Tannenberg Limited v Jellie

[2018] NZHC 1569

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-002623 [2018] NZHC 1569

IN THE MATTER

of the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of CHRISTOPHER WAYNE JELLIE

BETWEEN

TANNENBERG LIMITED

Judgment Creditor

AND

CHRISTOPHER WAYNE JELLIE

Judgment Debtor

Hearing:

12 June 2018

Appearances:

C W Jellie (Judgment Debtor) Applicant for annulment (in person) R B Hucker for Judgment Creditor (Respondent)

C T Jones for Official Assignee

Judgment:

28 June 2018

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

This judgment was delivered by me at                on  2018

pursuant to Rule 11.5 of the High Court Rules Registrar/Deputy Registrar

TANNENBERG LIMITED v JELLIE [2018] NZHC 1569 [28 June 2018]

The recall application

[1]                  On 12 June 2018, I dismissed the application of Christopher Jellie for an order annulling his adjudication in bankruptcy.1

[2]                  Mr Jellie applies for the recall of my judgment (which has yet to be sealed). In particular, he asserts that the Court, in dismissing his application for annulment, failed to apply the law in relation to claims for costs by lawyer-litigants and by in-house lawyers.

The annulment application and judgment

[3]                  Mr Jellie had been adjudicated bankrupt on 21 September 2017, Tannenberg relying upon a (High Court) judgment for costs dated 5 September 2016.

[4]                  Mr Jellie applied for annulment upon the basis that he should not have been adjudicated bankrupt.2 In his grounds of application, Mr Jellie had relied on two matters, first, that he was unaware of the adjudication hearing and, secondly, that he had lacked the opportunity to make payment.

[5]                  In his submissions at the annulment hearing, Mr Jellie asserted also that he should not have been adjudicated bankrupt because the underlying costs award was precluded by reason of the Court of Appeal’s judgment in Joint Action Funding Ltd v Eichelbaum.3

[6]                  I refused leave to Mr Jellie to rely upon this additional ground of opposition. In doing so, I identified the argument and recorded why it failed:4

Ground 3: lawyer-litigant

[23]In the first part of Mr Jellie’s written submissions, he developed the proposition that Tannenberg was not entitled to costs awarded by the Courts by reason of the Court of Appeal’s judgment in Joint Action Funding Ltd v Eichelbaum. The argument runs thus:

1 TANNENBERG LIMITED v JELLIE [2018] NZHC 1417 [12 June 2018]

2      Relying on s 309(1)(a) Insolvency Act 2006.

3      Joint Action Funding Ltd v Eichelbaum [2017] NZCA 249.

4      At [23] – [25].

(a)Tannenberg’s director and sole decision-maker is Gerald Sharrock.

(b)Mr Sharrock is therefore, in terms of Joint Action Funding Ltd v Eichelbaum a lawyer-litigant who is not entitled to a costs order.

(c)Even if entitled to costs, Tannenberg is limited to such sum as it had actually been billed for and paid.

[24]This argument fails at a number of levels:

(a)Tannenberg, not Mr Sharrock, has been the litigant in all the proceedings.

(b)Tannenberg was independently represented (not by Mr Sharrock) in the proceedings.

(c)The District Court judgment was in part a judgment (on the substantive counterclaim) for $7,507.72, and that remained unpaid at the date of adjudication.

(d)The various costs judgments have all been for scale costs. Mr Hucker has expressly confirmed in the course of his submissions that all his firm’s legal services for Tannenberg have been billed and paid in each instance and have exceeded the scale award.

[25]In the circumstances, I do not grant leave to Mr Jellie to rely on this additional ground of opposition. It is without merit.

The grounds of the application for recall

[7]                  Mr Jellie by his present application asserts that the judgment should be recalled both by reason of the unavailability of costs to a lawyer-litigant and by reason of the fact that Gerald Sharrock had a controlling interest in Tannenberg and was also a lawyer. Mr Jellie submits that Mr Sharrock had to be treated as Tannenberg’s in-house counsel.

Recalling a judgment – the principles

[8]                  I adopt as the most widely recognised articulation of the principles applying to recall a judgment a passage in the judgment of Wild CJ in Horowhenua County v Nash (No 2):5

5      Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633. Applied by the Supreme Court in Saxmere Co Ltd v Wool Board Disestablishment Company Ltd [2009] NZSC 122, [2010] 1 NZLR 76 at [2].

Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled — first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.

[9]                  It has been recognised by the Court of Appeal that the discretion to recall is to be exercised with circumspection and is not to be seen as a substitute for an appeal or an opportunity to reopen substantive matters already decided.6

[10]  The recall jurisdiction is not intended to provide a forum for a party to recast arguments previously given or to represent them in a new form or to put forward further arguments which could have been raised at the earlier hearing but were not.

Discussion

[11]I examine the two grounds to Mr Jellie’s application for recall.

[12]              First, Mr Jellie relies on Joint Action Funding Ltd v Eichelbaum to assert again that the previous lawyer-litigant exception in relation to an award of costs no longer applies and that Tannenberg’s costs judgment was therefore incorrect.

[13] As indicated by the passage from the annulment judgment set out at [6] above, this was an argument pursued at the annulment hearing and rejected in the judgment. Mr Jellie has his right of appeal. Recall would be inappropriate in relation to this first ground.

[14]              Secondly, Mr Jellie refers to this Court’s judgment in Commissioner of Inland Revenue v New Orleans Hotel (2011) Ltd.7 In that case it was determined that an award of costs was precluded where the successful party was represented by in-house counsel.

6      Falloon v Commissioner of Inland Revenue [2006] 22 NZTC 19,832 (HC) at [13], approved in Erwood v Maxted [2010] NZCA 93 (2010) 20 PRNZ 466 at [5]; Nottingham v Real Estate Agents Authority [2017] NZCA 145 at [11].

7      Commissioner of Inland Revenue v New Orleans Hotel (2011) Ltd [2018] NZHC 971.

[15]              Mr Jellie records in his application for recall that Mr Sharrock is both a controlling shareholder of Tannenberg and a lawyer. He asserts that Mr Sharrock therefore had to be classed as Tannenberg’s in-house lawyer.

[16]              Mr Jellie thereby relies on a judicial decision which he did not rely on at the time of the annulment hearing Any argument based on Mr Sharrock’s having been in- house counsel would have been as unmeritorious as the argument advanced (in relation to “lawyer – litigant”) in reliance on Joint Action Funding Ltd v Eichelbaum. That is because, as observed at [24] of the annulment judgment (above at [6]):

(a)Tannenberg, not Mr Sharrock, has been the litigant in all the proceedings.

(b)Tannenberg was independently represented (not by Mr Sharrock) in the proceedings.

[17]              Mr Jellie’s alternative argument (now identified on this application for recall) could have been advanced at the previous hearing. Had it been, it would have plainly been without merit. In these circumstances it would be inappropriate to recall the annulment judgment.

Orders

[18]I order:

(a)The application for recall of the judgment dated 12 June 2018 is dismissed.

(b)The costs and disbursements of the recall application are reserved.

Associate Judge Osborne

Solicitors:

Hucker Associates, Auckland Copy to: C W Jellie, Auckland

C T Jones, Official Assignee