Noel & Melva Yarrow Charitable Trust v Tennant

[2016] NZHC 1011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1146 [2016] NZHC 1011

IN THE MATTER

of the Trustee Act 1956

BETWEEN

NOEL & MELVA YARROW CHARITABLE TRUST

First Applicant

ROSEMARY ANNE TENNENT, LINDA MARGARET ROSE WILKINSON, GRANT HASSALL AS EXECUTORS OF THE ESTATE OF NOEL HENRY YARROW

Second Applicants

AND

PAUL STEVEN YARROW Respondent

Hearing:	On the papers
Counsel:	S Maloney for the Applicants C R Goode and E Lennie for the Respondent
Judgment:	18 May 2016

COSTS JUDGMENT OF MUIR J

This judgment was delivered by me on Wednesday 18 May 2016 at 10.30 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Counsel/Solicitors:

S Maloney, Lee Salmon Long, Auckland

C R Goode, Barrister, Auckland

E Lennie, Barrister, Auckland

YARROW CHARITABLE TRUST v PAUL STEVEN YARROW [2016] NZHC 1011 [18 May 2016]

[1]      I thank counsel for their memoranda.  Regrettably they were not forwarded to me until 17 May.

[2]      I note that the parties are in agreement as to the quantum of costs in the amount  of $21,023.00  plus  disbursements  of $790  but  are in  dispute about  the respondent’s liability to pay the same.

[3]      These  were  proceedings  initiated  by  the  applicants  following  service  of notices under s 75 of the Trustee Act 1956 on a basis, as expressed by counsel, that the respondent should be required to “put up or shut up” in respect of longstanding allegations which impacted on proper administration of the first applicant.

[4]      The applicants’ evidence in support of the application included as exhibits lengthy correspondence by the parties predating the application by four years.  It is apparent from that correspondence that:

(a)       In 2011 the respondent sought to engage in arbitration proceedings.

(b)The applicants disagreed that the arbitration clause applied or that any arbitration had been properly initiated.

(c)      The applicants nevertheless expressed a willingness to engage with the respondent at that time subject to the respondent providing a comprehensive list of his issues and relief sought.

(d)The respondent did not take any steps over the following four years to address either by way of arbitration, court proceedings or alternative dispute resolution processes, his claims.

(e)      The applicants warned the respondent that they intended to apply for directions seven months before doing so (and invited the respondent to articulate his complaints and engage in a resolution process) but received no substantive engagement from the respondent.

[5]      Section  75  notices  were  then  served  on  the  respondent  and  current proceedings subsequently initiated.

[6]      As  a  result  of  intense  case  management  of  the  application,  arbitral  and parallel High Court proceedings have now been initiated.   I am advised by the respondent that a challenge to the arbitrator’s jurisdiction was only partially successful with the result that there is a live set of issues that have to be determined within the arbitration clause.   The respondent’s position is therefore that the proceedings have simply served to crystalise a process which the respondent offered to initiate many years ago.

[7]      I cannot accept that this exonerates the respondent from a costs liability.  The fact that the applicants disagreed that the arbitration clause applied or that the arbitration had been properly initiated in 2011 did not prevent the respondent from pursuing an arbitration.   It simply foreshadowed a challenge.   Moreover, as the proceedings now initiated confirm, significant parts of the dispute did not properly fall within the ambit of the arbitration clause and were appropriately litigated in the High Court.

[8]      I am satisfied that as early as 2011 the applicants were pressing for a comprehensive list of the issues of concern to the respondent and identification of the relief which he sought.   No such list was forthcoming nor did the respondent initiate arbitral or court proceedings until after the s 75 application was made.

[9]      Most  significant  in  my  assessment  is  the  applicants’ advice  given  seven months in advance of the proceedings stating they intended to apply to the Court and their renewed invitation to the respondent to articulate his complaints in a comprehensive manner. An informal resolution process was also suggested.

[10]     In my view the applicants had no alternative but to initiate proceedings which have been successful in their intended purpose of forcing the respondent to articulate his  claims  and  commence  the  parallel  proceedings  referred  to.    I  accept  the applicants’ position that, absent their application, precision would not have been brought to the respondent’s claims within the time frame that has occurred and with

inevitable consequences in terms of the ongoing administration of the trust.  I accept also  that,  although  following  commencement  of  the  applicants’ proceedings  the respondent accepted that matters needed to be brought to a head, intensive case management was necessary in order to ensure that the arbitral and court proceedings were  initiated  in  a  timely  fashion.    This  involved  various  adjournments  and extensions of time being granted.

[11]     I am not prepared to find any impropriety on the part of the applicants’ counsel in relation to service of the s 75 notices which I note were served on the respondent’s counsel at the same time as the application for directions (that is over two months before notice has expired).

[12]     For the foregoing reasons I consider costs properly payable to the applicants. I also allow the sum of $892.00 for preparation of their costs memorandum on the principles confirmed by Allan J in Body Corporate Administration v Mehta (No 4).1

That  allowance  is  calculated  on  the  basis  of  0.4  days  by  analogy  to  the  time allocation for preparing a memorandum for a case management conference.

Disposal of the proceeding

[13]     The applicants advise that now that the respondent has initiated his arbitral and High Court proceedings the directions sought in the application are no longer required and the proceedings can be discontinued.

[14]     They  request  that  the  reasons  for  the  discontinuance  be  recorded  in  the present decision as to costs which I now do.

[15]     They further advise that a notice of discontinuance can be filed within one week of the costs order being sealed in terms of the present judgment.

Result

[16]     I   award   costs   to   the   applicants   in   the   amount   of   $21,915.00   plus disbursements of $790.

1      Body Corporate Administration v Mehta (No 4) [2004] NZHC 213 at [85].

[17]     I order that a notice of discontinuance be filed by the applicants within one

week of the present order being sealed.

Muir J