Kinney v Pardington

[2020] NZHC 46

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2013-443-000058

[2020] NZHC 46

BETWEEN

ERIN MAUREEN KINNEY

Plaintiff

AND

MYRTLE MARGARET PARDINGTON DAVID JOHN PARDINGTON

KENNETH MARK PARDINGTON

DefendantS

Hearing:	3 September 2019
Appearances:	C T Gudsell QC and P M Nielsen for the Plaintiff S W Hughes QC for the Defendants
Judgment:	31 January 2020

JUDGMENT OF CULL J

[Costs on a 2B basis]

[1]    In my judgment of 3 September 2019,1 in which I addressed party costs and administration costs, I found that the plaintiffs’ costs should be awarded on a 2B basis as payable by the estate. I allowed the parties to be heard on the amount of 2B costs, which were contested.2

[2]    I directed the parties to address the issues set out in [24] of the judgment and I now deal with each of them. I then turned to reasonable disbursements and offsets.

1      Kinney v Pardington [2019] NZHC 2196.

2 At [35].

ERIN MAUREEN KINNEY v MYRTLE MARGARET PARDINGTON [2020] NZHC 46 [31 January 2020]

Does Ms Kinney need to provide copies of actual invoices rendered?

[3] Ms Hughes QC, for the interested parties, submits that Ms Kinney should recalculate her claim for costs and in particular seeks to have copies of actual invoices rendered. She does so on the basis that Ms Kinney had litigation funding from her former counsel’s brother and that a party cannot seek more than that which has been paid for in each of the steps in question. In my judgment I directed the plaintiff to address the issues at [24]. The plaintiff has done so but has not provided copies of Ms Kinney’s invoices because of the significant further work and cost required to separately itemise attendances for the respective proceedings. However, an undertaking by the plaintiff’s solicitor and an affidavit by the plaintiff has been filed confirming that each item of costs sought by the plaintiff has been incurred. I reach the following conclusions.

[4]    Rule 14.2(1)(f) of the High Court Rules 2016 provides that an award of costs should not exceed the costs incurred by the party claiming costs. It is upon this basis that Ms Hughes seeks proof of Ms Kinney’s actual costs. In this case and at this stage of the proceeding, I am content to accept the undertaking given by Ms Kinney’s solicitor, which was made after a review of an attached schedule of scale costs as against invoices issued to, and subsequently paid, by the litigation funder for the plaintiff at the outset of these proceedings. The plaintiff has also filed an affidavit deposing that the funder of this litigation has paid in excess of 3C scale costs.

[5]    Given the length of this proceeding, the nature of the proceeding and the requirement on the plaintiff to prove paternity before advancing her Family Protection claim, I consider the Court is justified in relying on her current solicitors undertaking in satisfaction of r 14.2(1)(f). I am satisfied with the information that has been provided.

What is the appropriate preparation time payable for the commencement of proceedings?

[6]    Rule 14.2 provides that the party who fails with respect to a proceeding should pay costs to the party who succeeds, and the award of costs should reflect the complexity and significance of the proceeding apply here.3

[7]    This proceeding was commenced in February 2013 by the filing of the statement of claim seeking a paternity order, leave to bring proceedings out of time for a Family Protection Act claim and orders under that Act, for which Ms Kinney has been successful. An amended statement of claim was filed prior to May 2013, before the present counsel was instructed and there was no re-pleading of Ms Kinney’s claim.

[8]    Ms Hughes submits that the provision under the scale in Schedule 3 to compensate for the commencement of proceedings is intended to recompense a party for the cost of taking instructions and preparing and filing proceedings. She submits it is not intended that subsequent counsel could claim this sum for familiarisation with the file. Mr Nielson for the plaintiff submits that, while the plaintiff did not incur costs when the proceedings were commenced in February 2013, significant costs have subsequently been incurred which are not covered by Schedule 3. He submits that the plaintiff does not claim for “commencement of proceedings” costs per se, but rather claimed the three days allowed for that step made under Schedule 3 to cover other steps not specifically itemised.

[9]    Given the relevant attachments I have reviewed which summarise these other steps, I am satisfied that the costs claim for commencement of proceedings is appropriately used as a “catch-all” to cover the relevant costs. It is clear that a large amount of correspondence was required. Whether assessed as a specific step in Schedule 3 under r 14.5(1)(a), “by analogy” under r 14.5(1)(b), or simply as the time likely to be required for the particular steps under r 14.5(1)(c), I consider that the three days claimed is entirely appropriate in the circumstances of the case.

[10]Accordingly, I allow the three days claimed under the 2B scale.

3      High Court Rules 2016, r 14.2(1)(a) and (6).

Should costs be awarded to the plaintiff is respect of the application for consolidation and discovery?

[11]   In the plaintiff’s costs memorandum, the plaintiff seeks half the costs on an application for consolidation and, in the alternative, discovery. The plaintiff seeks half the costs on her application as the consolidation application was unsuccessful but additional discovery orders were made.

[12]   Ms Hughes submits that the interested parties must similarly be entitled to a 50 per cent cost entitlement given that they were successful in their opposition to the primary application of consolidation.

[13]   I accept Ms Hughes’ submission. The principal argument was on consolidation and in the alternative, orders were made for further discovery, which has been an issue throughout these proceedings. In the circumstances, however, both parties had success in respect of each of the applications and I find that costs should lie whether they fall. No costs are awarded to either party on the application of 22 January 2018.

What is the appropriate payment for preparation of affidavits?

[14]   Given my orders that scale 2B costs should apply, the claim by the plaintiffs based on band C costs for preparation of affidavits and hearing time is not upheld.

[15]   Consistent with the application of 2B costs, two and a half days for the preparation of affidavits is appropriate and I order accordingly.

What is the appropriate payment for the appearance on 2 December 2018?

[16]   The basis of Ms Kinney’s claim is that substantive hearings occurred in August 2016 and December 2018. The parties are agreed that the plaintiff’s claim for three days preparation for those hearings is justified.

[17]   The point of contention however is the 27 August 2018 valuation hearing, for which both parties prepared but reached a compromise, thus obviating a hearing. Both parties reached an accommodation and both parties were required to prepare for a potential hearing if a compromise could not be reached. I do not accept the plaintiff’s

claim for this “hearing” and consider the three days claimed under band B to be appropriate.

What are reasonable disbursements in this case?

[18]   Reasonable disbursements are payable to a successful plaintiff and these are normally approved by the Registrar. The principal component of the disbursements is for Mr Parson’s expert evidence, which totals $65,175.16.

[19]   Ms Hughes opposes the payment of this amount. She submits Mr Parson’s costs are extraordinary and complicated by his involvement in the parallel trust proceedings issued by the plaintiff. Ms Hughes submits that if an allowance is made for Mr Parson’s costs, they should be limited to a sum equivalent to that of Ms Roberts’ invoices.

[20]   Mr Parson is an expert forensic accountant and his involvement in this proceeding identified the ultimately agreed estate value and provided evidence relevant to the deductions from the estate account for payment to the family trust. I accept Mr Nielson’s submissions that Mr  Parson  was  in  a  different  position  to Ms Roberts, who had an ongoing involvement as the trust’s accountant. I am also mindful of the continued problems in obtaining adequate discovery of the trust’s information and documents and I am in no doubt that this added to his time and attendance.

[21]   I have had regard to r 14.12 of the High Court Rules, and I consider that     Mr Parson’s fees and expenses were necessary for a fair and equitable resolution in this matter and I approve payment of his costs. I accept Mr Nielson’s assurance that M Parson’s  attendance  and  the  provision  of  the  first  of  his  affidavits,  dated   14 September 2017 and which accompanied the plaintiff’s consolidated memorandum of the same date, has been omitted from the costs claimed.

[22]   I turn then to the subsequent claims for the travel and accommodation expenses for the August 2018 hearing for three counsel. I accept Ms Hughes’ submission that the claim for three counsel is inappropriate and those expenses should be for one counsel only. No approval had been given for additional counsel to be covered.

[23]   I direct the plaintiff’s counsel to submit a revised disbursements schedule for approval by the Registrar, given my findings above.

Offset in relation to unsuccessful interlocutory applications

[24]   Mr Gudsell on behalf of Ms Kinney properly accepted that costs from three unsuccessful interlocutory applications by Ms Kinney may be deducted from the overall figure, as I recorded at [21(g)] of my judgment of 3 September 2019.4 With the length of these proceedings, the issues raised during the proceedings regarding value of the estate, and the accounting issues in relation to the trust, I consider that a global approach is most appropriate in these circumstances.

[25]   Accordingly, I am not deducting a specific figure per interlocutory application but make an overall deduction of $10,000 in respect of the unsuccessful interlocutory applications made by Ms Kinney. I make this decision, balancing the plaintiff’s request for additional costs for affidavits and hearing time preparation and the involvement of more than one counsel for the purpose of attending hearings. At the end of the day, this litigation must finish. In the interests of fairness to all parties, I consider the deduction of $10,000 to be more than fair.

Final matters

[26]   As a result of the various memoranda filed by the parties, two further issues arise. The first issue is whether the plaintiff is entitled to claim for an additional three memoranda filed in respect of costs. The plaintiff claims a total of 8.4 days for memoranda and I grant that application.

[27]   The second issue is the time at which costs are payable. Ms Hughes submits that costs should not be payable until the expiry of the life tenant’s interest.

[28]   Costs follow the event and should be paid following the determination of all outstanding issues between the parties. Accordingly, I find that the costs should be paid once the final sum has been approved by the Registrar. I note that the estate does

4      Kinney v Pardington, above n 1.

not hold cash sufficient to meet the costs payment, but given the assets of the estate, financial accommodation must be reached to meet the award.

Result

[29]   The plaintiff is entitled to 2B costs, with the adjustments as directed and ordered in this judgment. Plaintiff’s counsel should now file an amended schedule of costs and disbursements for approval by the Registrar.

Cull J

Solicitors: