Norton v Archibald

[2021] NZHC 3259

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-791

[2021] NZHC 3259

UNDER

the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of GLENN WILLIAM ARCHIBALD

BETWEEN

MARK EDWARD NORTON and JOHN

TEHIRA HANNON as trustees of the WAIPEPE FAMILY TRUST
Judgment Creditors

AND

GLENN WILLIAM ARCHIBALD

Judgment Debtor

Hearing:	On the papers
Appearances:	SRJ Hamilton for the Judgment Creditors
Judgment:	17 December 2021

COSTS JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 17 December 2021 at 3.30pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors/Counsel:

Kiely Thompson Caisley, Auckland SRJ Hamilton, Barrister, Auckland

NORTON and HANNON as trustees of the WAIPEPE FAMILY TRUST v ARCHIBALD [2021] NZHC 3259 [17

December 2021]

Introduction

[1]    When this matter was called in the Bankruptcy List on 28 October 2021 I granted leave to the judgment creditors to withdraw the proceeding as Mr Archibald, the judgment debtor, had adjudicated himself bankrupt on a debtor’s petition two days prior on 26 October 2021.

[2]    The judgment creditors sought increased costs on the basis that Mr Archibald had always intended to file a debtor’s petition and had intentionally increased the judgment creditors’ costs by waiting until the eleventh hour to do so. I directed the judgment creditors to file a memorandum providing a basis for the award of increased costs in these circumstances.

[3]    A memorandum was filed on 4 November 2021 by the judgment creditors in support of their position.

Increased costs

[4]    Rule 14.6 of the High Court Rules 2016 permits the Court to award increased costs in certain circumstances. As counsel for the judgment creditors submit, rr 14.6(3)(a) and 14.6(3)(c) will clearly not apply to most bankruptcy proceedings. The judgment creditors also accept that this is not a case where Mr Archibald has pursued an argument or defence that is without merit or refused an offer that he ought to have accepted so the judgment creditors are not able to rely on 14.6(3)(b).

[5]    The remaining basis set out in r 14.6(3)(d) permits the Court to award increased costs where “some other reason exists which justifies the Court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.”

[6]    The cases referred to in the commentary where this basis has been relied upon appear to involve considerably more egregious behaviour than has occurred here.

[7]    Increased costs may be ordered, however, where costs have been wasted when a fixture has been vacated or a hearing is abandoned part way through due to default.1

[8]    The judgment creditors submit that Mr Archibald could have filed a debtor’s petition at any point since May 2021 when he first had notice of the judgment debt against him and an inference can be drawn that his failure to do so was designed to ensure that the judgment creditors’ legal fees were wasted costs and as high as possible. I am not satisfied that such an inference can necessarily be drawn. I accept that Mr Archibald appears to have attempted to avoid service but it is not clear that he waited until the eleventh hour in order to increase the costs of the judgment creditors.

[9]    I therefore order costs below on a 2B basis but make one adjustment to the schedule of costs claimed to remove the allowance for the preparation of the memorandum on costs. The Court’s usual practice is not to award “costs on costs”.2 Such an award will only be appropriate where there is some complexity in relation to the availability of costs or their quantum and the successful party has gone to considerable time and expense addressing that ambiguity over the unsuccessful party’s reasonable opposition. That is not the position in this case and so I deduct $956.00 from the total amount of $6,214.00 claimed.

[10]   The disbursements claimed are for filing fees, service and sealing this order and appear appropriate.

Result

[11]Costs are awarded to the judgment creditors on a 2B basis in the amount of

$5,258.00 plus disbursements of $1,050.00.

Associate Judge Sussock

1      See for example Marley New Zealand Ltd v Skellerup Rubber Services Ltd [2013] NZHC 3040.

2      Jeffreys v Morgenstern [2013] NZHC 1361 at [40]; Barry Park Investments Ltd v Body Corporate Number 95388 [2016] NZHC 1527 at [25]; Epsom Woods Ltd v Waitakere Farms Ltd [2020] NZHC 3137 at [4]; and for a recent example, Combined Property Maintenance Ltd v Singh [2021] NZHC 621 at [19].