Ballantyne v Ballantyne

[2021] NZHC 2111

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2020-419-000310

[2021] NZHC 2111

BETWEEN

EUGENIA JOCELYN BALLANTYNE AND WALLACE ROTOHIKO JONES AS TRUSTEES OF THE TUNKU FAMILY

TRUST
Applicants

AND

ANTHONY BALLANTYNE AS TRUSTEE OF THE TUNKU FAMILY TRUST

Respondent

Hearing:	On the papers
Counsel/ Representation:	D O O’Neill & H J Mills for Applicants Respondent in person
Judgment:	13 August 2021

JUDGMENT OF PAUL DAVISON J

This judgment was delivered by me on 13 August 2021 at 3:00 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

North End Law, Hamilton

BALLANTYNE AND ANOR v BALLANTYNE [2021] NZHC 2111 [13 August 2021]

Introduction

[1]                  This is an application for costs by the applicants, Mrs Eugenia Ballantyne and Mr Wallace Jones (the applicants).

[2]                  In my judgment dated 26 May 2021, I granted the applicants’ application for an order removing Mr Anthony Ballantyne (the respondent) as a trustee of the Tunku Family Trust (the Trust) and made orders authorising the sale of the Trust’s property at Whangamata, a vesting order, and other orders relating to the allocation and distribution of trust funds following the sale of the Whangamata property.1 I found that the applicants, as the successful party, were entitled to costs2 and directed the parties to file costs memoranda.

Background

[3]                  The substantive judgment for this proceeding involved an application under Part 18 of the High Court Rules 2016 (HCR) for orders pursuant to the Trustee Act 1956 (the Act) and the Court’s inherent jurisdiction.

[4]                  The applicants sought to remove the respondent as a trustee of the Trust on the grounds that he had consistently failed to cooperate with them regarding the proposed sale of the trust property at Whangamata, and by reason of issues arising as a result of him currently serving a term of imprisonment leading to practical difficulties in contacting him and making arrangements for the execution of documents required for the sale, including those required for compliance under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.

[5]                  The applicants also sought orders vesting the Whangamata property and a Hamilton property in the names of the applicants as continuing trustees so as to enable them to proceed with the sale and division of the property and net proceeds.

[6]The respondent did not oppose the application.

1      Ballantyne v Ballantyne as Trustee of the Tunku Family Trust [2021] NZHC 1190 at [57].

2 At [58].

[7]I granted the application and made orders:

(a)That the respondent be removed as a trustee of the Trust.

(b)That Trust properties (situated at Hamilton and Whangamata) be vested in the continuing trustees.

(c)The trustees be authorised to distribute the Hamilton property to Mrs Ballantyne.

(d)The trustees be authorised to sell the Whangamata property.

(e)Authorising the continuing trustees to determine and adjust quantum of the distribution of trust funds with the result that Mrs Ballantyne would receive a half-share of the combined value of the Hamilton property and the net proceeds of sale of the Whangamata property, as well as reimbursement of the sums paid by her for rates arrears on the Whangamata property.

Law

[8]                  The costs granted to a successful party are discretionary pursuant to r 14.1 of the High Court Rules 2016 (HCR). A party is not entitled to an award of costs that exceeds the actual costs incurred.

[9]                  The court may order increased costs under r 14.6(1)(b) where one or more of the grounds in r 14.6(3)(b) is satisfied. Rule 14.6(3)(b)(ii) allows increased costs where the party opposing costs takes or pursues an unnecessary step or an argument that lacks merit.

[10]              When assessing whether to grant increased costs, the court will generally consider behaviour during the litigation, but not before it.3 The Court will consider the extent to which the failure to act reasonably contributed to the time or expense of

3      Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188 (CA) at [160].

the proceeding,4 and where it finds that has occurred, determine whether an uplift is justified.5

Submissions

Applicants’ submissions

[11]Counsel for the applicants, Mr O’Neill, seeks:

(a)costs on a 2B basis (totalling $28,680.00); or

(b)increased  costs  on  a  2B  basis  with  a  25  per  cent  uplift (totalling

$32,982.00); or

(c)increased  costs  on  a  2B  basis  with  a  50  per  cent  uplift (totalling

$43,020.00).

[12]              Mr O’Neill also claims disbursements of $4,085.50 as detailed in his schedule. The disbursements include the valuation fees on the Hamilton and Whangamata properties.

[13]              Mr O’Neill submits that increased costs are justified because the proceedings arose as a result of the respondent’s refusal to cooperate with the other trustees regarding the sale of the Whangamata property necessitating an application for his removal as a trustee. He says that the respondent opposed the application, which resulted in a full hearing before the Court, however at the hearing advised that he would abide the decision of the Court.

[14]              Mr O’Neill also seeks an order that the respondent pays costs from his share of the proceeds of the Whangamata property.

4      Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) 24 NZTC 24,500 at [165].

5 At [165].

Respondent’s submissions

[15]              Unfortunately, the respondent does not address the issue of costs in his memorandum.

[16]              Instead, he advances a number of arguments relating to his criminal conviction and my substantive judgment dated 26 May 2021. Mr Ballantyne says he agrees with the sale of the Whangamata property. However, he seeks leave to argue that he is being arbitrarily arrested and imprisoned against his will.

Analysis

Scale costs

[17]              As the successful party, Mrs Ballantyne and Mr Jones are entitled to costs.  Mr O’Neill has set out the time allocations in his schedule attached to this judgment as “Table A”. His schedule appears appropriate.6

[18]              Further, Mr O’Neill includes the valuation fees in the disbursements claim. I do not accept these valuation fees as part of the costs award against the respondent. The trustees of the Tunka Trust would have required valuation fees regardless of whether these proceedings occurred. The trustees wished to sell the property and valuations of the Hamilton and Whangamata properties were required in connection with their decisions to sell and as regards the division of the proceeds. I do not consider that the valuations were necessarily required for the purposes of the application seeking removal of the respondent as a trustee.

[19]I shall accordingly make an order for costs in favour of the applicants of

$21,014.00. That sum is comprised of $19,359.00 in 2B standard costs and $1,655.00 in disbursements (less the claimed valuation fees).

6      Counsel has sought .2 days for step 32. The scale 2B schedule allows 2 days for step 32. I approved the .2 days on the basis that this is what counsel has sought, and that it appears reasonable.

Increased costs

[20]              Mr O’Neill does not specify the means by which it is alleged that the respondent contributed unnecessarily to the time or expense of the proceeding under r 14.6(3)(b), which warrants an uplift of either 25 per cent or 50 per cent to the standard 2B costs award.

[21]              However, I consider Mr O’Neill’s argument falls within r 14.6(3)(b)(ii), namely: “taking or pursuing an unnecessary step or an argument that lacks merit…”. Mr O’Neill submits that the only reason this proceeding went ahead was because the respondent was uncooperative with the other trustees. He opposed the application until the hearing on 30 March 2021. As a result of his opposition the applicants were required to incur legal costs in preparing for the hearing and to respond to the respondent’s opposition.

[22]              Although the respondent’s failure to cooperate with the other trustees led to them commencing the proceedings, his actions before the proceeding was commenced are not relevant to an assessment of whether to award an uplift on standard 2B costs.7

[23]              However, I agree with the applicants that during the course of the proceedings, the respondent advanced irrelevant and untenable arguments in response to the application to remove him as trustee. His opposition to the application was based on his assertion that he is innocent of the murder for which he was convicted and for which he has been sentenced to imprisonment. His proposition is that as he is innocent and should not have been found guilty of the murder, he should not be in prison, and because he should not be incarcerated it follows that he should not be removed as a trustee. Nevertheless, as the respondent was found guilty at his trial of the offence of murder and was sentenced to imprisonment, his contention that he is innocent of that offence was and is irrelevant to the issue of whether he should be removed as a trustee of the Trust. The respondent’s contentions regarding his criminal conviction are matters he can appropriately address by way of an appeal against his conviction. However, the fact that he is currently serving a term of imprisonment is relevant to whether he is in a position to carry out his duties as a trustee of the Trust.

7      Paper Reclaim Ltd v Aotearoa International Ltd, above n 3, at [160].

[24]              I accordingly find that the respondent failed to act reasonably in making his arguments and by doing so contributed unnecessarily to the time and expense of the proceeding.8 He pursued irrelevant arguments right up until the hearing, and it was only during the hearing that he advised that he would abide the decision of the Court.

[25]              Having found that the respondent pursued arguments that were irrelevant to the issue of whether he should be removed as a trustee of the Trust and thereby contributed unnecessarily to the time and legal expenses incurred by the applicants, I consider that a 25 per cent uplift of the Scale costs is warranted. A 25 per cent uplift of the costs award will yield a total of $24,198.75.

Result

[26]I make the following costs orders against the respondent:

(a)$24,198.75 to Mrs Ballantyne and Mr Jones against Mr Ballantyne (being scale 2B costs of $19,359.00 together with a 25 per cent uplift of $4,839.75); and,

(b)Disbursements of $1,655.00.

Paul Davison J

8      Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27(b)].

Table A

COSTS ASSESSMENT – CATEGORY 2

$2,390 per day

Time Allocations

Clause* 37	Originating application	2.0
Clause 22	Interlocutory application re service	0.6
Clause 29	Order re service	0.2
Clause 11	Memoranda 10/02/21 17/03/21 18/03/21	0.4 0.4 0.4
Clause 12	Appearance    at     mention (10/02/21)	0.2
Clause 30	Preparation of affidavits, issues and bundle of authorities	0.2
Clause 32	Preparation for day one	0.2
Clause 33B	Preparation for hearing	1
Clause 40	Preparation submissions	1.5
Clause 41	Preparing      bundle      of documents	0.6
Clause 42	Appearance	0.2
Clause 29	Sealing judgment	0.2

Disbursements

Valuation Fees – Hamilton	782.00
Valuation Fees – Whangamata	862.50
Filing Fee for originating application	540.00
Filing Fee for interlocutory application for directions as to service	200.00
Sealing Fee – service	50.00
Service Fees	175.00
Scheduling Fee	640.00
Second valuation fee – Hamilton	736.00
Sealing Fee – Judgment	50.00

*Note: in the judgment I refer to “step” rather than clause because Part 14 of the High Court Rules 2016 uses “step”.