Waimauri Limited v Mahon - [2023] NZHC 719

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1218

[2023] NZHC 719

UNDER the Insolvency Act 2006

IN THE MATTER OF

the bankruptcy of NEVILLE CHRISTOPHER MAHON

BETWEEN

WAIMAURI LIMITED

Plaintiff

AND

NEVILLE CHRISTOPHER MAHON

Defendant

Hearing: On the papers

Appearances:

David Chisholm KC and Michael Lenihan for the Plaintiff R B Hucker for the Defendant

Judgment:

4 April 2023

COSTS JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 4 April 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:
Brown Partners Lawyers (John Brown), Auckland, for the Plaintiff Hucker & Associates (R B Hucker), Auckland, for the Defendant

Copy for:
David Chisholm KC / Michael Lenihan, Auckland

WAIMAURI LIMITED v MAHON [2023] NZHC 719 [4 April 2023]

Introduction

[1] On 11 July 2022 the Court delivered a judgment (the Judgment) granting Mr Neville Mahon (Mr Mahon), the judgment debtor, his application to halt a bankruptcy adjudication brought by Waimauri Limited (Waimauri), the judgment creditor, pursuant to s 38 of the Insolvency Act 2006. Under the Judgment the bankruptcy adjudication was halted on condition that Mr Mahon provide security for the judgment debt to Waimauri. The security was to be provided by Mr Mahon to Waimauri within 14 days of the date of the Judgment (at [97](b)).

[2]Following the issue of the Judgment, the following occurred:

(a)Counsel for Mr Mahon issued a memorandum as to costs, dated 22 July 2022, seeking an order for costs on a 2B basis in favour of Mr Mahon;

(b)counsel for Waimauri filed a memorandum as to costs in reply to Mr Mahon’s memorandum dated 26 July 2022, opposing an order for costs in favour of Mr Mahon and seeking costs be awarded in favour of Waimauri;

(c)counsel for Waimauri filed a further memorandum as to costs dated 17 October 2022, updating Waimauri’s position as to costs since the issue of the Judgment on 11 July 2022.

[3]There are two matters to be determined in this costs Judgment:

(a)Costs up to the date of the Judgment 11 July 2022;

(b)Costs in respect of events following the Judgment in relation to granting of security by Mr Mahon.

Costs in relation to the judgment of 11 July 2022

Mr Mahon’s submissions

[4] Mr Hucker, on behalf of Mr Mahon, in summary, made the following submissions in support of the application for 2B costs to be awarded to Mr Mahon:

(a)Mr Mahon, in obtaining an order in the bankruptcy, albeit subject to a condition, was the successful party for the purposes of r 14.2(1)(a), and there are no grounds to reduce the award of costs under r 14.7;

(b)Making an order on condition of the payment of security ought not to lead to a reduction of costs. The portion of the hearing and evidence relating to the issue of security was de minimis.

(c)Waimauri was unsuccessful in resisting the…

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.

Continue reading Waimauri Limited v Mahon

Details

AGLC: Waimauri Limited v Mahon [2023] NZHC 719
Case: [2023] NZHC 719
Decision Date: 4 April 2023

CaseChat Overview and Summary

Waimauri Limited initiated bankruptcy proceedings against Neville Christopher Mahon, who subsequently applied to halt the adjudication under section 38 of the Insolvency Act 2006. Following a judgment on 11 July 2022, the Court halted the bankruptcy adjudication on the condition that Mr Mahon provide security for the judgment debt to Waimauri within 14 days. The case now focuses on the costs associated with the proceedings up to and following the July judgment. The primary legal issues revolve around whether costs should follow the event, or whether the indulgence granted to Mr Mahon in the form of a conditional halt justifies awarding costs against him.

Mr Mahon argued that he was the successful party in the proceedings and sought costs on a 2B basis. Waimauri, on the other hand, contended that Mr Mahon was granted an indulgence by the Court and thus costs should either be awarded in its favour or lie where they fall. The Court considered the submissions from both parties and relevant authorities. It found that while Mr Mahon was successful in obtaining the conditional halt, the grant of such a halt constituted an indulgence. Consequently, the Court determined that costs up to the date of the judgment should lie where they fall.

Following the July judgment, the Court assessed the situation regarding the provision of security. Waimauri argued that Mr Mahon's unreasonable position on the form of security resulted in wasted costs. The Court agreed, finding that Mr Mahon's conduct post-judgment warranted an order for costs against him in favour of Waimauri. Specifically, the Court awarded Waimauri $11,472.00, representing the costs incurred since the July judgment.

The Court's decision balances the principle of costs following the event with the recognition of the indulgence granted to Mr Mahon. The outcome reflects the need to fairly distribute costs in light of the procedural outcomes and the conduct of the parties post-judgment.

Orders