Smith v Hammonds Trustees Limited

[2025] NZHC 2646

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2023-488-000055

[2025] NZHC 2646

BETWEEN

ROWLAND McLAREN SMITH and

DOUGLAS McLAREN SMITH as trustees of the A.McL. SMITH FAMILY TRUST

First Plaintiffs

MATTHEW ERIC McLAREN SMITH
Second Plaintiff

AND

HAMMONDS TRUSTEES LIMITED

Defendant

Hearing:	On the papers
Appearances:	J L Bates for the Plaintiffs J Keating for the Defendant
Judgment:	11 September 2025

COSTS JUDGMENT OF ASSOCIATE JUDGE COGSWELL

This judgment was delivered by me on 11 September 2025 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

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

Solicitors:

Brown & Bates Lawyers, Napier Kennedys, Auckland

SMITH v HAMMONDS TRUSTEES LTD [2025] NZHC 2646 [11 September 2025]

Introduction

[1]        On 21 July 2025 the Court made consent orders under which a deed of appointment of further discretionary beneficiaries dated 9 March 2022 was set aside. The defendant consented to the orders sought.

[2]        The question of costs was to be resolved by the Court following the exchange of submissions, which have now been received.

The plaintiffs’ position

[3]        The plaintiffs say that they were wholly successful in the proceedings, and that in the ordinary way and in accordance with High Court Rule 14.2, they are entitled to costs.

[4]They seek their costs, including the costs of a senior counsel opinion.

[5]        The plaintiffs say that the defendant took a partisan approach and defended the proceedings, requiring further steps to be taken by them.

[6]        The plaintiffs say that there was no need for the defendant to file a defence to the claim. They say that they invited the defendant to file an appearance reserving rights including the question of costs. Instead, they say, the defendant denied that the act or decision to enter into the deed was not reasonably open to the original trustees.

[7]        The plaintiffs seek costs in accordance with costs category 2B and disbursements including the costs of counsel’s opinion.

[8]        It is correct that, albeit by consent, ultimately, the relief the plaintiffs sought was granted.

The defendant’s position

[9]        The defendant says that the proceedings were not necessary, as it had indicated that it would resign as a trustee and consent to the setting aside of the deed in issue.

[10]      It says that it notified the plaintiffs of its position before proceedings were issued, but that the plaintiffs proceeded to issue and then serve the proceedings in the face of that knowledge.

[11]      The defendant says that it unconditionally agreed to resign as trustee and consent to set aside the deed, which made the plaintiffs’ action in the proceeding unnecessary.

[12]      The defendant’s position is that the interests of justice do not support a costs order in favour of the plaintiffs because the proceeding was unnecessary from the outset and the plaintiff’s decision to serve it was without reasonable justification.

Discussion

[13]       I do not consider that the plaintiffs were wrong in commencing the proceedings and advancing them to the stage where the position was reached under which the relief they sought was granted.

[14]      The defendant filed a defence to the claim which specifically denied the plaintiffs’ claims for relief of their pleaded causes of action. The defendant does not address in submissions why it took that step instead of filing a notice of appearance reserving rights.

[15]      It follows from that that the plaintiffs were entitled to consider the proceedings defended.

[16]      The defendant attached correspondence which was on a without prejudice basis. I am not prepared to consider that correspondence due to the fact that the privilege in that correspondence is jointly held with the plaintiffs, and the plaintiffs have not waived the privilege.

[17]      Even if I was prepared to consider the without prejudice correspondence, it is clear that the offer of resignation was conditional and not acceptable to the plaintiffs and occurred after the proceeding were filed.

[18]      Standing back and considering the matter in the round, I consider that the defendant’s election to defend the proceedings entitles the plaintiffs to an order for costs.

[19]      Accordingly, I order that the defendant is to pay the plaintiffs costs on a Category 2 basis in the total sum of $15,535.00. The defendant is to pay the plaintiffs’ disbursements in the sum of $7,582.50, which sum includes the disbursement for their senior counsel’s opinion.

Associate Judge Cogswell