Corston v John Curtis Limited

[2023] NZHC 339

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-103

[2023] NZHC 339

BETWEEN

KATHRYN LOIS CORSTON

Plaintiff

AND AND

AND

JOHN CURTIS LIMITED

First Defendant

JOANNA ROSE CURTIS
Second Defendant

CHRISTINE MARGARET O’CONNOR

Third Defendant

Hearing:

(On the papers)

Appearances:

M A Powell for the Plaintiff

P Whiteside KC and J R Pullar for First and Second Defendants

Judgment:

28 February 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

CORSTON v JOHN CURTIS LIMITED [2023] NZHC 339 [28 February 2023]

[1]        In this proceeding, Ms Kathryn Corston (Kathryn), sought an order rectifying the share register of John Curtis Limited.

[2]        The shares, subject to the application, had originally been held by Mr John Robert Curtis (John). Upon the death of John, Pamela Curtis (Pamela) enjoyed a life interest in the shares as provided in John’s Will. However, during Pamela’s lifetime, she purported to transfer those shares to the trustees of the J S Curtis Trust, of which Joanna was a trustee.

[3]        Mr Peers, counsel for Kathryn, in his memorandum in support of an application for costs, submits that Pamela’s purported transfer of those shares was unarguably invalid since Pamela only held a life interest in the shares and therefore had no right to dispose of them. I agree.

[4]        Despite requests that the improperly transferred shares be returned to John’s estate, this did not occur and hence this proceeding was issued. As Mr Peers notes, once the proceeding was commenced, the second defendant, Joanna Curtis (Joanna), in her notice of opposition, asserted that Kathryn’s application for interim relief was not seriously arguable.

[5]        Joanna only belatedly agreed to execute the share transfer to return the shares to the John’s estate.

[6]        In my view, Joanna’s position lacked merit. I am quite satisfied that this is an appropriate case that Kathryn be awarded costs in respect of the need to bring this application. Joanna seeks costs on a 2B basis with a 50 per cent uplift.

[7]        In resisting costs, Mr Pullar, counsel for Joanna, focuses on the voting rights attaching to the shares that had been improperly transferred. In my view, the voting rights attaching to the shares is irrelevant to whether they were improperly transferred.

Mr Pullar then submits that while Joanna filed a notice of opposition, she did not defend the substantive application.

[8]        Joanna refers to her evidence where she claims there was a reasonable factual basis for thinking the shares had actually been paid for when improperly transferred by Pamela. In fact, in Joanna’s affidavit of 8 April 2022, she said that she did not know whether any payment had been made for the shares. However, as Mr Peers submits, that is an issue that could and should have been determined at the outset when Kathryn called for the shares to be transferred back to the estate. I do not accept resolution of that issue, to the extent it may have been relevant, should have required the issuing of proceedings. If the issue of payment was the reason why the shares were not being transferred back to John’s estate then it would have been an obvious matter for Kathryn to raise at the outset that payment was an issue that she needed to look into.

[9]        Joanna’s concerns, as raised in her affidavit, related to how she thought the executors of John’s estate would vote the shares if transferred back. Such was no justification to delay returning shares that should not have been transferred in the first place. Nor do I accept the submission for Joanna that the proceedings were misconceived on the basis that Joanna’s counsel considers the in issue did does not entitle the holder of those shares to appoint and remove directors. Again, whether or not that is the case, such is irrelevant to whether the shares were improperly transferred.

[10]      As I have said, I am satisfied this is an appropriate case for costs. The real issue is whether there should be an uplift. Given the view I have reached on costs in the related matter CIV-2021-409-588, I am satisfied that an uplift is not appropriate. However, having declined an uplift, I do not accept that Band A should apply to the memoranda filed.

[11]      There is an order that the second defendant, Joanna, is to pay the plaintiff costs on a 2B basis in respect of this proceeding being $10,516 plus disbursements as fixed by the Registrar.

Associate Judge Lester

Solicitors:

Buddle Findlay, Christchurch (for K Corston, Intervener) Taylor Shaw (for Second Defendant)

Copy to:
P Whiteside KC, Barrister, Christchurch (for Defendant)