Gough v Strahl - [2014] NZHC 1038

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2012-485-1574 [2014] NZHC 1038

BETWEEN
HARCOURT DAVID GOUGH

Plaintiff

AND

JOHN RUSSELL STRAHL First Defendant

AVENAL BERYL ELIZABETH MCKINNON

Second Defendant

CIV-2012-485-2027

BETWEEN AVENAL BERYL ELIZABETH MCKINNON
Plaintiff

ANDJOHN RUSSELL STRAHL First Defendant

HARCOURT DAVID GOUGH Second Defendant

Hearing: On the papers

Counsel:

N W Ingram QC and M T Kyriak for Mr Gough
R J B Fowler QC for Mr Strahl
J W A Johnson and H T Shaw for Mrs McKinnon

Judgment:

16 May 2014

COSTS JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is
3.30 pm on the 16th day of May 2014.

Solicitors: Kyriak Law, Auckland, for Mr Gough
DLA Phillips Fox, Wellington, for Mr Strahl
Wynn Williams Lawyers, Christchurch, for Mrs McKinnon

GOUGH v STRAHL [2014] NZHC 1038 [16 May 2014]

[1] In my judgment delivered on 29 November 2013 I reserved costs and invited memoranda if the parties were unable to agree.1 The parties have been unable agree and memoranda have now been submitted.

[2] There are two proceedings, described in [10] and [11] of my judgment.

[3] I deal first with the proceeding described in [10] (the first proceeding). Mr Strahl seeks costs, on a 2B basis, against Harcourt on that proceeding.2
Mr Ingram QC for Harcourt submits that the first proceeding should be dealt with as a case falling within the first or second class of cases referred to in Re Buckton and submits that the full costs of all parties should be met from the O T Gough Family Trust.3 Avenal does not seek separate costs on the first proceeding. She supports Mr Strahl’s submission that there should be an award of costs in his favour against Harcourt.

[4] This proceeding does not fall within the first class of cases mentioned by Kekewich J in Re Buckton in which the costs of all parties will ordinarily be paid out of the trust fund. The three classes are:

(a) proceedings by trustees to determine a question about the administration of a trust; and

(b) proceedings by a beneficiary for a similar purpose; and

(c) proceedings by a beneficiary making a claim adverse to other beneficiaries.

[5] The first proceeding falls clearly within the third class, namely an application by a beneficiary making a claim adverse to other beneficiaries. My reasons for that categorisation of the claim emerge clearly from the background, as described in my judgment. The proceeding did not arise from any difficulty of construction of the
trust deed which would have justified an application by the trustee. It was a step

1      Gough v Strahl [2013] NZHC 3184.
2      In this judgment I again refer to the Gough family members by their Christian names, for convenience and clarity, and I intend no disrespect in doing so.
3      Re Buckton [1907] 2 Ch 406 at 414-415.

taken by Harcourt to pursue his interests. This is not a case where all parties had a common interest in…

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 Gough v Strahl

Details

AGLC: Gough v Strahl [2014] NZHC 1038
Case: [2014] NZHC 1038
Decision Date: 16 May 2014

CaseChat Overview and Summary

In Gough v Strahl, the High Court of New Zealand was required to determine costs in two related proceedings between Harcourt Gough, John Russell Strahl, and Avenal Beryl Elizabeth McKinnon. The proceedings involved a family trust and the administration of its assets, with Harcourt and Avenal asserting claims against John Strahl, who was a trustee. The court was required to decide whether costs should be awarded on a standard or increased basis, and whether any costs should be borne by the trust fund.

The court found that the first proceeding, which involved a claim by Harcourt against Strahl, did not fall within the first or second classes of cases referred to in Re Buckton. Instead, it was categorised as a third-class case, where a beneficiary makes a claim adverse to other beneficiaries. As such, the costs principles set out in r 14.2 of the High Court Rules applied, rather than the specific provision in r 14.6(4)(c). The court held that Harcourt, as the unsuccessful party, should pay scale costs to Strahl. The court also noted that if Strahl had the right to recover his costs from the trust fund, then any costs recovered by him would effectively be borne by all beneficiaries.

In the second proceeding, which was initiated by Avenal, the court held that costs should not be deferred because the judgment was interim and there was the possibility of further proceedings. The court found that Avenal was wholly successful in the proceeding and awarded her costs on a 2B basis against Harcourt. The court rejected Harcourt's arguments that Avenal was not wholly successful, and that costs should be shared between the parties or paid out of the trust fund. The court also found that there were no circumstances that justified an award of increased costs.

The court ordered that Strahl recover $34,626.00 plus disbursements of $966.80 from Harcourt, and that Avenal recover $48,954 plus disbursements of $3,696.20 from Harcourt. These costs were to be paid by Harcourt and not the trust fund, unless Strahl was able to recover his costs from the fund.

Orders