Gamble v Schepens - [2024] NZHC 1354

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-488-000086

[2024] NZHC 1354

BETWEEN DEBORAH ANNE GAMBLE, DEIRDRE JANE LEADLEY and HAYLEE MARIE LEITH
Plaintiffs

AND

JOHN EMILE SCHEPENS and BRUCE

JOSEPH MORRIS in their capacity as
trustees of the estate of LILY JOSEPHINE SCHEPENS
First Defendants

JOHN EMILE SCHEPENS and BRUCE
JOSEPH MORRIS in their capacity as
trustees of the estate of ALLAN VICTOR SCHEPENS

Second Defendants

Hearing: On the papers

Counsel:

J P Browne and J P Cartwright for Plaintiffs

J P Golightly for First-named Defendant (J Schepens) C Muston for Second-named Defendant (B Morris)

Judgment:

28 May 2024

COSTS JUDGMENT OF ANDREW J

This judgment was delivered by Justice Andrew on 28 May 2024 at 3.00 pm
pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar
Date ……………………………

GAMBLE v SCHEPENS [2024] NZHC 1354 [28 May 2024]

Introduction

[1] In my judgment of 13 November 2023,1 I made orders removing Mr Bruce Morris and Mr John Schepens as trustees and appointed Schepens Trustee Ltd as trustee of the testamentary trusts at issue.

[2] The parties have filed written submissions addressing the question of costs. This is my judgment on costs.

[3]The Court apologises to the parties for the delay in considering this issue.

[4]There are two critical issues to determine:

(a)Whether the plaintiffs are entitled to indemnity or increased costs;

(b)The relative liability of Mr John Schepens and Mr Bruce Morris for costs.

Analysis and decision

[5] The plaintiffs seek indemnity costs of $75,000 together with disbursements (a total of $79,008.55) or alternatively, 2B scale costs with a 50 per cent uplift plus disbursements (a total of $67,104.55).

[6] Mr John Schepens opposes indemnity or increased costs. He accepts the plaintiffs’ 2B calculation of $46,072.55 (including disbursements) but contends there is no basis for any award of costs beyond that figure.

[7] Mr Morris supports the plaintiffs’ submissions on costs as “principled and appropriate”. In particular, he supports the plaintiffs’ contention that he should be jointly liable with Mr Schepens to the plaintiffs for 10 per cent of the costs and disbursements ordered. Mr Schepens, on the other hand, says that there should be no joint and several order and that Mr Morris should be liable for 30 per cent of the total costs award (with 70 per cent borne by Mr Schepens).

1 Gamble v Schepens [2023] NZHC 3191.

Issue (a) – Indemnity or increased costs

[8] I find that the threshold for an award of indemnity costs has not been met. It cannot be said that Mr Schepens has behaved either badly or very unreasonably.2 The truly critical issue is whether there is a proper basis for increased costs.

[9] Increased costs may be ordered where there is a failure by the party paying to act reasonably.3 However, generally costs are to reflect how parties acted during litigation, not before it.4

[10] The Court should consider the extent to which…

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 Gamble v Schepens

Details

AGLC: Gamble v Schepens [2024] NZHC 1354
Case: [2024] NZHC 1354
Decision Date: 28 May 2024

CaseChat Overview and Summary

The High Court of New Zealand considered a dispute involving Deborah Anne Gamble, Deirdre Jane Leadley, and Haylee Marie Leith as plaintiffs, and John Emile Schepens and Bruce Joseph Morris as defendants, in their capacities as trustees of the estates of Lily Josephine Schepens and Allan Victor Schepens. The primary focus of this case was on the costs incurred during the proceedings, specifically whether the plaintiffs were entitled to indemnity or increased costs and the relative liability for these costs between the defendants, Mr Schepens and Mr Morris. The case was heard on the papers, with submissions from counsel representing each party.

The court was required to decide two main issues. First, whether the plaintiffs were entitled to indemnity or increased costs given the conduct of the defendants during the litigation. Second, the relative liability of Mr Schepens and Mr Morris for the costs, considering their differing roles and actions during the proceedings. The plaintiffs sought indemnity costs or, in the alternative, a significant uplift on the scale costs, arguing that the defendants' conduct warranted such an award. The defendants, while acknowledging the plaintiffs' submissions on costs, disagreed on the extent of their liability, with Mr Morris supporting the plaintiffs' stance and Mr Schepens opposing any increased costs or joint liability.

The court found that while Mr Schepens' conduct was not egregious enough to warrant indemnity costs, his opposition to his removal as a trustee was unreasonable and contributed to the length and expense of the proceedings. This led the court to award increased costs, with a 50 per cent uplift on the scale costs, totaling $67,104.55. Regarding relative liability, the court determined that separate costs orders should be made against the defendants due to their differing actions during the litigation. Mr Schepens, who opposed his removal throughout, was held to be responsible for 80 per cent of the costs, while Mr Morris, who filed his appearance and affidavit late and had previously sought assurance of non-liability, was to pay 20 per cent. The court concluded that there should be no joint liability between the defendants.

In summary, the court ordered Mr John Schepens to pay 80 per cent of the total costs and disbursements award of $67,104.55, while Mr Bruce Morris was ordered to pay 20 per cent. The decision highlighted the importance of trustees acting in accordance with their duties and the consequences of failing to do so, both in terms of their personal liability and the costs associated with litigation.

Orders