Judge rejects counsel’s argument that issue estoppel barred costs order
In an applicant’s proceeding to set aside a statutory demand arising from a District Court judgment in the respondent’s favour, the High Court refused a request by the applicant’s counsel to recall its judgment awarding scale costs personally against him.
Before the District Court, the respondent in Vasanthan & Company Limited v De Lage Landen Limited [2026] NZHC 2473 obtained a judgment against the applicant and the guarantors of its liability to the respondent.
Associate Judge Cogswell of the High Court refused the guarantors’ request to set aside the respondent’s bankruptcy notices. The associate judge refused to award costs against the applicant’s counsel personally and instead awarded indemnity costs against the guarantors.
The Court of Appeal of New Zealand found no merit in the appeal from Cogswell’s judgment.
Meanwhile, in the present High Court proceeding, the applicant applied to set aside the respondent’s statutory demand. Both High Court proceedings flowed from the judgment of the District Court of New Zealand.
The respondent sought indemnity costs against the applicant’s counsel. For the costs application, the respondent’s counsel filed detailed submissions, while the applicant’s counsel provided minimal submissions.
On 22 June 2026, Associate Judge Lester found scale costs appropriate. Thus, the judge awarded costs against the applicant’s counsel personally on a 2B basis, plus disbursements as fixed by the registrar.
The applicant’s counsel applied to recall the June judgment. He alleged that Associate Judge Cogswell’s refusal to award costs against him personally in the parallel case created an issue estoppel bar to a costs award against him personally in the present proceeding.
The New Zealand High Court refused to recall the June judgment. For the recall application, the court ordered the applicant’s counsel to pay costs on a 2B basis.
Associate Judge Lester of the High Court ruled that issue estoppel did not apply.
While acknowledging that the two proceedings sought to enforce the same underlying debt, the court stressed the differences between their parties, their statutory frameworks, and their specific applications.
The court noted that the applicant’s counsel was not a party in either proceeding.
The court refused to revisit its June costs award against the applicant’s counsel, given that the applicant relied on its counsel’s advice when it initiated the present proceeding, which lacked merit and abused the process as a collateral attack against the District Court judgment.
“Counsel who are the originator or designer of a proceeding which is an abuse of process must bear the consequences of advising such a proceeding be brought, as opposed to counsel who act on instructions where different considerations may well apply,” Associate Judge Lester wrote.
Here are some other recent decisions by the High Court of New Zealand.
Upon the executors’ attempt to bring an originating application via a without-notice interlocutory application, the High Court issued a 24 July 2026 decision that discharged one executor and permitted the three remaining executors to keep serving in their role.
After previously issuing an interim injunction, the High Court made a 23 July 2026 decision acceding to Manage My Health’s request for a permanent injunction regarding patient data stolen during a December 2025 cyber incident.
In a proceeding arising from a plaintiff’s 2016 application for New Zealand citizenship, the High Court issued a 17 July 2026 decision striking out his proceeding, which it found vexatious, abusive of process, and lacking in merit or a reasonably arguable cause of action.
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