Hawkins v Hawkins - [2021] NZHC 1788

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-553

[2021] NZHC 1788

UNDER the Trustee Act 1956

IN THE MATTER

of the Heads Trust settled by Deed dated 3 June 2010

BETWEEN

ANGELA MAREE HAWKINS and ST MARTINS TRUSTEE SERVICES LIMITED

Plaintiffs

AND

SAMUEL WILLIAM HAWKINS

First Defendant

continued…2

Hearing: (Determined on the papers)

Counsel:

G A Cooper and S C Cowan for Plaintiffs

J R Pullar and M P Davis for First Defendant

Judgment:

15 July 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

This judgment was delivered by me on 15 July 2021 at 3.00 pm Pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 15 July 2021

HAWKINS v HAWKINS [2021] NZHC 1788 [15 July 2021]

AND
MORHAWK (2017) LIMITED

Second Defendant

AND

ST MARTINS LAW LIMITED

First Third Party

AND

ERROL WILLIAM HAWKINS and DENISE JUNE HAWKINS

Second Third Party

[1] On 17 June 2021, I released a judgment dismissing the first defendant’s application for summary judgment (the June 2021 Judgment).1

[2]As in the June 2021 Judgment, I will refer to the parties by their given names.

[3] Samuel sought summary judgment on the basis that the Trust, settled by the plaintiffs and first defendant, is a sham. I do not repeat the factual background and the evidence, which is set out in the June 2021 Judgment, suffice to say the application was dismissed because there were significant factual disputes. While I concluded there were some of the indicators of a sham trust present, I noted the inquiry as to whether the Trust was a sham is an intensely factual one, meaning the context of the matters relied on by Samuel was important.

[4] In respect of costs, I noted I had not heard from counsel but that in my view there was no reason why costs should not follow the event on a 2B basis. I noted that if counsel could not agree, memoranda should be filed.

[5] The plaintiffs now seek costs along with an uplift based on Samuel pursuing what the plaintiffs characterise as an unmeritorious claim for summary judgment given there were significant factual disputes.

[6] The ordering of costs at this stage, let alone an uplift, is opposed. Mr Pullar, counsel for Samuel, relies on r 14.8 of the High Court Rules 2016 (the Rules), which deals with costs on interlocutory applications. That rule provides that costs on an

1 Hawkins v Hawkins [2021] NZHC 1440.

opposed interlocutory application should, unless there are special reasons to the contrary, be fixed and become payable when the application is determined. However, r 14.8(3) provides that the rule does not apply to an application for summary judgment. Mr Pullar notes r 14.8 does not distinguish between applications for summary judgment by a plaintiff versus a defendant.

Costs on an unsuccessful defendant’s application for summary judgment

[7]Associate Judge Bell in Nand v Tower Insurance said:2

… While it is the general practice to reserve…

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.

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Details

Case: [2021] NZHC 1788
Decision Date: 15 July 2021

CaseChat Overview and Summary

In Hawkins v Hawkins, the plaintiffs Angela Maree Hawkins and St Martins Trustee Services Limited, and the first defendant Samuel William Hawkins were involved in a dispute regarding the validity of a trust settled by Deed on 3 June 2010. The plaintiffs sought costs from the first defendant following the dismissal of his application for summary judgment. The court was required to decide whether costs should be awarded to the plaintiffs and if an uplift was warranted given the first defendant's unmeritorious claim. The court considered the general practice of awarding costs against unsuccessful defendants applying for summary judgment and whether there were special reasons to deviate from this practice.

The court examined the reasoning of previous cases which established that a defendant applying for summary judgment should bear the costs of the application if unsuccessful, unless there are special reasons to the contrary. The court found that the first defendant's application for summary judgment was unmeritorious and pursued in the face of significant factual disputes. The court noted that the first defendant's evidence did not sufficiently address how he would benefit from his participation in the alleged sham trust. The court also considered the defendants' late filing of evidence and the unsuccessful challenge to the admissibility of an affidavit as factors that contributed to the factual disputes. The court ultimately decided that costs should follow the event on a 2B basis, with allowance for second counsel and only one allocation for steps 24 and 25. The court declined any uplift due to the late filing of evidence and the unsuccessful challenge to the admissibility of an affidavit.

In conclusion, the court awarded costs to the plaintiffs based on the first defendant's unsuccessful application for summary judgment. The court found that the first defendant pursued the application despite significant factual disputes and failed to adequately address the issue of his potential benefit from the alleged sham trust. The court ordered that costs should follow the event on a 2B basis, with allowance for second counsel and only one allocation for steps 24 and 25. The court declined any uplift due to the late filing of evidence and the unsuccessful challenge to the admissibility of an affidavit.

Orders