McLaughlin v McLaughlin

[2023] NZHC 1208

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2017-442-000052

[2023] NZHC 1208

BETWEEN

MARK JAMES McLAUGHLIN and ANDREW ASHLEY McLAUGHLIN (as
beneficiaries of the Ashley Trust) Plaintiffs

AND

JOHN DAVID MANUEL McLAUGHLIN

(as trustee of the Ashley Trust) First Defendant

AND

GLASGOW HARLEY TRUSTEE LIMITED

Second Defendant

AND

BRETT McLAUGHLIN

Interested Party

Judgment: 23 May 2023

COSTS JUDGMENT OF GENDALL J

[1]    On 7 December 2021 the plaintiffs filed an appeal to the Court of Appeal against the judgment I issued in this proceeding dated 9 November 2021. The second defendant was named as a second respondent in that appeal.

[2]    That appeal was set down for a two-day hearing in the Court of Appeal to commence on 7 March 2023.

[3]    On 6 March 2023, however, the plaintiffs and the second defendant reached an agreement that the plaintiffs would abandon that appeal to the Court of Appeal insofar as it affected the second defendant on the basis that:

MARK JAMES McLAUGHLIN v JOHN DAVID MANUEL McLAUGHLIN [2023] NZHC 1208 [23 May 2023]

(a)There were no issues between them as to costs; but

(b)The plaintiffs would not oppose an application by the second defendant to this Court, seeking an indemnity from the Ashley Trust (for which the second defendant was a previous trustee) for its costs in relation to the abandoned appeal.

[4]    A joint memorandum to this effect dated 6 March 2023 was filed in the Court of Appeal.

[5]Counsel for the second defendant has now filed in this Court memoranda dated

20 April 2023, seeking an order against the Ashley Trust for its costs and disbursements on this abandoned appeal on a solicitor/client basis totalling approximately $46,000. Copies of the second defendant’s invoices relating to this claim have been provided to the Court.

[6]    The invoices disclose that the lawyers’ hourly chargeable rate for work undertaken with respect to the appeal was assessed at $306 per hour. Generally, as I see it, that is a reasonable and appropriate rate here.

[7]    Counsel for the first defendant, John McLaughlin, has also filed on this issue a Memorandum dated 12 May 2023. This confirms that John supports the second defendant’s right to be indemnified from the trust fund of the Ashley Trust for its costs reasonably and properly incurred in respect of this appeal no longer pursued by the plaintiffs against the second defendant.

[8]    Additionally, counsel goes on to confirm that the first defendant “will abide the Court’s decision in respect of the reasonableness of the quantum of those costs.”

[9] And, as I note at [3](b) above, the position of the plaintiffs (the appellants to the Court of Appeal), as their counsel has confirmed, is that they do not oppose this present costs application by the second defendant.

[10]   The interested party, Brett McLaughlin, in this proceeding however, takes a different position. His counsel has filed a Memorandum dated 8 May 2023 on this costs issue. (Brett is also a discretionary and final beneficiary of the Ashley Trust.)

[11]That 8 May 2023 states:

Brett opposes that application (by the second defendant for its costs on the abandoned appeal by the plaintiffs to the Court of Appeal). The basis of Brett’s opposition is that GHL:

(a)   did not act in the best interests of the beneficiaries as a whole, including his interests, during its time as trustee; and

(b)  otherwise failed to perform adequately as trustee.

[12]That Memorandum goes on to state:

Brett instructs that he is conscious of the significant professional fees which have already been met from the Ashley Trust fund and, notwithstanding the plaintiffs’ decision to discontinue the appeal, his view is that GHL should not be indemnified from the trust fund for its appeal costs.

[13]   As to those comments from the interested party, Brett, I accept fully that the Ashley Trust fund to date has met substantial professional fees relating to this heated dispute between members of the McLaughlin family. For whatever reason, that has happened. Whether or not it was unavoidable is another matter, largely in the hands of the brothers here. The second defendant at relevant times acted as a trustee company associated with and working for all members of the McLaughlin family. No compelling evidence was provided at the lengthy High Court hearing before me to substantiate the claim that the second defendant did not act in the best interests of all beneficiaries (which obviously includes Brett), nor that it otherwise failed to perform adequately as a trustee.

[14]   In particular, nothing has been put before me now which in any way contradicts the comments (I usefully repeat here) that I made at [23] of my earlier 28 July 2022 Costs Judgment in this proceeding:

…for completeness, I record my view that GHTL, as an independent former trustee of the Ashley Trust drawn into this litigation largely through no fault on its part, is entitled to be reimbursed for all its reasonable legal costs and disbursements appropriately incurred throughout this long and acrimonious

dispute between members of the McLaughlin family, and in carrying out its functions as such trustee.

[15]   Brett is but one of the four brothers in the McLaughlin family. Here his three brothers Mark, Andrew, and John, appear to accept that the costs on the abandoned appeal sought by the second defendant should be met from the Ashley Trust. I find in all the circumstances this is appropriate.

[16]   As to the quantum of those costs and disbursements, as I note above, the sum of approximately $46,000 is sought.

[17]   In a Memorandum I issued on 21 February 2023 I directed that any issues the plaintiffs may have relating to this quantum were to be outlined to the Court in a Memorandum to be filed on their behalf. Nothing appears to have eventuated from this direction. Nor has any submission on quantum been advanced on behalf of Brett.

[18]   I have also now had an opportunity to consider the detailed invoice material which has been provided to the Court for the second defendant.

[19]   I am satisfied the costs incurred by the second defendant on the abandoned appeal to the Court of Appeal, calculated on a solicitor and client basis, (totalling approximately $46,000) are reasonable in the circumstances here.

[20]   An order is now made that the second defendant is entitled to be paid this sum of $46,000 from the Ashley Trust. This payment is to be made by the Ashley Trust to the second defendant when the funds of the Ashley Trust permit.

[21]   Leave is reserved for the second defendant, on giving notice to the plaintiffs, the first defendant and Brett, to approach the Court by Memorandum if any minor further adjustment of the $46,000 awarded here as its costs on the abandoned appeal may be sought from the Ashley Trust.

Gendall J

Postscript

[22]   This matter has a long and convoluted history. I apologise to the parties and to counsel, but I am not entirely sure as to whether there may still be any outstanding High Court matters in this proceeding for costs or otherwise, on which the parties seek orders from this Court. If so, please advise the Court appropriately and I will address this on the basis of the Memoranda and material filed.