Willis v Willis

[2018] NZHC 237

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-000092 [2018] NZHC 237

BETWEEN

LESLIE ARNOLD WILLIS

Plaintiff

AND

EILEEN ANNE WILLIS Defendant

Hearing:	24 October 2017
Appearances:	A Patterson for the Judgment Creditor H Fulton for the Judgment Debtor
Judgment:	26 February 2018

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 26 February 2018 at 10.30 a.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

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

Solicitors:

Rennie Cox, Auckland

H Fulton, Auckland

WILLIS v WILLIS [2018] NZHC 237 [26 February 2018]

[1]      On 24 October 2017, I delivered a judgment that annulled the bankruptcy of Ms Willis (Anne) under s 309(1)(a) of the Insolvency Act, on the basis that she should not have been adjudicated bankrupt.  The judgment records that the application for adjudication, made by Mr Willis (Leslie), her estranged husband, was sought for no greater purpose than to oppress her and was accordingly an abuse of process, justifying the annulment order.

[2]      I left open the issue as to costs between the parties.  Though I provisionally held that costs should be awarded against Leslie to Anne on at least a 2B basis, I allowed counsel the chance to confer. I also reserved the issue as to who (if anyone) would pay the costs of the Official Assignee, setting out that my preliminary view was that the Assignee should bear these costs.

[3]      The submissions filed by counsel for Anne suggest that 2B costs and disbursements have been agreed between the parties at $9,758.74.   However, the submissions filed by counsel for Leslie, which are in response to submissions for Anne, do not touch upon the issue of costs as between the two parties. From this I can infer that counsel for Leslie accepts this figure as agreed.

[4]      I therefore propose to make an order for costs and disbursements on a 2B basis against Leslie, in the sum of $9,758.74.

[5]      Turning to the matter of the Official Assignee’s costs, under s 309(5)(a), following annulment, the Court has a discretion to fix an amount as reasonable remuneration for the Assignee’s services and order that amount to be paid.

[6]      I accept the amount of $23,351.90, which the Assignee claims for remuneration up to the date of annulment as reasonable; neither party has taken issue with the quantum which the Official Assignee is claiming.

[7]      The issue therefore is to determine who is to bear these costs.

[8]      In my judgment, I determined that Anne’s delay in bringing proceedings for annulment of her bankruptcy, while germane to the exercise of the discretion to annul, was far from determinative of the exercise.

[9]      In determining who should pay costs, I believe the delay is of greater salience. A period of 10 months transpired between the date of adjudication and the application for annulment.  During this period the Official Assignee had a duty to undertake an investigation and division of Anne’s estate.  The length of delay was an important factor resulting in the size of the amount the Assignee now claims.

[10]     Yet, I also consider that Leslie bears accountability for the costs. While it cannot be said that Leslie “had no right to commence the bankruptcy proceedings”, his choice to pursue such a harsh remedy against his wife was for no greater reason than “to exacerbate her stress, complicate her legitimate claim in relationship property proceedings, and prolong its final resolution.”  This entire fiasco, which has caused considerable suffering for Anne, and financial pain for both parties, could have been avoided had Leslie shown even some small iota of magnanimity towards Anne instead of depriving her of access to funds to meet the costs debt awarded against her by Duffy J.

[11]     My  greatest  concern  in  awarding  costs  to  the  Assignee  is  to  avoid compounding the injustice on Anne, over and above what she has already suffered. Unfortunately, I have little confidence that the relationship property of Anne and Leslie and trust property in which they have an interest will be divided in a timely fashion, and I fear that an award which falls too heavily upon Anne will exacerbate her already considerable financial stress.

[12]     My  solution  is  thus  to  divide  the  burden  of  the  Official  Assignee’s remuneration between all three parties.

[13]     I order that Anne pay an amount totalling $3,502.79, which is 15% of the reasonable remuneration for the services of the Official Assignee.

[14]     I order that Leslie pay $8,173.17, which is 35% of the reasonable remuneration for the services of the Official Assignee.

[15]     Therefore, the Official Assignee will be left to bear the burden of shouldering the remainder, being $11,675.95, or 50% of the reasonable remuneration for the Assignee’s own services.

[16]     Furthermore,  since  the  Official Assignee  took  no  substantial  part  in  the annulment litigation, I make no order as to costs either against or in the Assignee’s favour.

[17]     I consider that this is an exceptional case, in which recourse to the public purse is justified to ensure that the financial and emotional stress, caused by the preceding litigation, is not further compounded. I do not consider, that in the interests of justice, I could make a greater award of costs against either Leslie or Anne in favour of the Official Assignee.

[18]     I hope my concerns for the amicable division of the relationship property of Anne and Leslie come to nought and that both parties move on from the bitter history of litigation, which has consumed them these last few years.

Result

[19]     I order:

(a)       Leslie is to pay costs and disbursements to Anne on a 2B basis, in the sum of $9,758.74.

(b)Anne and  Leslie are to  pay $3,502.79  and  $8,173.17  respectively towards the Official Assignee’s services.

Associate Judge Sargisson