Justitiae Trustee Company Limited v NZF Nominees Limited
[2021] NZHC 2323
•7 September 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-1954
[2021] NZHC 2323
BETWEEN JUSTITIAE TRUSTEE COMPANY LIMITED
PlaintiffAND
NZF NOMINEES LIMITED
Defendant
Hearing: On the papers Counsel:
B D Gray QC, R B Hucker and R Selby for the Plaintiff No appearance by or on behalf of the Defendant
D Salmon QC and A van Ammers for Fairlight Forestry Ltd and Clive Bradbury (Interested Parties)
K Glover for Clayton Bradbury (Interested Party)S Gollin for De Havilland Investments Ltd and Heather Bradbury (Interested Parties)
Judgment:
7 September 2021
JUDGMENT OF GORDON J
[Application to recall substantive judgment and costs judgment]
This judgment was delivered by me
on 7 September 2021 at 12pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors: Hucker & Associates, Auckland
West Auckland Law Office, Auckland Harrington Law Limited, Auckland
Counsel:B D Gray QC, Auckland D Salmon QC, Auckland
JUSTITIAE TRUSTEE CO LTD v NZF NOMINEES LTD [2021] NZHC 2323 [7 September 2021]
[1] The plaintiff, Justitiae Trustee Co Ltd (Justitiae) makes an application for recall of my judgment in Justitiae Trustee Co Ltd v NZF Nominees Ltd1 (substantive judgment), and my further judgment in Justitiae Trustee Co Ltd v NZF Nominees Ltd2 (costs judgment).
[2] Justitiae says the Court needs to reconsider both judgments in light of the decision of the Court of Appeal in McCallum Jnr v McCallum.3 Justitiae says that decision is relevant to both the substantive judgment and costs judgment.
[3] The application for recall is opposed by Clive Bradbury, Fairlight Forestry Ltd (FFL), Heather Bradbury, De Havilland Investments Ltd (DHIL) and Clayton Bradbury (together, the Bradbury parties). They say, in short, that:
(a)as Justitiae has appealed both judgments, their validity and correctness lies with the Court of Appeal. The High Court is functus officio and cannot recall them;
(b)the criteria for recall are not met in relation to either judgment. McCallum is not a new judicial decision of relevance and high authority with the potential to materially affect the two judgments. Justitiae is seeking to employ McCallum to relitigate matters already decided and raise arguments it could have raised earlier but did not; and
(c)Justitiae should be required to pay the Bradbury parties’ costs on this application on an indemnity basis or at least on a 2B basis with a 50 per cent uplift.
[4]The parties agreed to the Court making its decision on the papers.
[5] In Erwood v Maxted,4 the Court of Appeal set out guidelines for the recall of judgments in civil proceedings. One of the guidelines is that:5
1 Justitiae Trustee Co Ltd v NZF Nominees Ltd [2021] NZHC 659 (substantive judgment).
2 Justitiae Trustee Co Ltd v NZF Nominees Ltd [2021] NZHC 1585 (costs judgment).
3 McCallum Jnr v McCallum [2021] NZCA 237.
4 Erwood v Maxted [2010] NZCA 93.
5 At [23](c)(i)(d).
The Court will usually give only brief reasons for its decision on any application.
[6] I can see no reason why that guideline should not apply equally to an application for recall in this Court.
Procedural background
[7] A brief procedural background is as follows. The proceedings were heard in this Court on 22 and 23 February 2021. I delivered the substantive judgment on 30 March 2021. Justitiae’s claims failed in their entirety. I reserved costs.
[8]On 24 April 2021, Justitiae appealed the substantive judgment.
[9]The McCallum judgment was delivered on 8 June 2021.
[10]I issued the costs judgment on 30 June 2021.
[11] On 9 July 2021, the Bradbury parties filed a joint memorandum of counsel attaching a schedule quantifying costs as directed in the costs judgment.6
[12] On 12 July 2021, Justitiae filed a memorandum of counsel in response. In that memorandum counsel indicated that Justitiae intended to file an application to recall both judgments in light of McCallum.
[13]On 15 July 2021, Justitiae filed the recall application.
[14] On 23 July 2021 Justitiae amended its grounds of appeal in the Court of Appeal to appeal the costs judgment.
[15] Justitiae has paid security for costs in the Court of Appeal, filed a case on appeal and applied for the allocation of a hearing date.
6 Costs judgment, above n 2, at [95].
Legal principles
[16] Under r 11.9 of the High Court Rules 2016, a Judge may recall a judgment given in writing at any time before a formal record of it is drawn up and sealed. Neither judgment has yet been sealed.
[17] The leading statement of the law in respect of recall in New Zealand is still that of Wild J in Horowhenua County v Nash (No. 2):7
Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled — first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.
[18] The threshold for granting a recall application is high.8 The senior courts have commented that the recall of a judgment is a serious step that should be taken only in reasonably well identified9 and exceptional situations, within prescribed limits.10
[19] McGechan on Procedure sets out the policy behind restricting the scope of recall applications:11
Once a court has made an order, there is a significant policy reason for requiring the order to stand as conclusive, unless overturned on such challenge as may be available to affected parties. That reason is the principle of finality in litigation …
7 Horowhenua County v Nash (No. 2) [1968] NZLR 632 (SC) at 633; applied in Saxmere Co Ltd v Wool Board Disestablishment Co Ltd [2009] NZSC 122, [2010] 1 NZLR 76 at [2].
8 Nottingham v The Real Estate Agents Authority [2017] NZCA 145 at [13].
9 Andrew Beck and others (eds) McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR11.9.01(1)].
10 Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94, [2013] 1 NZLR 804 at [28].
11 McGechan on Procedure, above n 9, at [HR11.9.01(2)]; citing Gibson v Official Assignee [2019] NZHC 532, (2019) 29 NZTC 24-005 at [21].
Is the High Court functus officio?
[20]In Russell v Klinac, O’Regan J said:12
It is clear that a common law rule exists that once a Court has made an order, and an appeal has been lodged against that order, the Court becomes functus officio and is therefore unable to take further action in relation to the matter.
[21] The common law rule has been applied in the context of recall applications under the High Court Rules. In Siemer v Heron,13 Mr Siemer applied for recall (and for variation and rescission) of a judgment in circumstances where his appeal to the Court of Appeal subsisted. In refusing the application Keane J said:14
… [HCR 11.9] permits a judge to recall a judgment at any time before a formal record of it is drawn up and sealed. So far as I am aware, the order I made in this case has not been sealed. As to the application for recall, and indeed that for variation and rescission, however, the respondents take a more fundamental point that is fatal to Mr Siemer’s applications.
Mr Siemer, as they say, has appealed my judgment and the validity and correctness of the order I made now lies with the Court of Appeal. It has already made an order for stay and intimated when the appeal will be set down for hearing. My decision, as they say, is no longer mine to recall, rescind or vary.
[22] In TSB Bank Ltd v Burgess, Gendall J gave a judgment on an application to recall his judgment where the defendant had filed an appeal in the Court of Appeal.
The Judge said:15
[10] … The defendant’s present application to recall my earlier 10 December 2013 judgment has been rendered nugatory as the result of his appeal of this decision to the Court of Appeal.
[23] In relation to the costs judgment, Justitiae submits that the Court is not functus officio because I have yet to issue a judgment quantifying costs. I do not accept that
12 Russell v Klinac HC Whangarei AP18/01, 11 December 2001 at [15] citing Pacific Homes Ltd (In Liq) v Consolidated Joineries Ltd (1996) 9 PRNZ 331 (HC) and Horowhenua County v Nash (No.
2) above n 7.
13 Siemer v Heron HC Auckland CIV-2010-404-6880, 8 September 2011.
14 At [6] and [7].
15 TSB Bank Ltd v Burgess [2014] NZHC 204 citing Russell v Klinac, above n 12; and White v New Zealand Stock Exchange [2001] 1 NZLR 683 (CA) at 702.
submission. In the costs judgment I accepted that the items claimed in the schedules annexed to the Bradbury parties’ submissions were all properly claimed.16
[24]My judgment then contained the following orders:17
(a)I award increased costs with a 50 per cent uplift applied to 2B scale costs for steps taken in the period 18 September 2019 to 17 June 2020 (excluding any steps in respect of which costs have already been ordered or agreed) to Fairlight, Clive, Clayton, DHIL and Heather Bradbury against Justitiae;
(b)I award indemnity costs for the period 17 June 2020 to 23 February 2021 to DHIL and Heather Bradbury against Justitiae;18
(c)I award increased costs for the period from 17 June 2020 to 23 February 2021 on the basis of a 50 per cent uplift on 2B scale costs for Fairlight, Clive and Clayton for all items except for:
(i)Fairlight and Clive: the 50 per cent uplift is on 2C scale costs for item 30 (preparation of affidavits) and item 32 (preparation for hearing); and
(ii)Clayton: the 50 per cent uplift is on 2C scale costs for item 32 (preparation for hearing).
(d)To the extent that Clayton’s costs and disbursements are not recovered from Justitiae pursuant to my orders under the High Court Rules, those costs and disbursements19 are to be paid by Justitiae; and
(e)The disbursements, being filing fees and printing and binding claimed by Fairlight and Clive of $466.84, filing fees of $550 claimed by Clayton, and filing fees of $660 claimed by DHIL and Heather Bradbury, are to be paid to those parties respectively.
[25]I then directed as follows:20
[95] The claimants all annexed multiple schedules to their submissions prepared on various alternative bases. I direct that each successful claimant now file a single schedule with their calculations set out in full based on this decision. I will then issue a supplementary judgment making orders as to the precise amount of costs and disbursements to be paid by Justitiae to each of the parties.
16 Costs judgment, above n 2, at [92]. In its original submissions on costs Justitiae said: “The plaintiff accepts that the Defendants are entitled to costs. With one exception the Plaintiff agrees with the steps for which the Defendants seek costs”. Justitiae did not identify the step it was referring to.
17 At [94].
18 The award of indemnity costs was identified as: amount as set out in Schedule 4 to submissions for DHIL and Heather Bradbury.
19 These costs and disbursements were identified in a footnote: as set out in Schedule 5 to Clayton’s submissions.
20 Costs judgment, above n 2, at [95].
[26] What the Court sought and received from the Bradbury parties was a recompilation (and in some instances a recalculation on the basis of a 50 per cent uplift rather than a 75 per cent uplift) of schedules previously filed. There was no change to the items approved. No further items were added. All that remains is for the Court to issue a separate judgment quantifying the items already approved and in respect of which orders have already been made.
[27] In short, the fact that both judgments are under appeal is a complete answer to the application for recall.
Consideration of recall on merits
[28] I nevertheless briefly consider the application on its merits. Justitiae relies on the first category in Horowhenua County v Nash,21 referring to the Court of Appeal judgment in McCallum.
[29] I do not consider McCallum is a “new judicial decision of relevance and high authority” 22 with the potential to materially affect the substantive judgment. The only sense in which McCallum is “new” is that it was delivered after the substantive judgment. But it did not make new law. The Court of Appeal discussed principles in relation to a trustee’s powers and duties from previously decided cases and authoritative texts and then applied those principles in an appeal involving Beddoe orders.
[30] The instant case does not involve Beddoe orders. Rather it was a proceeding brought under s 68 of the Trustee Act 1956. That section provides that a person who is beneficially interested in any trust property and who is aggrieved by any act or omission or decision of a trustee in the exercise of any power conferred by the Trustee Act may apply to the Court to review the act or omission or decision.23
[31] Justitiae places particular reliance on McCallum to submit that this Court should have considered also acting under its inherent jurisdiction when determining
21 Horowhenua v Nash, above n 7.
22 At 633.
23 Trustee Act 1956, s 68.
whether to grant relief. In response, first, in the relevant paragraphs in McCallum,24 the Court of Appeal is simply discussing the standard of review (whether evaluative or whether it is a review of an exercise of discretion). It was in that context the Court of Appeal said, “There is no sound policy reason to distinguish the two exercises of the supervisory jurisdiction”.25
[32] Second, and in any event, McCallum would have no material effect on the substantive judgment. Although I found that s 68 of the Trustee Act 1956 did not apply, I went on to consider the merits of Justitiae’s claims and found against Justitiae on the merits.
[33] The submissions that Justitiae now seeks to make could have been made at the hearing. In its submissions on this application, Justitiae makes reference to a number of authorities that were discussed in McCallum but which pre-dated the hearing. Those authorities could have been referred to and relied on at the hearing.
[34] Justitiae is endeavouring to use this recall application to rerun its case in this Court. Recall is not available simply because a party wishes to add further arguments that could have been raised at the earlier hearing but were not.26
[35] In relation to the costs judgment, McCallum was delivered after the parties had filed their submissions on costs but just over three weeks before the costs judgment was delivered. If Justitiae considered McCallum was material to the costs judgment, the correct procedure would have been to apply for leave to file further submissions addressing McCallum.
[36] In particular, in relation to Clayton, it was apparent from his costs submissions and the schedule attached to those submissions, that the amount of costs sought by Clayton was a significant sum. The only particular submissions made by Justitiae opposing indemnity costs sought by Clayton were in one paragraph:
24 McCallum Jnr v McCallum, above n 3, at [59]–[61].
25 At [61].
26 Faloon v The Commissioner of Inland Revenue (2006) 22 NZTC 19,832 (HC) at [13] cited with approval in Erwood v Maxted, above n 4 at [23](b)(ii).
84.Clayton Bradbury seeks a Trustee’s indemnity. This is not available as Clayton accepts at paragraph 32 of his submissions that there are no trust assets or income against which he can indemnify himself. No authority is cited which allows a trustee to seek an indemnity against non-trust assets. Section 71, referred to by Clayton, is limited to the trust assets.
[37] The same principle applies as with the substantive judgment. Justitiae may not add further arguments that could have been raised earlier but were not.
Subsequent correspondence
[38] In the reply submissions on this application, counsel for Justitiae refers to letters written on an open basis from 4 August 2021 onwards. Those letters address a number of issues, one of which is the capacity in which Clayton appeared at the hearing.
[39] If Justitiae wishes to rely on that correspondence, the correct procedure is for it to make an application to the Court of Appeal for admission of fresh evidence on appeal.
Result
[40] The application by Justitiae for recall of the substantive judgment and the costs judgment is refused.
Costs on this application
[41] The Bradbury parties seek indemnity costs27 and in the alternative increased costs calculated on 2B basis with a 50 per cent uplift on this application. Relevant schedules are annexed to counsel’s submissions.
[42] As was said by the Court of Appeal in Calibre Financial Services Ltd v Mortgage Administration Services (Calibre) Ltd, parties have been on notice since the Court of Appeal decision in Erwood v Maxted that they are at risk of orders for
27 High Court Rules 2016, r 14.6(4)(a).
increased or indemnity costs where an application for recall is without merit.28
Calibre was such a case.
[43]In this case:
(a)Justitiae’s appeal of the two judgments is fatal to the recall application. The law on this issue is clear;
(b)The ground for recall in Horowhenua County v Nash is not met. The Court of Appeal in McCallum did not change the law. The Court of Appeal simply restated existing principles regarding a trustee’s powers and duties in its “survey” of previous cases and authoritative texts; and
(c)Justitiae is endeavouring to use this recall application to raise arguments it could have raised earlier but did not.
[44] For those reasons, I consider an award of indemnity costs in favour of the Bradbury parties is warranted. The actual costs and disbursements in the schedules to counsel’s submissions were reasonably incurred. I award costs against Justitiae Trustee Co Ltd as follows:
(a)$15,053.79 in favour of Clive Bradbury and Fairlight Forestry Ltd;
(b)$11,176.85 in favour of Heather Bradbury and De Havilland Investments Ltd; and
(c)$5,807.50 in favour of Clayton Bradbury.
Gordon J
28 Calibre Financial Services Ltd v Mortgage Administration Services (Calibre) Ltd [2013] NZCA 565 at [5].
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