RE STARPLUS HOMES LTD (IN LIQUIDATION)) v SUN [2014] NZHC 1395

RE STARPLUS HOMES LTD (IN LIQUIDATION)) v SUN [2014] NZHC 1395

The Court exercised its discretion under the High Court Rules and equitable principles to allocate costs according to conduct and reasonableness: Mr Sun's adversarial and unmeritorious conduct unjustifiably increased other parties' costs and warranted increased costs awards against him to the successful building suppliers; United Timber acted responsibly and is not ordered to pay costs to other claimants; liquidators' reasonable indemnity costs as stakeholder are to be paid from the fund and are to be borne equally by Mr Sun and United Timber, with adjustments for hearing fees, and specific cost scales and uplifts were ordered accordingly.

Citation
[2014] NZHC 1395
Parties
Applicant (liquidator of Starplus Homes Ltd (in Liquidation)): Shaun Neil Adams; Applicant (liquidator of Starplus Homes Ltd (in Liquidation)): John Robert Buchanan; First Respondent: David Wei Sun; Second Respondent: Magsons Hardware Ltd; Third Respondent: Hamilton Hardware Retail Ltd; Fourth Respondent: United Timber Merchants Ltd; Fifth Respondent: Dale King Building Supplies Ltd; Sixth Respondent: RD 1 Ltd
Court
High Court
Jurisdiction
New Zealand
Judgment Date
20 June 2014
Procedural Posture
Application Under Companies Act 1993 for Directions and Distribution of Funds From Mortgagee Sales / Costs Determination Following Directions and Entitlement Judgments
Outcome
Costs orders made against Mr Sun to compensate successful building suppliers for additional costs caused by his conduct; no costs order against United Timber; Mr Sun and United Timber to each bear 50% of the liquidators' indemnity costs; liquidators' awarded costs to be increased by hearing fees; monies to be paid...
Legal Topics
Marshalling, Security Interests, Mortgagee Sale, Interpleader, Costs (standard/increased/indemnity), Priority of Creditors
Companies Law Insolvency Property Law Equity Civil Procedure Marshalling Security Interests Mortgagee Sale +3 more

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Parties

Shaun Neil Adams

Applicant (liquidator of Starplus Homes Ltd (in Liquidation))

John Robert Buchanan

Applicant (liquidator of Starplus Homes Ltd (in Liquidation))

David Wei Sun

First Respondent

Magsons Hardware Ltd

Second Respondent

Hamilton Hardware Retail Ltd

Third Respondent

United Timber Merchants Ltd

Fourth Respondent

Dale King Building Supplies Ltd

Fifth Respondent

RD 1 Ltd

Sixth Respondent

Procedural Posture

Application Under Companies Act 1993 for Directions and Distribution of Funds From Mortgagee Sales / Costs Determination Following Directions and Entitlement Judgments

Legal Issues

  1. 1 Who should bear costs as among competing claimants to money paid into Court?
  2. 2 Whether liquidators are entitled to indemnity costs to be paid out of the fund
  3. 3 Whether equitable doctrine of marshalling applies to adjust priorities among secured creditors

Ratio Decidendi

The Court exercised its discretion under the High Court Rules and equitable principles to allocate costs according to conduct and reasonableness: Mr Sun's adversarial and unmeritorious conduct unjustifiably increased other parties' costs and warranted increased costs awards against him to the successful building suppliers; United Timber acted responsibly and is not ordered to pay costs to other claimants; liquidators' reasonable indemnity costs as stakeholder are to be paid from the fund and are to be borne equally by Mr Sun and United Timber, with adjustments for hearing fees, and specific cost scales and uplifts were ordered accordingly.

Court Disposition

Costs orders made against Mr Sun to compensate successful building suppliers for additional costs caused by his conduct; no costs order against United Timber; Mr Sun and United Timber to each bear 50% of the liquidators' indemnity costs; liquidators' awarded costs to be increased by hearing fees; monies to be paid...

Orders

  • Mr Sun shall pay Magsons Hardware Ltd costs on a 2B basis with a 25% uplift plus reasonable disbursements to be paid out of amounts otherwise payable to him from the fund
  • Mr Sun shall pay Hamilton Hardware Retail Ltd costs on a 2B basis with a 15% uplift plus reasonable disbursements to be paid out of amounts otherwise payable to him from the fund