022
COSTS JUDGMENT (NO 2) OF DUFFY J
This judgment was delivered by me on 31 March 2022 at 4.00 pm pursuant to
Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar
SPARKS v OLLIVER COSTS (NO 2) [2022] NZHC 633 [31 March 2022]
/2
BANKHOUSE TRUST LIMITED (as
trustee of the BANKHOUSE TRUST) Second Defendant
AUCKLAND WEST LEGAL SERVICES LIMITED, BAILEY TRUSTEE
SERVICES LIMITED and THE GLOVERFAMILY TRUST LIMITED (as trustees of the GLOVER TRUST)
Third Defendant
CAPITAL INVESTMENTS TRUST
LIMITED (as trustee of the CAPITAL INVESTMENTS TRUST)
Fourth DefendantTHE BBG TRUST LIMITED (as trustee of the BBG TRUST)
Fifth Defendant
OLLIVER TRUSTEE LIMITED (as trustee of the OLLIVER FAMILY TRUST)
Sixth Defendant
THE PHOENIX TRUST LIMITED (as
trustee of the PHOENIX TRUST) Seventh Defendant
[1] This judgment should be read together with the costs judgment I delivered on 22 December 2021.1 In that judgment I found that the plaintiff, Ms Sparks, is liable to pay category 2B costs to the first defendant, Mr Olliver. I now determine the quantum of the category 2B costs for Mr Olliver.
[2] I also now determine whether Mr Olliver and the second defendant Bankhouse Trust Ltd (Bankhouse) are entitled to claim for the disbursements they each seek from Ms Sparks.
Quantum of costs
[3] Mr Olliver has now provided a costs schedule at category 2B which commences from the time the proceeding was first filed in the Family Court in September 2014 and concludes with the discontinuance in this Court in 2020.2
[4] Counsel assisting the Court, Ms McCartney QC, had earlier provided a schedule of costs based on category 2B.
[5] Ms Sparks has filed various memoranda disputing her liability for costs but has not to my knowledge filed a schedule of scale costs based on category 2B for payment to Mr Olliver. Nor do her various memoranda address the quantum of costs, which is the issue for determination.
[6] Accordingly, the costs quantification will be based on the schedules provided by Mr Olliver and Ms McCartney.
[7]Mr Olliver has helpfully divided the cost allocations into three stages to reflect:
(a) stage one proceedings in Family Court; (b) stage two when the proceeding was first transferred to this Court and Mr Olliver was legally represented; and (c) stage three, which was the final stage in this proceeding when Mr Olliver was legally represented. There was a period between stage two and three in this Court when he was self-represented and, therefore, not entitled to claim costs.
1 Sparks v Olliver Costs [2021] NZHC 3600.
2 Memorandum of counsel for first and second defendants as to costs dated 4 February 2022.
Stage one
[8] For costs in the Family Court Mr Olliver quantifies those costs at $16,969 based on a time allocation of 7.1. The schedule filed by Ms McCartney identifies a time allocation of either 5.1 or 7.1. This difference is because she considers the affidavits should not have time credited because they are part of the commencement of defence. Ms McCartney quantifies costs in the Family Court at either $11,373 or
$15,833 depending on whether the time is 5.1 or 7.1. Either way the total she advances is less than that sought by Mr Olliver.
[9] I have viewed the register of documents filed in relation to the Family Court proceedings. I can confirm the steps claimed by Mr Olliver, except his claim for commencement of defence. There is no record of him filing a notice of defence. However, he did file affidavits in opposition to the Property (Relationships) Act claim. One being a narrative affidavit the other being an affidavit of assets and liabilities. Because there is no record of a notice of defence being filed by Mr Olliver I have made no allocation for this step. Because affidavits relevant to the defence of the Property (Relationships) Act claim were filed I consider it appropriate to include allowance for those affidavits as a separate item. At the daily rate and time allocations available under the District Court Rules at the date the subject documents were filed, these costs come to $6,942 At the daily rate and time allocations available at the date the subject documents were filed, these costs come to $12,488.
[10] Accordingly Mr Olliver is awarded category 2B costs for the Family Court as they were for the period September 2014 to October 2015. This comes to $6,942.
Stage two
[11] Next there is the period between October 2015 and March 2018 when Mr Olliver was legally represented in this Court, following the proceeding being transferred from the Family Court. Mr Olliver claims total time of 3.4 which comes to $8,126.
[12]Ms McCartney identifies total time of 1.4 time which comes to $4,662.
[13] Both Mr Olliver and Ms McCartney identify a total time of 0.8 to cover preparation for the first case management conference in November 2015 and filing a memorandum for that conference. Then Ms McCartney makes allowance for 0.6 time for filing an amended pleading. Mr Olliver on the other hand seeks 2.0 time for commencing a defence to the statement of claim and 0.6 time for pleading a response to first amended claim.
[14] I am satisfied that both are correct to claim a total time of 0.8 to cover work related to the first case management conference.
[15] Regarding the different assessments for time related to pleadings I do not accept the figures by either Mr Olliver or Ms McCartney. I have considered the Court’s register of documents filed. This shows a notice of proceeding and a statement of claim was filed on 4 December 2015. This document comprises 47 paragraphs. Then on 8 December 2015 a first amended statement of claim was filed. This document comprises 86 paragraphs. I have done no further analysis of the difference between the two pleadings.
[16] Mr Olliver filed a statement of defence to the first amended statement of claim on 26 January 2016. The register shows no statement of defence being filed to the original statement of claim, which is understandable given the proximity in time between its filing and that of the first amended statement of claim.
[17] It is clear to me that the statement of defence Mr Olliver filed on 26 January 2016 was the first such document of this kind that was filed by him. Accordingly, I consider he is entitled to claim 2.0 time, that being the allowance for filing the first statement of defence.
[18] Mr Olliver then claims 0.6 time for pleading a response to the first amended statement of claim. That claim is disallowed. It is clear that as between the statement of claim and the first amended statement of claim he only ever made one response in relation to both documents.
[19] It follows that I find Mr Olliver is entitled to claim total time of 2.8 at category 2B as applicable for the period October 2015 to January 2016 which comes to $6,244.3
Stage three
[20]This time period runs from April 2020 until the present.
[21] Mr Olliver claims 0.4 ($956) for filing a memorandum for a case conference on 11 March 2020. Ms McCartney makes no allowance for this step. The Court register of documents filed shows such a memorandum was filed on 11 March 2020. Accordingly, I am satisfied Mr Olliver is entitled to claim for this step.
[22] The balance of the steps claimed by Mr Olliver is problematic. Ms McCartney disputes any step being claimable. Mr Olliver has not identified well the several steps on which he relies for these claims. Once again it is necessary to refer to the Court register of documents filed to make sense of and identify the various steps.
[23] The balance of Mr Olliver’s claims are set out below in the tabular form with which he has presented them, save with the addition of a reference column so each step claimed can be easily referred to.
Reference
Event
Time
Amount
A
4: Counterclaim
1.6
$3,824
B
22: Filing 2 x interlocutory applications.
Leave application and substantive application.
1.2
$2,868
C
22: Filing interlocutory application (x 2)
1.2
$2,868
D
11: Filing memorandum (x 18)
7.2
$17,208
E
13: Appearance at case management conference (x 2)
0.6
$1,434
F
24: Preparation of written submissions
1.5
$3,585
G
25: Preparation by applicant of bundle for hearing
0.6
$1,434
H
26: Appearance at hearing of defended application for sole or principal counsel
3
$7,170
I
27: Second counsel (if allowed by court)
1.5
$3,585
J
Total
18.4
$43, 976
3 Being $2230, the then daily rate, times 2.8.
[24] Steps A, B and C overlap. Step A refers to a counterclaim which Mr Olliver had prepared. Step B refers to filing an interlocutory application and a leave application. The Court register of documents filed shows that on 21 April 2020 Mr Olliver filed an interlocutory application dated 20 April 2020 for security for costs and other applications together with an affidavit in support and a memorandum of counsel. At the time the substantive hearing was set down to be heard on 15 June 2020. The orders sought in this application were: (a) security for costs with leave reserved to bring further such applications; (b) leave to file a counterclaim against the plaintiff and proposed counterclaim defendant, the Glover Trust No 2 Limited; (c) tailored discovery relevant to the counterclaim; (d) freezing order on the anticipated distribution of funds from CIT Holdings Limited to the counterclaim defendant; (e) appointing a barrister to act for the children of Mr Olliver and the Ms Sparks; (f) vacating the trial date of 15 June 2020; and (g) ordering the unaffirmed affidavit of Mr Olliver in support of the application be filed, read and used in the hearing of the application. Attached to this application was a draft counterclaim.
[25] The Court register of documents filed shows that on 24 April 2020 an amended interlocutory application was filed. This amended application sought the same orders as were sought in the application dated 20 April 2020 with the addition of three further orders: namely, (i) strike out of the plaintiff’s current statement of claim (on which she was due to go to trial on 15 June 2020); (ii) summary judgment for the defendants on all causes of action in the plaintiff’s current statement of claim; and (iii) costs.
[26] A minute I issued on 5 May 2020 recorded that Mr Olliver’s various interlocutory applications would be heard on an urgent basis on 3 and 4 June 2020. A joint consent memorandum was filed on 6 May 2020 proposing timetable orders for the interlocutory hearing, which were confirmed by minute dated 6 May 2020. Then on 19 May 2020 the plaintiff filed her notice of discontinuance.
[27] Mr Olliver sought to continue with his application for leave to file a counterclaim. On 21 and 22 May 2020 I issued minutes which dealt with Mr Olliver’s arguments that he could continue to pursue his proposed counterclaim against the plaintiff and counterclaim defendant in the context of this proceeding rather than bring a separate proceeding against them. The application for discovery related to the
counterclaim. The application for a freezing order on anticipated distribution of funds to the counterclaim defendant also related to the counterclaim. The application for the appointment of counsel for the children of Mr Olliver and Ms Sparks related to the counterclaim. Thus all other interlocutory applications hinged on the leave application to bring the counterclaim being successful.
[28] Put shortly, I took the view there was no live counterclaim before me that was capable of being pursued in accordance with r 5.59 of the High Court Rules because Mr Olliver had not been granted the requisite leave to bring this counterclaim.4 Matters ended there and the focus of the proceeding turned to the question of costs following the discontinuance.
[29] The question for present purposes is whether Mr Olliver is entitled to an award of costs for the time and trouble he spent in preparing the interlocutory applications to be heard on 3 and 4 June 2020 in light of the plaintiff’s discontinuance of her proceeding, which also removed the opportunity from Mr Olliver to advance his interlocutory applications.
[30] It is generally difficult if not impossible to assess the merits of a disputed claim that is discontinued before trial. In principle, the same can be said for disputed interlocutory applications that are prevented from going to hearing because of a discontinuance. Here, however, the following is clear to me. First, the proceeding was due to go to trial on 15 June 2020. Mr Olliver’s interlocutory applications were clearly predicated on the trial date being vacated. If leave had been granted to bring the counterclaim and the related interlocutory applications the trial date would have been vacated as there was insufficient time for the counterclaim to go to trial on 15 June 2020. Given the history of the proceeding the Court would have been very reluctant to adjourn the trial so that Mr Olliver could bring his counterclaim against Ms Sparks and the counterclaim defendant particularly as the counterclaim could have proceeded as a separate claim and indeed that has now occurred.5
4 See Sparks v Olliver CIV-2015-404-002828,21 May 2020 and 22 May 2020 [Minutes of Duffy J].
5 Olliver v Sparks CIV-2020-404-1890.
[31] I do not propose to traverse the explanations Mr Olliver gave for delay in bringing the counterclaim, because those explanations and the Court’s view of them may now be relevant to his separate proceeding against the Ms Sparks and the counterclaim defendant. But I do consider that in relation to this proceeding and by the time Mr Olliver had sought leave to bring the counterclaim it was too late to allow applications that would have caused the trial date to be lost. In this proceeding the parties had been given ample time to prepare for trial and to resolve their dispute. They faced difficulties that flowed from Ms Sparks being self-represented and Mr Olliver being at times self-represented, but those difficulties would always have been present irrespective of the trial date.
[32] Accordingly, in an opposed leave application Mr Olliver would have found it very difficult to persuade me to grant the leave he sought for any of the interlocutory applications. The chances of those applications being successful were therefore minimal.
[33] Second, as the proposed counterclaim is now brought as a separate proceeding against Ms Sparks and the proposed counterclaim defendant, the work and time spent on drafting the counterclaim will now to some degree have found its way into the statement of claim filed in the new proceeding.6 Accordingly, if Mr Olliver is successful in that proceeding, he will be entitled to claim costs for the drafting of the statement of claim. Similarly the particular discovery orders he sought, which are relevant to the proposed counterclaim, are likely to be relevant to the separate proceeding he now brings against Ms Sparks. It would be wrong in principle for him to receive costs in relation to the proposed counterclaim and its related steps when some of those costs may also now be claimable in the new proceeding.
[34] It follows that I am satisfied Mr Olliver is not entitled to claim costs for the interlocutory applications he prepared and filed on 20 and 24 April 2020 respectively.
[35] After the notice of discontinuance was filed, this proceeding came to an end. Mr Olliver continued to take steps, but these related to the failed attempt to pursue the interlocutory applications and his attempt to seek costs on an indemnity, increased or
6 See Olliver v Sparks [2021] NZHC 220.
category 3 basis. All of these steps were unsuccessful. Costs at category 2B was not something he addressed. Following delivery of the first judgment on costs on 22 December 2022 he needed to be given the opportunity to file a further costs schedule based on a category 2B basis.
[36] Accordingly, I find the only step in stage three for which Mr Olliver is entitled to be awarded costs is the $956 for the memorandum for the case management conference on 11 March 2020.
[37] Taken together the costs claims for the three stages of the proceeding for which costs are sought come to a grand total of $14,142.
[38] Mr Olliver also sought costs for the costs application. However, he has been substantially unsuccessful in obtaining costs at the level he sought. Accordingly, I find he is not entitled to an award of costs for bringing the costs application.
Disbursements
[39] Mr Olliver seeks disbursements of $19,372.92. Three of the disbursements are said to cover the period between March and June 2020. I shall return to these later. The balance covers dates that run from 12 June 2020 to November 2021. He also seeks a sealing fee of $50. I am not satisfied Mr Olliver is entitled to this sealing fee. There is no record on the register of documents filed recording that he filed an order for sealing. He is entitled to recover the filing fee of $110 for the statement of defence he filed in January 2016.
[40] I find he is not entitled to the disbursements for the period between 12 June 2020 and November 2021. Those disbursements were not incurred in this proceeding given it was discontinued in May 2020. The disbursements can only be related to the various exchanges of memoranda and disputes that have accompanied Mr Olliver’s attempts to obtain an award of costs against Ms Sparks. Those attempts were essentially and substantially unsuccessful. The costs award he has obtained could have been obtained for far less expense than those he incurred in making his costs application. For this reason I consider he is not entitled to claim the disbursements related to those steps.
[41] Regarding the disbursements sought for the period between March and June 2020, Mr Olliver seeks reimbursement of a LINZ search fee of $31.31. The proceeding involved properties owned by defendants associated with Mr Olliver. The search may have been necessary for his defence of the proceeding. In the circumstances I am prepared to allow this disbursement claim.
[42] Mr Olliver also seeks reimbursement of an agency fee of $46.95 and office services of $4,065.13. Nothing further is said about these disbursements. These fees are part of invoice 61203 that was issued on 12 June 2020. This invoice covers work done from 4 March 2020 until 12 June 2020. The first three pages itemises work done before 19 May 2020. Pages 4 to 16 cover work done from 19 May 2020 to 12 June 2020. Clearly the bulk of the work was done after the notice of discontinuance was filed by Ms Sparks. In such circumstances I do not accept that Mr Olliver can claim full reimbursement of the agency fee and office services fee. No explanation is provided for either fee. In the circumstances I am not prepared to order payment of these fees as a disbursement related to a step in the proceeding for which Mr Olliver is entitled to claim costs.
[43] In his earlier application for costs dated 12 June 2020 Mr Olliver sought disbursements of $426.07 for work done between August 2014 and March 2015. These disbursements were incurred during stage one when the proceeding was in the Family Court. I accept that in its initial stages various incidental expenses would have been incurred such as photocopying of documents and research. For this time frame I consider the total disbursements sought are reasonable as they represent the type of disbursement costs that could be expected to be incurred. Accordingly I find Mr Olliver is entitled to those disbursements.
[44] It follows that apart from the filing fee of $110 for the statement of defence filed in January 2016, and the LINZ search fee of $31.31 and the earlier disbursements which total $426.07. No further disbursements are ordered. Accordingly, the total sum for disbursements awarded to Mr Olliver comes to $567.38.
Disbursements claim by Bankhouse
Bankhouse’s evidence
[45] Bankhouse seeks disbursements for the preparation of financial statements for the purpose of the litigation. This work covers the period from July 2015 to March 2020 and the amount sought to be recovered is $72,965.76 exclusive of GST. There are also external accounting services for the purposes of the litigation which cover the same period. The cost of those services sought to be recovered is $121,956.52.
[46] Bankhouse relies on an affidavit of Toni Ackroyd, an accountant who contracts to Bankhouse to provide general accounting services. She has prepared an affidavit in which she describes and outlines the internal and external accounting costs incurred by Bankhouse in the course of the proceedings and she attempts to allocate as best she can a proportion of those costs that she believes can properly be attributed to the preparation of the financial statements and other expenses connected to the litigation. Had the proceeding gone to trial this information would have been relied upon by Mr Olliver to support his case that there was nothing of value to which the claims brought by Ms Sparks could attach. This view of matters was to some extent supported by the two independent reports prepared by Mr Goodall, the Court appointed adviser.7
[47] Ms Ackroyd is an accountant with 15 years’ experience. She does not work exclusively for Bankhouse and does work for other organisations including publicly listed companies. As part of the services she has provided to Bankhouse she has prepared internal accounts for all of the entities involved in this proceeding, with such accounts then being verified by external parties when required. She has occupied this role since May 2015. However, she was involved in preparing accounts for various trusts and entities that covered accounting periods as early as March 2008. She has prepared a schedule of expenses incurred by Bankhouse in the period July 2015 to March 2020 in respect of her work. She acknowledges that some of the work done at this time provided services unrelated to this proceeding. She acknowledges that her invoices do not contain any detail as to the nature of the work in respect of which the invoice was rendered. She has, therefore, provided in her affidavit evidence what she
7 See [51] herein.
describes as a highly conservative estimate as to the proportion of the invoiced amount that was charged in respect of preparing financial statements and in the case of her appearance at Court on 11 July 2017 to answer Ms Sparks’ subpoena duces tecum.
[48] Ms Ackroyd says her estimate of the accounting costs Bankhouse has incurred is highly conservative. Bankhouse is the entity that has paid for the work she has done relevant to this proceeding. She describes the preparation of the financial statements for the various defendants entities as being an immensely time consuming job and says this was mainly because financial statements had not been prepared for some of them since, in some cases, 2008. In preparing the financial statements she says she relied on bank statements, invoices and prior financial statements as the source documents along with advice from the external accountants including PWC and Crowe Horwath (later Findex). Ms Ackroyd calculates her total costs for the relevant period as being
$167,749.01 of which, after apportionment, the amount relating to this proceeding she estimates as being $72,965.76.
[49] Ms Ackroyd explains that to the extent work for which she invoiced Bankhouse was not relevant to this proceeding, it was for on-going discussions with Mr Olliver and the associated corporate entities were having with the Inland Revenue Department (IRD) and other general company management work. In this regard Ms Ackroyd acknowledges that during the litigation Bankhouse and other defendants also incurred costs in arranging for PWC to provide accounting services. Those invoices totalled about $408,000, but they were principally rendered in relation to tax related matters in the course of negotiation with the IRD. She deposes that none of those costs have been attributed to costs incurred in this proceeding.
[50] Ms Ackroyd also identifies a schedule of costs Bankhouse has incurred in respect of external accounting services provided by Findex. Findex was engaged to review the financial statements Ms Ackroyd had prepared at Mr Olliver’s request. The documents produced by Findex were then provided to Ms Sparks in the course of the litigation. The invoices from Findex come to $121,956.52.
Evidence in opposition from counsel assisting
[51] Counsel assisting filed evidence in opposition to that relied upon by Bankhouse. The opposition evidence came from Keith Goodall, chartered accountant, and Vivian Fatupaito, insolvency practitioner. Mr Goodall was appointed by the Court pursuant to s 39 of the Property (Relationships) Act 1976 to provide a report on the financial circumstances of the parties for the purpose of the Property (Relationships) Act claim and the claim under s 182 of the Family Proceedings Act 1980 (regarding nuptial trust assets) between Ms Sparks and Mr Olliver. Ms Fatupaito is one of the liquidators for CIT Holdings Ltd. This company is not a defendant in this proceeding however it is one of the corporate entities associated with Mr Olliver and Ms Sparks.
[52] Mr Olliver objected to some of the evidence contained in the affidavits of Mr Goodall and Ms Fatupaito. I acknowledge that passages of their affidavits are argumentative and speculative. This is not helpful and such statements should not form part of evidence provided by counsel assisting the Court. However, there are parts of their evidence that are relevant to the question of the disbursements claim, which I find are not objectionable.
[53] Mr Goodall’s evidence confirms that for him to provide an opinion on value he needed up to date financial information and there were significant gaps in the information that was available to him. This evidence is consistent with the general impression provided from Ms Ackroyd’s evidence, both when she appeared before me in July 2017 and in her affidavit evidence.
[54] Mr Goodall observes that the IRD was involved in the affairs of Mr Olliver and the corporate entities associated with him and that work had to be done to prepare financial accounts for IRD. This is also consistent with Ms Ackroyd’s evidence.
[55] Mr Goodall opines that updated financial statements should have been prepared for the corporate entities, including Bankhouse and its corporate trustee to meet statutory obligations owed under the Companies Act 1993 and tax legislation. This leads Mr Goodall to surmise that all Ms Ackroyd needed to do regarding providing financial information for the proceedings was to access this information. He also adds the comment that from his experience in relationship property cases
parties are required to disclose/discover financial information at the time they file their original affidavit of assets and liabilities. These last two statements are examples where Mr Goodall’s evidence strays into the area of argument.
[56] Ms Fatupaito has provided an affidavit that addresses matters beyond identifying whether the Bankhouse claim for disbursements is reasonable or not. I have put those matters to the side. However, in one part of the affidavit Ms Fatupaito confirms that for CIT Holdings Ltd, the associated corporate entity for which she was a joint liquidator, limited financial information was available. She also deposes that without accurate and complete company records and information she has found it an “interminable and laborious task to determine the historical financial position of the company” and to “verify what other recoveries may be available to the liquidators and substantiate creditor claims.” In this regard, albeit in relation to the one corporate entity for which she now has responsibility as liquidator, Ms Fatupaito’s evidence confirms that of Mr Goodall and Ms Ackroyd.
[57] Neither Mr Goodall nor Ms Fatupaito are in a position to challenge the apportionment Ms Ackroyd has made regarding the portion of her costs associated with the financial information she prepared for the proceeding and for which Bankhouse has paid. On the evidence before me I have no reason to reject the apportionment Ms Ackroyd has made.
[58] My own experience of this proceeding has shown me that relevant financial information was scarce. Why that was is not something I was able to form a view on. Ms Sparks presented the situation as if there was information available to Mr Olliver that was not being disclosed. Mr Olliver presented the situation as if he and the various corporate entities associated with him (including the other defendants) were in financial difficulty, there was no money to prepare and maintain the necessary financial accounts and once those corporate entities/defendants experienced cash shortages they had stopped maintaining their financial records in the way they should have done. There were also criticisms that Ms Sparks had taken computer records of relevant financial information, which made it difficult for financial records to be prepared.
[59] I am in no position to determine where responsibility lies for the financial information being so messy. However, it is clear to me that it was a mess. I am also in no position to reject Ms Ackroyd’s evidence when she tells me how she has apportioned her charges between work done for IRD purposes and work done for the purpose of the proceeding. Also, at the time the proceeding was live Mr Goodall never complained to the Court that he was being denied access to financial information that could have been made available to him, but which was being withheld. His affidavit evidence suggests something different but at the time he was engaged in preparing reports for the Court he never raised any complaint with the Court about the information that was available to him.
[60] Accordingly, I accept Ms Ackroyd’s evidence. I acknowledge what Mr Goodall says that Mr Olliver and the various corporate entities who are parties to the proceeding will have statutory obligations to maintain up to date financial records. However, when money is short, as appears to have been the case here, compliance with statutory obligations can and often does fall by the wayside. That is the reality of insolvency.
[61] I see no reason not to accept the time and charge rate Ms Ackroyd has applied. It follows that I consider Bankhouse is entitled to claim $72,9654.76 as a disbursement for instructing Ms Ackroyd to prepare the financial information that she provided for the purpose of this proceeding. Had the proceeding gone to trial it can be expected that the work she did would have been before the Court by way of affidavit evidence.
[62] I now turn to the fees charged by Findex. Gregory James is a senior partner of Findex. He has provided an affidavit in which he confirms that Findex provided services to Bankhouse and for which it was paid the total sum of $121,956.52 exclusive of GST. It seems actual time spent was higher, but Findex wrote the balance off.
[63] Mr James’ evidence is that Bankhouse engaged Findex in 2018 to review and finalise financial statements prepared by Ms Ackroyd as well as to prepare income tax returns in respect of trusts and companies associated with Mr Olliver for a number of years up to 2016, and in one case going as far back as 2006. Mr James refers to an
annexure marked A as a table identifying the financial statements originally prepared by Ms Ackroyd which were then reviewed and finalised by Findex as well as the income tax returns prepared by Findex. He says the work that had to be done was very time consuming as it involved a review of all financial activities for quite a number of trusts and companies.
[64] Annexure B to his affidavit is further information that was obtained from Findex’s records in respect of the first Findex invoice Ms Ackroyd attaches to her affidavit. Mr James confirms the invoice includes the relevant timesheets showing details of the work done which was in respect of financial statements and income tax returns for the 2015 year and earlier and the entities for which the work was done.
[65] Annexure C contains information also from Findex’s system in respect of the second Findex invoice annexed to Ms Ackroyd’s affidavit. This information includes relevant time sheets showing details of the work done which was in respect of financial statements and income tax returns for the 2016 year (first instalment) and the entities for which the work was done.
[66] Similarly annexure D contains further information obtained from Findex’s system in respect of the third Findex invoice annexed to Ms Ackroyd’s affidavit. The information includes the relevant time sheets showing details of the work done which was also in respect of the financial statements and income tax returns for 2016 year (second and final instalment) and the entities for which the work was done. Mr James confirms the Findex invoices have been paid in full.
[67] What Mr James does not say in his affidavit is whether he or staff at Findex audited or in any way assessed the apportionment Ms Ackroyd had done between the work she did for the purpose of gaining financial information for this proceeding as opposed to the work that she was doing that was required for the interactions Mr Olliver and associated corporate entities were having with IRD. That is the critical issue. That Ms Ackroyd performed work to enable the Court and the IRD to have a better understanding of the financial circumstances of Mr Olliver and the corporate entities/defendants associated with him does not seem to me to be so much in dispute. The dispute is in relation to the apportionment of Ms Ackroyd’s costs. Mr James’s
evidence confirms that Ms Ackroyd did extensive financial work. But as I read his affidavit I do not see him providing any help to me in terms of evidence that would support the apportionment Ms Ackroyd has made.
[68] I have already found that I am prepared to rely on Ms Ackroyd’s apportionment as I see no basis for rejecting her evidence. She is a professional person independent of Mr Olliver and the corporate entities associated with him. As an accountant she has professional and ethical responsibilities and obligations.
[69] Mr Olliver and Bankhouse have obviously considered it important to provide evidence that confirms the evidence of Ms Ackroyd. Mr James’s evidence confirms that overall she has performed the work she says she has performed. That goes to some way to confirm her evidence, but it is not helpful on the critical issue.
[70] It is clear to me that for the purposes of the proceeding it would not have been necessary to have financial evidence which went back as far as 2006 which is what Findex says Ms Ackroyd has on occasion done. However, that is not at odds with Ms Ackroyd’s evidence because she acknowledges that she has spent some time going through financial information for the purposes of satisfying the IRD as well as for the purpose of this proceeding. By confirming that Ms Ackroyd has worked as extensively as she says she has done, the Findex evidence goes some way to confirm her evidence.
[71] Ms Ackroyd has responsibly acknowledged that of the accounting work she performed over the relevant time, of her total costs of $167,749.01, $72,965.76 is attributable to work done for this proceeding. That is approximately 43 per cent of her total costs. Findex essentially performed an audit/assessment of Ms Ackroyd’s overall work. Accordingly, I consider it appropriate to apportion the Findex payment along the same lines as Ms Ackroyd has apportioned her payment. This would allow Bankhouse to recover 43 per cent of the Findex payments as a disbursement in this proceeding.
[72]A 43 percent allowance of the Findex payments comes to $52,441.
Result
[73] Mr Olliver is awarded costs in the sum of $14,142 and disbursements in the sum of $567.38.
[74]Bankhouse is awarded disbursements in the total sum of $125,406.76 (being
$72,965.76 and $52,441).
Duffy J
0
2
1