COMMISSIONER OF INLAND REVENUE v LIVINGSPACE PROPERTIES LIMITED (in rec and in liq) [2020] NZHC 2143

COMMISSIONER OF INLAND REVENUE v LIVINGSPACE PROPERTIES LIMITED (in rec and in liq)[2020] NZHC 2143 [24 August 2020]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2010-409-002323[2020] NZHC 2143UNDER the Companies Act 1993IN THE MATTER the liquidation of Livingspace PropertiesLimited (in rec and in liq)BETWEEN COMMISSIONER OF INLANDREVENUEPlaintiffAND LIVINGSPACE PROPERTIES LIMITED(in rec and in liq)DefendantRepresentation: J Moss and H Weston for K L Buxton and D I Henderson(applicants for leave)R B Walker (liquidator) in personJudgment: 24 August 2020(Determined on the papers)JUDGMENT OF OSBORNE J(costs)This judgment was delivered by me on 24 August 2020 at 12 pm pursuant to Rule 11.5of the High Court RulesRegistrar/Deputy RegistrarDate:[1] Self-evidently this proceeding relates to the liquidation of LivingspaceProperties Ltd (in rec and in liq) (Livingspace).[2] In September 2019, Associate Judge Johnston made orders:(a) directing that named persons be served with documents associated withan application made by the liquidator, Robert Walker (the servicedirections); and(b) declaring that the Court has inherent jurisdiction to remove a liquidatorand to entertain applications for leave to apply for such removal (theinherent jurisdiction declaration).1[3] The liquidator sought review by a Judge. I heard the review application andgave a judgment rescinding the service directions but confirming the inherentjurisdiction declaration.2[4] By a supplementary judgment, I ruled by consent that the previous judgmentmade by the Associate Judge as to costs would remain undisturbed.3[5] By this judgment, I determine matters of costs and disbursements relating tothe review application.Costs application of respondents (Kristina Buxton and David Ian Henderson)[6] For the respondents, Mr Moss seeks an award of costs on a 2B basis togetherwith disbursements.4 He has correctly calculated a 2B award at $11,233 and hasverified reasonable disbursements of $160.[7] Mr Moss submits that the liquidator's review was entirely unsuccessful.1 Commissioner of Inland Revenue v Livingspace Properties Ltd [2019] NZHC 2213.2 Commissioner of Inland Revenue v Livingspace Properties Ltd [2020] NZHC 1434.3 Commissioner of Inland Revenue v Livingspace Properties Ltd [2020] NZHC 1664.4 High Court Rules 2016, category 2 under r 14.3(1) and band B under r 14.5(2).[8] On the second aspect — the inherent jurisdiction declaration — that is plainlycorrect. The liquidator was unsuccessful in seeking to have the inherent jurisdictiondeclaration rescinded.[9] The situation in relation to the first aspect of the review — the servicedirections — is a little more complicated. At one level it might be argued that theliquidator was successful in that the service directions were rescinded. But that arose,not for reasons developed by the liquidator in support of the review application butrather, because the Court found that the service directions had arisen out of amisconceived process commenced by Mr Walker when previously seeking furtherdirections from the Court. I explained the flawed background under a heading "Asupplementing procedure goes off the rails" in my review judgment.5 Ms Buxton hadconsistently argued from the outset that the liquidator's request for further directionsshould have been treated as a fresh application.6 In the review judgment, I upheld thatsubmission. That led me to conclude that the service directions had been unnecessaryand to rescind them. The substantive outcome was that, in the event the liquidatorwished to pursue the documents of persons other than Ms Buxton and RFD FinanceLtd, the liquidator would need to make separate application.[10] In these circumstances, it is correct to view the liquidator as having been theunsuccessful party on the review application as a whole.Liquidator's position on costs[11] Mr Walker elected to file no submissions in relation to costs and disbursements.Outcome[12] This becomes a straightforward case for application of the principle that costsshould generally follow the event. A 2B award is appropriate.5 Commissioner of Inland Revenue v Livingspace Properties Ltd, above n 2, at [85]–[93].6 At [88].[13] It is just that the liquidator pay the respondents' costs as calculated by Mr Moss,together with the sum of $956 in relation to the memorandum filed in support of thecosts application.Orders[14] I order:(a) Robert Bruce Walker is to pay to Kristina Buxton and David IanHenderson (jointly) costs which I fix in the sum of $12,189; and(b) Robert Bruce Walker is to pay to Kristina Buxton and David IanHenderson (jointly) their reasonable disbursements which I fix in thesum of $160.Osborne JSolicitors:Canterbury Legal, ChristchurchCounsel: J Moss, Barrister, ChristchurchCopy to: R B Walker