MARK HECTOR NORRIE AS LIQUIDATOR OF PAKIRI INVESTMENTS LIMITED (IN LIQUIDATION) v I SUTICH AND ORS AND TIME3 GLOBAL LIMITED [2015] NZHC 2913

MARK HECTOR NORRIE AS LIQUIDATOR OF PAKIRI INVESTMENTS LIMITED (IN LIQUIDATION) vI SUTICH AND ORS AND TIME3 GLOBAL LIMITED [2015] NZHC 2913 [20 November 2015]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV 2013-404-002847[2015] NZHC 2913IN THE MATTER OFANDCompanies Act 1993IN THE MATTER OF An application under s 266 for productionof documents and examination ofrespondentsBETWEEN MARK HECTOR NORRIE ASLIQUIDATOR OF PAKIRIINVESTMENTS LIMITED (INLIQUIDATION)ApplicantAND IGOR SUTICHFirst RespondentLARRIE NEWMANSecond RespondentRAJENDRAN RAVIKULANThird RespondentARRON GLYN JUDSONFourth RespondentHearing: On the papersCounsel: M H Norrie the LiquidatorR B Hucker for the RespondentJudgment: 20 November 2015JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE CHRISTIANSENThis judgment was delivered by me on20.10.15 at 4:30pm, pursuant toRule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateCIV 2013-404-003305BETWEEN MARK HECTOR NORRIE ASLIQUIDATOR OF PAKIRIINVESTMENTS LIMITED (INLIQUIDATION)ApplicantAND TIME3 GLOBAL LIMITEDRespondentIntroduction[1] Mr Norrie, the liquidator of Pakiri Investments Ltd (in liq) applies for costs inrelation to two proceedings.[2] The first of these proceedings, CIV-2013-404-2847, concerned an applicationunder s 266 of the Companies Act 1993 for an examination order of a person involvedin the management of Pakiri. That application was successful and the examinationwas concluded on 16 June 2014 before Judge Doogue. Mr Norrie was represented byindependent counsel during the examination itself, but not at any other time duringthis proceeding. After the examination had been carried out, Mr Norrie applied toAssociate Judge Doogue for costs in relation to the examination proceeding, but thatapplication was adjourned until the outcome of the second proceeding was known.[3] The second proceeding, CIV-2013-404-3305, concerned an applicationseeking orders that certain property be transferred back to Pakiri. Mr Norrie broughtthese proceedings in his own name and he was not represented, except at one mentionshearing. By its judgment dated 21 May 2015, the Court allowed this application andordered the property returned. That decision has now been appealed to the Court ofAppeal.[4] Mr Norrie seeks costs on a 2B basis in both proceedings. In relation to the firstproceeding, this application is limited to the examination itself. Both applications areopposed.CIV 2013-404-002847[5] Mr Norrie seeks costs for the conducting of the examination itself. This taskwas performed by counsel. Mr Hucker opposes this application. He argues that theproceedings came to an end when the examination order was conducted and there aretherefore no proceedings in motion to which a costs order could attach. This argumentis inherently attractive given that the High Court Rules make no express provision forcosts for the conducting of an examination.[6] Further, Mr Hucker correctly points out that the examined person is not truly alitigant in the proceedings from this point. Rather they are a detained person and theironly role is to answer questions. There is no situation in which the examined personcould expect to receive costs for such a proceeding. As such, it is difficult if notimpossible to cast either party as the "successful" one, as regards the examinationitself.[7] The Court also accepts Mr Hucker's argument that there is a close analogybetween a court ordered examination and an examination conducted before aliquidator. In either circumstance, the appropriate course for costs is that set out in theprovisions of the Companies Act 1993, Liquidation Regulations 1994.[8] For these reasons the Court considers that there should be no order for costs inrelation to the s 266 proceedings.CIV 2013-404-003305[9] In relation to this proceeding, the primary objection to Mr Norrie's applicationis that he was self represented in the proceedings. It is a well established rule, whichMr Norrie accepts, that a self-represented litigant is not entitled to costs, althoughdisbursements may be payable.1 However, Mr Norrie submits that his role as anofficer of the Court makes this an exceptional case, such that costs should be awarded.The central question then is what impact Mr Norrie's role as a liquidator has on hiseligibility for costs.Costs for liquidators[10] Liquidators are in a similar position to directors in terms of costs awards. Aswith directors, there are situations where liquidators may bring proceedings in theirown name or in the name of the company. When they elect to do so in their own name,they will be liable for costs, although the company may indemnify them. When theyelect to do so in the name of the company, generally it is the company that will be1 High Court Rules, r 14.2(f); Commissioner of Inland Revenue v Chesterfields Preschools Ltd[2010] NZCA 400 at [162]; Re Collier (a bankrupt) [1996] 2 NZLR 438 (CA); Transit NZ v CookHC Greymouth CP6/93, 30 June 1994.liable. As is often the case with costs, there is a symmetry between the liquidator'sliability for costs and their right to claim costs in their own account.Costs in the absence of independent counsel[11] Costs are generally awarded to compensate a party for the cost of retainingindependent counsel. The principle behind this is that successful parties should not beout of pocket for bringing or defending proceedings.2 As such, the unsuccessful partyis required to make a reasonable contribution to the costs which have been incurred.3Since 1 January 2000, this contribution has been fixed by a scale estimated to be two-thirds of the reasonable cost.4[12] A difficulty arises, however, when a party is not represented by independentcounsel but rather represents itself, or appoints in-house counsel for this task. Thereis a principle that a party may not profit from an award of costs.5 Hence those whoreceive legal services free of cost or who perform the work themselves are not entitledto receive costs.6 The position with in-house counsel is somewhat different, however.While in many cases in-house counsel will not be suitable representatives, in othercases, their services will be entirely adequate. These services also come at a cost andso the Courts have repeatedly accepted that an award of costs may be made to coverthe expenses associated with in house counsel. Nor are companies required to providedetailed evidence of salaries and time cards in order to qualify. Just as Courts arewilling to accept the assurances of counsel that scale costs do not exceed the costsactually billed, they are willing to accept that the cost of in-house counsel exceedsscale costs without evidence to support this conclusion.7[13] Where an insolvent company elects to continue to employ in-house counselthere is no reason why this rule should not also apply to them. Similarly, a liquidator2 Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [8] per Hammond J for theCourt.3 At [8].4 At [10]-[11], High Court Rules, r 14.2(d).5 High Court Rules, r 14.2(f).6 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400 at [162]; ReCollier (a bankrupt) [1996] 2 NZLR 438 (CA); Transit NZ v Cook HC Greymouth CP6/93, 30June 1994.7 Henderson Borough Council v Auckland Regional Authority [1984] 1 NZLR 16 (CA) at 23, perCooke J.would be entitled to use in-house lawyers and receive scale costs for their work.Where a liquidator is a trained lawyer, it may also be possible for him to seek costs inrelation to legal work he, himself has performed when acting for the company.[14] However, where the liquidator brings proceedings in his own name, thesituation is somewhat different. Here, the liquidator who chooses to act for himself isproperly viewed as a pro se litigant. There are clear rules that a pro se litigant is notentitled to an award of costs. Especially where he is not legally trained, this rule willprevent a liquidator from obtaining an award of costs for his own work in bringingproceedings in his own name.The present case[15] This brings us to the present case. The situation in relation to the secondproceeding is exactly that described above. Mr Norrie, who is not a trained lawyer,has elected to bring proceedings in his own name. He has also elected not to retaincounsel, but has prosecuted the proceedings himself. While he is successful, he hasnot expended any cost on the proceeding and is not entitled to an award of costs. Hisonly remedy is the costs which he is entitled to take in the liquidation.[16] The situation in the first proceeding is similar. Mr Norrie was only representedonce by independent counsel for a single mentions hearing. Mr Hucker accepts thatcosts may be payable for that appearance, but argues that such costs should be refusedpursuant to rule 14.7 of the High Court Rules, because of the delays caused by MrNorrie's own actions.[17] The Court agrees with this submission. The costs in relation to this element ofthe proceeding are very minor. By contrast, Mr Norrie's late filing of affidavits led toan adjournment part way through a fixture and his failure to produce Mr Piper forcross-examination also put the respondent to additional expense. In thesecircumstances, the Court considers that it is just to let costs lie where they fall inrelation to this proceeding.Disposition[18] For the reasons set out above, the Court makes no award of costs. Costs are tolie where they fall.Associate Judge Christiansen