Wiri Wholesale Timber Limited v Parkes

[2019] NZHC 1685

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000813

[2019] NZHC 1685

UNDER

the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of J Parkes and A S Parkes

BETWEEN

WIRI WHOLESALE TIMBER LIMITED

Judgment Creditor

AND

GRACE PARKES

Judgment Debtor

CIV-2019-404-000814

BETWEEN

WIRI WHOLESALE TIMBER LIMITED
Judgment Creditor

AND

ANTHONY STEPHEN PARKES

Judgment Debtor

Hearing:	11 July 2019
Appearances:	J Ropati for the Judgment Creditor T Nelson for the Judgment Debtors
Judgment:	18 July 2019

COSTS JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 18 July 2019 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Solicitors:

iCLAW Culliney Partners, Hamilton J Ropati, Auckland

T Nelson, Auckland

Registrar/Deputy Registrar Date.......................................

WIRI WHOLESALE TIMBER LTD v PARKES [2019] NZHC 1685 [18 July 2019]

[1]I thank counsel for their costs memoranda.

[2]My question about actual costs was directed to r 14.2(f):

(f) an award of costs should not exceed the costs incurred by the party claiming costs:

[3]        I accept counsel for the creditor’s advice as to the actual costs incurred by the judgment debtors.

[4]        The remaining issues relate principally to what is an appropriate award for scale steps relating to the two applications for adjudication; and in that respect:

(a)What is the appropriate costs category for the proceedings?

(b)What is a reasonable amount of time for the steps (allowed under the scale) that have been taken in each proceeding? Should there be no award or a reduction in the award for the second proceeding, taking into account that one of the applications substantially duplicates another?

[5]In my assessment:

(a)The appropriate costs category for the proceedings is Category 2. In terms of r 14.3 the proceedings are of average complexity requiring counsel of skill and experience considered average in the High Court.

(b)The fact that the second proceeding is closely related to the first and obviously involves a large measure of duplication may affect what is a reasonable time for the steps involved in the second proceeding, but it does not change the nature of the proceeding as one of identical complexity requiring counsel of skill and experience considered average in the High Court.

(c)A reasonable time for the steps allowed in relation to the first proceeding (whether that is Mr or Ms Parkes’ proceeding) is a normal amount of time. The same would apply to the second proceeding if it

had not been so closely related to the first. But given the obvious degree of duplication in the two proceedings, it is reasonable for the debtors to ask whether there should be a reduction in the compensation awarded towards the judgment creditors’ actual costs in the second proceeding. I accept that a reasonable amount of time for the allowable steps in the second proceeding is a comparatively small amount of time under r

14.5. It follows that I do not accept the debtors’ alternative submission that there should be no award for the second proceeding, but nor do I accept the creditor’s contention that the award should reflect Band B.

[6]A remaining issue relates to GST:

(a)The judgment creditor is claiming the usual disbursements including fees of Court, all of which are GST inclusive.1

(b)As the Court of Appeal stated in New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282 an award of disbursements should include GST only if the successful party is not GST-registered. 2 The Court also said at [17]:

If a successful party is to be fully reimbursed for its actual claimable expenses, then the Court must know whether it is registered for GST. The aim when allowing disbursements is full recovery, so that the successful party is not left out of pocket.

(c)The onus is on the successful party to provide this information. If the Court receives no information from the party as to its ability to recover a GST input credit from Inland Revenue, the Court should proceed to exclude GST from disbursements.3

(d)Presently, I have not been provided with any information as to whether the creditor is GST-registered and that, I expect, is because it is

1      Fees of Court are GST inclusive : reg 13 High Court Regulations 2001.

2      New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282 at [60].

3      Ditto at 61.

registered.    Consequently,    GST    is    to    be    excluded    from    its disbursements.

[7]        The judgment debtors make a final submission. They argue, in effect, that there has been a duplication of the service fees claimed. I accept the creditor has incurred service fees of $130 in each proceeding; I accept that it is entitled to be compensated for them.

Order

[8]I order as follows:

Bankruptcy notices

(a)In each proceeding the judgment creditor is entitled to 2B costs on the following step allowed in the High Court scale:

(i)Item 44 – filing and serving bankruptcy notice – 0.2 of a day x

$2,230 = $669.

Adjudication proceedings – item 45

(b)In the first proceeding the judgment creditor is entitled to 2B costs on the following steps as follows:

(i)Item 45 – filing application for adjudication by creditor. 0.6 of a day x $2,230 = $1,338.

(c)In the second proceeding the judgment creditor is entitled to 2A costs on the following steps as follows:

(i)Item 45 – filing application for adjudication order by creditor. 0.3 of a day x $2,230 = $669.

Appearance at hearing – item 46

(d)As I indicated at the hearing, the award for the appearance on both proceedings is made on the basis that there will be one 2B award, split equally between the two proceedings. Therefore the allocation to each proceeding is $446. The allocation is made pursuant to r 14.7(f).

(e)The calculation for each proceeding is as follows: 0.4 of a day x $2,230

= $892, x 50% = $446.

Disbursements

(f)The disbursements claimed are allowed, with this proviso: GST may not be charged on the disbursements and is to be deducted from the amounts claimed for each proceeding, as follows:

(i)$174 for filing fees on the bankruptcy notice.

(ii)$130 for service fees on the bankruptcy notice.

(iii)$435 for filing fee on the application for adjudication.

Associate Judge Sargisson