Vegar v Aorangi Forests Ltd - [2014] NZHC 2910

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-3163 and 3166 [2014] NZHC 2910

IN THE MATTER
of a proposal by Peter Thomas Vegar and a

proposal by Helen Jean Vegar under the
Insolvency Act 2006

BETWEEN

PETER THOMAS VEGAR First Insolvent

HELEN JEAN VEGAR Second Insolvent

AND

AORANGI FORESTS LTD & ORS Creditors

CIV-2013-404-3685

IN THE MATTER of an appeal under Regulation 32(1) of the Insolvency (Personal Insolvency) Regulations 2007

BETWEEN ANTHONY JOHN EBERT AND JENNIFER JANE EBERT Appellants

ANDPETER THOMAS VEGAR Respondent

CIV-2013-470-536

IN THE MATTER of an appeal under Regulation 32(1) of the Insolvency (Personal Insolvency) Regulations 2007

BETWEEN HILLERSDEN VINEYARD CONTRACTING LTD (IN LIQUIDATION)
Appellant

ANDPETER THOMAS VEGAR AND HELEN JEAN VEGAR
Respondents

PETER THOMAS VEGAR v AORANGI FORESTS LTD & ORS [2014] NZHC 2910 [21 November 2014]

Hearing: (On the papers)

Counsel:

RB Stewart QC for Provisional Trustee
KW Fulton for Mr and Mrs Vegar
SP Bryers for Trustees of Florence Trust
JK Boparoy for Hillersden Vineyard

Judgment:

21 November 2014

JUDGMENT OF BREWER J [Costs]

This judgment was delivered by me on 21 November 2014 at 12 noon pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors: Kevin McDonald & Associates (Takapuna) for the Provisional Trustee
Craig Griffin & Lord (Auckland) for Mr and Mrs Vegar
Gaines Law (Blenheim) for Trustees of the Florence Trust
Waterstone Insolvency (North Shore City) for Hillersden Vineyard

Introduction

[1] Hillersden Vineyard Contracting Ltd (in liquidation) (“Hillersden”) and the Florence Trust failed in appeals against the Provisional Trustee’s decision to reject their votes against creditors’ proposals.1 Subsequently, Hillersden and the Florence Trust withdrew their opposition to the proposals, which I then approved.2

[2] The Provisional Trustee, Mr Brown, and the insolvent proposers, Mr and

Mrs Vegar, seek costs.

Issues

[3] Should Mr Brown be awarded costs against Hillersden and the Florence

Trust:

(a) for the withdrawn oppositions to the proposals; and/or

(b) for the failed appeals?

[4] Should Mr and Mrs Vegar be awarded costs against Hillersden and the

Florence Trust:

(a) for the withdrawn oppositions to the proposals; and/or

(b) for the failed appeals?

Discussion

[5] The usual rule is that costs follow the result. If two successful parties are related, such that one counsel could well appear for both, but for some unjustified reason separate counsel are employed, costs may be modified to avoid imposing a
double burden.

1 Vegar v Aorangi Forests Ltd & Ors [2014] NZHC 1109.
2 Vegar v Aorangi Forests Ltd & Ors HC Auckland CIV-2013-404-3163, 3 June 2014 (Minute).

[6] The award of costs where a creditor unsuccessfully opposes a creditors’ proposal can be on a different basis. This Court has held3 consistently that the burden of the costs of a Provisional Trustee falls on the proposing debtor;4 and where a creditor unsuccessfully opposes a creditors’ proposal, costs lie where they fall.5

[7] The reason for the different approach is that a creditor who successfully opposes a creditors’ proposal gets nothing in costs. That is because the debtor, who…

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: [2014] NZHC 2910
Decision Date: 21 November 2014

CaseChat Overview and Summary

In the case of Vegar v Aorangi Forests Ltd, the High Court of New Zealand addressed appeals related to the insolvency proceedings of Peter Thomas Vegar and Helen Jean Vegar. Hillersden Vineyard Contracting Ltd and the Florence Trust, as creditors, had appealed against the Provisional Trustee's decision to reject their votes against creditors' proposals. The Vegars subsequently withdrew their opposition to the proposals, which the court then approved. The issue before the court was whether costs should be awarded to the Provisional Trustee, Mr. Brown, and the insolvent proposers, Mr. and Mrs. Vegar, against Hillersden and the Florence Trust for the withdrawn oppositions to the proposals and the failed appeals.

The court found that the usual rule is that costs follow the result, but where two successful parties are related and separate counsel are employed without justification, costs may be modified to avoid imposing a double burden. In this case, the court found that neither Hillersden nor the Florence Trust did anything in relation to opposing the creditors' proposal that would trigger a change to the usual costs situation. The court also held that the award of costs where a creditor unsuccessfully opposes a creditors' proposal can be on a different basis, with costs lying where they fall. The court found that the appeals should be treated differently, as they were separate proceedings, and therefore, costs should follow the event. The court ordered that Hillersden is to pay costs to Mr. and Mrs. Vegar of $10,149 plus disbursements of $261.45 and costs to Mr. Brown of $5,671. The Florence Trust is to pay costs to Mr. and Mrs. Vegar of $10,646 plus disbursements of $261.45 and costs to Mr. Brown of $5,920.

Orders