WILLBURN FURNITURE AND RESTORATIONS LTD (IN LIQ) v GLEDHILL [2016] NZHC 549

WILLBURN FURNITURE AND RESTORATIONS LTD (IN LIQ) v GLEDHILL [2016] NZHC 549

Because the first defendant deliberately stripped the company of assets and ignored creditors, the Court exercised the r 14.6(4)(d) exception to the predictable costs regime and awarded increased costs (but not full indemnity) against him: 2B costs and disbursements jointly and severally against both defendants and a further increased costs award solely against the first defendant.

Citation
[2016] NZHC 549
Parties
First Plaintiff (company in Liquidation): Willburn Furniture and Restorations Ltd (in liq); Second Plaintiff (liquidator): Colin David Owens; Second Plaintiff (liquidator): Grant Stephen Jarrold; First Defendant (director): Matthew Lawrence Gledhill; Second Defendant (son of Director): Cameron Matthew Gledhill
Court
High Court
Jurisdiction
New Zealand
Judgment Date
1 April 2016
Procedural Posture
Civil — Company Liquidation and Breach of Directors' Duties / Final Judgment on Liability and Costs (post Judgment Costs Determination)
Outcome
Judgment for plaintiffs. Costs awarded: 2B costs and disbursements totalling NZD 13,828.04 jointly and severally against both defendants; further increased costs of NZD 10,000 plus NZD 103.50 disbursement against the first defendant alone.
Legal Topics
Directors' Duties, Liquidation, Indemnity Costs, Increased Costs, Reckless Trading, Costs Quantification
Company Law Insolvency Civil Procedure Costs Law Directors' Duties Liquidation Indemnity Costs Increased Costs +2 more

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Parties

Willburn Furniture and Restorations Ltd (in liq)

First Plaintiff (company in Liquidation)

Colin David Owens

Second Plaintiff (liquidator)

Grant Stephen Jarrold

Second Plaintiff (liquidator)

Matthew Lawrence Gledhill

First Defendant (director)

Cameron Matthew Gledhill

Second Defendant (son of Director)

Procedural Posture

Civil — Company Liquidation and Breach of Directors' Duties / Final Judgment on Liability and Costs (post Judgment Costs Determination)

Legal Issues

  1. 1 Whether indemnity costs should be awarded against the first defendant
  2. 2 Whether increased costs are justified under High Court r 14.6(4)(d) as an exception to predictable assessment
  3. 3 Whether defendants are jointly and severally liable for 2B costs and disbursements

Ratio Decidendi

Because the first defendant deliberately stripped the company of assets and ignored creditors, the Court exercised the r 14.6(4)(d) exception to the predictable costs regime and awarded increased costs (but not full indemnity) against him: 2B costs and disbursements jointly and severally against both defendants and a further increased costs award solely against the first defendant.

Court Disposition

Judgment for plaintiffs. Costs awarded: 2B costs and disbursements totalling NZD 13,828.04 jointly and severally against both defendants; further increased costs of NZD 10,000 plus NZD 103.50 disbursement against the first defendant alone.

Orders

  • 2B costs and disbursements totalling NZD 13,828.04 awarded jointly and severally against both defendants.
  • Further award of increased costs of NZD 10,000 plus disbursement of NZD 103.50 made against the first defendant only.