McGrath v Simson - [2015] NZHC 3310

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-001716 [2015] NZHC 3310

BETWEEN
KAREN JANE MCGRATH,

JOHN GRAEME GARDNER, ANNA LOUISE COOK, SUZANNE JUDI DAVIES First Plaintiffs

KAREN JANE MCGRATH AS EXECUTOR AND TRUSTEE OF THE ESTATE OF SALLY ELIZABETH SIMSON

Second Plaintiff

KAREN JANE MCGRATH AS TRUSTEE OF THE R & S SIMSON FAMILY TRUST

Third Plaintiff

AND

RUSSELL JAMES SIMSON AS EXECUTOR AND TRUSTEE OF THE ESTATE OF SALLY ELIZABETH SIMSON

First Defendant

RUSSELL JAMES SIMSON AS TRUSTEE OF THE R & S SIMSON FAMILY TRUST

Second Defendant

RUSSELL JAMES SIMSON Third Defendant

Hearing: On the papers

Appearances:

M J Wallace for the Plaintiffs
Defendant in person

Judgment:

18 December 2015

JUDGMENT OF DUNNINGHAM J

MCGRATH v SIMSON [2015] NZHC 3310 [18 December 2015]

Introduction

[1] On 28 October 2015, I issued a judgment rectifying a settlement agreement concluded between the plaintiffs and the defendants, and dismissing the defendants’ claims to have the settlement agreement set aside.1

[2] As the successful party, the plaintiffs are, in the ordinary course, entitled to an award of costs. I had hoped therefore that the issue of costs could be resolved by agreement but, failing that, I also made directions for the filing of memoranda on costs.

[3] Agreement has not been reached on costs, so I now must determine: (a) whether the plaintiffs are entitled to costs;
(b) if so, at what level; and

(c) if costs are awarded, in which defendants’ capacity should Mr Simson

be required to meet any award of costs.

The plaintiffs’ application for costs

[4] The plaintiffs’ application for costs is conventional. They say they have been wholly successful in their claim against the defendants and, as is the usual course, costs should follow the event.2

[5] As the proceedings were categorised as category 2, they submit that a 2B costs categorisation for all steps taken in the proceeding is appropriate. The memorandum attaches a schedule setting out the plaintiffs’ calculation of the steps taken in this proceeding, and the related claim for costs for each step taking into account the change of daily rate from 1 July 2015.

[6] The plaintiffs properly note that an application was made by them for entry of

judgment by default on the basis that the defendants’ pleading was deficient and

1 McGrath v Simson [2015] NZHC 2644.
2 High Court Rules, r 14.2(a).

amounted to an admission of the plaintiffs’ claim. Costs on that interlocutory application were reserved and the plaintiffs do not seek an order of costs in respect of that application. While the plaintiffs’ application was unsuccessful, the defendants were self-represented at that hearing so the primary rule is the defendants are not entitled to an award of costs.3

[7] The plaintiffs also note that Mr Russell Simson is sued in three separate capacities. As first defendant, he is sued as the executor and trustee of the estate of Sally Elizabeth Simson, as second defendant he is sued as trustee of the R & S…

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.

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Details

Case: [2015] NZHC 3310
Decision Date: 18 December 2015

CaseChat Overview and Summary

The High Court of New Zealand dealt with a dispute between the plaintiffs, Karen McGrath and others, and the defendant, Russell Simson. The plaintiffs sought rectification of a settlement agreement and dismissed the defendant's claims to have the settlement agreement set aside. The court issued a judgment in favour of the plaintiffs, and they sought costs for their success. The court had to determine whether the plaintiffs were entitled to costs, the appropriate level of costs, and in which capacity the defendant should meet any award of costs.

The plaintiffs argued that they were entitled to costs as they had been wholly successful in their claim against the defendant. They submitted that a 2B costs categorisation for all steps taken in the proceeding was appropriate. The defendant, on the other hand, did not address the application of the High Court Rules to the exercise of the court's discretion to award costs. Instead, he focused on the substantive effect of the proceedings on him and claimed that the court's decision had cost him hugely already. However, the court accepted that the defendant's inability to pay was not demonstrated on the evidence.

The court exercised its discretion to award costs in accordance with the High Court Rules. It was satisfied that 2B costs for all steps, except the interlocutory application seeking judgment by default, should be awarded. The court also found that the costs should not be met from either the estate of Sally Elizabeth Simson or the assets of the R & S Simson Family Trust, but should be met from the defendant personally. The court awarded costs against the defendant in his personal capacity and ruled that he was not entitled to seek payment or reimbursement of any such award of costs from the estate of Sally Elizabeth Simson or from the assets of the R & S Simson Family Trust.

In conclusion, the High Court of New Zealand awarded costs against the defendant in his personal capacity and ruled that he was not entitled to seek payment or reimbursement of any such award of costs from the estate of Sally Elizabeth Simson or from the assets of the R & S Simson Family Trust. The court exercised its discretion in accordance with the High Court Rules and found that the costs should be met from the defendant personally. The court's decision was based on the fact that the defendant's role in the litigation was primarily motivated by his personal interest in retaining control over the assets of the R & S Simson Family Trust, despite the requirement in Sally's will that he work with the new trustee Karen McGrath, who was appointed under the will.

Orders