Dunphy v Ngati Mutunga o Wharekauri Trust

[2012] NZHC 1802

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2010-485-2185 [2012] NZHC 1802

IN THE MATTER OF     section 27 of the Charitable Trusts Act

1957 and s 27 of the Incorporated Societies

Act 1908

AND IN THE MATTER OF the liquidation of Ngati Mutunga o Wharekauri Trust (in liquidation) and Ngati Mutunga o Wharekauri Society Incorporated (in liquidation)

AND IN THE MATTER OF an application by James Pohio under s

250 of the Companies Act 1993 to terminate the liquidations

Hearing:         On the papers

Counsel:         H L Thompson for the Liquidators

S C Potter for Ngati Mutunga o Wharekauri Iwi Trust

Judgment:      23 July 2012

JUDGMENT OF MALLON J (Costs)

[1]      On  12  March  2012  Mr  Pohio  filed  an  application  under  s 250  of  the Companies Act to terminate the liquidations of a trust and an incorporated society. The application was on the basis that the liquidators had missed or wilfully closed their eyes to dubious and fraudulent transactions, that court staff had obstructed Mr Pohio’s attempts to inform himself about the proceedings, that there had been professional misconduct by lawyers, and that the Judge who heard the liquidators’ application for directions ought to have recused himself.

[2]      Mr Pohio was advised of the hearing date for his application but did not attend the hearing.   Counsel for the liquidators and counsel for the new Trust did attend the hearing.   I dismissed Mr Pohio’s application in a judgment given on

27 April 2012.   The liquidators and the new Trust sought costs on an indemnity

DUNPHY & SHEPHERD v NGATI MUTUNGA o WHAREKAURI TRUST HC WN CIV 2010-485-2185 [23

July 2012]

basis.  I said that if they wished to pursue a costs order on that basis they would need to file memoranda and Mr Pohio would need to be given the opportunity to respond.

[3]      On 11 May 2012 memoranda for the liquidators and the new Trust were filed and served on Mr Pohio.  Mr Pohio has not responded.  He has had the opportunity to do so.  I therefore proceed to determine the application for costs.

[4]      The liquidators have calculated that 2B costs on the s 250 application would give an award of $3,384.   They have set out a schedule of their actual costs in relation to this application.  Those costs total $13,635.  They seek indemnity costs or alternatively an increase of 100% on 2B costs (ie. $6,768).

[5]      The new Trust also seeks indemnity costs.   In the alternative to indemnity costs, the new Trust seeks an uplift on 2B costs by 50% (ie. $5,076).  The new Trust has submitted invoices that it has paid to its solicitors in relation to the application. Those invoices total $23,358 excluding GST and disbursements.   They apparently include an amount for pursuing this costs application.   But other than that, it is unclear why the new Trust’s legal costs are so much higher than the liquidators’ costs.

[6]      The basis on which indemnity/increased costs are sought is that Mr Pohio made serious allegations in the application which were unsubstantiated, that his application had no prospect of success, and that his application was brought with an ulterior motive.

[7]      I  am  not  prepared  to  order  indemnity  costs.    Mr  Pohio  made  serious allegations which he could not substantiate.  They were the kind of allegations that are (unfortunately) not unusual where lay litigants, who are aggrieved at some issue or other, file documents in the Court.   Because there is no attempt to substantiate them, those against whom the allegations are made need not incur cost in defending them over and above the usual cost in opposing an application.   I am, however, prepared to order costs in the sum of $5,000 to each of the liquidators and the new Trust.   This is more than 2B costs, but it represents a reasonable contribution to actual reasonable costs (as per the liquidators’ actual costs).  I do so on the basis that Mr Pohio’s application was completely without merit and should not have been

brought.   I do not uplift the costs award any higher than this because Mr Pohio appears to have had the sense not to pursue the application by not attending the hearing.  He ought, however, to have informed the parties that he was not intending to pursue it so that the costs of the hearing could have been avoided.

[8]      I do not make an order for the payment of disbursements or interest, as sought by the new Trust.  The costs order is a sufficient contribution to the parties’ total costs.

Mallon J

Solicitors:

McMahon Butterworth Thompson, Auckland for the Liquidator

Enterprise Law, Auckland for Ngati Mutunga o Wharekauri Iwi Trust