Turuki Healthcare Charitable Trust v Halse

[2021] NZHC 1765

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2020-419-000061

[2021] NZHC 1765

UNDER

Insolvency Act 2006

IN THE MATTER OF

The bankruptcy of ALLAN GEOFFREY HALSE

BETWEEN

TURUKI HEALTHCARE CHARITABLE TRUST

Judgment Creditor

AND

ALLAN GEOFFREY HALSE

Judgment Debtor

Hearing:	6 July 2021
Appearances:	J R Halligan for Judgment Creditor Judgment Debtor in Person
Judgment:	14 July 2021

COSTS AND FINAL DISPOSITION JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 14 July 2021 at 4.30 pm

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

Date………………………..

TURUKI HEALTHCARE CHARITABLE TRUST v HALSE [2021] NZHC 1765 [14 July 2021]

Introduction

[1]    In my judgment of 14 April 2021,1 I declined (at that stage) to make any determination of whether the application by Mr Halse to set aside the Bankruptcy Notice should be granted.

[2]    Instead, I ordered that the Bankruptcy Notice was to be amended, requiring Mr Halse to pay the sum of $5,000 by 5 July 2021 at 9.00 am.

[3]    Mr Halse made payment of the $5,000 in accordance with my orders. It was made to the judgment creditor’s solicitor’s trust account on 2 July 2021.

[4]    This judgment addresses the issue of what orders should now be made given that the proceedings are at an end. It also contains my decision on the issue of costs.

[5]    In accordance with my judgment, the parties have filed submissions on costs. I also heard brief argument on the costs issue at the telephone hearing on 5 July 2021.

Discussion

[6]    It is clear that there has been no failure to comply with the Bankruptcy Notice and it no longer serves any purpose. Mr Halse has paid the $5,000 and essentially the proceedings now fall away.

[7]    I formally record that there has been no act of bankruptcy committed by Mr Halse.

[8]    In substance, the position of Turuki Healthcare Charitable Trust (Turuki), as judgment creditor, has been vindicated. It has succeeded in enforcing its judgment debt. It has at all times acted in accordance with its legal rights; it was entitled to have originally issued the Notice in the sum of $33,050. The reason that there is no longer any Bankruptcy Notice to set aside is because Mr Halse has complied with it. In all these circumstances, I find that the appropriate order to make is to dismiss Mr Halse’s application to set it aside.

1      Turuki Healthcare Charitable Trust v Halse [2021] NZHC 794.

[9]I now turn to address the question of costs.

[10]   It is well-settled that the party who loses in respect of an application should pay the costs of the party that won.2

[11]   In Shirley v Wairarapa District Health Board, the Supreme Court held that unless there are exceptional reasons, costs should follow the result. That is, the loser, and only the loser, pays.3

[12]   The Court is required to adopt a “realistic” approach in determining whether there was success or failure.4 Success on limited terms is still regarded as success.5

[13]   I find that in this case, and in adopting a realistic approach, the judgment creditor, Turuki, was ultimately the successful party. In the proceedings before me, Turuki only  ever sought  to  enforce its Employment Court judgment6  in  the sum of

$5,000. It succeeded in having that judgment debt paid to it by Mr Halse. Turuki was also successful in having its Bankruptcy Notice amended and, in substance, it successfully defended the challenge to the validity of the Bankruptcy Notice on the wide-ranging grounds put forward (unsuccessfully) by Mr Halse.

[14]   Had Mr Halse paid the $5,000 at the outset, then the proceedings before me would not have been necessary.

[15]   In applying r 14.2(1)(a) of the High Court Rules 2016 and the principle that costs follow the event, I find that Mr Halse, as the losing party, should pay costs to Turuki, the judgment creditor.

[16]   So far as possible, the determination of costs should be predictable and expeditious (r 14.2(1)(g)). An award of costs should also reflect the complexity and

2      Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [20], citing High Court Rules 2016, r 14.2(1)(a).

3      Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].

4      Packing In Ltd (in liq) v Chilcott [2003] 16 PRNZ 869 (CA) at [6], where it was held that success or failure was better assessed by a realistic appraisal of the end result rather than by focusing on who initiated what step, and the extent to which that step succeeded or failed.

5      Weaver v Auckland Council, above n 2.

6      CultureSafe NZ Ltd v Turuki Healthcare Services Charitable Trust [2020] NZEmpC 165.

significance of the proceedings (r 14.2(1)(b)). In applying those principles, and as a matter of discretion, I conclude that Mr Halse should pay costs to Turuki on a 2B basis plus disbursements.

[17]   There remains the issue of whether a costs award should be immediately payable or whether, in response to the concerns raised by Mr Halse, I should fix costs now (as I have done) but defer any obligation to pay them pending the determination of the appeal to the Court of Appeal.

[18]   Mr Halse has appealed the Employment Court judgment of Judge Holden fixing the penalty at issue at $5,000, to the Court of Appeal. There are also related judicial review proceedings at issue before the Court of Appeal in which Mr Halse challenges his obligation to make payment of any penalty at all.

[19]   In my judgment of 14 April 2021, I extended the date for paying the $5,000 in the amended Bankruptcy Notice until 5 July 2021. That was an indulgence to Mr Halse and was intended to give him the opportunity in the intervening period between the date of the judgment and 5 July 2021 for his appeal to the Court of Appeal (at that time scheduled for 14 April 2021) to be heard and determined.

[20]   Regrettably, the application by Turuki and others to strike out the appeal did not proceed, as scheduled, on 14 April 2021. I understand that there has been a change in Mr Halse’s legal representation and the strike-out hearing in the Court of Appeal is to be re-scheduled.

[21]   In all the circumstances, and as a matter of discretion, I conclude that Mr Halse should not be required to pay the 2B costs and disbursements I have awarded until the outcome of the appeal to the Court of Appeal is known. That order will be conditional upon Mr Halse taking all reasonable steps to prosecute his appeal with diligence, including taking the steps necessary to ensure the prompt disposition of the application by Turuki and others for the appeal to be struck out.

Result

[22]I make the following orders:

(a)The application by Mr Halse, the judgment debtor, to set aside the Bankruptcy Notice, is dismissed.

(b)The judgment debtor, Mr Halse, as the losing party, in substance, is to pay costs to the judgment creditor, Turuki Healthcare Charitable  Trust Ltd, on a 2B basis plus disbursements.

(c)Mr Halse is not required to pay the 2B costs plus disbursements until such time as the outcome of the appeal to the Court of Appeal is known.

(d)Leave is reserved to either party to apply for further orders and directions.

Associate Judge P J Andrew