Singh v Brar

[2023] NZHC 505

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-477

[2023] NZHC 505

UNDER

Part 5 of the Trusts Act 2019 and Part 18 of the High Court Rules 2016

BETWEEN

AVTAR SINGH and RANJIT SINGH as

trustees of the Sikh Sangat NZ Trust First Plaintiffs

JASPAL SINGH and JASWINDER SINGH
AUJLA as trustees of the Sikh Sangat NZ Trust
Second Plaintiffs

AND

GURINDERPAL SINGH BRAR as the

Founding Trustee of the Sikh Sangat NZ Trust

First Defendant

ATTORNEY-GENERAL

Second Defendant

Hearing:	21 October 2022
Counsel:	N Williams, R Parlane and J Morriss for the Plaintiffs G Sidnam for the First Defendant
Judgment:	14 March 2023

JUDGMENT OF HARVEY J

[Costs]

This judgment is delivered by me on 14 March 2023 at 4 pm

pursuant to r 11.5 of the High Court Rules.

.....................................................

Registrar / Deputy Registrar

Counsel:  Nick Williams, Barrister, Auckland

Solicitors:Shine Lawyers NZ Limited, Auckland Anderson Creagh Lai, Auckland

SINGH v BRAR [2023] NZHC 505 [14 March 2023]

Introduction

[1]    Avtar Singh, Ranjit Singh, Jaspal Singh and Jaswinder Singh Aujla were the original trustees of the Sikh Sangat NZ Trust.1 They commenced proceedings against the first defendant, Gurinderpal Singh Brar, the founding trustee.2 Interim orders were sought restraining Mr Brar from taking actions as trustee.3 These orders were initially opposed but at the hearing on 19 October 2022, an interim resolution was reached and I issued orders by consent on 21 October 2022.4 To avoid doubt, the substantive proceeding has been adjourned.

[2]    The parties now seek costs. Both counsel contended that they are the successful party and seek costs from the other. They both seek actual costs, less scale costs paid by the opposing party, from the trust.

[3]The issues for determination are:

(a)Should any party be indemnified by the trust for their costs to date?

(b)What scale costs should be awarded?

Background

[4]    Given the submissions made, the following further background concerns the Beddoe orders previously made by Walker J, the orders sought in the application, the agreement ultimately reached and earlier proposals by both parties.5 The plaintiffs filed the substantive proceeding on 2 September 2021. They sought orders to prevent their removal, to remove Mr Brar as a trustee and for an account or enquiry or appointment of a receiver. The Beddoe application was then filed 7 September 2021.

[5]    On 30 November 2021 the plaintiffs proposed measures to maintain the status quo, pending the resolution of the substantive proceeding. They confirmed that if

1      The Trust is a charitable trust which runs gurdwaras (temples) for the Sikh communities in Auckland and Rotorua. Mr Brar purportedly removed all four original trustees, but this is disputed.

2      Mr Brar carries out preaching for the Trust. [Redacted].

3      The second defendant was not named as a respondent to the application.

4      Singh v Brar HC Auckland CIV-2022-404-477, 21 October 2022.

5      Singh v Brar [2022] NZHC 666.

Mr Brar did not agree to the proposal they would file an application for interim relief. On 9 December 2021 the Beddoe application was heard. A further proposal was put forward by the plaintiffs on 24 December 2021. Following that, on 27 January 2022 Mr Brar and the trust’s solicitors wrote to the plaintiffs’ solicitors addressing, amongst other things, the appointment of an independent auditor to audit the trust’s accounts and to oversee the work of the trust’s auditor, Mr Khatri.

[6]    On 1 April 2022, Walker J delivered judgment on the Beddoe application, confirming that it was reasonable and appropriate for the plaintiffs to bring the substantive proceeding and that the applicants were entitled to be reimbursed out of the assets of the trust for their reasonable legal costs in doing so.6

[7]    The application for interim relief was filed on 1 July 2022 and sought in effect four orders and directions. First, an order restraining Mr Brar from exercising any rights or powers under the trust, including taking further steps to remove the second plaintiffs; and obtaining any property, privilege, service, pecuniary advantage, benefit or valuable consideration from the trust, including any salary. Secondly, a direction that the plaintiffs remain validly appointed trustees until the substantive proceeding is resolved. Thirdly, a direction that the first defendant disclose all assets and liabilities of the trust, all financial and banking records, and all benefits he has received from the trust. Fourthly, the appointment of a receiver to administer the trust until further order of the Court or when the substantive proceeding is resolved.

[8]    On 22 July 2022, Mr Brar made a proposal to the plaintiffs regarding the protection of trust assets, which included the appointment of an independent trustee. On 1 August 2022, the plaintiffs responded that they would not agree to any proposal which  involved  Mr  Brar  retaining  control  over  the  trust  or  its  finances.  On  17 August 2022, the plaintiffs reiterated that no proposal that included Mr Brar remaining connected to the trust was acceptable. They would, however, agree to the Public Trustee being appointed sole trustee.

[9]    On 22 September 2022, Mr Brar proposed that he would temporarily step down as trustee, pending [redacted]. He would then resume his role after [redacted] or

6      Singh v Brar, above n 5.

[redacted]. Prior to stepping down, the trust board would revoke the clause giving any power to the founding trustee and require consensus decision making.

[10]On 5 October 2022, the plaintiffs sent their response seeking agreement that:

(a)Mr Brar formally resign as trustee (including as Founding Trustee) of the trust by properly executing a Deed of Resignation that will be effective for the interim period;

(b)Mr Brar undertakes that if [redacted] he becomes ineligible for appointment as a trustee;

(c)During the interim period, Mr Brar will not exercise any control over the trust or trustees (whether directly or indirectly via the other trustees he has purported to appoint, or via the secretary), or obtain any money, property, or benefit from the trust, including a salary. Mr Brar and his family will not have use of any trust property, including vehicles;

(d)Mr Brar will not be a preacher for the temple during the interim period;

(e)The plaintiffs be kept informed of the trust’s affairs by receiving financial statements, board minutes and resolutions when completed, bank statements each month, and updates from the independent trustee, as well as providing relevant information to the independent trustee;

(f)The concept of “founding trustee” in the Trust Deed be revoked; and

(g)All trespass notices issued to devotees must be revoked; and

(h)The plaintiffs reserve their rights to refer matters back to the Court if they are informed by the independent trustee of any misconduct by other trustees.

[11]   As foreshadowed, at the hearing on 19 October 2022, the parties reached agreement after the plaintiffs had made submissions, which included Mr Brar’s resignation as a trustee.

[12]   The consent orders I made directed that the first defendant may not be appointed as trustee of the trust. Mr Brar was restrained from exercising any rights or powers under the trust, including taking further steps to remove the second plaintiffs; and obtaining any property, privilege, service, pecuniary advantage, benefit or valuable consideration from the trust, including any salary. I appointed the Public Trust as interim independent trustee and made consequential directions. A direction was also issued that the trustees’ decisions or resolutions must be unanimous. The trust was ordered to keep the plaintiffs informed about the trust’s activities by providing, on at least a monthly basis, bank statements, any financial statements and board minutes and resolutions when completed. The plaintiffs are entitled to request additional updates directly from the Public Trust at their own expense, if any. I also issued freezing orders over certain trust property.

Should any party be indemnified for their costs to date?

Plaintiffs’ submissions

[13]   Mr Williams submitted that a Beddoe order was made in favour of the plaintiffs in relation to the substantive proceeding.7 Although the application was not then conceived of, and so the order does not apply to it, indemnification is consistent with Walker J’s order because the application was made in the best interests of the trust and its charitable purposes.

[14]   Counsel contended that it is no answer for Mr Brar to claim that none of the plaintiffs are now trustees. Walker J’s judgment refutes that proposition where she made orders regarding the first plaintiffs who were challenging  their removal  by  Mr Brar. Mr Williams also referred to Carmine v Ritchie which held that a bona fide trustee who is concerned that a power removing him or her has been exercised contrary to the best interests of the beneficiaries or charitable purposes is entitled to an indemnity for costs reasonably incurred in making an application to the Court.8

[15]   Further, Mr Williams argued it would not have been realistic to require the plaintiffs to file a further Beddoe order for the application, given the urgency, the

7      Singh v Brar, above n 5.

8      Carmine v Ritchie [2012] NZHC 2279.

further costs it would entail and the earlier findings of Walker J. Counsel also referred to Waho v Te Kōhanga Reo National Trust where Mr Waho obtained a declaration that his removal as a trustee was unlawful.9 The Court then granted Mr Waho indemnity costs relying on the Trustee Act 1956, ss 38(2) and 170.10 Mr Williams highlighted the similarity between the plaintiffs’ conduct and Mr Waho’s behaviour. Actual costs less scale costs as claimed are $53,009.

[16]   Additionally, Mr Williams submitted that Mr Brar has no entitlement to be indemnified from the trust because he did not act reasonably. He should have resigned as trustee as soon as [redacted].

First defendant’s submissions

[17]   Mr Sidnam submitted that the application was ill-founded and unsuccessful, so the plaintiffs did not act reasonably. Additionally, the plaintiffs are attempting to take a “shortcut” by seeking costs against the trust without varying the Beddoe order. The application was not so urgent that the plaintiffs could not have sought further Court direction. Further, the suggested approach is inconsistent with Walker J’s judgment.

[18]   Counsel contended that Mr Brar defended the proceeding notwithstanding his position that the trust should have been joined as a party. He argued that Mr Brar acted properly in opposing the application and ensuring that the trust did not have to pay the high costs of a receiver. As such, Mr Sidnam submitted that the first defendant should be reimbursed from the trust property for his actual costs in opposing the application. Mr Brar’s costs are $189,372.89, less scale costs as claimed of $155,324.89.

Legal principles

[19]   A trustee has a duty to protect trust assets for the beneficiaries, which extends to bringing and defending claims necessary to fulfil that duty, within reason.11 Additionally, trustees have a right of indemnity from the assets of the trust from costs

9      Waho v Te Kōhanga Reo National Trust [2018] NZHC 3388.

10     Now the Trusts Act 2019, ss 81(2) and 140.

11     McLaughlin v McLaughlin [2018] NZHC 3198, [2019] NZAR 286 at [28], citing Pratley v Courteney [2018] NZCA 436, [2018] NZAR 1787 at [18].

properly incurred in carrying out the trust’s business if they are acting reasonably.12 This includes a trustee who unsuccessfully opposes an application so long as the opposition was for the benefit of the trust and reasonable. However, it is usually good practice for a trustee seeking to oppose an application to adopt a neutral stance and seek the Court’s directions. If they do not they may be exposed to party costs.

[20]   In “hostile claim” litigation between trustees, usually the normal principle that costs are awarded to the successful party applies.13 Nonetheless, in some cases there will be good reason even in hostile claims to depart from that orthodox principle.

Excessive or unreasonable costs also lie beyond the scope of indemnity.14

[21]   A Beddoe order is a direction sought from the Court that authorises the use of trust funds for the trustee’s cost of bringing or defending proceedings if it is satisfied the proposed claim or defence is in the best interests of the trust.15 It may be made in relation to one cause of action but not others.16 Partial indemnity may also be granted where parts of the litigation are hostile.17

Discussion

[22]   Although I am of the view the plaintiffs should be indemnified in principle, I have determined that costs are to be reserved pending the determination of the substantive hearing.

[23]Walker J concluded that regarding the plaintiffs’ substantive claims:18

… there is a seriously arguable case of breach of trust and that the removal notice served on the applicants was to suppress scrutiny of the second respondent’s control and management of the Trust. The issues warrant examination and it is reasonable that the applicants seek orders and directions in the main proceeding.

12     Trusts Act 2019, s 81; and see s 140.

13     Woodward v Smith [2014] NZHC 407, [2014] 3 NZLR 525.

14     Jones v O’Keefe [2019] NZCA 222.

15     Re Beddoe [1893] 1 Ch 574 (CA); McLaughlin v McLaughlin above n 11; and McCallum v McCallum [2020] NZHC 907.

16     See McLaughlin v McLaughlin, above n 11.

17     Glasgow Harley Trustee v McLaughlin [2019] NZHC 3385.

18 At [120].

[24]   In light of a seriously arguable case of breach of trust, like Walker J, I accept that it was not unreasonable for the plaintiffs to take the action that they did to ensure that any alleged further breach of trust was prevented. In addition, seeking orders to limit Mr Brar’s access to the trust, on the face of the material before the Court, notwithstanding that the substantive case remains extant, were not unreasonable actions to safeguard the trust and its assets. I also accept the plaintiffs’ submission that the fact Mr Brar sought to remove the plaintiffs as trustees is no barrier to their entitlement to have their costs met if they act reasonably in opposing their removal.19 The interlocutory application was part of that opposition and it sought to preserve the trust’s position in light of the time until trial. I accept that, on the face of the material before the Court, it was made in the best interests of the trust.

[25]   Moreover, in principle, indemnification of costs for the interlocutory application is consistent with the Beddoe orders then made. Walker J found that the substantive claims did not fall into the “hostile claim” category in Re Buckton.20 She was satisfied the substantive claims seeking to prevent the plaintiffs’ removal as trustees, remove Mr Brar, and for an account or enquiry or appointment of a receiver, were reasonable.21 Accordingly, I consider that there is a strong argument that the plaintiffs should be indemnified from the trust, at least for part of the amount ordered by Walker J. To do otherwise could discourage potentially genuine efforts to preserve a trust’s assets in a situation where there is at least an arguable case.

[26]   That said, if both parties are to be indemnified, that will exceed the $80,000 limit set by Walker J:22

The entitlement [for the plaintiffs] to be reimbursed out of the assets of the Trust is limited to total expenditure of $80,000 plus GST. In the event that it is anticipated that the reasonable legal costs will exceed that sum, further directions of the Court will be necessary. The applicants have leave to apply for such further direction in that event. Any application for further pre-emptive directions should be accompanied by updated advice from independent counsel as to the merits of the main proceeding.

19     Singh v Brar, above n 5, at [95]–[96], citing Harre v Clarke [2014] NZHC 2533.

20     Singh v Brar, above n 5, at [104].

21     At [120]–[127].

22     At [136(e)].

[27]   For instance, Mr Brar claims $155,324 from the trust, assuming the plaintiffs would pay scale costs of $34,048 personally. But if the plaintiffs were indemnified, they would also be entitled to have the trust pay any costs awarded against them. The total burden to the trust could exceed $250,000, just for the interlocutory application which resulted in consent orders.23 That is contrary to the rationale of the order of Walker J, and no further direction was sought by either party. In addition, the costs of the substantive proceeding are unknown.

[28]   It will be remembered that the trust is a charity with its funds derived primarily from donations from devotees. I note the comment in New Zealand Māori Council v Foulkes that “every dollar paid in trustees’ expenses is a dollar denied to beneficiaries”.24 No doubt this was also at the forefront of Walker J’s assessment when determining the Beddoe application when she made the order set out above.

[29]   Two further points are relevant to indemnification. First, Mr Brar did not seek a Beddoe order or directions before proceeding with his opposition to the application. Secondly, in his notice of opposition, it is stated that Mr Brar agreed to “not pay his legal costs related to his defence of the substantive proceeding, or this application, from the funds of the Trust” despite the fact he “believes that he is entitled to his legal costs in this proceeding, and the substantive proceeding, being paid out of the Trust’s funds”. It is not clear why he has departed from that agreement.

[30]   Nonetheless, it is difficult to determine whether Mr Brar should be indemnified from the trust at this early stage. There is insufficient information available to determine accurately whether Mr Brar was acting in the best interests of the trust by opposing the application. He claims to have “successfully opposed” a receiver being appointed which he says has saved the trust money. However, whether this was in the best interests of the trust remains a live issue, especially in light of the legal fees associated with the application and its opposition. Further, because the application resulted in agreement on an interim basis at least, and because that occurred before the first defendant made submissions, I did not have an opportunity to make any factual

23     I note that Mr Brar’s actual costs appear at first glance excessive, being double the actual costs claimed by the plaintiffs. The plaintiffs’ actual costs also appear to be high for such an application.

24     New Zealand Māori Council v Foulkes [2015] NZHC 489 at [31], cited in Butterfield v Public Trust [2017] NZCA 367, [2017] NZAR 1439 at [21].

findings, even preliminary ones. The plaintiffs in opposition to Mr Brar being indemnified referred only to the fact [redacted]. There are no clear indicia of reasonableness or unreasonableness in relation to Mr Brar’s actions.

[31]   Therefore, no order for costs is appropriate at this time. I reach this decision both in light of the lack of information surrounding the reasonableness of Mr Brar’s actions and the possible total cost of this application and the overall proceeding to the trust. It is more appropriate for the total burden to the trust, which the beneficiaries ultimately bear, to be determined in light of the factual findings that will be made in the substantive hearing.  In this  regard I  consider the special  reasons  exception in  r 14.8(1) of the High Court Rules 2016 is met.

What scale costs should be awarded?

Plaintiffs’ submissions

[32]   Mr Williams submitted that the plaintiffs achieved in large part what they sought by filing their application. It was a similar outcome to what they proposed in a settlement offer almost a year prior. Their key requirements, that Mr Brar was removed as trustee and an independent person appointed to supervise the trust with a suitable level of control over decision-making, were achieved. They also secured orders restraining Mr Brar from influencing or obtaining benefit from the trust and freezing orders over trust assets.

[33]   Although the plaintiffs had sought an order directing that they remain as validly appointed trustees until the resolution of case, this was met, in counsel’s submission, by the order requiring the trust to keep the plaintiffs informed of the state of the trust’s affairs by providing financial information, minutes and resolutions.

[34]   In addition, counsel contended that the first defendant’s resolution proposals did not meet the test in the High Court Rules, r 14.11 relating to settlement offers. None of the proposals met the plaintiffs’ fundamental requirements that unanimous decision-making would be mandatory should an independent trustee be appointed and Mr Brar’s appointees remain; and that Mr Brar resign as trustee unconditionally. These two elements were consistent with the orders obtained. Mr Williams also

pointed out that, as mentioned, the plaintiffs made resolution offers almost a year prior to the application that would have achieved the same outcome eventually reached.

[35]   Counsel noted that Mr Brar’s affidavit and undertakings were provided only three working days before the hearing. Added to that, offers made by Mr Brar were done so in late September 2022 with oppressive response times, after significant costs had been incurred. Mr Williams submitted that the plaintiffs were justified in refusing Mr Brar’s offers which contained unacceptable conditions. Moreover, counsel contended that the undertakings given were not sufficient in light of the Court’s view of Mr Brar’s prior conduct.

[36]   Mr Williams then argued that this conclusion is also consistent with the position with respect to costs rules that apply to trusts under common law. He argued that where a trustee is removed for misconduct, even if some of the charges are rejected, the trustee who is removed will usually be ordered to pay the costs of the applicant as well as bear their own costs. The same is correct where the trustee acts unreasonably.

[37]   In relation to scale costs, Mr Williams submitted 2B is the appropriate categorisation for memoranda, an appearance at a list call, and the sealing order. However, counsel contended that 2C is appropriate for filing the application, and preparation of submissions and the hearing bundle due to the time taken for these steps. The application involved preparing and compiling a significant supporting affidavit from one of the plaintiffs. The plaintiffs were then required to produce two affidavits in reply to respond to the defendant’s affidavit. The bundle was significant at almost 700 pages.

[38]   Five weeks after the plaintiffs filed the two reply affidavits, the defendant filed a 14 page memorandum objecting to the affidavits in reply. The plaintiffs were required to deal with the defendant’s submissions. By a minute 7 October 2022 Venning J ordered the majority of the Jaspal Singh affidavit in reply was admissible, and the entire affidavit of Delpreet Singh was admissible. This added to the workload and, in Mr William’s submission, is an example of Mr Brar’s actions adding to the

costs   of the  proceedings.     Scale costs as claimed total $23,661 plus $2,830 disbursements.

First defendant’s submissions

[39]   Mr Sidnam submitted that the plaintiffs were not the successful party. There has been no judgment on the merits. It would therefore be inappropriate for the Court to express a view of the apparent strengths or weaknesses of either party’s position when determining who should be liable for costs: F v Minister of Internal Affairs.25 The Court must focus on what was sought by the plaintiffs in their application and the outcome reached. Counsel contended that the plaintiffs were not successful in obtaining the relief sought in their application, and that the interim position agreed between the parties is markedly different from that.

[40]   In any case, Mr Sidnam argued, based on several key grounds, the application would not have succeeded. First, the trust and current trustees were not joined to the application, which is fatal. Secondly, the plaintiffs’ reasoning for the application is contrived as the application was only made when a fixture was not available until 2024. Thirdly, the undertaking provided only by the second plaintiff would have been insufficient to underpin the injunction sought. Fourthly, the plaintiffs’ evidence did not pass the high bar necessary to appoint a receiver.

[41]   Regarding the eventual outcome, Mr Sidnam submitted that the order seeking to restrain Mr Brar from exercising any powers over or obtaining benefit from the trust was unnecessary in light of the plaintiffs’ application for a receiver. The same was true of the second order seeking the plaintiffs be treated as validly appointed trustees until resolution of the substantive proceeding because this order was abandoned at the hearing. The order seeking to direct Mr Brar to disclose financial records was unnecessary as he had already indicated in his statement of opposition that he would do so. It was provided on 22 July 2022 and updated 6 October 2022.

25     F v Minister of Internal Affairs [2013] NZHC 2117. The first defendant also refers to Maehl v Auckland Council [2017] NZHC 1902.

[42]   Fourthly, the plaintiffs’ final order sought appointment of a receiver to administer the trust until further order of the Court, following resolution of the substantive proceeding. The consent orders made do not provide for the appointment of a receiver, but rather an independent trustee, who has specific powers that do not amount to powers of administration. An independent trustee also costs the trust less than a receiver – a significant consideration for any entity, but more particularly a charitable trust.

[43]   Mr Sidnam contended that the first defendant was successful in his opposition. While Mr Brar resigned as a trustee, this was not sought by the plaintiffs in their application, and the first defendant was successful in his opposition to the reinstatement of the plaintiffs as trustees and to the appointment of a receiver to the trust. Mr Sidnam also argued that a without prejudice save as to costs offer, if close to the value or benefit of a judgment made, may be taken into account in fixing costs. He submitted that the written proposals made by the first defendant in January 2022, which was ignored by the plaintiffs until March 2022, addressed the appointment of an independent auditor to audit the trust’s accounts. The further proposal made on  22 September 2022 was very close to the consent orders made.

[44]   Mr Sidnam contended that this application can be properly categorised as 2C. The application, supported by multiple affidavits and exhibits, ran to over 330 pages. The issues required to be considered in opposing the application were numerous and required extensive research. Scale costs as claimed total $33,938 plus $110 in disbursements.

Legal principles

[45]   Rule 14.2(1)(a) provides that “the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds”. However, determining which party achieved success in litigation is within the discretion of the Court.26 There are two competing lines of authority in New Zealand. The first is the “realistic appraisal” approach where the Court takes account of how much time had been spent dealing with each of the issues and any other relevant matters in order to

26     See High Court Rules 2016, r 14.1(1).

do justice to both sides in the circumstances of the case.27    Success or failure is assessed by a realistic appraisal of the end result.28

[46]   The second line of authority holds that “partial success is still success”.29 A party that is successful as to some of its claims does not fail simply because others failed, but reduced costs may reflect the extent of the failure.30 The second line of authority is more prominent, but the “realistic appraisal” approach has not been overruled and it remains within the discretion of the Judge to apply it where justice requires.31

[47]   If a party makes a Calderbank offer and the opposing party, rejecting the offer, receives a less beneficial outcome at trial, the party who made the offer may receive costs (reversing the usual principle that the successful party receives costs).32 The offer must be in writing and expressly stated to be without prejudice as to costs.33 However, the effect of such an offer on costs is within the discretion of the Court.34

Discussion

[48]   My finding above in relation to indemnity costs renders this issue moot. For completeness I address several relevant points. Mr Brar argued that in “successfully opposing” the application for a receiver he has saved the trust money because an independent trustee is more cost-effective. He has not provided any evidence in support of that claim. It is also relevant that the plaintiffs’ motivation in applying for a receiver was their concern that the then trustees might carry out Mr Brar’s directions.

[49]   Another consideration as to success is Mr Brar’s undertakings on 13 October that he would not be paid a salary from the trust, would not use the trust vehicle and would not make any disposal of trust assets. In contrast, the order granted prevents

27     See Packing In Ltd (in liq) v Chilcott (2003) 16 PRNZ 869 (CA).

28 At [6].

29     See Water Guard NZ Ltd v Midgen Enterprises Ltd [2017] NZCA 36; and Weaver v Auckland Council [2017] NZCA 330.

30     Weaver v Auckland Council, above n 36, at [26].

31     See Middeldorp v Avondale Jockey Club Inc [2021] NZCA 238, leave to appeal declined

Middledorp v Avondale Jockey Club Inc [2021] NZSC 117.

32     See rr 14.10–14.11.

33     Rule 14.10.

34     Rule 14.11(1).

Mr Brar from receiving a salary, using trust assets or having any control over the trust until the resolution of substantive proceedings. This was quite different to what Mr Brar had sought. I also agree with the plaintiffs that their application for an order directing they remain as validly appointed trustees was not crucial to the overall application. The objective behind the order was met by the requirement that the trust keep the plaintiffs informed by providing financial information, minutes and resolutions, along with the orders removing Mr Brar’s control over the trust.

[50]   On the other hand, the agreement ultimately reached was one each parties’ offers were not too distant from. For instance, Mr Brar had offered to remove the founding trustee clauses from the trust deed, which would remove his powers and require consensus decision making among the remaining trustees and the agreed to independent trustee. That offer went some way towards what the plaintiffs were seeking to achieve with their application. There was also the offer to have Court monitoring orders over the trust and to not dispose of assets (excluding cash) without the leave of the Court, alongside an independent trustee being required to approve expenditure over $5,000 for capital costs and $1,000 for operating costs.

[51]   Regarding scale costs, taking the application, the settlement offers, and the orders as a whole, it seems clear that the plaintiffs succeeded in preventing Mr Brar from being able to affect trust affairs. In contrast, Mr Brar had consistently proposed positions that were less than that objective. For example, his proposal that he would “step down” as trustee until [redacted] but would resume or be reappointed either if [redacted] (offers of 22 September, 13 October and 14 October) or [redacted].35 The order made prevents Mr Brar from being reappointed until after substantive proceedings are completed, which in any case will follow [redacted].

[52]   Either way, as foreshadowed, the question of success is moot until the question of indemnification can be resolved because if Mr Brar is permitted to be indemnified, he will be entitled to reimbursement of any costs against him. In that case, whether scale costs are awarded or whether they lie where they fall, makes little difference because the trust would pay regardless. Accordingly, in summary, and despite my

35     Proposal in Brar affidavit of 13 October.

earlier preliminary conclusions regarding the plaintiffs, as the proceedings are merely adjourned, it is difficult to see how a costs award in favour of any party is appropriate at this juncture.

Decision

[53]All costs issues are reserved.

Harvey J

Addendum

[54]Parts of this judgment have been redacted to comply with a suppression order.