Wang v Meltzer HC Auckland CIV-2010-404-3177

[2011] NZHC 1358

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-3177

IN THE MATTER OF     The Insolvency Act 2006

AND IN THE MATTER OF The proposal of MAY YAN WANG

BETWEEN  MAY YAN WANG Insolvent

ANDJEFFREY PHILIP MELTZER Applicant

Judgment:      5 August 2011 at 2:30 PM

JUDGMENT OF ASSOCIATE JUDGE SARGISSON (On costs)

This judgment was delivered by me on 5 August 2011 at 2.30 pm pursuant to

Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date ..........................

Solicitors:

Blackwells, Auckland

Meredith Connell, Auckland

Sargent Law, Auckland

WANG V MELTZER HC AK CIV-2010-404-3177 5 August 2011

[1]      On  6  December  2010,  I  gave  judgment  dismissing  the  application  for approval of a proposal under s 333 of the Insolvency Act 2006.

[2]      The Commissioner of Inland Revenue, who opposed the application, now seeks court costs against the provisional trustee, Mr Meltzer, under r 14.2(2) of the High  Court  Rules.    It  was  Mr  Meltzer  who  applied  for  court  approval  of  the proposal, as required by s 333.

[3]      I agree with counsel for Mr Meltzer, and counsel for Ms Wang, the insolvent, that it is inappropriate for Mr Meltzer to bear the costs of these proceedings.  My reasons are stated briefly:

(a)      Mr Meltzer was compelled, as provisional trustee, to apply to the court for approval of the proposal once the majority of creditors had approved the proposal.  Hillyer J observed in Re Farmer that in such circumstances a trustee is not in the position of a normal litigant;[1]

[1] Re Farmer HC Auckland B812/90, 1 October 1991 at 20.

(b)Holding professional trustees like Mr Meltzer liable for costs will (in the   absence   of   special   reasons)   be   a   disincentive   to   accept appointment and that will undermine the statutory regime in respect of proposals;

(c)      Though counsel for the Commissioner posited that there are sufficient or special reasons in this case for an order, I am unable to agree.  Mr Meltzer has not acted in a manner that is inconsistent with his responsibilities as provisional trustee.   In Re Liddle Associate Judge Christiansen found such reasons and that the provisional trustee’s conduct amounted to an abuse of process that warranted an indemnity

award against the trustee.[2]   But there is no such abuse in this case;

(d)Moreover, while Mr Meltzer made himself available to the Court as needed, he essentially played a minor role in the proceedings.   In reality it was Ms Wang who substantially put the case for approval.

[2] Re Liddle HC Auckland CIV-2009-404-5377, 25 June 2010.

[4]      For these reasons I decline to make an order for costs against Mr Meltzer.

Associate Judge Sargisson