Mason v Dodd

[2020] NZHC 2005

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-00936

[2020] NZHC 2005

BETWEEN

ALEXANDER CHARLES MASON

Plaintiff

AND

PAUL MORLEY DODD

Defendant

Hearing:	On the papers
Judgment:	10 August 2020

JUDGMENT OF KATZ J

[Costs]

This judgment was delivered by me on 10 August 2020 at 10:00 am Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:           Gilbert Walker, Auckland

G J Thwaite, Abraham Lincoln Chambers Limited, Auckland Counsel:     S Hunter QC, Shortland Chambers, Auckland

MASON v DODD [2020] NZHC 2005 [10 August 2020]

Introduction

[1]    In this proceeding Alexander Mason claims that Paul 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 allegedly gave 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.

[2]    Mr Mason sought summary judgment against Mr Dodd on the basis  that    Mr Dodd has no defence to the claims. I dismissed that application, having found the claims to be unsuitable for summary determination, by a very wide margin.1

[3]    Mr Dodd now seeks costs in respect of Mr Mason’s failed summary judgment application.

Costs application

[4]    Mr Dodd seeks costs on a 2B scale basis, in the sum of $6,812, comprised as follows:

(a)filing opposition to an interlocutory application (item 23; 0.6 days;

$1,434);

(b)preparation of written submissions (item 24; 1.5 days; $3,585);

(c)appearance by principal counsel (item 26; 0.5 days; $1,195); and

(d)second counsel (item 27; 0.25 days; $597.50).

[5]    Mr Dodd also seeks a disbursement of $95.65, being the filing fee for the notice of opposition to the summary judgment application.

[6]    Mr Mason advises that if a costs award is made against him he will ask      Mr Dodd, in his capacity as trustee of the two Mamari trusts, for the money. That is

1      Mason v Dodd [2020] NZHC 1508.

not, however, an issue before me for determination. That will be a matter for the trustees in due course.

[7]    If costs are awarded, Mr Mason submits that the claim for second counsel is excessive and should not be certified.

Should costs be awarded?

[8]    In NZI Bank Ltd v Philpott the Court of Appeal decided that in most cases of unsuccessful summary judgment applications the incidence of costs is best decided when the final result of the case is known.2 However, where a summary judgment application was plainly inappropriate, costs may be fixed immediately.3

[9]    Associate Judge Matthews considered this to be the case in Emmons Developments v Mitsui Sumitomo, where the plaintiffs sought summary judgment despite a critical bona fide question of fact that could only be decided at trial.4 Despite the plaintiffs withdrawing their application prior to it being heard and determined, the Judge considered that it had been unreasonable to bring the application and he accordingly fixed costs immediately.

[10]   Exceptional circumstances are not necessary, however, in order to justify determining costs immediately, rather than after trial.5 Where it should have been clear to the plaintiff that there was an arguable defence, costs will generally be fixed immediately. In Vision Aluminium,  Master  Hansen  observed  that  if  costs  were not normally awarded against the plaintiff in such circumstances, the courts would face a flood of unmeritorious summary judgment applications.6 The prospect of an immediate award of costs in respect of clearly unmeritorious summary judgment applications incentivises parties to carefully and objectively assess the merits of such applications before bringing them.

2      NZI Bank Ltd v Philpott [1990] 2 NZLR 403, (1990) 3 PRNZ 695 (CA).

3      Emmons Developments New Zealand Ltd v  Mitsui  Sumitomo  Insurance  Co  Ltd  [2016] NZHC 1244.

4      Emmons Developments New Zealand Ltd v Mitsui Sumitomo Insurance Co Ltd [2016] NZHC 1244 at [9].

5      Vision Aluminium Ltd v McLaughlan HC Christchurch CP123/90, 8 June 1990.

6      Vision Aluminium Ltd v McLaughlan HC Christchurch CP123/90, 8 June 1990.

[11]   As noted above, I found Mr Mason’s causes of action to be unsuitable for summary determination, by a wide margin. Amongst other things, Mr Mason provided no expert evidence as to the usual or accepted professional standards applying to accountants involved in the establishment of trusts at the relevant times. Further, there are causation issues that will need to be addressed at trial. It is currently not clear whether Mr Mason has suffered any loss. This will also need to be the subject of evidence and submission at trial. Finally, it appears to be strongly arguable that at least three of the four causes of action are statute barred.

[12]   It is rare for claims in negligence to be suitable for summary judgment and this case was no exception. It should have been apparent from the outset that this proceeding was not suitable for summary determination. It is therefore appropriate to fix costs now, rather than after trial.

What quantum of costs should be awarded?

[13]   Mr Mason accepts Mr Dodd’s calculation of quantum except for the cost claim for second counsel.

[14]   It is rare to certify for second counsel in summary judgment applications. I do not propose to do so in  this  case.  I otherwise  award  costs  in  accordance  with  Mr Dodd’s schedule. I am also satisfied that the disbursement is appropriate.

Result

[15]   I award costs to Mr Dodd in the sum of $6,214 together with the claimed disbursement of $95.65. The total costs award is therefore $6,309.65.

Katz J