Lim v Yip
[2025] NZHC 227
•20 February 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-920
[2025] NZHC 227
BETWEEN STEVEN YIP LIM and SUEY YIP WONG
First Plaintiffs
SELINA YIP LIM
Second PlaintiffAND
MING LIM-YIP and JOSEPH DA HONG LIM-YIP
Defendants
Hearing: On the papers Counsel:
M C Harris and D Scholes for the Plaintiffs
V Bruton KC and P A Brown for the Defendants
Judgment:
20 February 2025
COSTS JUDGMENT OF BLANCHARD J
This judgment was delivered by me on 20 February 2025 at 12.00 pm pursuant to Rule 11.5
of the High Court Rules Registrar/Deputy Registrar
Solicitors: Gilbert Walker (Z A Brentnall), Auckland
Russell McVeagh (P Brown), Auckland
LIM and WONG v LIM-YIP and LIM-YIP [2025] NZHC 227 [20 February 2025]
[1] My substantive judgment in this proceeding was delivered on 16 October 2024.1 I now deal with the issue of costs.
[2] Both sides of the litigation seek cost orders in their favour. The plaintiffs seek an indemnity for their costs from the Shue Wah Lim Trust (SWLT). In addition, they seek an order that the defendants reimburse the SWLT. Alternatively, they seek an order that the defendants pay them scale costs with a 50 per cent uplift.
[3] For their part, the defendants seek orders that no costs be awarded in favour of any party for steps taken in this proceeding before 20 September 2023 or 4 October 2023, that the plaintiffs pay them indemnity costs from 4 October 2023 to the end of the first day of trial, and that costs lie where they fall in relation to the second to fifth days of trial.
The plaintiffs’ claim for indemnity from the SWLT
[4] The plaintiffs say that they should be indemnified because their claim comes within the second of the categories of trust litigation in Re Buckton.2 In contrast, the defendants say that the plaintiffs should not be indemnified because the claim comes within the third category in Re Buckton.
[5] The first category in Re Buckton is proceedings brought by trustees to obtain the court’s guidance on the construction of the trust deed or some aspect of the trust’s administration. Cases in the second category are similar. They are proceedings brought by someone other than trustees (such as a beneficiary), but which would have justified proceedings by the trustees. In proceedings in the first and second categories, the costs of all parties necessarily participating are treated as incurred for the benefit of the estate and ordered to be paid out of the trust fund.
[6] Proceedings in the third category involve a “hostile claim” against the trustees, or another beneficiary. The claim may still involve a point of construction, or administration. It will often involve a claim to a beneficial interest or entitlement
1 Lim v Yip-Lim [2024] NZHC 3012.
2 Re Buckton [1907] 2 Ch 406 (Ch). See also Kain v Public Trust [2022] NZCA 239, (2022) 5 NZTR 32-008 at [12].
to a part of the trust fund. In proceedings in the third category, the usual principles as to costs apply. Ordinarily, they will follow the event.
[7] The categories overlap and it can be difficult to discriminate between the second and third categories. Further, the expression “hostile” is a convenient shorthand, but it is in some ways inaccurate. A better, but still not wholly accurate, label is “self-interested.” Proceedings will be in the third category, rather than the second, if they are “self-interested.”3
[8] In McCallum Jnr v McCallum, the Court of Appeal indicated that proceedings for or concerning the removal of trustees will generally be “self-interested litigation.”4
[9] I agree with the defendants that these proceedings are in the third category. The primary reason the plaintiffs brought the proceedings was to advance their own interests, rather than simply to advance the interests of the SWLT generally. I therefore decline the plaintiffs’ claim for indemnity from the trust.
The successful party for costs purposes
[10] Both sides claim to be the successful party in the litigation. I must determine who is correct.
[11] In their original statement of claim of 17 June 2022, the plaintiffs sought an order removing the defendants as trustees of the SWLT and an order reappointing the first plaintiffs and Shue-Wah Lim Trustees Ltd as trustees of the trust (and ancillary orders). On 30 September 2024 (the first day of trial), the plaintiffs filed an amended statement of claim that substituted the order seeking reappointment of the first plaintiffs and Shue-Wah Lim Trustees Ltd with an order seeking appointment of either:
(a)Comac Trustees Ltd (Comac) plus one person nominated by each side; or
3 McCallum Jnr v McCallum [2021] NZCA 237, (2021) 32 FRNZ 851 at [42].
4 At [35] and [42].
(b)Comac and Jeff Turner.
[12] The result of the trial was that the defendants were removed as the trustees and Comac was appointed as the trustee. The plaintiffs were therefore largely successful in obtaining the orders sought in the first amended statement of claim. On this basis, they could be seen as the successful party for costs purposes. However, it must be kept in mind that the defendants consented to the orders. Early in the trial, the defendants agreed to being removed and supported the appointment of Comac.
[13] As the parties had agreed on what the outcome should be, it appeared for a time that the trial might finish early, but this did not prove to be the case. The problem was that the defendants insisted on the trial proceeding so they could obtain a decision on the question of whether they had acted with an improper purpose in appointing themselves as trustees. The plaintiffs offered not to pursue their claim that the defendants had acted wrongly in appointing themselves. But the defendants’ response was that, if the plaintiffs took that course, they would seek leave to add to their counterclaim a new claim for a declaration that their appointment of themselves was proper. This meant that the parties were in the strange position of having largely agreed on the outcome but still needing to proceed with a five-day trial.
[14] Both sides rely on various attempts they say they made to try to resolve the proceedings. However, some of the settlement attempts relate not just to these proceedings, but to all the other disputes between the parties. I am not able to take these attempts to settle into account in deciding the question of costs in these proceedings. As the other disputes are not before me, I am not able to assess the reasonableness of the attempts at global settlement.5 At times, the parties appear to have come close to a global settlement,6 but it is unclear why exactly a settlement has not been reached. I suspect there is fault on both sides, but I do not know if that is correct.
5 Concrete Structures (NZ) Ltd v Palmer HC Auckland CIV-2004-463-825, 7 April 2005.
6 The disputes between the parties are crying out for a global settlement. It makes no sense at all for the parties to continue to try to resolve the issues between them by litigation. It is obvious that they need to settle everything and get on with their lives.
[15] The defendants place particular emphasis on an open global settlement offer of 7 October 2021. It is true that under cross-examination at trial, Suey7 accepted that the different aspects of the settlement offer were “reasonable”. However, I agree with the submission for the plaintiffs that the letter did not contain an offer of settlement. Rather it was an attempt to secure an option. If the plaintiffs accepted the terms, the defendants would review information to be provided to them and decide if they still wished to proceed with the settlement. For this reason, I do not think I can take the letter into account in determining costs.
[16] For these reasons, I will focus on the attempts to settle that were directed at these proceedings alone.
[17] On several occasions, the defendants proposed the appointment of an independent trustee. As explained in my substantive judgment, on 18 May 2020 (prior to these proceedings being commenced), the defendants made an interlocutory application in related probate proceedings for an order appointing Perpetual Trust Ltd (Perpetual) as trustee of the SWLT. On 4 October 2023, they proposed the appointment of Perpetual as the trustee. On 22 July 2024, they amended their counterclaim to seek an order appointing Perpetual. On 9 August 2024, following an objection by the plaintiffs to Perpetual as trustee, the defendants amended their counterclaim again to seek an order appointing Public Trust.
[18] However, there are two factors that undermine the defendants’ reliance on these matters. First, the defendants were changeable on whether they wanted an independent trustee. As I explained in my substantive judgment, in a joint affidavit of 5 April 2023, they said they were no longer in favour of an independent trustee being appointed until a later stage. Consent orders that they proposed on 20 September 2023 proposed the appointment of Suey and Hong (and Sam Bassett). Their offer of 26 July 2024 assumed they would remain as trustees. Their affidavit of 13 September 2024 and their opening submissions also contemplated that they could remain as trustees.
7 As in my substantive judgment, because surnames are common, for convenience, and meaning no disrespect, I refer to Suey Yip Wong and Hong Lim-Yip by their given names.
[19] Second, as I have explained, even when it was ultimately agreed early in the trial that an independent trustee (Comac) should be appointed, the defendants still insisted that the trial must continue, so the issue of whether they had acted with an improper purpose in appointing themselves could be determined.
[20] Taking all the above matters into account, my conclusion is that a costs order should be made in favour of the plaintiffs. The one thing the parties were not able to agree on was whether the defendants had acted with an improper purpose. The defendants insisted that issue must be resolved. The plaintiffs were the successful party in relation to it. They were the successful party for costs purposes.
The plaintiffs’ claim for a 50 per cent uplift
[21] As I have explained, the plaintiffs seek a 50 per cent uplift. They rely on three matters as justifying an uplift. They say that the defendants acted unreasonably in insisting upon the provision of all trust information as a condition to mediation, in issuing subpoenas and serving a draft amended statement of defence and counterclaim immediately before the trial, and in insisting that the issue of whether they acted with an improper purpose be determined at trial.
[22] In my view, the first two matters do not justify an uplift. However, the final matter does. Having agreed that they should be removed and Comac should be appointed in their place, it was unreasonable for the defendants to insist on it being determined whether they acted wrongly in appointing themselves. This meant that a five-day trial was required and the parties were put to considerable expense that could have been avoided. In the circumstances, I consider that a 50 per cent uplift is appropriate in relation to the costs associated with the appearance of counsel at trial.
Costs on the costs application
[23] This was not a straightforward costs application. The plaintiffs seek costs for the filing of a costs memorandum and an affidavit.8 There is no step for costs applications in sch 3 to the High Court Rules 2016. Step 36 permits costs for steps
8 Neal v Neal [2022] NZHC 2625 at [33].
not specifically mentioned as allowed by the Court. In this case, I consider 1.5 days is appropriate, in line with step 24 for preparing written submissions for an interlocutory application. I award the plaintiffs $3,585 as costs on costs.
Quantum of the plaintiffs’ scale costs and disbursements claim
[24] I have reviewed the plaintiffs’ scale costs calculation. The amounts claimed are appropriate. They total $61,901.
[25] Once the costs associated with the appearance of counsel at trial are uplifted by 50 per cent and costs on the costs application are added, the costs increase to
$74,448.50.
[26] The plaintiffs also claim disbursements of $12,809.32. Again, the amounts claimed are appropriate.
Amounts paid by SWLT
[27] The plaintiffs’ costs memoranda suggest that some of the defendants’ costs in these proceedings and other amounts have improperly been paid by the SWLT. The information I have about these matters is incomplete. I direct Comac to consider these matters, but otherwise I do not make any orders in relation to them.
Result
[28]I decline the plaintiffs’ application for an indemnity from the SWLT.
[29] I order the defendants to pay the plaintiffs costs of $74,448.50 and disbursements of $12,809.32.
[30] I direct Comac to consider the amounts paid by SWLT referred to in the plaintiffs’ costs memoranda.
Blanchard J
0
4
1