Public Trust v Gargan

[2013] NZHC 2012

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV 2013-470-8 [2013] NZHC 2012

BETWEEN

PUBLIC TRUST Applicant

AND

IAN WALTER GARGAN and ELIZABETH SUSAN COLLINS- GARGAN

First Respondents

ELIZABETH MARY LAMBERT Second Respondent

Hearing:	19 July 2013 (on papers)
Appearances:	F B Collins for Public Trust I and E Gargan – first respondents
Judgment:	12 August 2013

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE [on Costs]

This judgment was delivered by me on

12.08.13 at 5 p.m, pursuant to

Rule 11.5  of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:

Gibson Sheat, Wellington

Ms E Lambert

Copy:

Mr and Mrs Gargan, Tauranga

PUBLIC TRUST v GARGAN & ORS [2013] NZHC 2012 [12 August 2013]

[1]      I  gave  judgment  in  this  matter  on  10  May  2013  at  which  time  I  gave directions under the Property Law Act 2007 as to the payment of the net surplus proceeds of the sale of the property which had been sold at the instigation of the applicant as mortgagee.  The circumstance which I reviewed in the course of my judgment revealed that the first respondents as the mortgagors had sought to impede the mortgagee/applicant from enforcing its security over the property which the first respondents  owed.    They  enlisted  the  assistance  of  the  second  respondent  who devised a series of transactions plainly intended to advance the objectives of the first respondents.  As it turned out they were unsuccessful and as I concluded in my judgment there was no doubt about the entitlement of the applicant to proceed with a mortgagee sale of the property which the first respondents owned.

[2]      The applicant now seeks an order for costs.  Costs are sought against both the first and second respondents and on an indemnity basis.

[3]      In the first place the position which the first respondents took was of no merit.  Secondly, it is also clear that they approved of the involvement of the second respondent in this matter and indeed went along with the ill-advised scheme which she promoted to obstruct the mortgagee sale.

[4]      The applicant was successful and I can see no reason why both the first respondents  and  second  respondents  should  not  pay  the  costs  of  the  applicant. Further, in my view this is an appropriate case for a direction that the respondents pay indemnity costs pursuant to r 14.6(3b)(ii) HCR.  This was not a case where the first respondents were seeking genuinely required clarification from the Court of a doubtful legal position.   The points that they sought to raise when they embarked upon the scheme which they did with the assistance of the second respondent have been considered (and revisited) on a number of occasions, as the authorities which I referred to in my judgment of 10 May 2013 make clear.  It became obvious that the first respondents were prepared to be guided by the second respondent at all stages of the caveating process but that fact does not exonerate them from the making of costs orders against them.  They did not, in involving a second respondent, do so on the basis that she was a person who would provide them with legal advice in which

they could have confidence that might have been obtained had they sought to instruct a competent solicitor.  Rather, they appear to have enlisted the assistance of a second respondent on the basis that she was a person who is in broad sympathy with their objectives of defeating the mortgagee’s entitlements.

[5]      The conclusion must be that the first respondents have no answer to the applicant’s application for an order directing them to pay costs and costs on an indemnity basis.

[6]      Because of the circumstances of the case, a like order is required against the second respondent, Ms Lambert.  I further obtain assistance from the remarks of Osborne AJ in his costs judgment in ASB Bank Limited v Lambert1to the following effect:

Bringing that history together

[15]     I have referred earlier to the peculiarity of Ms Lambert’s sale and purchase arrangements.   With minor variations, they have the same hallmarks.  There is nothing commercially balanced about them.  They are plainly  devices  to  defend  the  interests  of  those  mortgagors  whom  Ms Lambert for her own reasons chooses to go out of her way to “support”.

[16]      Ms Lambert is persistently interfering with the rights of lenders who have taken the appropriate steps after lending money to register and, if necessary, realise their securities.  As Associate Judge Faire observed in Watson v Williams, the enforcement of rights under registered mortgages is being obstructed.

...

[28]      It is also just that the applicant receive indemnity costs under r

14.6(4)(a)  High  Court  Rules,  on  the  basis  that  there  are  vexatious  and

unnecessary elements to both Ms Lambert’s opposition to the orders sought

and her very involvement in the schemes which inevitably give rise to this and other proceedings.  The repeated pattern of Ms Lambert’s sale and purchase transactions through the cases which I have referred to also, in my judgment, qualifies “as some other reason” in terms of r 14.6(4)(f) to depart from the usual scale.

1 HC Hamilton, 1 May 2013, CIV 2013-419-204.

[7]      The Court has authority to fix the costs relating to the proceeding in which it has given judgment.  The costs which the Court has jurisdiction to order are those ancillary to the proceeding in which it gave its judgment.  The Court cannot, in the guise of exercising that costs jurisdiction, make a wider debt-collection type order encompassing other costs which, while arguably legitimate, were not related to the proceeding which gave rise to the judgment pursuant to which costs are fixed.

[8]      The invoices which have been annexed to the affidavit filed in support of the costs order are not added up but they would appear to total $30,412.69.  Quite a number of those invoices though appear to relate to matters other than the originating application for directions which I dealt with in my judgment.     The narration contained in the invoices shows that three relate to the present proceeding which are dated 28 February 2013 (x 2) and 2 May 2013.  The first of the two invoices for 28

February 2013 totals $305.44 and relates to service of the Court proceedings while the other invoice of the same date relates, as does the following invoice of 2 May

2013, to normal fees and disbursements attributable to the involvement of a party in the position of the applicant in proceedings of the kind in which I gave judgment. The total of the three invoices is $14,962.29.  I am satisfied that those invoices represent reasonable costs and disbursements relating to the proceeding which the applicant brought.

[9]      There was also produced as an exhibit to the affidavit in support of the costs application a further tax invoice dated 28 June 2013.  That however would appear to relate to post-judgment matters including preparing the present costs application and the  documents  relating  to  it.    In  general  terms  those  types  of  costs  are  not recoverable.   At some point there has to be a cut-off of the matters that can be claimed for by way of a costs application and, in my view, seeking costs on the making of a cost application falls on the wrong side of the line.

[10]     The result is that there will be an order for costs in the sum of $14,962.29.

J.P. Doogue

Associate Judge