Mitchell v Mitchell

[2019] NZHC 567

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2017-463-61

[2019] NZHC 567

BETWEEN

HAMUERA WALKER MITCHELL, HOKIMATE KAHUKIWA, PETER STAITE AND VERONICA BUTTERWORTH

Plaintiffs

AND

AND

TE KIRI WHERO EWA MAKARETA MITCHELL

First Defendant

MALCOLM TUKINO SHORT AND ALEXANDER JAMES WILSON

Second Defendant

CONTINUED OVERLEAF

On the papers:	At Auckland
Judgment:	26 March 2019

JUDGMENT OF POWELL J

[Costs]

This judgment was delivered by me on 26 March 2019 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

MITCHELL v MITCHELL [2019] NZHC 567 [26 March 2019]

ANDWARWICK MOREHU, RIMINI DENIS PAUL, KATARINA KEREAMA AND DONNA HALL

Third Defendants

ANDTE KOTAHITANGA O NGATI WHAKAUE ASSETS TRUST

Fourth Defendant

AND  BRYCE MURRAY

Fifth Defendant

[1]                 This judgment follows my decision of 19 October 2018 determining that  John Kahukiwa and his firm Corban Revell was no longer able to act as either solicitors or counsel for the plaintiffs in this proceeding.1

[2]                 At the end of my earlier judgment I confirmed that the fourth defendant Assets Trust was entitled to costs on a 2B basis, but reserved leave to apply in the event that there was any dispute with regard to fixing the amounts to be paid.

[3]                 In the event, the plaintiffs and the Assets Trust have been unable to reach agreement on the amount to be paid and, following the filing of memoranda, have requested the sum to be fixed.

[4]                 In the meantime the third named plaintiff, Peter Staite, sought leave to be released as a plaintiff in the proceedings. This was not opposed by the other parties, once the costs arising from the application to restrain counsel had been determined. Mr Staite has subsequently filed a memorandum which he disputed liability for costs on the basis of “negligence by both fiduciaries the Assets Trust and Mr Kahukiwa”. Given this position I gave leave for both Mr Kahukiwa and the Assets Trust to respond to the matters that he raised.

[5]There are therefore two matters to be considered:

(a)the amount of costs payable by the plaintiffs to the Assets Trust on the application to restrain counsel; and

(b)whether there is any basis for discounting Mr Staite’s liability as one of the plaintiffs.

Issue One – the amount of costs payable

[6]                 As noted, both Mr Kinsler on behalf of the Assets Trust, and Mr Warren on behalf of the plaintiffs other than Mr Staite, have undertaken calculations of the amounts payable on a 2B basis. Mr Kinsler’s calculation amounted to $32,892.50 plus

1      Mitchell & Ors v Mitchell & Ors [2018] NZHC 2665.

a 25 per cent uplift and $1,593 disbursements, a total of $41,115.63. Mr Warren’s calculation amounted to $9,732.50 (including disbursements). The difference is primarily the result of the Assets Trust claiming greater amounts at case management conferences, together with significant amounts preparing affidavits, additional preparation time due to the complexity of the application and, as noted, an uplift of 25 per cent on the basis the plaintiffs failed without reasonable justification to accept a legal argument.2

Discussion – Issue One

[7]First, I decline to uplift the costs sought.

[8]                 What is required is that the award does justice as between the parties.3 Having considered the submissions filed by counsel I am satisfied that costs sought by the Assets Trust are excessive on any basis, and simply do not reflect the application that proceeded before the Court.

[9]                 In particular, the costs sought under Item 13 for attendance at case management conferences are excessive. The conferences were not solely focused on the narrow issue of restraint of counsel, and in fact at the first of the conferences the matter of restraint had not yet become the subject of formal application, with the primary agenda of the conference being to discuss timetabling matters. At the other conference, the matter of restraint seems to have been one of five matters discussed. As a result, I am satisfied the Assets Trust is entitled to an allowance only for the second of the conferences, an allowance of 20 per cent on the basis the matter of restraint was one of five covered at the conference. As per the plaintiff’s submissions, this comes to a total of $133.80.

[10]             Similarly, the costs sought under Items 30 for five days’ worth of preparing affidavits  is  also  excessive.  The  plaintiffs’  submissions  cite  a  judgment  by   van Bohemen J stating that Items 22 (as sought here) and 23 include the preparation of affidavits in support of or in opposition to an interlocutory application.4 The

2      High Court Rules 2016, r 14.6(3)(b)(iii).

3      Beirne v Kidd [2015] NZHC 3118 at [12].

4      Alpine South Fishing Ltd v Kim [2018] NZHC 3253 at [11].

affidavits prepared in this case do not however relate solely to the matter of restraint of counsel and, as Mr Warren noted, it is clear the restraint application is not a court proceeding in its own right. Instead, I am satisfied Item 22 may be increased to a full day (to $2,230 instead of the $1,338 sought).

[11]             Finally, the fourth defendants seek costs under Item 33 on the basis that the application was complex and the hearing occupied three quarters of a day. I struggle to see that a hearing of this nature is complex enough to warrant allowance for preparation time, additional to what was already being sought under Item 24, being the preparation of the written submissions relied upon by the fourth defendants.

[12]             Making these changes, I conclude that a costs award of $9,165.30 appropriately reflects the nature and complexity of the application and should be paid by the plaintiffs together with the disbursements as sought.

Issue Two – is there any basis for discounting Mr Staite’s liability?

[13]             Mr Staite did not take issue with the amount of the costs sought but rather submitted, as noted, that he should not have to pay costs due to the breaches of fiduciary duty owed to him by the Assets Trust and Mr Kahukiwa.   In summary,  Mr Staite considered the Assets Trust and Mr Kahukiwa should have advised him of the conflict of interest as between Mr Kahukiwa and the Assets Trust. In response, Mr Kahukiwa stated that he always kept Mr Staite advised and informed about the proceedings and that he acted on Mr Staite’s instructions. The Assets Trust acknowledged that Mr Staite may have had an evolving understanding of the issues in the litigation but noted the evidence he had filed in relation to the application at issue and submitted it was entitled to rely upon those documents, and concluded that there were no grounds to absolve Mr Staite of his liability to the Assets Trust.

Discussion – Issue Two

[14]             It is noted that Mr Staite’s involvement in the proceeding was not limited to being a named plaintiff, but extended to giving evidence in support of the various interlocutory applications scheduled to be heard on 5 October 2018, including the application to restrain counsel. Specifically in relation to this issue Mr Staite deposed:

46.I was recently advised by email that the trustees of the AT seek to have John Kahukiwa removed from the proceedings as lawyer acting on behalf of the 3 hapu.

47.I have not been presented any evidence of actual prejudice suffered in these proceedings by the AT, or its trustees, as a result of John Kahukiwa representing the 3 hapu.

Parallel Dual Roles

48.The legal advice of John Kahukiwa as described by the AT evidence is parallel in purpose and intent in meeting the Objects of the AT deed of trust. I do not see a prejudicial cross over or collision of privileged information that (if it existed) cannot be carefully managed in his fiduciary duty before a breach occurs. [At] exists within an interconnected frame-work which at its heart is for Ngati Whakaue me ona Hapu.

49.The 3 hapu do not understand why they continue to be deprived of trust funds assistance in times of need.

50.I cannot see any losses caused on the AT by its 3 hapu beneficiaries. Those trustees need to consult with their beneficiaries by hui a hapu if there is a problem. So why have they not done so is a mystery.

[15]             It is apparent that Mr Staite was, as a named plaintiff, not only aware of the issue raised by the Assets Trust with regard to Mr Kahukiwa’s position but as the Assets Trust noted, at least to an extent, was also  aware  of  the  evidence  the  Assets Trust had filed. Mr Staite nonetheless specifically supported the plaintiffs’ opposition to the application to restrain counsel. It was only after the decision restraining Mr Kahukiwa and Corban Revell was issued and the costs order made against the plaintiffs that Mr Staite raised any issue with his position and sought to withdraw as a plaintiff.

[16] In those circumstances, I am satisfied that there is not, nor can be, any basis for Mr Staite to be excused liability as a plaintiff for the costs award made against the plaintiffs in respect of the application to restrain counsel and he is therefore liable as one of the plaintiffs for the amounts stated at [12] above.

Decision

[17]             The Assets Trust is entitled to costs on the application to restrain counsel in the sum of $9,165.30 plus disbursements of $1,593.

Powell J