Cron v Tucker
[2024] NZHC 1000
•30 April 2024
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-226
[2024] NZHC 1000
BETWEEN PENELOPE JEAN CRON, PHILIP SIMON MAUGER,
STEPHEN WARNER MAUGER and TIMOTHY JAMES MAUGER
PlaintiffsAND
SIMON MICHAEL TUCKER
First Defendant
AND
LOUISE CORANETTA HERMANSSON
Second Defendant
Hearing: On the papers Counsel:
S P Rennie and F H Scrase for the Plaintiff K W Clay and R Paul for the First Defendant T J Castle for the Second Defendant
Judgment:
30 April 2024
JUDGMENT OF HARLAND J
(as to costs)
Introduction
[1] This proceeding relates to the estate of the late Mr Warner Mauger who, in January 2019, executed two deeds of gift, one for $550,000 to the first defendant and another for $485,000 to the second defendant. Both defendants were employed by Mr Mauger in Rookwood Holdings Ltd (Rookwood), the vehicle through which Mr Mauger operated a highly successful contracting and property development business.
[2]The plaintiffs are Mr Mauger’s four adult children.
CRON v TUCKER [2024] NZHC 1000 [30 April 2024]
[3] The defendants applied for standard and particular discovery against the plaintiffs. I determined these applications in my judgment of 20 December 2023.1 At the end of that judgment I said:2
Costs should follow the event. The defendants have had limited success. Contemporaneous memoranda addressing costs are to be filed and served by 9 February 2024. Any response is to be filed contemporaneously by 23 February 2024.
[4] Counsel have since filed memoranda. In total, there have been eight memoranda filed outlining each party’s submissions about costs.
[5] This judgment determines costs. In it I consider which party was successful in respect of which application and to what extent.
Background
[6] The applications I determined in my judgment in December 2023 were for standard and particular discovery. Both were opposed by the plaintiffs. The hearing in respect of both applications lasted a full day.
[7] The defendants sought an order that the plaintiffs file an affidavit of documents by way of standard discovery. Ms Cron had filed an affidavit of documents, but the defendants submitted it was insufficient. Regarding that issue, I outlined the following background:
[34] A case management conference was held before Dunningham J on 22 August 2022. An issue was raised about the plaintiffs’ affidavit of documents as Ms Cron had filed it in her capacity as a litigation guardian on behalf of the late Mr Mauger.
[35] In her discussion about this issue, Dunningham J noted that counsel for the defendants were technically correct that the affidavit of documents had not been sworn on behalf of the current plaintiffs. However, she noted that, as the pleadings had not changed, there was no obvious reason to consider that the scope of discovery had changed. The Judge also noted that ongoing discovery had been provided and further relevant documents had been identified, and she observed:
1 Cron v Tucker [2023] NZHC 3815 [December judgment].
2 At [105].
The defendants have done no more than suggest it is possible that the individual plaintiffs have additional documents which Penelope Cron was not aware of when she swore the original affidavit of documents.
[36] Because the defendants were technically correct, the Judge made a direction as follows:
[14] The following timetabling directions are made:
…
(b) the current plaintiffs are to file an affidavit (or affidavits) of documents by 19 September 2022 which may, to the extent it replicates the affidavit of documents already filed by Penelope Cron, simply confirm and adopt that affidavit;
…
[37] Ms Cron’s affidavit of documents was then filed, including 12 further documents which were set out in the schedule attached to it.
[38] The defendants submit that this affidavit of documents was not filed by the plaintiffs as directed by the Court because, although it states to be on behalf of all plaintiffs and that Ms Cron has made enquiries and the plaintiffs have no further relevant documents within their control that are discoverable, there is no explanation provided about the nature of the enquiries she made. Mr Clay submits it is not sufficient that there simply be an affidavit said to be sworn on behalf of all plaintiffs because, although that was considered a possibility by the Judge, she did not give a direction in those terms.
[8] I did not conclude that Dunningham J’s minute required each of the current plaintiffs to file an affidavit, but I held that the plaintiffs were required to provide some explanation as to the nature of the enquiries made.3 I found that a bare assertion that enquiries had been made was insufficient. To that end, I concluded that the defendants’ application for standard discovery was successful to a “very limited extent”.4
[9] The defendants next application sought particular discovery, which the plaintiffs opposed. The defendants had the burden of proving that the affidavit of documents provided by the plaintiffs was incomplete. The defendants sought some thirty documents, which I categorised broadly as medical and health related files, communications between one or more of the plaintiffs with each other or trustees, and trust documents. I grouped the documents sought and dealt with them under 14 headings for the first defendant and one for the second.
3 December judgment, above n 1, at [39]-[40].
4 At [42].
[10] I granted the first defendant’s application for discovery of the “Alpine View” file, a file that includes a psychiatric review of the late Mr Mauger as well as records from staff at the retirement village he resided at prior to his death. Ms Cron noted she had control of that file in her 19 May 2021 affidavit. I required her to explain, if she no longer had the file, why that was the case.
[11] I also granted the first defendant’s application in relation to the grief counsellor’s file (the “counsellor’s file”) finding relevance established and noting that discussions Mr Mauger had with the counsellor may provide greater insight into his mental capacity and general state of mind.5
[12] The parties agreed that two files entitled “Gift Letter.docx” and “Deed of Gift Letter.pdf” should be discovered.
[13] It appears that 13 documents, which the plaintiffs had initially claimed were not discoverable, were in fact provided to the defendants without the need for court orders.6
[14] The remainder of the first defendant’s application for particular discovery was dismissed. Regarding the second defendant’s application for particular discovery, I directed that further enquiry be made by the plaintiffs in relation to Dr Chima’s cognitive assessment report.
[15] In summary, of the 14 groups of documents sought by the first defendant, I dismissed their application in relation to 12 of them and allowed two. In relation to the documents sought by the second defendant, I required the plaintiffs to make further enquiry in relation to one document while dismissing the balance of this application.
Legal principles
[16] Whether or not costs should be awarded is a matter for the Court’s discretion.7 Generally, the party who fails with respect to a proceeding or an interlocutory
5 December judgment, above n 1, at [60].
6 At [85].
7 High Court Rules 2016, r 14.1.
application should pay costs to the party who succeeds.8 Absent exceptional circumstances, costs will follow the event.9 Rule 14.7 of the High Court Rules 2016 (HCR) allows exceptions to the general rules, noting:
14.7 Refusal of, or reduction in, costs
Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—
(a) the nature of the proceeding or the step in a proceeding is such that the time required by the party claiming costs would be substantially less than the time allocated under band A; or
(b) the property or interests at stake in the proceeding were of exceptionally low value; or
(c) the issues at stake were of little significance; or
(d) although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs; or
(e) the proceeding concerned a matter of public interest, and the party opposing costs acted reasonably in the conduct of the proceeding; or
(f) the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
(i)failing to comply with these rules or a direction of the court; or
(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or
(iii)failing, without reasonable justification, to admit facts, evidence, or documents, or accept a legal argument; or
(iv)failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or
(v)failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or
(g) some other reason exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.
8 High Court Rules, 14.2(1)(a).
9 Shirley v Wairarapa District Health Board [2006] NZSC 63; [2006] 3 NZLR 523 at [19]
[17] Finally, costs on an opposed interlocutory application must be fixed in accordance with the rules “unless there are special reasons to the contrary”.10
[18] The Court of Appeal has held that “success” for the purpose of costs is “better assessed by a realistic appraisal of the end result rather than by focussing on who initiated what step, and the extent to which that step succeeded or failed.”11
Submissions
First defendant’s submissions
[19] Mr Clay, for the first defendant, referred to rr 14.2(1)(a) and 14.8 of the HCR. Mr Clay submitted the plaintiffs failed to remedy issues with discovery when given the opportunity to do so by Dunningham J and when initially requested in 2020. Despite the plaintiffs making the submission in their notice of opposition that the application was “unmeritorious and unlikely to succeed”, he highlighted that the plaintiffs went on to provide 13 further documents, made enquiries as to the executor’s estate, and the Court directed that a further affidavit be filed.
[20] Mr Clay submitted that the first defendant was successful in both applications for standard and particular discovery, albeit only to a very limited extent in relation to the standard discovery application. In relation to the particular discovery, 14 categories of documents were sought by the first defendant, with discovery of two files ordered and two other files agreed to be made available. In relation to the files agreed to be provided, Mr Clay submitted that, absent the application, the documents would not have been provided. Mr Clay submitted the plaintiffs’ position regarding the Alpine View file, of itself, justifies costs on a 2B basis, as it would never have been provided to the defendants absent the defendants’ application.
[21] In his reply submissions, Mr Clay highlighted that Ms Cron’s 8 September 2022 affidavit did not comply with the Court directions, leading to the interlocutory application for further discovery. He submitted that there were several opportunities prior to the Court’s judgment for the plaintiffs to furnish the defendants with the
10 High Court Rules, r 14.8.
11 Packing in Ltd (in liq) v Chilcott (2003) 16 PRNZ 869 at [6].
requested information, none of which were taken up. Mr Clay sought to distinguish High Quality Ltd v Eco Cubes Ltd on the grounds that it involved numerous instances of conduct by both parties that did not impress the Court.12
[22] Mr Clay further submitted that it is not immediately clear that Ms Cron’s affidavit of 6 February 2024 meets the requirements of the affidavit directed by this Court in December 2023.
[23] The first defendant seeks an order of costs against the plaintiffs on a 2B basis amounting to $10,755 with disbursements of $540, totalling $11,295.
Second defendant’s submissions
[24] Mr Castle, for the second defendant, referred to the plaintiffs’ strenuous opposition to the applications and their lack of compliance with the Court’s directions about the filing of submissions. He submitted that the plaintiffs’ submissions in respect of these applications were not served on counsel for the defendants until the hearing before me had begun.
[25] As well, Mr Castle noted that, while the defendants had complied with the Court’s timetabling directions, the plaintiffs had defaulted on the direction that they serve their evidence in reply by 29 September 2023, with no explanation being provided for failing to do so. Furthermore, Mr Castle submitted that the plaintiffs have not fully complied with the obligations arising from my judgment.
[26] The second defendant seeks an order of costs against the plaintiffs on a 2B basis amounting to $8,365.
Plaintiff ’s submissions
[27] Mr Rennie for the plaintiffs noted that the significant majority of the defendants’ requests for documents were successfully defended by the plaintiffs, meaning the very limited extent to which orders were granted in favour of the defendants cannot outweigh the overall success of the plaintiffs.
12 High Quality Ltd v Eco Cubes Ltd [2023] NZHC 3424.
[28] Mr Rennie highlighted that the first defendant had made requests for particular discovery of 23 documents and the second defendant for 10 documents. He submitted that the first defendant had failed in relation to 21 of these and the second defendant had failed in relation to all of theirs. Mr Rennie referred to High Quality v Eco Cubes where the respondent was found to be successful in part because:13
[the applicant] did not accept informal communication that the bulk of the documents later sought by way of formal application were no longer held. There was no reason to not accept the informal communication. This compounds the failure to make an informal request for documents. Parties in litigation should not treat discovery applications to the Court as inevitable. They should first attempt to resolve matters between themselves.
[29] In his reply submissions, Mr Rennie highlighted that neither Weaver v Auckland City Council nor Water Guard NZ v Midgen Enterprises Ltd are authority for the proposition that any level of claimant success will automatically render the claimant a successful party overall.14 Mr Rennie referred to Kelly v Lasque Construction Ltd, where the Court found the respondent to be the successful party despite the applicant having been successful in obtaining discovery orders for two out of 15 documents sought.15
[30] Mr Rennie submitted that the plaintiffs successfully resisted what was “the primary purpose of the defendant’s application for standard discovery, namely, to have each plaintiff file an affidavit”. He labelled the plaintiffs’ success on this application “pyrrhic” because it had not resulted in the production of any additional documents of any practical benefit to the plaintiffs.
[31] Mr Rennie seeks costs on a 2B basis against each defendant, with a 10 per cent reduction against each defendant to reflect their partial success, and a further 15 per cent reduction to benefit the first defendant to acknowledge the limited category of documents ordered to be discovered on their application for particular discovery. In total, the costs and disbursements sought are $4,788.30 from the first defendant and
$5,720.40 from the second defendant.
13 High Quality Ltd v Eco Cubes Ltd, above n 12, at [36].
14 Citing Weaver v Auckland City Council, [2017] NZCA 330 (CA); and Water Guard NZ v Midgen Enterprises Ltd [2017] NZCA 36.
15 Kelly v Lasque Construction Ltd [2014] NZHC 1469.
[32] In the event these arguments are not persuasive and referring to r 14.7(d) of the HCR, Mr Rennie submitted in the alternative that costs ought to lie where they fall. He characterised the majority of the defendants’ document requests as “unmeritorious and unsuccessful”, which had consumed a large portion of the plaintiffs’ time, arguing against their discoverability. Mr Rennie cited Speargrass Holdings Ltd v Queenstown Lakes District Council as an example of a case where an applicant’s failure on two of three of its causes of action had “roughly doubled preparation and hearing time”, justifying the Court’s finding that costs should lie where they fell.16
[33] Finally, and as a further alternative, if costs are awarded, Mr Rennie submitted they should only be nominal, with one set of costs awarded between both defendants, and appropriately reduced to recognise their limited success. Mr Rennie noted the courts have refused or reduced costs awarded in favour of multiple parties where there is some overlap or community of interest in their litigation position.17 He submitted there was significant overlap in the defendants’ submissions in this case, meaning only one set of costs should be awarded. With appropriate reductions, if costs are awarded, Mr Rennie submitted these should be nominal sums of $1,034.80 for each defendant.
Discussion
[34] A key concern for the defendants relates to the plaintiffs’ lack of urgency in providing the Alpine View documents. I have been advised that the plaintiffs served some 250 pages of documentation, said to comprise the Alpine View file, on the defendants on 8 March 2024, following a case management conference with Osborne
J. Osborne J noted in a minute that further files might still be obtained as part of the Alpine View file and impressed upon Mr Rennie the need for expedition in obtaining them.
[35] Mr Castle, in his most recent submissions, has advised the Court that “far from all” the documents ordered have been provided by the plaintiffs. While I am aware that rr 14.6(3)(b)(i) and (iv) are only engaged when increased costs are claimed, I am satisfied these factors may be taken into account in forming my overall assessment of
16 Speargrass Holdings Ltd v Queenstown Lakes District Council [2018] NZHC 2760 at [32].
17 Independent Māori Statutory Authority Board v Auckland Council [2017] NZHC 678 at [9].
proceedings. The lack of cooperation between the parties on any matter must colour what counts as “success”.
[36] I agree with Mr Clay that, absent these proceedings, none of the documents or files would have been made available for discovery. The defendants have claimed, and I agree, that files such as the Alpine View file and the counsellor’s file should not have been at issue in the first place. I am sympathetic to the argument presented by Mr Castle that those files should have been uplifted years ago, after the late Mr Mauger died, as these proceedings were contemplated well before his death.
[37] However, the fact remains that the defendants were unsuccessful on most of their claims.
[38] The plaintiffs referred me to Kelly v Lasque where Thomas J awarded the plaintiffs costs on a 2B basis to the extent of their success, which she determined was 15 per cent of the costs sought, while awarding the defendants 2B costs at 85 per cent.18 In that case, the plaintiffs had sought 15 categories of documents and were successful in respect of two. Thomas J opined:19
I am mindful of the limited extent to which the plaintiffs were successful and what documents in fact were disclosed as a result. It is also relevant to take into account the extent of documentation sought by the plaintiffs in a broad range of categories, not justified by the pleadings, where three categories were abandoned three days before the hearing and the application relating to the insurance documents was withdrawn at the hearing itself. The plaintiffs’ application included categories of documents that could not have been discoverable, for example, the employment agreement.
[39] The defendants in this case also succeeded to a limited extent, with two categories of documents ordered to be discovered and two made available by agreement. Despite this, while the requests were broad, I do not categorise them as unmeritorious or wasteful of the Court’s time. Further, as Mr Clay submits, it is unlikely anything at all would have been provided absent the Court’s orders. Those factors, in my view, merit a slightly different approach than that taken by Thomas J.
18 Kelly v Lasque, above n 15, at [11].
19 At [9].
[40] In Speargrass Holdings v Queenstown Lakes District Council, the Court determined that costs lying where they fell “fairly reflect[ed] each party’s success overall”.20 In Speargrass, the appellant succeeded in attaining its desired outcome but chose to run two additional sets of proceedings, which the Court found would have roughly doubled preparation and hearing time.21 Mr Rennie submitted that the numerous failed document requests consumed much of the plaintiffs’ time in this case also. I note Mr Clay distinguished this case on the basis that, in Speargrass, the Judge was considering costs at the end of the proceeding. That fact, in my view, does not negate the value of it as a comparator in this case.
[41] In my view, the Alpine View file and counsellor’s file were the main and obvious files to expect to be provided. I was not persuaded by the plaintiffs’ argument that they were not in their control. The remainder of the categories of files, apart from the medical file, seem, with respect, to have been marginally important to the issues in contention between the parties in the proceedings. Taking a realistic appraisal of the end result, I consider that the files in respect of which the orders were made were the most significant part of the application for particular discovery. For this reason, I do not consider success should be attributed in the way Mr Rennie characterised it or to be clear, on a numeric basis.
[42] The plaintiffs’ argument in respect of standard discovery is more compelling. But, it too must be looked at in the broader context of the plaintiffs apparent delay complying with Court orders. Although this does not specifically go to the merits of the applications for discovery, it does provide important background and perhaps justification for the need for the applications.
[43] But equally, I am particularly persuaded that the applications by the defendants did not need to be dealt with separately. There was a community of interest and, without intending any disrespect to counsel, could have been advanced by one counsel with the other counsel simply adopting those submissions. Two of the ten documents requested by the second defendant were covered in my analysis of the first defendant’s
20 Speargrass Holdings v Queenstown Lakes District Council, above n 16, at [32].
21 At [32].
submissions and three (possibly four) had already been discovered. There was a large amount of general crossover between both applications.
[44] In the round, and noting the decisions in Speargrass and Kelly, I have found that costs should lie where they fall. Acknowledging the importance of the files discovered, the fact remains that most of the defendants’ claims were unsuccessful.
[45] The applications for costs by all parties are dismissed. Costs will lie where they fall.
Harland J
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