Ridge v Parore - [2014] NZHC 708

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-000957 [2014] NZHC 708

UNDER Section 174 of the Companies Act 1993

BETWEEN

SALLY ANNE JUDITH RIDGE and

JAMIE DILLON RIDGE First Plaintiffs

SALLY ANNE J UDITH RIDGE Second Plaintiff

AND

ADAM CRAIG PARORE and AARON LLOYD as Trustees of the Adam Parore Family Trust

First Defendants

ADAM CRAIG PARORE Second Defendant

SMALL BUSINESS ACCOUNTING (NZ) LIMITED

Third Defendant

Hearing: On the papers.

Counsel:

D W Grove for the Plaintiffs
Z G Kennedy and R W Harris for the Defendants

Judgment:

9 April 2014

COSTS JUDGMENT OF GILBERT J

This judgment is delivered by me on 9 April 2004 at 2.30pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

RIDGE & Anor v PARORE & Ors [2014] NZHC 708 [9 April 2014]

Introduction

[1] I dismissed the plaintiffs’ claims in a judgment delivered on

28 February 2014.1

This judgment deals with costs.

[2] There is no dispute that this is a category 2 proceeding and that band B allows a reasonable amount of time for all relevant steps. Scale costs calculated on that basis amount to $73,232 plus disbursements of $31,610.15. The plaintiffs do
not dispute this calculation.

[3] The defendants seek a 50 per cent uplift on the grounds that the plaintiffs’ claims lacked merit and they unreasonably refused to accept settlement offers. The plaintiffs submit that no uplift is justified.

[4] In Bradbury v Westpac Banking Corp, the Court of Appeal observed that increased costs may be ordered in cases where a party has failed to act reasonably.2

Did the plaintiffs’ claims lack merit?

[5] Rule 14.6(3)(b)(ii) of the High Court Rules permits the Court to order increased costs against a party who has contributed unnecessarily to the time or expense of the proceeding by pursuing arguments that lack merit.

[6] At the commencement of the trial, the plaintiffs advanced six causes of action:

(a) Breach of trust – based on an assertion that 50 per cent of the shares in Small Business Accounting (NZ) Limited (SBA) were held by the trustees of the Parore Family Trust on trust for Ms Ridge or the trustees of the Sally Ridge Family Trust.

(b) Estoppel – based on an alleged representation by Mr Parore on behalf of the Parore Family Trust that Ms Ridge, or the trustees of the
Sally Ridge Family Trust, held a 50 per cent shareholding in SBA.

1 Ridge v Parore [2014] NZHC 318.
2 Bradbury v Westpac Banking Corp [2009] 3 NZLR 400 at [27].

(c) Oppressive conduct – s 174 of the Companies Act 1993 – based on an allegation that the trustees of the Parore Family Trust had wrongfully refused to pay 50 per cent of the SBA dividends to the plaintiffs.

(d) Breach of an alleged property sharing agreement.

(e) Alternative claim for breach of the alleged property sharing agreement.

(f) Claim under the Property (Relationships) Act 1976.

[7] By the time the plaintiffs…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Ridge v Parore

Details

AGLC: Ridge v Parore [2014] NZHC 708
Case: [2014] NZHC 708
Decision Date: 9 April 2014

CaseChat Overview and Summary

In the High Court of New Zealand, Auckland Registry, the case of Ridge v Parore involved the plaintiffs, Sally Anne Judith Ridge and Jamie Dillon Ridge, who filed claims against the defendants, Adam Craig Parore and Aaron Lloyd, who were the trustees of the Adam Parore Family Trust, as well as Adam Craig Parore individually and the company Small Business Accounting (NZ) Limited. The plaintiffs' claims centred around allegations of breach of trust, estoppel, oppressive conduct under the Companies Act 1993, and a breach of a property sharing agreement, among others. The defendants contested these claims, leading to a comprehensive legal battle. The court was tasked with determining the merits of the plaintiffs' claims, the reasonableness of their actions in pursuing these claims, and the implications for costs awarded.

The primary legal issues before the court included whether the plaintiffs' claims had any merit and whether their refusal to accept settlement offers was reasonable. The court examined the nature and prospects of success of the plaintiffs' claims, particularly focusing on the breach of trust claim, which was the only one remaining by the time of closing submissions. Additionally, the court assessed the plaintiffs' conduct in relation to multiple settlement offers made by the defendants, evaluating whether these rejections were justified and whether they contributed to the unnecessary increase in costs.

The court found that the plaintiffs' claims were misconceived and lacked merit, leading to an unreasonable increase in the defendants' costs. The plaintiffs' inability to clearly and consistently plead their case and their failure to engage with the defendants' settlement offers were critical factors in the court's decision. The court concluded that the plaintiffs' actions contributed unnecessarily to the time and expense of the proceeding, warranting an award of increased costs. Specifically, the court ruled that a 50 per cent uplift on the scale costs was appropriate, effective from 1 January 2013, when the plaintiffs unreasonably rejected a settlement offer and continued to pursue claims that had no realistic prospect of success.

The final orders of the court mandated that the defendants were entitled to costs calculated on a 2B basis for all steps up to 1 January 2013, and on the same basis with a 50 per cent uplift for all steps taken from 1 January 2013. The defendants were also awarded their disbursements as claimed. This decision underscored the importance of acting reasonably in legal proceedings and the consequences of pursuing claims without merit.

Orders