Forbes v Townsend - [2023] NZHC 2833

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-665

[2023] NZHC 2833

UNDER the Contract and Commercial Law Act 2017

BETWEEN

GRANT DAVID FORBES, JENNIFER LEE FORBES and STEPHEN LAWRENCE

GALLAUGHER as trustees of ASSURER TRUST
Plaintiffs

AND

SARAH CAROLINE TOWNSEND and

FREDERICK MUIR WARD as trustees of the ERSKINE TRUST

Defendants

Hearing: On the papers

Appearances:

S C Price and R G Muston for Plaintiffs P C Murray for Defendants

Judgment:

10 October 2023

JUDGMENT OF ASSOCIATE JUDGE PAULSEN (COSTS)

This judgment was delivered by me on 10 October 2023 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

FORBES v TOWNSEND (COSTS) [2023] NZHC 2833 [10 October 2023]

[1] In a judgment of 15 September 2023, I dismissed the plaintiffs’ application for summary judgment.1 I noted that I was not aware of any reason why costs should not be reserved in the usual manner,2 but if either party wished to apply for costs they could do so although I was not to be taken as encouraging that course of action.3

[2] The defendants have applied for costs on a 2B basis with a 50 per cent uplift. The plaintiffs oppose the defendants’ application for costs but themselves seek costs for having to file a memorandum for doing so.

[3] The defendants accept that the usual position is, where a plaintiff is unsuccessful on a summary judgment application, costs are reserved until determination of the substantive claim. However, they submit costs may be fixed where there are legal or factual issues which made the case unsuitable for summary judgment and where the application should never have been brought.4

[4] The defendants argue the plaintiffs’ summary judgment application should never have been brought because:

(a)based on a settled line of authorities the plaintiffs’ claim could not succeed;

(b)the plaintiffs sought to fundamentally change their approach to the claim during the hearing, which was never appropriate in a summary judgment context;

(c)there were factual matters arising on the plaintiffs’ own evidence that made the case unsuitable for summary judgment; and

(d)summary judgment was sought as to liability only, but in this case liability could not be determined separately from quantum.

1      Forbes v Townsend [2023] NZHC 2578 at [77].
2      NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA) at 406.
3      Forbes v Townsend, above n 1, at [78].
4      Srinagar Ltd v Horowhenua District Council [2022] NZHC 1094 at [8] and [10], citing Emmons Development New Zealand Ltd v Mitsui Sumitomo Insurance Co Ltd [2016] NZHC 1244 and Vision Aluminium Ltd v McLaughlan HC Christchurch CP 123/90, 8 June 1990.

[5] In addition, the defendants say the plaintiffs were on notice that the summary judgment application could not succeed. On two occasions the defendants’ solicitors wrote to the plaintiffs’ solicitors advising them it was inappropriate to seek summary judgment and that costs would be sought if the application was not withdrawn.

[6]…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Forbes v Townsend

Details

AGLC: Forbes v Townsend [2023] NZHC 2833
Case: [2023] NZHC 2833
Decision Date: 10 October 2023

CaseChat Overview and Summary

The High Court of New Zealand heard a case between Grant David Forbes, Jennifer Lee Forbes, and Stephen Lawrence Gallowher as trustees of the Assurer Trust (plaintiffs) and Sarah Caroline Townsend and Frederick Muir Ward as trustees of the Erskine Trust (defendants). The dispute arose from the plaintiffs' unsuccessful application for summary judgment. The defendants subsequently applied for costs on a 2B basis with a 50% uplift, which the plaintiffs opposed. The defendants argued that the plaintiffs' application for summary judgment should never have been brought due to several reasons, including settled authorities, a change in approach during the hearing, factual matters, and the inseparability of liability and quantum. The plaintiffs countered that the usual position of reserving costs until the final outcome of the case should apply, and they rejected the suggestion that the application was unreasonably pursued.

The court considered the defendants' arguments and noted that typically, when a plaintiff is unsuccessful on a summary judgment application, costs are reserved until the determination of the substantive claim. However, the court may fix costs if the case is unsuitable for summary judgment and the application should never have been brought. The court found that while the case was borderline, the plaintiffs were not acting unreasonably. They had raised matters not previously argued, and the factual matters were not as straightforward as the defendants suggested. The correspondence between the defendants' counsel and the plaintiffs' solicitors did not alter the court's view that costs should be reserved.

In conclusion, the court reserved costs on the plaintiffs' application for summary judgment and did not award the plaintiffs costs for filing memoranda in respect of costs. The plaintiffs were advised that they might consider themselves fortunate not to have had costs awarded against them and that they did not correspond with the defendants' counsel in respect to costs before memoranda were filed. The case highlights the importance of carefully considering the appropriateness of summary judgment applications and the potential consequences of pursuing them without sufficient merit.

Orders