Glover Trust Limited v Glover Trust Corporation Limited [2014] NZHC 2494 (10 October 2014)

Last Updated: 29 October 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-006931 [2014] NZHC 2494

IN THE MATTER OF	Part 18 of the High Court Rules
BETWEEN	THE GLOVER TRUST LIMITED, BAILEY TRUSTEE SERVICES LIMITED and AUCKLAND WEST LEGAL SERVICES LIMITED First Plaintiffs CIT HOLDINGS LIMITED Second Plaintiff
AND	GLOVER TRUST CORPORATION LIMITED First Defendant GLOVER NO 2 LIMITED Second Defendant

Hearing:	8 October 2014
Counsel:	M D Pascariu for the Plaintiffs T A Chubb for the Defendants
Judgment:	10 October 2014

JUDGMENT OF DUFFY J [re Costs]

This judgment was delivered by Justice Duffy on 10 October 2014 at 4.00 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Counsel: T A Chubb, Auckland

_{Solicitors: Minter Ellison Rudd Watts, Auckland}

GLOVER TRUST LTD and ORS v GLOVER TRUST CORPORATION LTD and ANOR [2014] NZHC 2494 [10 October 2014]

[1] Two costs matters are yet to be determined in this proceeding. These relate to: The Glover Trust Ltd & Ors as Trustees of The Glover Trust v Glover Trust Corp Ltd and Anor HC Auckland CIV 2012-404-6931, 20 March 2013 (“the substantive judgment”); and The Glover Trust Ltd v Glover Trust Corp Ltd HC Auckland CIV

2012-404-6931, 23 September 2013.

Substantive judgment

[2] The first plaintiffs were the successful party in this judgment. At [57] of the judgment, Allan J held that the plaintiffs were entitled to costs, and directed counsel to file memoranda if they were unable to agree on quantum. No agreement was reached and, accordingly, the plaintiffs seek an award of costs from this Court.

[3] I have considered the memoranda filed by counsel for the plaintiffs and counsel for the second defendant. I also heard from the parties at a judicial conference. I am satisfied that the plaintiffs are entitled to category 2B costs.

[4] The second defendant accepts that the schedule of itemised costs attached to the plaintiffs’ memorandum on costs is correct in terms of the appropriate allowances under the scale. It follows that the plaintiffs are entitled to costs in the sum of

$32,039.

[5] The plaintiffs are also entitled to disbursements. Because this was a Part 18 matter, the disbursements are less than the plaintiffs have sought in their itemised schedule. When the fees sought are adjusted, the total disbursements come to

$725.10.

Recall and joinder judgment

[6] In the recall and joinder judgment, Allan J reserved costs. The first plaintiffs seek costs at category 2B. The second defendant does not question the application of category 2B for this costs award.

[7] However, the second defendant disputes one of the items in the first plaintiffs’ costs schedule, and further seeks to establish a set-off.

[8] The first plaintiffs have claimed an allowance for a second counsel. The second defendant contends that there should be no allowance for a second counsel. The second defendant also argues that because no costs have been awarded to the second defendant in relation to its successful application for a stay of proceedings and variation of freezing orders, the Court should take that into account by discounting the quantum of the costs to be awarded to the plaintiffs in respect of their successful recall and joinder application. I do not accept either argument of the second defendant.

[9] Regarding the need for second counsel, I consider that the subject matter of this judgment involved complicated questions of jurisdiction, which warranted a second counsel.

[10] Regarding the suggested set-off, I consider that it would be wrong to discount the first plaintiffs’ costs in such a broad-brush way. The second defendant has not sought costs in the matters in which it was successful. Thus, any potential costs award that it may be entitled to is undetermined and so unquantified. Before any set- off could be done properly, the Court would first have to identify what the second defendant’s costs entitlement might be. However, this could not be done without first giving the first plaintiffs an opportunity to be heard on that topic. But without notice from the second defendant of the costs entitlement that it seeks, the first plaintiffs cannot address this topic. The second defendant’s argument is, therefore, misconceived.

[11] If the second defendant seeks to set off costs that it might obtain against those that are awarded to the first plaintiffs, it will first need to make an application for an award of costs.

[12] I have one concern about the plaintiffs’ itemised costs schedule here: this is in regard to item 22, “filing an interlocutory application”. The need to bring the application for recall and joinder was brought about by the first plaintiffs’ error in the first place. The first plaintiffs omitted to join CIT Holdings Limited as a defendant in the proceeding at the relevant time they could not join the company as a plaintiff. It was this omission that led to the application for recall and joinder. Accordingly, I

consider that the plaintiffs are not entitled to recover the cost of filing the interlocutory application; nor are they entitled to claim the filing fee for this application as a disbursement.

[13] When it comes to the subsequent steps that the first plaintiffs took, these were prompted by the second defendant, who actively opposed the recall and joinder application. I consider that there were other options open to the second defendant. It could have consented to, or not opposed the application. It also could have abided the decision of the Court. Instead, it chose to raise a number of arguments against the application. Once it embarked on that course, it exposed itself to the risk of an award of costs, should its opposition fail.

[14] At the conference before me, counsel for the second defendant argued that the omission to join CIT Holdings Limited from the outset meant that the second defendant was prejudiced through not getting full discovery, and that this was a matter that I could take into account when quantifying costs. However, I note that at [32] of his recall and joinder judgment, Allan J rejected that same argument when it was before him, describing it as “impermissible speculation”. I do not consider, therefore, that I can place any weight on this argument.

[15] The adjusted schedule of the first plaintiffs for costs relating to the application to recall and joinder comes to costs of $4,875.50. The first plaintiffs are also entitled to disbursements of $50 to cover the sealing fee.

Result on costs

[16] Costs and disbursements relating to the substantive judgment of Allan J are: Costs $32,039.00

Disbursements $ 725.10 [17] Costs and disbursements for the recall and joinder judgment of Allan J are:

Costs $4,875.50

Disbursements $ 50.00 [18] At today’s conference, it became clear that there are still outstanding costs

matters relating to this proceeding. These are in respect of the application for a stay of proceedings and application to vary freezing orders. The second defendant was successful in those applications. If the second defendant is going to pursue costs in relation to those applications, it must do so within 15 working days of the date of this judgment. The plaintiffs have 15 working days from the date of receipt of the second defendant’s costs memorandum to file their response.

Duffy J