Easton v New Zealand Guardian Trust Company Limited

[2017] NZHC 203

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2015-485-9 [2017] NZHC 203

IN THE MATTER	of the Trustree Act 1956
BETWEEN	IAN CHARLES EASTON Plaintiff
AND	THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED Defendant

Hearing:	On Papers
Counsel:	J O Upton QC for Plaintiff L J Taylor QC and J Orpin for Defendant
Judgment:	20 February 2017

JUDGMENT OF ELLIS J

[1]      On 13 December 2016, I gave judgment awarding costs in the amount of

$59,675.48 in favour of New Zealand Guardian Trust Company Limited (NZGT) after Mr Easton was granted leave to discontinue.1 I also ordered that, as a result of an application of r 15.24 by analogy, Mr Easton was not permitted to take any further steps in his new proceeding against NZGT (CIV-2016-485-963) until those costs are paid.2

[2]      Mr Easton has since applied to have my judgment recalled on this latter point.  Essentially he says that as a result of events subsequent to my costs judgment (namely that his bank has refused to lend him the money required to pay the costs

order, or to fund his ongoing litigation) the requirement to pay the costs should be

1      Easton v The New Zealand Guardian Trust Co Ltd [2016] NZHC 3011.

2      Application by analogy, pursuant to r 1.6(1) was required because Mr Easton had issued the new proceedings prior to the release of my costs judgment.

EASTON v THE NZ GUARDIAN TRUST COMPANY LTD [2017] NZHC 203 [20 February 2017]

deferred  until  NZGT  has  repaid  money  that  it  owes  him.     Alternatively,  he contemplates a form of off-setting.

Recall: relevant principles

[3]      The circumstances in which a judgment may be recalled are strictly limited. They are:

(a)      where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority;

(b)where  counsel  have  failed  to  direct  the  Court's  attention  to  a legislative provision or authoritative decision of clear relevance; and

(c)      where for some other very special reason justice requires that the judgment be recalled.

[4]      Mr Easton relies on the third ground, in relation to which this Court has held that:3

While the third category is not defined with particularly in the judgments, it is quite clear that the discretion to recall must be exercised with circumspection, and it must not in any way be seen as a substitute for appeal. In particular there are some things that it can be said the power to recall does not extend to. It does not extend to a challenge of any substantive findings of fact  and  law  in  the  judgment.  It  does  not  extend  to  a  party  recasting arguments previously given, and re-presenting them in a new form. It does not extend to putting forward further arguments, that could have been raised at the earlier hearing but were not.

Opposition

[5]      NZGT opposes the recall application.  It says:

(a)      the application is an attempt to re-litigate my earlier judgment by putting forward arguments that could and should have been put to the

Court at the time it determined costs;

3      Faloon v Commissioner of Inland Revenue (2006) 22 NZTC 19,832 (HC), approved by the

Court of Appeal in Erwood v Maxted [2010] NZCA 93, (2010) 20 PRNZ 466 at [5].

(b)even  if  the  grounds  for  recall  were  made  out,  r  15.24  is  not discretionary. And given that the only reason that it did not apply directly is because the new proceedings were issued before the costs judgment was delivered. NZGT should not be denied the protection afforded by the rule for that reason; and

(c)       in any event:

(i)the money Mr Easton advanced to NZGT was not a loan that is repayable on demand; and

(ii)even if the advances were repayable now, they could only be repaid by NZGT selling the assets of the trust (which is the very thing that Mr Easton wants to avoid).

Discussion

[6]      In a sense it is true that the matter of the debt due by NZGT to Mr Easton could have been raised at the time his costs submissions were filed.  The advances were  made  in  December  2011  and  January 2014. The  debt  existed  at  the  time submissions were filed.

[7]      I do accept that Mr Easton did not, then, appreciate that the bank would decline to provide him with further funding.  But that could only have been relevant at the time submissions were filed if r 15.24 was discretionary. Where it applies, the plaintiff must pay costs before commencing a new proceeding; there is no discretion to order that payment be deferred.  The only reason it can now be suggested that the Court could order a deferral is because:

(a)       the delay in issuing the costs’ judgment; and

(b)      the issuing of new proceedings by Mr Easton;

meant that r5.24 had to be applied by analogy.

[8]      Although I do not criticise Mr Easton for seeking to protect his position by issuing proceedings in the intervening period (limitation is apparently a potential issue) it would, perhaps, have been preferable had he made a gentle inquiry.  In any event it is only because he took the course he did that the rule did not apply directly. The signal point is that it would be wrong in principle if NZGT were to be denied the mandatory protection afforded by the rule because of a hold-up at the Court.  Equally there is no real unfairness in the operation by analogy of a rule which, Mr Easton’s advisers would well have understood, applied upon his discontinuance.

[9]      In short, if the application for recall were allowed it would have the effect of defeating the purpose of r 15.24, contrary to r 1.6(2).

[10]     In light of that conclusion I do not propose to venture in to the apparently vexed factual question of whether the advances to NZGT are, or are not, loans repayable on demand.   It of course remains open to Mr Easton to test his own position by making such a demand, although I note NZGT’s advice that the only way that the funds could be repaid by NZGT in cash is by the selling Trust assets (the

very thing that Mr Easton wishes to avoid).4

Conclusion

[11]     The recall application is dismissed accordingly and NZGT is entitled to its 2B

costs in that regard.

[12]     The upshot is that, as before, Mr Easton is unable to take any steps in his new proceeding  unless  and  until  he  pays  the  costs  awarded  in  my  judgment  of

13 December 2016,  together with  the costs  just  awarded.   The most  immediate consequence is that the 15 March hearing of his application for an interim injunction, in which he seeks to prevent NZGT from taking steps to realise the Moutoa Trust’s

assets (ie to sell the family farm property) is in jeopardy.

4      The Trust's only assets are shares in companies which own the cropping land. Mr Easton wishes to stop the sale of the cropping land.

[13]     In these circumstances I can only agree with Mr Taylor that it is appropriate to order that, unless the outstanding costs are paid in full, within seven days of the date of this decision, Mr Easton's new proceeding (CIV-2016-485-963) should be struck out, and the 15 March hearing date for his interim injunction application vacated.  NZGT would, at that point, be released from the undertakings it has given

in the new proceeding in relation to the sale of the farm property.

Rebecca Ellis J