Pryde v Devery

[2014] NZHC 374

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2013-425-000073 [2014] NZHC 374

BETWEEN  THOMAS McNEIL PRYDE Plaintiff

ANDGRANT PATRICK DEVERY and TIMOTHY PAUL DEVERY as trustees of the Estate of John Bruce Devery Defendants

Submissions filed:    13 February 2014 and 28 February 2014

Counsel:                  A Stevens for Plaintiff

A S P Tobeck for first-named Defendant, G P Devery
No appearance on this issue for second-named Defendant

Judgment:                5 March 2014

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

as to costs

[1]      Grant Devery, a defendant in this proceeding, seeks costs on Mr Pryde’s

discontinuance of his claim in this proceeding.

Background

[2]      The background to this litigation is relatively simple.  An impasse developed between the three trustees of a family trust.  There was a dispute as to the extent to which debts incurred should be met by Grant Devery and as to a quantification and payment which Grant Devery was seeking for his financial contributions.

[3]      Mr Pryde as the professional trustee responsibly filed this proceeding seeking directions from the Court as to disposal and realisation of the Trust’s main asset, a

farm, together with such other relief as the Court considered appropriate.

PRYDE v DEVERY [2014] NZHC 374 [5 March 2014]

[4]      Both Grant and Timothy Devery filed notices of appearance indicating that

they did not oppose Mr Pryde’s claim.

[5]      Negotiations  ensued  and  a  settlement  was  reached.    Grant  and  Timothy Devery resigned as trustees and were replaced by an additional independent trustee. Grant Devery was given an opportunity to purchase the farming assets but did not purchase them, with the result that the properties were marketed by tender.

[6]      On the closing date of the tenders, Grant Devery lodged caveats over the four relevant titles, thereby inhibiting the trustees’ ability to accept the tenders unconditionally and to effect settlement.

[7]      On 5 December 2013, counsel for the trustees urgently filed a memorandum. She responsibly explained that an impasse had been reached once again and sought the Court’s directions as to how the trustees might proceed.

[8]      Grant Devery responded with an affidavit dated 9 December 2013, the thrust of which was that Timothy Devery (Grant’s younger brother) had been influencing the trustees in their decision-making in a number of ways.

[9]      In the event, Grant Devery, faced with the threat of further litigation, saw fit to withdraw the caveats.  The trustees were then able to proceed with the sale of the properties which was completed on 17 January 2014.

[10]     Counsel for the trustees in early February filed the notice of discontinuance.

Costs on the discontinuance

[11]     The provision applicable to costs on a discontinuance is r 15.23 High Court Rules.   A plaintiff who discontinues a proceeding must pay the defendant’s costs unless the defendant otherwise agrees or the Court otherwise orders.

[12]     For  Grant  Devery,  Mr  Tobeck  submits  that  Mr  Pryde  should  pay  Grant Devery’s costs and disbursements from the time Grant Devery’s December 2013 affidavit was filed. The sum, Mr Tobeck calculates, is $4,852.

[13]     Mr Tobeck says that it was inappropriate of Mr Pryde to expect to have matters relating to the caveats resolved through this proceeding.  Mr Tobeck submits that because there were caveat issues any proceeding to resolve them had to be pursuant to the Land Transfer Act 1952.  He submits that this proceeding in which Mr Pryde as trustee sought directions was an inappropriate vehicle to be continued for the purposes of dealing with the caveat issues.

[14]     I disagree.

[15]     Mr Pryde acted in a wholly appropriate way in seeking directions in the first place.   When Mr Pryde and his new co-trustee were faced with Grant Devery’s caveats, it was again wholly appropriate for him to keep the proceeding alive with a view to the possibility that the Court might provide some direction to the trustees. That might have taken the form of directions as to how to deal with the caveats.  It might  have  involved  a  request  to  the  Court  to  convene  a  judicial  settlement conference so that the litigation costs might be minimised.   Mr Tobeck’s implicit suggestion that it would have been better that the trustees commence a separate proceeding in relation to the caveats simply underscores the extent to which parties can end up with unresolved disputes and further litigation costs through embarking (or forcing others to embark) upon more than one piece of litigation.

[16]     Appropriately, r 14.1(1) High Court Rules makes all matters in relation to costs at the discretion of the Court.

Discussion

[17]     It would have been manifestly unjust in the circumstances of this case to allow the default rule in relation to discontinuances to result in a costs award against Mr Pryde.

[18]     I refuse Grant Devery’s request for an order of costs and disbursements, either in the sum sought or at all.

[19]     Happily,  given the family trust context, the trustees have not themselves applied for an order that Grant Devery pay something towards the costs and disbursements of this proceeding.  Had such an application been made I would have in the circumstances had to seriously consider the possibility of such an award given that r 14.2(a) allows me to consider which party has truly succeeded in the litigation. The fact is that Mr Pryde succeeded in his initial need for directions by obtaining the agreement of the defendants to a replacement trustee.  It is then very arguable that Mr Pryde succeeded at the next step when he indicated he wished the Court to consider making other directions when the trustees found that Grant Devery had caveated titles to land which was on the point of being sold.  For the reasons I have indicated,  I  view  that  second  step  taken  by  Mr  Pryde  in  relation  to  different directions as a responsible and appropriate course for a trustee to take.  Mr Pryde’s step was again effective – the caveats were removed.

[20]     As it is, Mr Pryde does not seek a payment of costs and disbursements and I

take the consideration of such an order no further.

Outcome

[21]     There is no order as to the costs of this proceeding.

Solicitors:

Cruickshank Pryde, Invercargill

John K Fraser Ltd, Invercargill
Duncan Cotterill, Wellington

Counsel: A S P Tobeck, Barrister, Otautau

Goodman Tavendale Reid, Christchurch

Associate Judge Osborne