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Mason v Dodd

Mason v Dodd

Case [2020] NZHC 2916 12 November 2020

Civil Litigation & Procedure

Trusts & Equity

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000936

[2020] NZHC 2916

BETWEEN
ALEXANDER CHARLES MASON

Plaintiff

AND

PAUL MORLEY DODD

Defendant

Hearing: 20 October 2020

Appearances:

G J Thwaite for the Plaintiff / Respondent S T Coupe for the Defendant / Applicant

Judgment:

12 November 2020

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 12 November 2020 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Gilbert Walker, Auckland G J Thwaite, Auckland

MASON v DODD [2020] NZHC 2916 [12 November 2020]

Introduction

[1] The defendant, Paul Dodd, has applied for orders that the plaintiff, Alexander Mason, pay security for the defendant’s costs in the sum of $65,000, and that this proceeding is stayed until the plaintiff provides that security.

[2] Mr Mason claims that Mr Dodd, his former accountant, gave him incorrect advice in 1994 about setting up a family trust (“the Mamari Trust”) and transferring his assets to it. Mr Dodd is alleged to have given Mr Mason further incorrect advice and/or failed to correct his earlier advice in 2013 when a second trust (“the Mamari (No 2) Trust”) was established.

[3] Mr Mason’s first and third causes of action relate to the settlement of the Mamari Trust. Mr Mason says that Mr Dodd breached both his contractual obligations and/or his duty of care to Mr Mason. Mr Mason’s second and fourth causes of action relate to the settlement of the Mamari (No 2) Trust. Again, one cause of action is in contract, the other in tort.

[4] The application for security for costs is made in reliance on r 5.45 of the High Court Rules 2016, and on the basis that there is reason to believe that Mr Mason will be unable to pay Mr Dodd’s costs if Mr Mason is unsuccessful at trial. Mr Dodd relies on the fact that Mr Mason has failed to promptly pay judgment debts and costs awards in separate legal proceedings, resulting in enforcement action being taken against him. Mr Mason has also failed to pay Mr Dodd’s costs following Mr Mason’s unsuccessful application for summary judgment in this proceeding.

[5] Mr Dodd further contends that Mr Mason’s claim lacks merit, and is unlikely to succeed, and that in all the circumstances it is just that an order for security for costs is made.

[6] Mr Mason opposes the making of an order for security for costs, arguing that there is no reason to believe that Mr Mason will be unable to pay the costs of Mr Dodd if he is unsuccessful. Further, Mr Dodd contends that the Court should not exercise its discretion to make an order, given that Mr Mason has a sound legal claim, the

proceeding arises out of errors on the part of a government entity, there is no significant difference in evidence between the parties, and Mr Dodd has omitted certain evidence, has caused…

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 Mason v Dodd

Details

AGLC: Mason v Dodd [2020] NZHC 2916
Case: [2020] NZHC 2916
Decision Date: 12 November 2020

CaseChat Overview and Summary

Paul Dodd has applied for orders that Alexander Mason pay security for Dodd's costs in the sum of $65,000, and that this proceeding be stayed until Mason provides that security. Mason claims that Dodd, his former accountant, gave him incorrect advice in 1994 about setting up a family trust and transferring his assets to it. Dodd is alleged to have given Mason further incorrect advice and/or failed to correct his earlier advice in 2013 when a second trust was established. The application for security for costs is made in reliance on r 5.45 of the High Court Rules 2016, and on the basis that there is reason to believe that Mason will be unable to pay Dodd’s costs if he is unsuccessful at trial. Dodd relies on the fact that Mason has failed to promptly pay judgment debts and costs awards in separate legal proceedings, resulting in enforcement action being taken against him. Mason opposes the making of an order for security for costs, arguing that there is no reason to believe that he will be unable to pay the costs of Dodd if he is unsuccessful. The issues for determination are: (a) Based on the evidence of surrounding circumstances, is it reasonable to infer that Mason will be unable to pay Dodd’s costs if he is unsuccessful in this proceeding? (b) Is it just in all the circumstances, balancing the interests of Mason and Dodd, that Mason is required to pay the security for costs? In support of Dodd’s application, it was submitted that: (a) Mason was a defendant in a claim made against him by his former barrister, Mr Hacking. Mason was unsuccessful in that proceeding and was ordered to pay $48,852 plus interest and costs to Mr Hacking. A further award of costs of $16,311.75 was made against Mason in connection with an appeal in that proceeding. Mr Hacking had to commence enforcement action in relation to a property owned by Mason in Australia to recover the debt. (b) Mason was liable to pay two costs awards of $46,500 and $13,122.10 in relation to Family Court proceedings he commenced against Mrs Mason’s property manager and welfare guardian, Mr Allen. Bankruptcy proceedings were issued against Mason to enforce these debts. (c) Mason has not paid costs of $6,309.65 awarded to Dodd by Katz J following his unsuccessful summary judgment application. (d) Mason is also involved in another proceeding which relates to the Mamari Trusts (namely, the appeal of Fitzgerald J’s decision). It is reasonable to infer that Mason owes or may incur significant legal fees of his own in relation to each of these actions. (e) Mason’s income is the pension and a monthly distribution of $4,000 from the Mamari Trusts. He lives in a property owned by the Mamari Trust, and his only other known assets are a property in Australia and a half-share in a loan of $100,000 made to his son. In response, it was submitted that: (a) Mason engaged in the litigation relating to Mr Hacking’s costs and the bankruptcy proceedings in good faith and for legitimate reasons. (b) Mason has now paid the judgment debts and outstanding costs awards, using the “modest amount” of personal funds he had left after settling most of his assets into the trusts. (c) Mason has real estate in Australia against which enforcement action could be taken should Mason be unsuccessful. (d) Mason will have funds to pay an adverse costs order if he is successful in the Court of Appeal in having Dodd and Ms Triezenberg removed as trustees, himself reinstated as a trustee, and a further trustee appointed. It was held that it would not be “just in all the circumstances” to require Mason to pay security for costs. The application for security for costs is dismissed. Mason is entitled to his costs on this application on a 2B basis. Dodd did not act unreasonably by bringing this application. He established the first limb of the test, that of Mason’s inability to pay, and Mason’s claim does face significant obstacles.

Orders