Kinnon v Hong

[2023] NZHC 3274

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-000030

[2023] NZHC 3274

BETWEEN

DOUGLAS MURRAY KINNON and AVRYL MARGARET KINNON
Plaintiffs

AND

BOON GUNN HONG

First Defendant

NOMINEES AND TRUSTEES LIMITED

Second Defendant

Hearing:

On the papers

Counsel:

M Nicholls for the Plaintiffs

B G Hong in person for the Defendants

Judgment:

17 November 2023

COSTS JUDGMENT OF HARVEY J

This judgment is delivered by me on 17 November 2023 at 4 pm pursuant to r 11.5 of the High Court Rules.

.....................................................

Registrar / Deputy Registrar

Solicitors:

Martin Nicholls Limited, Far North

And to:
The First Defendant

KINNON and KINNON v HONG – COSTS [2023] NZHC 3274 [17 November 2023]

Introduction

[1]    Douglas Kinnon and Avryl Kinnon, as trustees of the Cedar Lodge Trust, claimed that their former solicitor, Boon Hong, transferred their property at 75 Rangitane Loop Road, Kerikeri to a company that Mr Hong controlled called Nominees and Trustees.

[2]    On 27 July 2023, I delivered a formal proof judgment finding that the property is held on constructive trust for the Cedar Lodge Trust and that Mr Hong acted in breach of trust and fraudulently in equity.1 I found Mr Hong and his associated company Nominees and Trustees Ltd were liable in principle for an account of profits with quantum to be determined at a second-stage hearing.

[3]Mr Hong has since filed an appeal against that decision.

[4]The plaintiff’s costs schedule reads as follows:

Date	Item	Description	Time
12/01/2021	1	Commencement of claim	3
24/03/2021	10	Preparation for first CMC	0.4
24/03/2021	11	Filing memorandum for first CMC	0.4
21/06/2021	13	Appearance at first CMC	0.3
13/08/2021	11	Plaintiff’s updating memorandum	0.4
19/08/2021	11	Plaintiff’s memorandum for second CMC	0.4
28/09/2021	13	Appearance at second CMC	0.3
17/11/2021	13	Plaintiff’s memorandum for third CMC	0.4
25/11/2021	13	Plaintiff’s memorandum for third CMC	0.4
2021–2022	20	Plaintiff’s discovery of documents	2.5
21	Inspection of documents	1.5
30	Preparation of affidavits, list of issues and authorities and common bundle	2
32	Preparation for formal proof hearing	2
22/09/2022	34	Appearance at formal proof hearing	0.25
Total	$34,657.50

1      Kinnon v Hong [2023] NZHC 1988.

[5]    I indicated my preliminary view was that costs should be awarded on a 2B basis. Parties were invited to file submissions within one month. Douglas and Avryl Kinnon as trustees of the Cedar Lodge Trust now apply for 2B costs and disbursements. Mr Hong filed a memoranda out of time on 30 October 2023 challenging certain items claimed but he did not dispute in general liability for costs.

Discussion

[6]    Mr Hong disputes the item dated 21 June 2021. He says there was no conference on 21 June and the first conference was instead on 21 September. This is correct as confirmed by the minute of Associate Judge Bell who thanked counsel for the memoranda and allocated a face-to-face case management conference for September 2021. This item is therefore disallowed.

[7]    As to the items dated 13 August and 19 September, Mr Hong submits memoranda were already filed for the first case management conference. In the 13 August memorandum Mr Hong contends that it was unnecessary and merely updated the Court that discovery had been attended to when it was not in issue. The 19 September memorandum, in Mr Hong’s submission, again updated the Court that parties will attend to further discovery and the first case management conference would need to be rescheduled. He submits only one memorandum per case management conference should be allowed.

[8]    The matters covered in the 13 August 2021 memorandum are updating but also include the plaintiff’s position on the defendant’s request for an extension of time. It was appropriately filed. I agree with the plaintiff that item 11 is an appropriate analogy. The 19 September 2021 memorandum was clearly prepared for the second case management conference. The matters discussed were required to be in that document by virtue of the High Court Rules 2016, r 7.4 and Schedule 5.

[9]    Regarding the 17 and 25 November 2021 memoranda Mr Hong submits again that only one memorandum should be allowed. The Court had directed that preferably joint memorandum be filed. However, on 22 November 2021 Mr Hong had filed a memorandum seeking discovery orders. This introduced a new issue into the

Chambers List conference. It was prudent for the plaintiffs to respond with their position prior to the conference.

[10]   Finally, Mr Hong disputes the plaintiff’s claim for item 30, preparation of affidavits. He notes that his application for summary judgment has been dealt with and costs awarded to the plaintiff. He says the plaintiffs should have relied on the affidavit filed in that application.

[11]   I have reviewed the previous costs schedule seeking costs on Mr Hong’s unsuccessful application for leave to file for summary judgment. The plaintiffs claimed for “preparation of opposition to summary judgment”, item 23. This includes the preparation of affidavits. Associate Judge Sussock awarded that item on a 2C basis given the complexity of Mr Hong’s application and affidavit that the plaintiffs had to respond to, and the scope of material facts.

[12]   There are minor changes in the affidavits filed for the formal proof hearing, which are no doubt helpful, but there is substantial repetition. Notwithstanding that, there would still have been work involved in reviewing the affidavits, ensuring they were appropriate for the formal proof hearing, along with preparing the list of authorities. I do not consider any of the grounds set out in r 14.7 justifying a refusal of or reduction in costs are met for this item.

Decision

[13]   Mr Hong is ordered to pay the plaintiff $33,940.50 in costs and $1,811.69 in disbursements.

Harvey J