Ip v Ip

Case [2016] NZHC 528 24 March 2016

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1197 [2016] NZHC 528

UNDER
the Declaratory Judgments Act 1908 and

Section 51 of the Trustee Act 1956

BETWEEN

YUM KEUNG IP Plaintiff

AND

YUM KEUNG IP AND ROSA WEI CHING TAI

First Defendants

SUI FONG IP CHOW and ROSA WEI CHING TAI as trustees of the Valonia Trust

Second Defendants

SUI FOND IP CHOW (also known as

CHOW SUI FONG) Third Defendant

Hearing: On the papers

Judgment:

24 March 2016

COSTS JUDGMENT OF DUFFY J

This judgment was delivered by me on 24 March 2016 at 2.15 pm pursuant to
Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar

Solicitors:
Lee Salmon Long, Auckland
McVeagh Fleming, Auckland

IP v IP AND ORS [2016] NZHC 528 [24 March 2016]

Introduction

[1] The applicant, Mr Yum Keung Ip, and the third defendant, Mrs Sui Fong Ip Chow, have each filed memoranda seeking costs in relation to Mr Ip’s application for freezing orders over certain trust property. That application was discontinued on the day of the hearing when Mrs Ip Chow provided an undertaking to the High Court that (amongst other things) she would not charge, encumber or otherwise dispose of the disputed property.

[2] Mr Ip seeks a deferral of the costs decision pending the outcome of the substantive hearing, or alternatively seeks scale costs in his favour. Mrs Ip Chow seeks increased costs in respect of the application for freezing orders, as well as scale costs in relation to the costs memorandum prepared by counsel.

Factual background

[3] The applicant, Mr Ip, brought proceedings under the Trustee Act 1956 alleging various breaches and misconduct in the administration of two family trusts, the Victoria Trust and the Valonia Trust. There were three respondents:

(a) Mr Ip and Ms Rosa Wei Ching Tai, as Trustees of the Victoria Trust; (b) Mrs Ip Chow and Ms Tai, as Trustees of the Valonia Trust;
(c) Mrs Ip Chow in her personal capacity.

[4] The two trusts were established while Mr Ip and Mrs Ip Chow were married. Following their separation in July 2013, Mr Ip and Mrs Ip Chow implemented a relationship property agreement effecting certain changes to the trust arrangements. However, it appears that Mr Ip subsequently regretted aspects of that agreement. He filed proceedings alleging breaches of trust and misconduct in the administration of the Victoria Trust and the Valonia Trust. Mr Ip also asserted the existence of an implied, resulting, constructive or bare trust over properties in Hong Kong that were purchased during the marriage. Mr Ip sought freezing orders in respect of various trust property as well as two apartments in Hong Kong.

[5] A hearing was scheduled to take place on 11 February 2016 in relation to the application for freezing orders. However, in court the parties agreed to sign a written undertaking in relation to the properties, such that judicial determination of the matter became unnecessary. The parties were invited to file memoranda regarding costs.

Submissions for the…

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 Ip v Ip

Details

AGLC: Ip v Ip [2016] NZHC 528
Case: [2016] NZHC 528
Decision Date: 24 March 2016

CaseChat Overview and Summary

The case of Ip v Ip involves a dispute over costs related to an application for freezing orders over certain trust property. The applicant, Mr Yum Keung Ip, brought the proceedings under the Trustee Act 1956, alleging breaches and misconduct in the administration of two family trusts, the Victoria Trust and the Valonia Trust. The application for freezing orders was discontinued on the day of the hearing when the third defendant, Mrs Sui Fong Ip Chow, provided an undertaking to the High Court. Mr Ip seeks a deferral of the costs decision pending the outcome of the substantive hearing, or alternatively seeks scale costs in his favour. Mrs Ip Chow seeks increased costs in respect of the application for freezing orders, as well as scale costs in relation to the costs memorandum prepared by counsel. The court was required to decide on the liability for costs after the discontinuance of the application, whether increased costs were justified, and the appropriate amount of costs to be awarded.

The court found that the general presumption is that costs relating to an interim application should be awarded at the determination of the application. The court noted that the New Zealand Oxford Dictionary defines “determine” to mean “bring or come to an end,” and in the present case, the application had come to an end as a result of the discontinuance and therefore the application had been determined. The court considered that it was more suitable to deal with costs at that point in time, rather than deferring the decision until the determination of the substantive proceedings. The court also found that Rule 15.23 of the High Court Rules applies by analogy to the present proceedings, with the result that Mr Ip would be required to pay costs incidental to the interlocutory application up to and including the day of the hearing, unless the court orders otherwise. The court found that Mr Ip’s conduct in accepting the February undertaking indicated that the terms of the undertaking were reasonable and therefore that his prior rejection of a similar (if not superior) offer was unreasonable. As a result of that rejection, the parties were put to considerable time and expense preparing for a hearing which never needed to proceed at all. Increased costs were therefore justified in respect of steps taken after 28 January 2015.

The court awarded Mrs Ip Chow costs in the sum of $10,258.00 and disbursements as claimed of $240.20. The court also ordered that Mr Ip pay Mrs Ip Chow’s costs of and incidental to the interlocutory application up to and including the day of the hearing.

Orders