Thomson v Surch

[2023] NZHC 3419

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-863

[2023] NZHC 3419

IN THE MATTER

of the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of Troy Adam Surch

BETWEEN

CHRISTOPHER BRUCE THOMSON and DALE ANTHONY WADSWORTH

Judgment Creditors

AND

TROY ADAM SURCH

Judgment Debtor

Hearing:	(On the papers)
Appearances:	S T Dymond for Judgment Creditors S M Kilian for Judgment Debtor
Judgment:	29 November 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

This Judgment was delivered by me on 29 November 2023 at 12:00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

THOMSON v SURCH [2023] NZHC 3419 [29 November 2023]

[1]                 The judgment creditors’ opposed application to have the judgment debtor,  Mr Surch, adjudicated bankrupt was due for hearing on 30 March 2023.

[2]                 The application had been opposed on the ground that Mr Surch was not insolvent, with him claiming in an affidavit that he was in the process of selling an asset which would provide sufficient funds to pay the debt. That Mr Surch was not insolvent was apparently his position up to the date of the hearing.

[3]                 However, and as recorded in my judgment delivered on 20 April 2023, at the commencement of the  hearing,  Mr Kilian,  counsel  for  Mr Surch,  advised  that  Mr Surch had applied to the New Zealand Insolvency and Trustee Service to be adjudicated bankrupt meaning Mr Surch accepted he was insolvent.

[4]                 My judgment was released on 20 April 2023, formally dismissing the judgment creditors’ application to have Mr Surch adjudicated bankrupt once Mr Surch’s bankruptcy, on his own application, appeared on the Insolvency Register.1

[5]                 I directed that if no memorandum in respect of costs was filed within five working days, then the judgment creditors would be entitled to costs on a 2B basis plus disbursements as fixed by the Registrar.

[6]                 The Registrar has just brought to my attention that counsel for the judgment creditors on 24 April 2023 filed a memorandum seeking indemnity costs. I apologise on behalf of the Court that the application was not processed in a timely way, but as  I say, it has only just been referred to me.

[7]                 Indemnity costs of $21,400.00 including disbursements are sought. The total costs and disbursements on a 2B basis would be just under $11,250.00.

[8]                 In blunt terms, indemnity costs are sought on the basis that Mr Surch wasted everyone’s time by asserting that he was solvent, that he had an asset to sell that would pay the debt, and then bankrupting himself on the eve of the hearing.

1      Thomson v Surch [2023] NZHC 850.

[9]                 Counsel for the judgment creditors, Mr Dymond, had filed written submissions on 15 March 2023 critical of what the judgment creditors considered was a pattern of Mr Surch avoiding service. Mr Surch had also protested that the Auckland High Court was not the appropriate Registry for the bankruptcy proceeding to be filed, albeit the only affidavit he filed in the proceedings was sworn in Auckland and that he had attended a call-through in Auckland and had engaged Auckland counsel.

[10]              While Mr Surch challenged the circumstances in which the underlying judgment was entered against him (he not filing a defence and then claiming not to have been served), Mr Surch had taken no steps to have that judgment set aside.

[11]              In accepting that indemnity costs are appropriate, I do not put any real weight on matters pre-dating the application for adjudication. Costs are being sought in respect of the adjudication application and not Mr Surch’s alleged avoidance of service in respect of the underlying proceedings.

[12]              I accept, however, the submission that Mr Surch adopted a hopeless position in claiming he was solvent which was contradicted in the clearest of terms by his own decision to apply for bankruptcy. As I have said, in plain language, he wasted everyone’s time.

[13]              I am satisfied in terms of r 14.6(4)(a) of the High Court Rules 2016 that indemnity costs are appropriate because Mr Surch acted vexatiously, frivolously or improperly in asserting he was solvent when plainly that was not the case. No explanation was offered by Mr Surch either directly or through counsel to explain the inconsistency in his position.

[14]Accordingly, there is an order that Mr Surch is to pay the judgment creditors

$21,400.00 which is a total of costs and disbursements.

Associate Judge Lester