Stojkov v Kamal - [2015] NZHC 2513

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1786 [2015] NZHC 2513

UNDER the Companies Act 1993 section 286

IN THE MATTER OF

an order to enforce liquidators' duties

BETWEEN

STOJAN STOJKOV Applicant

AND

IMRAN MOHAMMED KAMAL Respondent

Hearing: On the papers

Appearances:

M Taylor for Applicant
J K Mahuta-Coyle for Respondent

Judgment:

13 October 2015

COSTS JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 13 October 2015 at 4:30pm
pursuant to Rule 11.5 of the High Court Rules

……………………………………………………
Registrar/Deputy Registrar

Solicitors:
Angela Parlane, Auckland, for Applicant
Devine Law Ltd (Fintan Devine) Wellington, for Respondent

Copy for:
Matt Taylor, Auckland, for Applicant
J K Mahuta-Coyle, Wellington, for Respondent

STOJAN STOJKOV v IMRAN MOHAMMED KAMAL [2015] NZHC 2513 [13 October 2015]

[1] Stojan Stojkov is a creditor of Bela Ltd for $18,348.50 being the outstanding part of an award by the Employment Relations Authority for unpaid wages. Bela Ltd carried on business as a restaurant in Auckland. On 20 June 2015 it went into voluntary liquidation, appointing Imran Mohammed Kamal as liquidator. While the company operated only in Auckland and all its creditors are in Auckland, Mr Kamal has his office in Porirua. Mr Stojkov requested a creditors’ meeting. Mr Kamal refused. Mr Stojkov applied for an order requiring Mr Kamal to call a creditors’ meeting. Mr Kamal opposed. He withdrew his opposition before the matter was called. On 4 September 2015 I made orders in terms of Mr Stojkov’s application and directed that a meeting of creditors be called within 15 working days.

[2] I directed the parties to file memoranda if they could not agree costs. This decision deals with the costs application. There are two questions:

[a] What is the costs category for the proceeding?

[b] Should Mr Kamal pay costs personally or is he entitled to be reimbursed out of the assets of the company?

[3] There is no dispute that Mr Stojkov is entitled to costs, as he has succeeded. The parties agree on the time allocations and the steps claimed for. I have assessed costs according to the circumstances at 4 September 2015. In their memoranda for costs, the parties have also raised matters that occurred later. Those matters are not relevant to the costs judgment for this proceeding although they may be relevant for other aspects of the liquidation.

What is the costs category for the proceeding?

[4] Mr Stojkov contends for category 2, Mr Kamal for category 1. This is not a category 1 proceeding. Applications under s 286 of the Companies Act to compel liquidators to carry out their duties are not so straightforward that they should be given to junior counsel. Care is required to ensure that the application is brought

within the provisions of the Companies Act and the High Court Rules to ensure that appropriate relief is sought. Not all counsel get it right, including those with average skill and experience.

[5] I approve the applicant’s calculation of costs under category…

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 Stojkov v Kamal

Details

AGLC: Stojkov v Kamal [2015] NZHC 2513
Case: [2015] NZHC 2513
Decision Date: 13 October 2015

CaseChat Overview and Summary

In Stojkov v Kamal, Stojan Stojkov, a creditor of Bela Ltd, sought an order to enforce the duties of the liquidator, Imran Mohammed Kamal. Stojkov sought the enforcement of his right to a creditors’ meeting, which Kamal had refused to call. The primary legal issues before the court were the categorization of the proceeding for costs purposes and whether Kamal should personally bear the costs or if he should be reimbursed from the company’s assets. The court determined that the proceeding did not qualify for the lower cost category, given the necessity for careful adherence to statutory and procedural requirements. The court assessed the costs under category 2, totalling $5,446.00. The second issue, regarding Kamal’s personal liability for costs, was resolved by examining whether Kamal's actions constituted any impropriety warranting personal liability. The court found Kamal’s refusal to call the creditors’ meeting, despite being correctly informed of the legal duty to do so, amounted to unreasonable conduct. Therefore, the court ruled that Kamal should personally bear the costs of $5,446.00.

Orders