Perriam v Wilkes costs HC Auckland CIV-2009-425-000284
[2011] NZHC 1087
•2 September 2011
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2009-425-000284
BETWEEN WENDY JOY PERRIAM Plaintiff
ANDLAWRENCE ERNEST WILKES First Defendant
ANDSTEPHEN JOHN BRADSHAW Second Defendant
ANDALEXANDER MCLENNAN WILSON Third Defendant
ANDLESLEY MARGARET INSTONE Fourth Defendant
ANDJUDITH ELEANOR FLETT Fifth Defendant
ANDFRANK THOMAS PERRIAM Sixth Defendant
ANDQBE INSURANCE (INTERNATIONAL) LIMITED
Third Party
Judgment: 2 September 2011 at 10:00 AM
COSTS JUDGMENT OF VENNING J
This judgment was delivered by me on 2 September 2011 at 10.00 am, pursuant to Rule 11.5 of the
High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Lewis Callanan, Auckland
Hornabrook Macdonald, Auckland
Copy to: D J Chisholm, Auckland
PERRIAM V WILKES (Costs) HC AK CIV-2009-425-000284 2 September 2011
Background
[1] On 11 and 18 August 2011 the Court dealt with the following interlocutory applications brought by the plaintiff:
(a) for non-party discovery against Mr Frank Perriam;
(b) for non-party discovery against the trustees of the Colorado Property
Trust;
(c) for joinder of Frank Thomas Perriam; (d) for a preservation order;
(e) for a restraining order.
[2] The parties have exchanged memoranda as directed regarding costs. I propose to fix costs on the basis of the memoranda and the earlier directions of the Court.
The application for non-party discovery against Mr Frank Perriam
[3] In the judgment of 11 August the Court opined that the appropriate order may be for costs to lie where they fall because, even though he had successfully opposed the application in relation to a copy of his Will, Mr Perriam had delayed in providing copies of bank accounts as ordered by the Court. Mr Chisholm has submitted that costs should be awarded to Mr Perriam as the application for non-party discovery was unsuccessful. He submits that the reason suggested for denying Mr Perriam costs as a non-party, namely the late discovery of the Jameson Strategies bank statements is not a sufficient reason to deny Mr Frank Perriam, who was a non-party at the relevant time, costs in the usual way: r 8.27.
[4] In response, Ms Callanan sought costs from the non-party. She also submitted that the Jameson Strategies bank accounts were encompassed by the order of the Court dated 17 March 2011 directing that the non-party was to provide:
Copies of all bank account statements for the past six years in the name of
Frank Perriam and any other entity controlled by Frank Perriam ...
She says the Jameson Strategies bank accounts were accounts of an entity controlled by Frank Perriam. I agree the evidence supports that contention.
[5] The order for discovery was made on 17 March 2011. It was not complied with in relation to the Jameson Strategies bank account accounts until 18 July 2011.
[6] The Jameson Strategies bank statements were bank statements of an entity controlled by Mr Frank Perriam. They were covered by the order made by Faire J on
17 March. They should have been discovered earlier. In the circumstances, despite Mr Chisholm’s submission and despite the fact costs would normally be awarded to a non-party I decline to make an order for costs in favour of Mr Frank Perriam on the non-party application for costs against him.
[7] However, I also reject the plaintiff’s application for costs on that application. Often costs are awarded to a non-party (on a solicitor/client basis) even where they are ordered to provide discovery. Because of the particular circumstances of this case I have determined that costs should not be awarded in favour of the non-party. However, the application proceeded to a hearing because the plaintiff sought to obtain a copy of Mr Perriam’s Will. That application was unsuccessful. The plaintiff is not entitled to costs on her unsuccessful application.
[8] The result is that costs are to lie where they fall on that application.
Colorado Property Trust
[9] The trustees of the Colorado Property Trust seeks costs on the non-party discovery application against them, restricted to the costs of the application itself, there being no costs of compliance with the order.
[10] The plaintiff seeks costs against the non-party on the basis that the end result was the non-party was directed to provide a duly executed authority addressed to the bank for the plaintiff to obtain the bank statements directly from that bank.
[11] The plaintiff’s submission overlooks the starting point that the trustees of the Colorado Property Trust are strictly non-parties to these proceedings. Rule 8.27 must be the starting point. While one of the trustees was the plaintiff ’s former husband, the trustees cannot be criticised for the approach they have taken to the application for discovery. By letter of 7 July the solicitors confirmed the trustees were prepared to disclose the requested bank statements on the basis their reasonable costs were met or, as an alternative:
The trustees would even be agreeable to providing an authority addressed direct to the relevant bank to enable your client to obtain copies of the bank statements direct. However the costs would need to be met by your client.
The plaintiff refused to accept this offer.
[12] A hearing was required. The result of the hearing was that the plaintiff obtained an order in terms which had been offered to her prior to the hearing.
[13] The non-party trustees are entitled to costs. Costs are sought on a 2B basis which is appropriate. There will be an order for costs calculated on a 2B basis and approved by the Court in the sum of $2,016.
Joinder of Frank Perriam
[14] On this application I expressly made no order for costs.
Costs on the revocation of the preservation order
[15] Counsel for Mr Frank Perriam seeks costs on the revocation of the preservation order which was initially obtained ex parte. Costs are sought on a 2C basis calculated in the sum of $11,092. Time band C is submitted to be appropriate as it is said a comparatively large amount of time was required to respond to the application and to seek to have it set it aside.
[16] The plaintiff submits that Mr Frank Perriam’s costs (calculated on a 2B basis) should be set off against the plaintiff’s costs in relation to the subsequent restraining order in which the plaintiff was partially successful and that any difference in favour of Mr Perriam is subsumed by the interest earned on the moneys held by Mr Perriam so that no order should be made.
[17] The plaintiff’s suggested approach to this issue is misconceived on two bases. First, it is necessary and appropriate in this case to consider the costs incurred on each of the interlocutory applications separately. Ultimately, a set-off may be appropriate when it comes to the actual payment of costs, r 14.17 but the first task must be to fix the appropriate sum for costs on each individual application. Next, the submission that Mr Perriam has had the advantage of the interest earned and that that should be deducted from the costs he has incurred presupposes that ultimately the Court will find the moneys were not his and rather, belonged to the plaintiff. However, the merits of the plaintiff’s claim to the moneys are still to be determined. The fact interest has been earned on the moneys is irrelevant to the issue of the appropriate order for costs and the payment of such costs now. Any adjustment in relation to interest earned (if necessary) can follow the outcome of the substantial proceedings.
[18] For the reasons given in the judgment of 11 August there was no jurisdiction for the plaintiff’s application for a preservation order. But more significantly for costs purposes, it should not have been made as an ex parte application for the
following reasons:
There was no urgency. The bank statements had been provided some weeks prior to the application for preservation order and in that time there had been
no attempt by Mr Perriam to move or dissipate funds.
The plaintiff was well aware that Mr Frank Perriam was represented by
solicitors and counsel.
General allegations of fraud and conspiracy were raised to support the application.
The plaintiff did not alert the Judge considering the ex parte application to the pleading issues raised in Associate Judge Faire’s judgment of 6 October
2010.
The application sought preservation of all the funds in the two bank accounts
although the evidence supported at most a claim to a lesser sum.
[19] Mr Frank Perriam is entitled to costs on his successful setting aside of the preservation order. Given the circumstances of the ex parte application it is appropriate that there be an order for increased costs. However, I am not able to accept the non-party’s submission that time band C is appropriate. In my judgment the time involved in responding to the application and on the jurisdictional point should not have been more than average. However, for the above reasons I agree with Mr Chisholm’s alternative submission that there should be an order for increased costs. I make an order for costs calculated on a 2B basis with an uplift of a third over that 2B basis. I calculate the uplifted costs to be $6,266.67, together with disbursements of $138.30.
The plaintiff ’s application for restraining order
[20] The plaintiff seeks costs on her successful (in part) application for a restraining order under s 43 Property (Relationships) Act 1976 calculated on a 2B basis of $2,841.30 including disbursements. Mr Frank Perriam opposes the application for costs. First Mr Chisholm notes that, once again, the plaintiff initially attempted to apply ex parte. Mr Chisholm next made the point that the Court has reserved the position of Mr Perriam to revisit the orders once the pleading against Mr Perriam is confirmed. He submits that costs on this application should be reserved pending the strike-out application and for a substantive hearing of the restraining application, following receipt of the plaintiff’s pleading against Mr Perriam.
[21] While I understand the reason for Mr Chisholm’s submission ultimately, if the proceedings against Mr Perriam are struck out, and the moneys are directed to be paid back to him and/or there is a later application to revoke the restraining orders
the appropriate order for costs on such applications and outcomes can be made at that time.
[22] At the present time the situation is that the plaintiff made an application for a restraining order which was opposed, but on which the plaintiff was partially successful after a hearing. Generally costs should follow the outcome of interlocutory hearings: r 14.8.
[23] In my judgment the appropriate outcome on this application is for the plaintiff to have costs but for the order to be adjusted down in the exercise of the Court’s discretion under r 14.7(g) to take account of two factors, first that the application was initially made ex parte when that was not appropriate given the background to the proceeding and the earlier hearing and second, that the plaintiff was only successful in restraining part of the moneys in the bank accounts rather than the full amount, again despite the issues canvassed at the earlier hearing. I adjust the plaintiff’s claim for costs down by a third to reflect those factors. The order for costs calculated on that basis is $1,894.20.
General matters
[24] In the course of her memorandum in relation to costs counsel for the plaintiff has referred to the benefit that she says Mr Frank Perriam has had in relation to the moneys held through the bank accounts in his name and the interest earned by him. She submits that that is a matter that should be taken into account. But that overlooks that, while the plaintiff has been given leave to join Mr Frank Perriam, at the time these applications were before the Court he was a non-party and there was no proper claim formulated against him. It also pre-supposes that whatever the claim the plaintiff advances against Mr Frank Perriam will ultimately be successful. Costs on interlocutory applications cannot be dealt with on that basis. They must be dealt with on the basis of the outcome of the interlocutory application.
Result
(a) No order is made on the plaintiff’s applications for non-party discovery against Mr Frank Perriam and for joinder of Mr Frank Perriam.
(b)The plaintiff is to pay the trustees of the Colorado Property Trust the sum of $2,016 for costs on the application for non-party discovery.
(c) The plaintiff is to pay Mr Frank Perriam costs in the sum of $6,266.67 together with disbursements of $138.30 on the plaintiff’s application for the preservation order.
(d) Mr Frank Perriam is to pay the plaintiff the costs of $1,894.20 on the
plaintiff’s application for restraining order under s 43 of the Property
(Relationships) Act 1976.
Venning J
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