MacNamara v MacNamara
[2021] NZHC 2947
•2 November 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-000404
[2021] NZHC 2947
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
SHERYL ANN MACNAMARA, NOEL JAMES MACNAMARA AND
GRAHAM LINCOLN WILFRED CRAIG as
trustees of the MacNamara Home Trust Second Defendants
SHERYL ANN MACNAMARA, NOEL JAMES MACNAMARA AND
GRAHAM LINCOLN WILFRED CRAIG as
trustees of the MacNamara Family Trust Third Defendants
Hearing: (On the papers) Judgment:
2 November 2021
COSTS JUDGMENT OF VENNING J
This judgment was delivered by me on 2 November 2021 at 2.00 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Lee Salmon Long, Auckland
Shieff Angland Solicitors, Auckland Claymore Partners Limited, Auckland
Counsel:L Kearns QC, Auckland B O’Callahan, Auckland
MACNAMARA v MACNAMARA [2021] NZHC 2947 [2 November 2021]
Introduction
[1] On 10 September 2021 the Court delivered a judgment on the Trustees’ application for directions.1 The Court reserved the issue of costs observing:
[40] … The general corpus of the Trusts and Mrs Macnamara should not have to bear the costs of Mr Macnamara’s unsuccessful opposition to the application for directions. If the parties cannot agree costs I will fix them following an exchange of submissions: …
[2] The parties have not agreed costs. They have exchanged submissions. This judgment deals with costs in relation to all matters concerning the application for directions and the hearing of 10 September 2021.
[3] Mr Macnamara sought leave to appeal that judgment and also sought a stay of execution. The Court dealt with those applications in a judgment issued on 24 September 2021.2 In that judgment the Court separately dealt with the issue of costs on those applications. The Court directed Mr Macnamara was to pay costs on both those applications on a 2B basis to the Trustees and Mrs Macnamara.
[4] It is unnecessary to address the issue of costs arising from the judgment of 24 September 2021 any further. The judgment is clear. Mr Macnamara is to pay costs to both the Trustees and Mrs Macnamara, in each case on a 2B basis. The Registrar may seal an order for costs accordingly. This judgment deals with costs in relation to the judgment of 10 September 2021.
Trustees’ costs
[5] The Trustees seek costs in relation to the application for directions on a 2B basis, together with fees of $1,500 plus GST incurred in instructing Mr Tauber, a chartered accountant who is assisting the Trustees. Mr Tauber prepared and filed an affidavit in support of the Trustees’ application.
[6] In his memorandum on behalf of Mr Macnamara in relation to costs Mr O’Callahan confirmed that he does not oppose the costs sought by the Trustees, save
that he says two memoranda for which costs are sought ought to be allowed at band A, rather than band B, as the particular steps required only a relatively small amount of time.
[7] He also qualified his position by making it clear that Mr Macnamara does not agree to two separate orders of costs being made against him. For the reasons that follow I am satisfied it is appropriate in this case for Mr Macnamara to pay costs to both the Trustees and Mrs Macnamara as [40] of the judgment of 10 September 2021 contemplated.
[8] I also accept the Trustees’ response that the memoranda Mr O’Callahan identified required a normal amount of time. Costs on a time band B basis are appropriate for all steps taken by the Trustees.
Result – Trustees’ costs
[9] I confirm that the Trustees are to have costs against Mr Macnamara on a 2B basis for all steps associated with the application the Court dealt with in its 10 September judgment and also, the disbursement relating to Mr Tauber’s fee.3
[10] The costs claimed by the Trustees for steps in relation to the hearing and judgment of 24 September 20214 are a separate matter and the Court has already directed that the Trustees are to have costs on a 2B basis in relation to that. No further order is required.
Mr Macnamara’s application
[11] That leaves the issue of Mrs Macnamara’s claim to costs. Mr O’Callahan submitted that Mrs Macnamara was not entitled to a separate award of costs in addition to the Trustees. He argued that the applicant and only beneficiary of the orders was the Trustees. Mr Macnamara had opposed the directions because he wanted to preserve the assets of the Trust and did not want to lose the opportunity to challenge the decision should it prove amenable to challenge. He submitted that, to the extent
Mr Macnamara sought inspection of the deed that was really directed at the Trustees, although the deed was in Mrs Macnamara’s custody. He argued there was no requirement for Mrs Macnamara to mount a case in relation to the directions and that Mr Macnamara should not be exposed to two sets of costs for opposing a single application brought by one party.
Analysis
[12]As a matter of general principle, all costs are at the discretion of the Court.
[13] While the present position is not directly analogous High Court Rule 14.15 is of some assistance. HCR 14.15 provides that the Court must not allow more than one set of costs where defendants defend separately unless it appears to the Court there is good reason to do so. In the present case there was good reason for Mrs Macnamara to be represented in the application and for Ms Kearns QC to make submissions on her behalf. As a beneficiary, like Mr Macnamara, Mrs Macnamara was concerned in and potentially affected by the orders sought.
[14] Having regard to the issues raised by the application and the basis for Mr Macnamara’s opposition to the application for directions, it was entirely appropriate for Mrs Macnamara to be represented and to present submissions supporting the direction the Trustees sought.
[15] Further, there was not necessarily an identity of interest between the position of the Trustees given their responsibilities and Mrs Macnamara’s interests. There was good reason for her to take part in the application and hearing. The longer the debt remained unpaid the greater the interest costs and the more costs the Trustees would incur in having to address the issue. The costs would reduce the Trusts’ assets.
[16] Next, Mr Macnamara’s memorandum was at least in part directed to seeking orders or directions directly against Mrs Macnamara, for instance, in relation to the application for inspection of the deed. Mr Macnamara also criticised the actions of Mrs Macnamara. His opposition to the application suggested Mrs Macnamara was relying on a forged document. She was entitled to respond.
[17] Both the Trustees and Mrs Macnamara were represented by responsible and senior counsel. They properly took the view separate representation was required.
[18] The hearing time was not extended by Mrs Macnamara’s involvement. The Trustees’ counsel was content to allow Mrs Macnamara to have the main running of the matter. Ms Kearns’s submission covered matters which needed to be addressed in order for the Court to deal with the application.
[19] For those reasons I am satisfied that it is appropriate that Mrs Macnamara receive a separate award of costs.
[20] Mr O’Callahan also challenged the quantum of the costs on behalf of Mr Macnamara. He argued the Court should disallow the costs claimed for a memorandum of 18 August 2021 and the further step claimed for preparing for the hearing and filing affidavits. The memorandum related to the Trustees’ application. The costs of it are recoverable. While the preparation for the hearing and filing affidavits by Mrs Macnamara is not specifically provided for in the rules, I accept that the costs are recoverable. Mrs Macnamara was put to the cost of obtaining the affidavit(s) because of Mr Macnamara’s opposition to the Trustees’ position. There were also further costs incurred in preparing (at short notice) to respond to the late submissions filed on behalf of Mr Macnamara. I accept that the steps are properly claimed for and allow them.5
Is an uplift justified?
[21] Mrs Macnamara seeks an uplift in the scale costs. She seeks an order for costs in the sum of $12,000.
[22] In response, on behalf of Mr Macnamara, Mr O’Callahan took issue with the “threat” in Mrs Macnamara’s solicitors’ letter of 20 August 2021 that costs would be sought against Mr Macnamara’s solicitors personally. He submitted that was inappropriate and in breach of r 2.7 of the Lawyers and Conveyancers Act (Lawyers:
Conduct and Client Care) Rules 2008 and the Court should apply HCR 14.7(g) and refuse or reduce any costs award accordingly.
[23] I do not consider the rule Mr O’Callahan referred to, to be directly engaged. The “threat” in Mrs Macnamara’s solicitors’ letter was not to make any accusation about Mr Macnamara or his solicitors. The appropriate rule in the Conduct and Client Care Rules was r 13.8. Mr Macnamara’s solicitors had a duty not to attack Mrs Macnamara’s reputation by filing a document alleging fraud or dishonesty without having taken appropriate steps to ensure that reasonable grounds for making the allegation existed.
[24] The general basis of Mr Macnamara’s response to this application could only be construed as an allegation that Mrs Macnamara and another deponent were party to a fraud. In those circumstances it was proper for Mrs Macnamara’s solicitors to raise that matter with Mr Macnamara’s advisers, although that should have been in the context of the solicitor’s obligations rather than the reference to seeking costs against the solicitors personally.
[25] Ms Kearns submits that, in terms of r 14.3(b)(ii) Mr Macnamara took an argument that lacked merit. Alternatively, r 14.6(3)(d) applies. Ms Kearns submitted that Mr Macnamara’s opposition to the application lacked merit from the start. She noted that Mr Macnamara had alleged he did not remember signing the deed and was concerned the signature might not be his. As she noted, the Court had rejected his evidence on that:6
Mr Macnamara’s evidence that the signature may not be his is unsatisfactory and unconvincing. It is vague and inconsistent with his earlier evidence. I reject it on the basis that it is lacking in credibility and is inherently implausible.
[26] As Ms Kearns noted Mr Macnamara now suggests that his opposition was rather to preserve the opportunity to challenge the Trustees’ decision should it prove amenable to challenge. Again, that is a rather vague assertion.
[27] I agree that, in the circumstances, Mr Macnamara did take an argument that lacked merit. His general behaviour in relation to the application would normally justify an order for increased costs. However, as noted, the issue of costs is ultimately at the discretion of the Court.
[28] I take into account that Mr Macnamara is already facing two orders for costs on the one application. In the event I consider the just outcome to be costs to scale (as sought) for both the Trustees and Mrs Macnamara.
Result – Mrs Macnamara’s costs
[29] Mr Macnamara is to pay Mrs Macnamara costs and disbursements associated with the application and directions made on 10 September 2021 in the sum of
$8,006.50.
[30] As noted, the order that Mr Macnamara pay Mrs Macnamara costs on a 2B basis was made in the judgment of 24 September 2021.7 Again, like the Trustees’ costs on that matter, no further order is required.
Venning J
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