Parbery v Parbery

[2013] NZHC 934

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV2011-409-001678 [2013] NZHC 934

BETWEEN  JAMES KIRTLAND PARBERY Plaintiff

ANDJULIAN DAVID PARBERY Defendant

Hearing:         29 April 2013

Counsel:         J M Kirkland for Plaintiff

P A Cowey and C A Corlett for Defendant

Judgment:      1 May 2013

COSTS JUDGMENT OF WHATA J

[1]      The plaintiff, Mr James Parbery, has discontinued proceedings against the defendant (his brother), Mr Julian Parbery.  James claimed, in short, that Julian had diverted James’ money into Julian’s family trust.  The money was said to be a gift to James from their mother, Mary.  At the time of the discontinuance there were three live causes of action based on constructive trust, breach of fiduciary duty and equitable fraud.

[2]      Essential to the plaintiff’s case, I am told, was the mother’s evidence.  She is aged 83.   She was invited by both brothers to give evidence on their behalf.  The sequence of the affidavit evidence produced by her illustrates the difficulties she confronted.  She produced an affidavit on behalf of the plaintiff.  She was then asked and produced an affidavit on behalf of the defendant.  In response she was asked and did provide a final affidavit on behalf of the plaintiff.

[3]      This  matter  had  been  set  down  for  hearing  commencing  29 April  2013.

James, having considered the matter further, and given the mother’s health and age,

PARBERY V PARBERY HC CHCH CIV 2011-409-001678 [1 May 2013]

chose  (it  is  said)  to  discontinue  the  proceedings  to  alleviate  strain  on  her deteriorating health.

[4]      The defendant, Julian, disputes the reason given for the discontinuance.  He says that the mother’s evidence was not central to the resolution of the case and he denies that the plaintiff is acting benevolently towards the mother.  He says that the plaintiff claims in essence that his inheritance has been stolen from him by the defendant.  This allegation of fraud within a family is said to resonate differently to a purely commercial dispute in that the defendant cannot be criticised for wishing to defend his reputation.  He says he has been denied his opportunity to have his day in Court and clear his name.   He notes that the proceeding was filed after the bitter ending of the parties’ 18 year business relationship.   He says that he wanted the accounts of the jointly owned company to be audited and the plaintiff refused.  He alleges that the plaintiff, James, removed the full extent of the company’s available cash assets to bank accounts beyond the company’s control.   He also alleges that false annual returns were filed, including the record that there was a unanimous resolution not to appoint an auditor for the current year.  His ex parte application to appoint an interim liquidator was then approved by the High Court.  The plaintiff is then said to have secretly purchased the company’s bank debt from the BNZ and appointed a receiver.   The assets were then seized and sold.   The defendant then purchased the assets of the company from the receiver and the receiver obtained

$565,000.   That sum enabled the creditors to be repaid.  At the conclusion of the receivership it is expected that there should be sufficient funds to repay the shareholders’ current accounts in full, including any sum alleged to be owing to the plaintiff.

[5]      All of this is said to be background to support the defendant’s contention that he should have had his day in Court.  The plaintiff is denying that opportunity and that the plaintiff should therefore pay costs on discontinuance in accordance with r 15.23.

Assessment

[6]      Rule 15.23 governs costs on discontinuance.   It states:

15.23 Costs

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[7]      There are circumstances where the Court will depart from this general rule, including where the plaintiff has chosen to discontinue because it has achieved its end by other means, or for reasons not connected to the strengths or weaknesses of the plaintiff’s case.[1]   Generally, this Court will not consider the respective merits of the competing contentions in the proceedings.[2]

[1] Refer Fong & Anor v Wong & Anor HC Auckland CIV 2008-404-5547, 13 May 2010 at [11].

[2] Refer North Shore City Council v Local Government Commission (1995) 9 PRNZ 182 (HC).

[8]      Ultimately, the rules concerning costs, like all rules, are designed to achieve a just and equitable result and this should govern the overall assessment of costs.[3]

[3] Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150.

[9]      In this case I am not prepared to dwell on the respective contentions of the parties as to merits.   Ultimately, whatever the causes of action, this was a simple familial claim for monies had and received by one brother at the expense of the other brother.[4]    The defendant denies that this was the case.   He admits transferring his brother’s money to his own family trust, but he says by agreement of the plaintiff. Plainly, however, their mother got caught up in their dispute and would rather have nothing to do with it.    She is 83.  It is immediately obvious why it is the plaintiff might not wish to put his mother through the ordeal of a trial and the prospect of

cross-examination.    I am  not  exactly clear  why  it  is  the  mother  needs  to  give evidence.  Oral argument did not assist much.  But given that both parties elected to call evidence from her, they clearly thought it was relevant.  I proceed on that basis.

[4] A claim for money had and received was struck out because of limitation issues. Claims based on equitable principles survived.

[10]     In my view this is one of those occasions where the Court must approach the issue of costs with a view to the bigger picture and to endorse the conduct of a

litigant that minimises harm to a third person and reduces the ongoing consumption

of judicial time and other legal resource.  I understand the defendant’s desire to have his day in Court, but I think that this must be balanced against the benefits of avoiding the inevitable stress to their mother.

[11]     Accordingly, in accordance with my general[5]  and specific[6]  discretion to do so, I reduce a 2B scale costs order against the plaintiff by 50%.

Result

[5] Rule 14.1.

[6] Rule 14.7(g).

[12]     There shall be an order in favour of the defendant, reduced by 50% on a 2B

basis.

[13]     The defendant produced a schedule of costs.  Nevertheless, I invite the parties to agree the quantum and revert to me for a final order.

Addendum

[14]     At my request the parties were invited to report to the Court on settlement discussions between counsel to the extent that they might be relevant to my overall evaluation.  Ultimately they did not assist me.  I wish to record however that while tenacity  is  laudable,  an  unduly  adversarial  approach  was  taken  to  this  simple exercise.  Settlement negotiations (to the extent that they are open) between counsel, should be able to be reported to the Court on a joint basis and without acrimony.

Solicitors:

Saunders & Co, Christchurch

Parry Field, Christchurch