Body Corporate 81012 v Memelink

[2022] NZHC 2019

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2021-485-419 [2022] NZHC 2019

BETWEEN

BODY CORPORATE 81012,

BODY CORPORATE 68792 and BODY CORPORATE 378945

Plaintiffs

AND

HARRY MEMELINK and

CISCA JOHNETTE FORSTER AS
TRUSTEES OF THE LINK TRUST (NO.1)

Defendant

CIV-2020-485-462

BETWEEN

THE OFFICIAL ASSIGNEE IN THE BANKRUPTCY OF HARRY MEMEMLINK ESTATE 889243

First Plaintiff

THE OFFICIAL ASSIGNEE IN THE BANKRUPTCY OF HARRY MEMELINK ESTATE 895147

Second Plaintiff

AND

HARRY MEMELINK,

CISCA JOHNETTE FORSTER and
ROY WILLIAM BASSETT-BURR AS
TRUSTEES OF THE LINK TRUST (NO.1)

Defendant

CIV-2020-485-374

BETWEEN

LYNX TRUSTEES LIMITED (IN LIQ)
Plaintiff

AND

HARRY MEMELINK

First Defendant

BODY CORPORATE 81012, 68792 AND 378945 v MEMELINK (COSTS) [2022] NZHC 2019

[15 August 2022]

CISCA JOHNETTE FORSTER and

ROY BASSETT-BURR AS TRUSTEES OF THE LINK TRUST (NO.1)

Second Defendants

On the papers:

Counsel:

A S Olney for Plaintiffs in CIV-2021-485-419

P Chisnall and C Jolliffe for Plaintiffs in CIV-2020-485-462

G A Neil and R M Hindriksen for Plaintiff in CIV-2020-485-374 D G Livingston for Defendants in all matters

Judgment:

15 August 2022

JUDGMENT OF CHURCHMAN J

[Costs]

Introduction

[1]    On 31 May 2022, I entered judgment against Mr Memelink and Ms Forster as trustees of the Link Trust (No. 1), in three related proceedings.1 At the end of that judgement, I invited the parties to agree costs. In the absence of agreement, the various plaintiffs were to file memoranda within 14 days, with the defendants having five working days to respond.

[2]    On 4 July 2022, counsel for the plaintiffs in the liquidation proceeding (CIV-2020-485-374) filed a memorandum with the Court seeking resolution of one aspect of their costs claim. No response to their memorandum has been filed by any other party.

[3]    Costs have been mostly agreed between the parties. The only aspect of the plaintiffs’ claim for costs that is disputed by the defendants is the claim for the attendance of second counsel at the substantive hearing. The issue is whether the plaintiffs’ claim for 1.5 days for the attendance of second counsel should be allowed.

1      Body Corporate 81012 v Memelink [2022] NZHC 1244.

Positions of the parties

Plaintiffs

[4]    The plaintiffs submit that their claim for the appearance of second counsel at hearing is properly made as:

(a)three separate matters were heard together;

(b)the documentation adduced in the two primary proceedings was voluminous;

(c)the hearing was commenced on the assumption that it would run for the six allocated days;

(d)second counsel was immersed in the file and instrumental in assisting with the preparation of evidence, submissions, and other documentation; and

(e)attendance of second counsel at the hearing was required to provide assistance to primary counsel during its course, and also to hear the evidence and the submissions of the other parties so as to assist with the preparation of the closing submissions.

Defendants

[5]    The defendants provided no separate submissions or memoranda. It is evident from the plaintiffs’ memorandum that the defendants dispute the claim for second counsel’s appearance at hearing.

Discussion

[6]    Schedule 3 of the High Court Rules 2016 provides that costs for second counsel may only be awarded where allowed by the Court.

[7]    The rules provide no further guidance as to when it is likely to be appropriate for the Court to award such costs, but generally only one counsel is provided for.2 The authorities show that whether the Court will depart from the presumption of allowance only for single counsel is influenced by the following factors:3

(a)the complexity of the proceedings;

(b)the range and volume of evidence;

(c)the number of witnesses;

(d)where the trial has taken place; and

(e)whether there has been some unusual feature in the litigation.

[8]    The Court must consider whether the circumstances of the hearing justify requiring the unsuccessful party to contribute to the costs of junior counsel representing the successful party.4

[9]    I accept the plaintiffs’ argument that the proceedings were complex, and that this was compounded by the amalgamation of the three related proceedings, brought by the liquidators, the Body Corporates, and the Official Assignee. There was a large amount of affidavit evidence, much of which had no relevance to the determination of issues at hearing. As noted in the judgment, “1,000 pages of documentation were filed and served on the first day of the hearing”.5

[10]   There is also the fact that these proceedings took place in the context of a much wider and “ongoing saga of litigation involving Harry Memelink, the Link Trust (No.1) (the Trust), Lynx Trustees Limited (in liq) (Lynx), and others with whom he and those entities interact”.6

2      Northwest Developments Ltd v Zhang [2019] NZHC 2146 at [23].

3      David Bullock and Tim Mullins The Law of Costs in New Zealand (1st ed, LexisNexis, Wellington, 2022) at [2.17].

4      Halls Group Ltd v Rowe [2018] NZHC 3302 at [18].

5      Body Corporate 81012 v Memelink, above n 1, at [43].

6 At [1].

[11]   However, the hearing did not proceed over the course of the allocated six days, taking less than two days, and did not involve the presentation of a substantial amount of oral evidence. The plaintiffs’ total claim for costs amounts to $65,155.98. If their claim for second counsel is not allowed, it will reduce by $3,585 to $61,570.98.

[12]   Ultimately, I have concluded that the circumstances of the hearing justify requiring the unsuccessful party to contribute to the costs of second counsel representing the successful party. While the hearing did not take up all of the allocated six days, the issues before the Court were complex, and their resolution required canvassing the considerable amount of documentation, which was filed very late.

Result

[13]   I accept the plaintiffs’ claim for second counsel in the proceedings and confirm the costs order in the sum of $65,155.98, inclusive of disbursements of $625.98.

Churchman J

Solicitors:

Meredith Connell, Auckland for Plaintiff in CIV-2020-485-374 Steve Hill Law, Lower Hutt for Plaintiff in CIV-2021-485-419 Anthony Harper, Christchurch for Plaintiff in CIV-2020-485-462

Livingston & Livingston, Wellington for Defendants in all proceedings

Counsel:

A S Olney for CIV-2021-485-419

P Chisnall for CIV-2020-485-462