FINNIGAN AND WHITTFIELD V HE HC AK CIV-2009-404-000753

FINNIGAN AND WHITTFIELD V HE HC AK CIV-2009-404-000753 13 August 2010IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2009-404-000753UNDER the Companies Act 1993 IN THE MATTER OF the liquidation of HARD TO FIND BUT WORTH THE EFFORT QUALITY SECOND HAND BOOKS (WELLINGTON) LIMITED BETWEEN PERI FINNIGAN AND JOHN TREVOR WHITTFIELD Applicants AND YONG QUAN HE, JUN YOU HE AND JUN HA HE Respondents Hearing: (On the Papers) Appearances: D G Smith for the Applicants P S J Withnall for the Respondents Judgment: 13 August 2010JUDGMENT OF DUFFY J [Re Costs]This judgment was delivered by Justice Duffy On 13 August 2010 at 5.00 pm, pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar Date:Counsel: D G Smith P O Box 3799 Shortland Street Auckland 1140 for the Applicants P S J Withnall P O Box 10201 The Terrace Wellington 6143 for the Respondents Solicitors: Greg Dunning and Associates (G R Dunning) P O Box 31264 Milford North Shore City 0741 for the Applicants P J Morahan P O Box 30913 Lower Hutt 5040 for the Respondents[1] The successful respondents in this proceeding seek an award of costs on a category 2B basis. The application is opposed. [2] An award of costs usually follows the event. I am satisfied that this general principle should apply to this proceeding. There is nothing exceptional about the case which would justify a departure from the general principle. The respondents are, therefore, entitled to an award of costs. [3] Category B is a standard categorisation for costs purposes. The proceeding had greater complexity than many category 2B proceedings. I consider that the proceeding is well within the scope of category 2B. Thus costs on a 2B basis are appropriate. [4] The applicants have suggested that the respondents should not benefit from an award of costs because the respondents have enjoyed the good fortune of a "quirk in the law". The respondents are affronted by that suggestion, and with good reason. The legal principles which determined the outcome of the substantive proceeding are well established. Furthermore, they are founded in a concept of fairness, which holds that it would be unfair to require someone who is both a creditor and a debtor of a bankrupt to pay his or her debt to the bankrupt in full, whilst at the same time only receiving a dividend, or nothing as payment of the debt owed by the bankrupt: see Finnigan v He [2010] 2 NZLR 668 (HC) at [39]. There is nothing quirky or undeserved about the respondents' success in the proceeding. [5] The applicants contend that when it comes to quantifying the award of costs, the proceedings should be treated as analogous to a summary judgment proceeding. If this were so, it would reduce the sum of the costs to be paid. The respondents contend that the proceeding is an originating application which conforms with item 8 of Schedule 3, and that it is therefore inappropriate to treat it as being akin to a defended summary judgment application. I consider the respondents are correct. [6] As the respondents have pointed out in their memorandum, a summary judgment application is an interlocutory application. It may or may not determine the proceeding. The hearing of an originating application results in a finaldetermination. Therefore, that the respondents are entitled to costs of $5,920, as set out in the schedule attached to their application. [7] The applicants do not dispute the reasonableness of the disbursements sought and, accordingly, I direct that the respondents are entitled to disbursements of $5,726.70.Result[8] The respondents are awarded costs of $5,920, together with disbursements of $5,726.70. Duffy J