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.

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.

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Details

Case: [2018] NZHC 1569
Decision Date: 28 June 2018

CaseChat Overview and Summary

In the High Court of New Zealand, Associate Judge Osborne dismissed an application by Christopher Wayne Jellie for the recall of a previous judgment dismissing his application for annulment of his adjudication in bankruptcy. The case involves Tannenberg Limited, a judgment creditor, and Christopher Jellie, the judgment debtor. The dispute arose from a judgment for costs awarded to Tannenberg, which led to Jellie's adjudication in bankruptcy. The primary legal issue was whether the bankruptcy adjudication should be annulled based on the grounds that Jellie was unaware of the adjudication hearing and lacked the opportunity to make payment. Additionally, Jellie argued that the costs award was incorrect due to the principles established in Joint Action Funding Ltd v Eichelbaum, which concerns the eligibility of lawyer-litigants for costs.

Associate Judge Osborne examined the arguments put forth by Jellie and concluded that they were without merit. The Court found that Tannenberg, not its director Gerald Sharrock, was the litigant in the proceedings, and Tannenberg was independently represented. Furthermore, the Court determined that the argument based on the eligibility of lawyer-litigants for costs, as per Joint Action Funding Ltd v Eichelbaum, was misplaced because Tannenberg, as the litigant, was entitled to the costs awarded. The Court also rejected Jellie's argument that Gerald Sharrock, being both a controlling shareholder of Tannenberg and a lawyer, should be considered Tannenberg’s in-house counsel, as this argument was not advanced during the initial annulment hearing and would have been without merit.

The Court held that the principles for recalling a judgment, as outlined in Horowhenua County v Nash (No 2), did not apply in this case. The Court exercised its discretion not to recall the judgment, noting that 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. Therefore, the application for recall was dismissed. The costs and disbursements of the recall application were reserved for future determination.

Orders