Hardy v Whitcombe - [2017] NZHC 3132

IN THE HIGH COURT OF NEW ZEALAND
DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2017-412-000047 [2017] NZHC 3132

IN THE MATTER
of the estate of RICHARD ANTHONY

REID

BETWEEN

RICHARD MATHESON HARDY AND OTHERS

Plaintiffs

AND

TODD WHITCOMBE Defendant

Appearances:
R Butler for Plaintiffs/Respondents

C S Withnall QC for Defendant/Applicant

Judgment:

14 December 2017

JUDGMENT OF ASSOCIATE JUDGE OSBORNE [costs]

The costs issues

[1] On 30 October 2017, the Court entered summary judgment for the defendant.1

It directed that the plaintiffs would pay the defendant’s costs and disbursements, but reserved the quantum. The defendant and the plaintiffs have now filed memoranda.

[2] The defendant says that an order should be made that the plaintiffs pay his costs on an indemnity basis. The costs claimed are for Mr T J Shiels QC, who was originally counsel for the defendant, in the sum of $26,482.56, together with the costs of Mr C
S Withnall QC who appeared for the defendant when Mr Shiels was unable to continue

1 Hardy v Whitcombe [2017] NZHC 2382.

HARDY v WHITCOMBE [2017] NZHC 3132 [14 December 2017]

to act in this case through to the fixture, in the sum of $7,475. As well, the defendant claims his solicitors’ fees of $9,235.

[3] In the alternative to seeking indemnity costs, counsel says that, from a starting- point of costs on a 2B basis, there should be an increase but counsel does not specify the extent of the increase sought.

The costs hierarchy

[4] All matters are at the discretion of the Court if they relate to costs of a proceeding.2 Part 14 of the High Court Rules nevertheless recognises three broad categories of costs determination:

(a) Costs according to scale, arrived at by daily recovery rates3 and time allocations;4

(b)Increased costs under r 14.6(3) High Court Rules, which may be awarded in a number of situations, described by the Court of Appeal in Bradbury v Westpac Banking Corporation as being “where there is a failure by the paying party to act reasonably”.5 An example is where the party pursues an argument which lacks merit;6 and

(c) Indemnity costs under r 14.6(4) High Court Rules, which may be awarded in a number of situations. Generally they are awarded, as described by the Court of Appeal in Bradbury, “where a party has behaved either badly or very unreasonably”, for example a breach of
confidence or flagrant misconduct.7

2      Rule 14.1(1) High Court Rules.
3      Pursuant to r 14.4 High Court Rules, under Schedule 2.
4      Pursuant to r 14.5, High Court Rules, under Schedule 3.
5      Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400 at [27].
6      Rule 14.6(3)(b)(ii), High Court Rules.
7 At [27].

[5] In this case, the plaintiffs rely primarily on r 14.6(4)(a) which provides:

(4) The court may order a party to pay indemnity costs if—

(a) the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step…

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 Hardy v Whitcombe

Details

AGLC: Hardy v Whitcombe [2017] NZHC 3132
Case: [2017] NZHC 3132
Decision Date: 14 December 2017

CaseChat Overview and Summary

In Hardy v Whitcombe, the plaintiffs sought a declaration of a constructive trust over the estate of the deceased, Richard Anthony Reid. They argued that Mr Reid had agreed with their father that they would be provided for in his will, either by mutual wills or by a secret trust. The defendant, Todd Whitcombe, sought summary judgment on the basis that the plaintiffs had no standing to bring the claim and that the claims were wholly without merit. The Court agreed with the defendant, and ordered that the plaintiffs pay the defendant’s costs and disbursements. The plaintiffs argued that the Court should exercise its discretion to order that costs lie where they fall, or in the alternative that they pay scale costs. The defendant argued that he was entitled to indemnity costs, or in the alternative, increased costs on a scale 2B basis. The Court found that the plaintiffs’ claims were not vexatious, frivolous, improper or unnecessary, and therefore did not warrant indemnity costs. However, the Court found that the claims were wholly without merit, and ordered that the plaintiffs pay the defendant’s costs on an increased costs basis, with a 25 per cent uplift on a scale 2B award.

The Court found that the plaintiffs’ claim was based on a genuine belief that they should have been provided for in the deceased’s will. However, the Court found that there was no evidence to support the plaintiffs’ claims of a mutual wills agreement or a secret trust. The Court found that the defendant was entitled to increased costs, as the plaintiffs’ claims were not sustainable on their evidence. The Court found that a 25 per cent uplift on a scale 2B award was appropriate to reflect the defendant’s entitlement to increased costs. The Court rejected the plaintiffs’ argument that costs should lie where they fall, or that they should only pay scale costs. The Court found that the defendant was entitled to costs for filing a statement of defence, as it was an appropriate step in the proceeding.

Orders