O'Connor v O'Connor HC Dunedin CIV 2010 412 402 [2011] NZHC 1422 (6 October 2011)

Last Updated: 9 November 2011

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

_{CIV 2010 412 402}

UNDER the Administration Act 1959

IN THE MATTER OF of the Estate of Patrick Anthony O?Connor

BETWEEN CLAIRE MARY O?CONNOR , BRENDON PATRICK ROBERT O?CONNOR, PATRICIA MARGARET GWENELLEN O?CONNOR, BRONWYN EVELYN DANIELS, MIKE BENJAMIN REEVES AND ANDREA KIM REEVES Plaintiffs

AND MARGARET MARY O?CONNOR Defendant

Hearing: By Memoranda

(Heard at Christchurch)

Appearances: L A Andersen for Applicant/Defendant

W J Scotter for Respondents/Plaintiffs

Judgment: 6 October 2011

JUDGMENT OF ASSOCIATE JUDGE OSBORNE AS TO COSTS

[1] This proceeding concerned the estate of Patrick O’Connor who was the defendant’s husband. The plaintiffs, who were variously their children and grandchildren, had sought orders for the removal of the defendant as administrator of her husband’s estate and appointing a corporate trustee in her place. The proceeding was issued in June 2010 and was defended. Discovery and case management

_occurred.

O?CONNOR V O?CONNOR HC DUN CIV 2010 412 402 6 October 2011

[2] On 1 July 2011 the plaintiffs notified the Court that they were electing not to proceed.

[3] Costs were reserved for submission upon the basis that the plaintiffs had discontinued.

Costs on a discontinuance – the principles

[4] Rule 15.23 provides –

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[5] I adopt as a convenient summary of the principles which emerge from the cases, and in particular the Court of Appeal’s review in Kroma Colour Prints v Tridonicatco NZ Ltd,[1] as they are summarised by the authors of McGechan on Procedure at HR 15.23.01 –

(a) Although r 15.23 is designed to give a certain and predictable outcome upon discontinuance, it may be displaced “if there [are] just and equitable circumstances not to apply it”. One example is Small v A Judicial Committee HC Christchurch CIV-2009-409-2622, 20

April 2010, where a discontinuing plaintiff who had achieved all he set out to achieve was awarded “modest” costs as, effectively, a successful party. Another example is the award of scale costs to the discontinuing plaintiff in Coromandel Heritage Protection Society Inc v Thames Coromandel DC HC Hamilton CIV-2007-419-1649, 11

February 2008. Discontinuance followed the defendant council eventually making proper disclosure relating to resource consent applications and associated litigation.

(b) The general costs discretion in r 14.1 can also override r 15.23.

(c) The Court will not speculate on the merits of a case it never heard.

Only in the exceptional case where the merits are clear might they influence the Court’s costs decision upon a discontinuance. Also, the expense of an inquiry into the merits tends to undo the costs benefits of discontinuance: Stollery v Fruit 2Go Ltd HC Tauranga CIV-2009-

_{470-283, 10 March 2011 at [15].}

Defendant’s claim

[6] The Court had determined that this was a Category 2 proceeding.

[7] The defendant has applied for costs on a 2B basis together with disbursements. Having regard to the steps taken in the proceeding (which principally relate to defence, discovery, inspection and case management conferences) the application of scale 2B produces a figure of $12,032, the calculation of which is not challenged by the plaintiffs. Unchallenged disbursements total

$195.87.

[8] In his memorandum in support of the defendant’s costs, Mr Andersen referred to r 14.2(a) (the principle that the party who fails with respect to a proceeding should pay the cost of the party’s exceeds). While that principle applies generally in relation to matters of costs, the more directly relevant provision is r 15.23. That rule must be given some primacy given that it specifically relates to discontinuances and having regard to the Court of Appeal’s observations in Kroma Colour Prints (above [4](c)) where it was observed that the Court will only in exceptional cases consider the merits of the case.

The plaintiffs' opposition to costs

[9] For the plaintiffs, Mr Scotter gathered his submissions under three main points, asserting –

The plaintiffs had acted reasonably in issuing the proceeding and, if it

_{had proceeded to trial, they would almost certainly have succeeded.}

The defendant acted unreasonably in refusing to provide the plaintiffs with information about the estate (especially as to its gross value) before the proceeding was issued.

The plaintiffs did not “fail” in the proceeding – the proceeding was successful because it enabled them to obtain more accurate

_{information from the defendant about the estate.}

[10] What has happened is that the plaintiffs have now come to the view that the issues which they wish to pursue can be better dealt with in the Family Court under the provisions of the Family Protection Act 1955 and of the Protection of Personal and Property Rights Act 1988.

Discussion

Obtaining information

[11] I begin with the obtaining of information through this proceeding.

[12] Mr Scotter submitted that there was an analogy between this case and cases such as Sybeem Holdings Ltd v Body Corporate No. 187087[2]. In Sybeem, the plaintiffs issued the proceeding in order to obtain access to the accounts and records of the Body Corporate under the Unit Titles Act 1972. Although some limited access to documents had been given by the Body Corporate before the High Court proceeding was issued, there was a continuing delay even after the proceeding was issued in the Body Corporate’s supplying the documents. Unsurprisingly, costs were

awarded to the plaintiff.

[13] Mr Scotter submitted that the outcome for the plaintiff in Sybeem was analogous to that in the present case. I disagree. The plaintiff ’s statutory right to information under the Unit Titles Act was central in the Sybeem case. It was the very matter pursued by way of relief. The present proceeding was hostile litigation in which the rights of discovery and inspection arose as procedural rights in relation to the substantive issues in the litigation. If, as Mr Scotter’s submissions imply, discovery and inspection were necessary as a precursor to deciding whether the High

_{Court claim should proceed, there were avenues open to the plaintiffs without the}

filing of a claim: see r 8.25. In the event an application for pre-commencement discovery had been made, then the expenses of that application would have been dealt with in the context of that application, pursuant to r 8.27.

[14] In this case, the plaintiffs chose to commence their proceeding which they have subsequently, in the light of discovered information, considered to be less appropriate than proceedings in another jurisdiction. They have had the benefit of discovery and inspection which has apparently helped them to shape their claims for that other jurisdiction. But in relation to this proceeding, the substantive claim itself has effectively failed.

Unreasonable refusal to provide information?

[15] My consideration of this submission is essentially comprehended by the previous discussion. The plaintiffs, faced with an executor’s refusal to supply information (whether reasonable or unreasonable), had available to them the option of pre-commencement discovery either in this Court or in the District Court. Instead they chose to issue the substantive proceeding itself.

[16] There is the added aspect of this case that the plaintiffs are essentially attacking the interest of the defendant. She is under no obligation, outside litigation, to voluntarily provide information about her own position to others. Insofar as she is executor of her late husband’s estate, there are issues of confidentiality which may arise, entitling the executor to require an order of the Court if information is to be disclosed. The pre-commencement discovery rules are there to deal with that situation.

Success in the proceeding?

[17] In my view, the more appropriate basis of consideration of this costs application is under r 15.23. Discovery of information was not the substantive focus of this proceeding, as it was in Sybeem. At this point we simply do not know what the outcome of the plaintiffs' substantive claims will be. The observations of the Court of Appeal in Kroma Colour Prints appropriately identify the difficulties and

risk of speculating on such outcomes, unless they are remarkably clear. The likely outcome in this case are not clear.

Conclusion

[18] I do not find it just and equitable to depart from the primary provision of r

15.23. This is not a case where a discontinuing plaintiff has achieved all that it set out to achieve. Nor is it a case where the merits of the substantive issues are manifest.

Order

[19] I order that the plaintiffs pay the defendant’s costs in the sum of $12,032

_{together with disbursements in the sum of $195.87.}

Associate Judge Osborne

Solicitors:

Harkness Henry, Hamilton [e-mail]

Medlicotts, Dunedin [e-mail]

L A Andersen, Dunedin [e-mail]

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[1] Kroma Colour Prints v Tridonicatco NZ Ltd [2008] NZCA 150; (2008) 18 PRNZ 973 at 975

[2] Sybeem Holdings Ltd v Body Corporate No. 187087 HC Auckland CIV 2009-404-7806 3 May 2011