MacNamara v MacNamara

[2023] NZHC 944

NOTE: ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-000404

[2023] NZHC 944

BETWEEN

SHERYL ANN MACNAMARA

Plaintiff

AND

NOEL JAMES MACNAMARA

Defendant

CIV-2020-404-000646

BETWEEN

NOEL JAMES MACNAMARA
Plaintiff

AND

SHERYL ANN MACNAMARA

First Defendant

Continued overleaf…

Hearing:	On the papers
Judgment:	27 April 2023

JUDGMENT OF WYLIE J

[Costs]

This judgment was delivered by Justice Wylie

On 27 April 2023 at 11.00 am Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:

Shieff Angland Lawyers/L J Kearns KC/J S Langston, Auckland Claymore Partners Ltd/B O’Callahan, Auckland

J Cundy Auckland

MACNAMARA v MACNAMARA [2023] NZHC 944 [27 April 2023]

BETWEENSHERYL ANN MACNAMARA, NOEL JAMES MACNAMARA AND GRAHAM

LINCOLN WILFRED CRAIG as trustees of the MACNAMARA HOME TRUST

Second Defendants

ANDSHERYL ANN MACNAMARA, NOEL JAMES MACNAMARA AND GRAHAM

LINCOLN WILFRED CRAIG as trustees of the MACNAMARA FAMILY TRUST

Third Defendants

Introduction

[1]    I refer to my reserved judgment dated 3 April 2023.1 I there made various directions under s 133 of the Trusts Act 2019 at the request of the independent trustees, Christopher Darlow and William Patterson. I held that they were entitled to be indemnified from the assets of the Trusts for their reasonable costs and disbursements in bringing the application. I also recorded that Ms Macnamara had signalled that she intended to seek costs against Mr Macnamara and I made various directions for the filing of memoranda in that regard.

[2]I have now received those memoranda.

(a)Ms Macnamara seeks costs from Mr Macnamara on a 2B basis in the sum of $8,006.50. The memorandum filed on her behalf does not explain why she is entitled to costs.

(b)Mr Macnamara opposes Ms Macnamara’s request for costs. He says that costs should fall equally as between the parties because they were incurred in relation to directions sought by the trustees and because the directions benefited both parties.

Analysis

[3]    Special rules have been devised in the Court’s equitable jurisdiction to guide parties to trusts-related litigation. Costs in such cases remain at the discretion of the Court but case law provides litigants with some guidance as to how the discretion is likely to be exercised.2

[4]    The classic exposition of the applicable principles was given by Kekewich J in Re Buckton.3 In that case, the Judge divided Trust litigation into three broad categories:4

1      Macnamara v Macnamara [2023] NZHC 715.

2      Woodward v Smith [2014] NZHC 407, [2014] 3 NZLR 525 at [22].

3      Re Buckton [1907] 2 Ch 406; Woodward v Smith, above n 2, at [22]–[25].

4      Woodward v Smith, above n 2, at [23].

(a)The first category involves 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. In such cases, 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.

(b)The second category involves a similar application, but by somebody other than a trustee (such as a beneficiary). However, it is a case which would have justified application by a trustee. The same approach is taken to costs in the second category as to the first.

(c)The third category is where a beneficiary is making a “hostile claim” against the trustee 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 to a part of the trust fund. In this third category, involving a hostile claim against a trustee or another beneficiary, the usual principles as to costs apply. Ordinarily they will follow the event.

[5]    These categories can overlap and it can be difficult to discriminate between the second and the third categories.5

[6]    In the present case, the trustees were seeking directions. There was no application by Mr Macnamara. Rather, Mr Macnamara made submissions in relation to aspects of the trustees’ application and Ms Macnamara made submissions, primarily in response to the submissions made by Mr Macnamara. Mr Macnamara’s submissions in relation to the trustees’ application for directions were, in my judgment, a hostile claim. Mr Macnamara sought to revisit various decisions entrusted to the trustees by the consent order made by the Court on 27 August 2020. He was disputatious and he ignored or sought to revisit orders already made by this Court. His submissions  did  not  bona  fide  relate   to   the   administration   of   the   Trusts. Mr Macnamara was seeking to better his (or more precisely, his new trust’s) position

5      See Woodward v Smith, above n 2, at [24]; McDonald v Horn [1995] 1 All ER 961 (CA).

at Ms Macnamara’s expense. In my judgment, the matters raised by Mr Macnamara fall into category (c) noted above.

[7]    Ms Macnamara was required to attend Court, to support the trustees’ application and to take issue with many of the claims being made by Mr Macnamara. As  a  result,  it  is  appropriate  that  Ms  Macnamara’s  costs  should  be  met  by  Mr Macnamara.

[8]    The matter was not particularly onerous and I am satisfied that costs should properly be fixed on a 2B basis. I have checked the schedule filed by Ms Macnamara in support of her application for costs. Insofar as I can glean, the work claimed for was carried out. The schedule has been calculated in accordance with the relevant High Court Rules.

[9]    As a result, I make an award of costs in favour of Ms Macnamara and against Mr Macnamara in the sum of $8,006.50.

Wylie J