Blumenthal v Stewart

[2016] NZHC 3161

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-454-90 [2016] NZHC 3161

UNDER

The Family Protection Act 1955 and the

Law Reform (Testamentary Promises) Act 1949

IN THE MATTER OF

the Estate of JOHN HAWTHORN MATHIESON late of Palmerston North (Deceased)

UNDER

Part 18, Rule 18.1 High Court Rules

IN THE MATTER OF

the J H MATHIESON TRUST

BETWEEN

COLIN PAUL BLUMENTHAL Plaintiff

AND

BRUCE ANTHONY STEWART First Defendant

NEUROLOGICAL FOUNDATION OF NEW ZEALAND

Second Defendant

Hearing:	On the papers
Counsel:	P A Morten for Plaintiff J M Morrison for First Defendant S R Morris for Second Defendant
Judgment:	20 December 2016

JUDGMENT OF ELLIS J (Costs and other matters)

I direct that the delivery time of this judgment is

2 pm on the 20th day of December 2016

BLUMENTHAL v STEWART [2016] NZHC 3161 [20 December 2016]

[1]      Events subsequent to my substantive judgment almost exactly a year ago have  been  rather  tortuous.1      A useful  chronology  is  set  out  at  para  12  of  the memorandum of counsel for the second defendant dated 31 October 2016.  I hope by this judgment to tidy up all loose ends.  In order to understand the background to the issues this decision needs to be read in conjunction with my substantive judgment.

Stay

[2]      On 24 September 2016 (over nine months after the release of my original judgment) Mr Morten filed a memorandum seeking a stay of my decision pending the plaintiff’s appeal to the Court of Appeal  which is scheduled to be heard in March 2017. The short point is, however, that I decline to order a stay in the absence of a formal application.

Costs

[3]      The  first  defendant  seeks,  and  is  entitled  to,  costs  in  relation  to  an interlocutory hearing in August 2014. These costs total $7,960.2

[4]      Both defendants also seek their 2B costs in relation to the substantive matter. This raises issues about the application of r 14.15 and consideration of the extent of common interest and overlap between the defendants and their participation in this matter.  In that respect I note:

(a)      on 10 July 2015 (just before trial) the defendants filed a joint memorandum informing the Court that the second defendant adopted the  evidence  of  the  first  defendant  but  that  the  second  defendant would conduct the defence to the claim;

(b)      that stance was maintained throughout the hearing;

1      Blumenthal v Stewart [2015] NZHC 3187, [2016] NZFLR 647.

2      Notwithstanding Mr Morten’s objection to the claim for 0.2 of a day for the preparation of an

undertaking, I allow that claim. Mr Morten did not take issue with the other items claimed.

(c)      I  noted  in  my  judgment  that  the  lead  role  played  by  the  second defendant at the hearing was appropriate;3

(d)it was nonetheless necessary for the first defendant to give evidence, and he did so;4   and

(e)      in light of the way in which the plaintiff chose to run part of his case (involving a personal attack on Mr Stewart in his capacity as trustee both of Mr Mathieson’s estate and the J H Mathieson Trust) it cannot be said that his interests were the same as the interests of the second defendant;

(f)      it  was,  in  my  view,  justifiable  for  Mr  Stewart  to  be  separately represented at the hearing;

(g)that said, any costs awarded should nonetheless reflect the much more limited role taken by his counsel.

[5]      I do not propose to explain in detail each costs item I propose to allow, disallow or modify.  Where necessary I will footnote a brief explanation.  Suffice it to say that I have reached my decision by considering all the matters raised by Mr Morten, the defendants’ response, the terms of r 14.15 and the authorities to which Mr Morten has helpfully referred me.  I agree with him that some adjustment to the costs claimed by the defendants is required to reflect those matters.   My general approach has been to order that each cost item should either be shared between the two defendants or that only one of them should be permitted to claim it, depending on the particular circumstances.

[6]      My decision is best recorded in tabular form.   I begin by noting that the relevant 2B daily rate up until 30 June 2015 was $1,990.   After that date it was

$2,230.

3      At [26] – [27].

4      At [25] of my judgment I recorded my view that it was important that Mr Stewart gave evidence and that I found his evidence helpful.

Attendance (Schedule 3)	Days allowed under HCR	First defendant	Second defendant
Statement of defence	2	$2,985	$9955
Prep for conference 6/11/14	0.4	-	$796
Appearance at 6/11/14 conference	0.3	-	$597
Memorandum   28/11/14 for  conference 1/12/14	0.4	$398	$398
Appearance at 1/12/14 conference	0.3	$298.50	$298.50
Memorandum   19/3/15   for   conference 23/3/15	0.4	$398	$398
Conference 23/3/15	-	-	-6
Preparation of affidavits	2.5	$4,975	-7
Preparation of authorities8	2	-	$4,460
Preparation for hearing	3	$2,230	$4,460
Appearance at hearing	3	$2,230	$4,460
Sealing judgment	0.2	$446
TOTAL	$13,514.50	$17,308.50

[7]      As  far  as  disbursements  are  concerned,  the  principal  issue  raised  by Mr Morten is the instruction by the second defendant of out of town counsel.   In support of his submission that the associated cost should not be payable as a disbursement.   In support Mr Morten relied on the decision on Buis v Accident Compensation Corporation which, in turn, refers to the decision of this Court in Ainsworth & Collinson Ltd v Edmunds and of the Court of Appeal in Air New

Zealand Limited v Commerce Commission.9

[8]      It is not clear to me why the second defendant needed to instruct Auckland counsel. As I understand it the Foundation is based in Wellington (or at least the file

indicates  that  that  is  where  its  address  for  service  is).    In  the  absence  of  any

5      I accept Mr Morten’s submission that the second defendant’s defence largely replicated that of

the first defendant.

6      The Court made directions on the basis of the memoranda filed; there was no conference.

7      As recorded in my judgment, I declined to receive the only affidavit prepared on behalf of the second defendant.

8      At this point the daily rate had risen from $1,990 to $2,230.

9      Buis v Accident Compensation Corporation (2010) 19 PRNZ 585 (HC) at [25], Ainsworth & Collinson Ltd v Edmunds (2009) 19 PRNZ 565 (HC) and Air New Zealand Limited v Commerce Commission [2007] NZCA 27, [2007] 2 NZLR 494.

explanation I agree with Mr Morten that the second defendant is not entitled to recover the related disbursements.

[9]      Although Mr Morten also took issue with other items for which receipts had not, at the point of writing his memorandum, been provided, as I understand it that deficiency has now been remedied.   All other disbursements will be allowed accordingly.

Result

[10]     In formal terms, therefore:

(a)      I decline to make an order for stay pending appeal in the absence of any formal application;

(b)in     relation     to     the     interlocutory     matter     determined     by Joseph Williams J  in August  2014  the  plaintiff  is  to  pay  the  first defendant’s costs totalling $7,960;

(c)       in relation to the substantive proceedings the plaintiff is to pay:

(i)       the first defendant’s 2B costs in the sum of $13,514.50; and

(ii)      the second defendant’s costs in the sum of $17,308.50;

(d)      the plaintiff is to pay each of the defendant’s disbursements as sought

in their respective memoranda other than those disbursements that

relate to the second defendant’s  use of out of town counsel.

Solicitors:           McIntosh & Signal, Feilding, for Plaintiff.

Rainey Collins, Wellington, for First Defendant. TGT Legal, Auckland, for Second Defendant.

“Rebecca Ellis J”