Thompson v Quinn [2012] NZHC 5 (17 January 2012)

Last Updated: 16 February 2012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-008457 [2012] NZHC 5

UNDER Section 165 of the Companies Act 1993

BETWEEN BRUCE JAMES THOMPSON Applicant

AND CLIVE ANTHONY QUINN & PAMELA ISABEL QUINN

Respondents

Hearing: (On the papers)

Counsel: D R Bigio for Applicant

S P Bryers for Respondents

Judgment: 17 January 2012 at 2:00 PM

_{COSTS JUDGMENT OF VENNING J}

This judgment was delivered by me on 17 January 2012 at 2.00 pm, pursuant to Rule 11.5 of the

_{High Court Rules.}

Registrar/Deputy Registrar

Date...............

Solicitors: Lee Salmon Long, Auckland

Martelli McKegg Wells & Cormack, Auckland

Copy to: D R Bigio, Auckland

S P Bryers, Auckland

THOMPSON V QUINN HC AK CIV-2010-404-008457 17 January 2012

[1] The judgment of 6 October 2011 refers. Costs were awarded in favour of the applicant on a 2B basis. The parties have been unable to agree on certain aspects of the appropriate costs award. Counsel have exchanged memoranda and have agreed the matter may be dealt with on the papers. I have considered the various memoranda and record my decision as to costs as follows.

Items 4.13, 4.14 and 4.15

[2] The applicant seeks costs for steps associated with responding to an application by Mr Wells, a trustee of the R J Thompson Trust. Mr Wells, together with the applicant and Mr Quinn, was a trustee of the Trust. Mr Wells sought an interim stay and variation of a timetable order in order to ascertain the views of the beneficiaries of the R J Thompson Trust. Ultimately the application was not pursued as is recorded in the minute of Ellis J of 13 April 2011.

[3] The applicant seeks costs associated with its opposition to the application, the preparation for a response to the application and the appearance at the conference before Ellis J. (In the reply memorandum counsel accepts there is an overlap between the claim made under 4.11 of the Third Schedule for attendance at case management conference, and 4.15).

[4] Having reviewed the file I largely accept the respondents’ submissions on this issue. The application was brought by a third party trustee Mr Wells, not the respondent. The fact that Mr Wells was a partner of the solicitor on record for the respondents is not relevant. The applicant also overstates the position in stating the application was dismissed on its merits by Ellis J. The Judge made an indication that she was not minded to grant the stay but the practicality of the timetable and the hearing date meant it was unnecessary to pursue the application in any event.

[5] Apart from filing a memorandum confirming their general support for the application the respondents took no formal steps in relation to it. If the applicant wished to pursue costs in relation to the particular application by Mr Wells, any such

application should have been directed against Mr Wells. In making that observation I am not to be taken as giving any indication as to whether or not any such costs award would be appropriate in any event given Mr Wells’ position as trustee.

[6] I accept the applicant’s point that in an appropriate case a costs award may include all steps taken in relation to a proceeding, including steps taken by parties other than respondents but such awards are subject to the overall discretion of the Court. Given the background to this case and the particular application in issue I decline to make an order for the costs sought by the applicant in relation to items

4.13, 4.14 and 4.15. The applicant is, however, entitled to costs for the attendance at the case management conference before Ellis J on 13 April 2011 claimed in 4.11. Other issues were addressed at that conference.

Items 8 and 9.1

[7] The difference between the parties in relation to these items is that the applicants have regarded the originating application and the hearing on it as a substantive application and fixture in its own right and have claimed costs for the preparation and attendance at the hearing accordingly. The respondents take the view that the matter is more analogous to a summary judgment application.

[8] The Third Schedule does not expressly deal with general originating applications. However, as counsel for the applicants have noted, it does identify specified originating applications relating to relief in respect of statutory demands and caveats and expressly provides that:

Items 25 to 30 apply to a specified originating application instead of items 1,

2, 4.10, 4.11, 8 and 9.

[9] The inference to be drawn is that the drafters of the Rules did intend that the above items including item 8 and 9, would apply to other originating applications. I allow the applicant’s claim for the costs of preparation and attendance at the hearing in terms of items 8 and 9.1.

Gardner Valuations Limited invoice

[10] The applicants claim as a disbursement the cost of a valuation for the purpose of assisting Mr Lane with his report and evidence . The respondents object to this disbursement. They note the valuation was never produced and the valuer did not give evidence. Alternatively they submit that the appropriate course is to defer consideration of the claim until the substantive proceeding is heard.

[11] Rule 14.12 applies. In the circumstances of this case the cost of the valuation report would be recoverable as a disbursement if it can be regarded as an expense approved by the Court for the purpose of the proceeding, if it was properly incurred for the purposes of the proceeding, was specific to the conduct of the proceeding, was reasonably necessary for the conduct of the proceeding and was reasonable in amount.

[12] In the present case, in reaching its decision of 6 October 2011, the Court took into account Mr Lane’s evidence in relation to rental. Mr Lane in turn took into account and relied on the Gardner valuation. I accept that the Gardner valuation was an expense incurred for the purposes of the application before the Court, that it was specific to that application, and was reasonably necessary for the purposes of the proceeding. There has been no challenge to the reasonableness of quantum. I approve the Gardner disbursement. There is no principled reason to defer payment of that disbursement until the substantive proceeding, which will be a separate proceeding, is heard.

Mr Lane’s invoices

[13] Mr Lane gave evidence as an expert witness for the applicant. However, the respondents take the view that the hearing was in the nature of a preliminary procedure and that Mr Lane’s evidence will undoubtedly be central to the substantive proceeding. Again it is submitted the appropriate course is to defer liability for Mr Lane’s costs.

[14] The same response applies. Mr Lane’s expert evidence was necessary to support the application. It was directly relevant. I approve the costs of Mr Lane’s fees in relation to his evidence as a disbursement. Again there is no issue as to the reasonableness of quantum. There is no principled reason to defer payment of Mr Lane’s costs for work done to date. Any further costs incurred by Mr Lane in relation to the substantive proceeding will be a matter for determination in that separate proceeding.

Result/orders

[15] On the above basis I order that the respondents are to pay the applicant’s

costs in the proceeding in the sum of $16,732.00 together with disbursements of

_{$17,502.38, in total $34,234.38.}

Venning J