Haines v Memelink

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2021-485-28

[2021] NZHC 2333

UNDER the Insolvency Act 2006

IN THE MATTER

of an application for an order pursuant to s 17 of the said Act setting aside a bankruptcy notice

BETWEEN

QUENTIN STOBART HAINES

Judgment Debtor

AND

HARRY MEMELINK and

CISCA FORSTER in their capacities as the trustees of Link Trust (No. 1)

Judgment Creditors

Hearing: On the papers

Appearances:

J D Dallas for first judgment debtor D Livingston for judgment creditors

Judgment:

7 September 2021

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[Costs]

[1] In my judgment dated 29 June 2021 I declined the judgment debtor’s application for an order setting aside a bankruptcy notice served on him by the judgment creditors, the trustees of the Link Trust (No. 1). I reserved costs, indicating that my preliminary view was that costs should follow the event. Counsel have been unable to resolve costs and I now have memoranda from Mr Livingston for the trustees and Mr Dallas for the judgment debtor. The trustees seek costs on a 2B basis which Mr Livingston has calculated at $8,126, together with disbursements of $110 making a total of $8,236.

HAINES v MEMELINK [2021] NZHC 2333 [7 September 2021]

[2] Mr Dallas accepts that the rules require costs in proceedings to be dealt with at the conclusion of the same, that the trustees were successful in the proceeding, the appropriateness of 2B costs in this case and Mr Livingston’s calculation of costs and disbursements.

[3] However, the judgment debtor has appealed from my decision on the basis that I failed to take into account a judgment debt owed by the trustees to the judgment debtor which Mr Dallas submits makes the trustees net debtors of the judgment debtor.

[4] The difficulty is that that is a matter of dispute, and further complicated by a recent summary judgment on liability in favour of the trustees against the judgment debtor.

[5] Obviously, it would not be appropriate for this Court, dealing with a costs application, to seek to resolve the dispute between the parties as to whether or not the judgment debt owed by the trustees to the judgment debtor, or the more recent summary judgment as to liability, materially alter the position.

[6] The proper course is for this Court to fix costs so that these too are before the Court of Appeal, but stay execution of the costs order. I fix costs and disbursements at the agreed figure of $8,236 and make an order staying execution of that costs order pending the conclusion of the appeal or further order of this Court.

Associate Judge Johnston

Solicitors:
J D Dallas, Wellington for judgment debtor
Livingston & Livingston, Wellington for judgment creditors

CaseChat Overview and Summary

Haines v Memelink is a case in the High Court of New Zealand involving a dispute over a bankruptcy notice. Quentin Stobart Haines, the judgment debtor, applied for an order to set aside a bankruptcy notice served on him by Harry Memelink and Cisca Forster, the trustees of Link Trust (No. 1). The case was heard on the papers with appearances made by J D Dallas for Haines and D Livingston for the trustees. The associate judge's decision, delivered on 7 September 2021, was to decline Haines' application for an order setting aside the bankruptcy notice. The trustees sought costs on a 2B basis, and the judgment debtor accepted the trustees' calculation of costs and disbursements. However, Haines appealed the decision, arguing that the associate judge failed to consider a judgment debt owed by the trustees to Haines, which would make the trustees net debtors of Haines. The court decided that it would not be appropriate to resolve the dispute over the judgment debt or the more recent summary judgment in favour of the trustees against Haines, as it was a matter for the Court of Appeal. Instead, the court fixed costs and disbursements at the agreed figure of $8,236 and made an order staying execution of the costs order pending the conclusion of the appeal or further order of the court.

The legal issues in this case included whether the associate judge failed to take into account a judgment debt owed by the trustees to Haines, which would make the trustees net debtors of Haines. Additionally, the court had to determine the appropriate costs to be awarded to the trustees and whether or not to stay execution of the costs order pending the conclusion of the appeal. The court also considered whether it was appropriate to resolve the dispute over the judgment debt or the more recent summary judgment in favour of the trustees against Haines, as it was a matter for the Court of Appeal.

The court's reasoning was that it would not be appropriate for the High Court, dealing with a costs application, to seek to resolve the dispute between the parties as to whether or not the judgment debt owed by the trustees to Haines, or the more recent summary judgment as to liability, materially altered the position. The proper course was for the court to fix costs so that these too were before the Court of Appeal, but stay execution of the costs order. The court fixed costs and disbursements at the agreed figure of $8,236 and made an order staying execution of that costs order pending the conclusion of the appeal or further order of the court.

The final orders of the court were to decline Haines' application for an order setting aside the bankruptcy notice, fix costs and disbursements at the agreed figure of $8,236, and make an order staying execution of that costs order pending the conclusion of the appeal or further order of the court.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

UNDER	the Insolvency Act 2006
IN THE MATTER	of an application for an order pursuant to s 17 of the said Act setting aside a bankruptcy notice
BETWEEN	QUENTIN STOBART HAINES Judgment Debtor
AND	HARRY MEMELINK and CISCA FORSTER in their capacities as the trustees of Link Trust (No. 1) Judgment Creditors

Hearing:	On the papers
Appearances:	J D Dallas for first judgment debtor D Livingston for judgment creditors
Judgment:	7 September 2021