Lusty v Thorburn - [2019] NZHC 2945

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-002593

[2019] NZHC 2945

UNDER the Contract and Commercial Law Act 2017 and the Declaratory Judgments Act 1908

IN THE MATTER

of an application for specific performance

BETWEEN

AILEEN BERYL LUSTY, RONALD HUNT LUSTY and WARWICK JAMES ROLAND

BROWNE as executors of the Estate of Kenneth Richard Lusty

Plaintiffs

AND

CRAIG MAXWELL THORBURN and

CARLY EVE THORBURN as trustees of the THORBURN TRUST

Defendants

Hearing: Determined on the Papers

Counsel:

M J Matthew for Plaintiffs A A H Low for Defendants

Judgment:

12 November 2019

COSTS JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 12 November 2019 at 11.00 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:
Rennie Cox, Auckland
Alexandra Low & Associates, Auckland

LUSTY and BROWNE as executors of the Estate of Kenneth Richard Lusty v C M THORBURN and C E
THORBURN as trustees of the THORBURN TRUST Costs Judgment [2019] NZHC 2945 [12 November 2019]

Introduction

[1] In a written judgment of 14 October 2019, I dismissed the plaintiffs’ application for summary judgment. I expressed a preliminary view that costs should be reserved but allowed memoranda to be filed if either party sought costs. The defendants have applied for costs on a 2B basis. The plaintiffs argue that costs should be reserved pending the hearing of the substantive proceeding.

The defendants’ submissions on costs

[2] For the defendants, Ms Low acknowledges that costs on a plaintiff’s unsuccessful application for summary judgment will generally be reserved.1 She argues, however, that in exceptional cases costs may be awarded against a plaintiff at this stage, and, that this is such a case because:

(a)prior to the commencement of the proceeding, the defendants had indicated their willingness to seek directions on the principal issue arising between the parties, which Ms Low identifies as whether the defendants could grant a lease in perpetuity on the terms demised;

(b)the defendants waited for three years for a response to that proposal from the plaintiffs, but the plaintiffs then elected to file summary judgment proceedings;

(c)the plaintiffs refused to accept settlement offers without justification; and

(d)the costs of defending the summary judgment application have exhausted the resources of the Thorburn Trust and the trustees may not be able to defend the substantive proceeding.

1 NZI Bank Ltd v Philpott [1990] 2 NZLR 403.

Discussion

[3] In NZI Bank Ltd v Philpott, Heron J held that the question of costs on summary judgment applications should be approached on broad principles and said:2

Whilst a defendant may be regarded as successful in one sense in resisting an application for summary judgment, it is of course not a final determination in the proceeding itself. If ultimately the plaintiff does succeed it seems to us in the general run of cases that the defendant should pay for both proceedings, the Court paying particular attention to the reasons why…

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 Lusty v Thorburn

Details

AGLC: Lusty v Thorburn [2019] NZHC 2945
Case: [2019] NZHC 2945
Decision Date: 12 November 2019

CaseChat Overview and Summary

The High Court of New Zealand, Auckland Registry, heard a case between Aileen Beryl Lusty, Ronald Hunt Lusty, and Warwick James Roland Browne, as executors of the Estate of Kenneth Richard Lusty, and Craig Maxwell Thorburn and Carly Eve Thorburn, as trustees of the Thorburn Trust. The dispute centred on an application for specific performance. The plaintiffs sought to enforce a lease agreement, while the defendants argued that the lease terms were not in line with the charitable purposes of the Trust. The case was determined on the papers, with counsel for the plaintiffs and defendants presenting written submissions. The judgment was delivered by Associate Judge Paulsen on 12 November 2019.

The legal issue before the court was whether the defendants should be awarded costs on a 2B basis, given the plaintiffs' unsuccessful application for summary judgment. The defendants argued that the plaintiffs should bear the costs due to their unreasonable pursuit of the summary judgment application, refusal to accept settlement offers, and the financial strain placed on the defendants by the need to defend the application. The plaintiffs countered that the dispute was complex and required a full trial to resolve the factual controversies, and that there was no abuse of process warranting an award of costs.

Associate Judge Paulsen examined the principles governing costs in summary judgment applications, referencing NZI Bank Ltd v Philpott. The judge found that the plaintiffs' application for summary judgment was not unreasonable, as the dispute involved complex factual issues that could not be resolved through a declaration or application under the Declaratory Judgments Act 1908. The judge also dismissed the argument that the plaintiffs' refusal to accept settlement offers or the financial strain on the defendants warranted an award of costs. The court concluded that the plaintiffs' decision to proceed with the summary judgment application was justified and not an abuse of process.

The court reserved the costs of the plaintiffs' unsuccessful application for summary judgment. The decision underscores the importance of evaluating each case on its merits and the necessity of a full trial to resolve disputes involving complex factual issues and questions of trust purposes. The judge's ruling protects plaintiffs from undue financial burden when pursuing legitimate claims and reinforces the principle that costs should not be awarded merely because a party's application is unsuccessful.

Orders