Sutton v Sutton

[2023] NZHC 2493

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2021-419-001

[2023] NZHC 2493

UNDER

Part 18 High Court Rules, sections 51 and 68

Trustee Act 1956

IN THE MATTER OF

Breach of trust, appointment of independent trustee, directions

BETWEEN

ALAN MICHAEL CORNELIS SUTTON

First Plaintiff

AND

MARK WILLIAM SUTTON

Second Plaintiff

AND

MICHAEL HOWARTH SUTTON

First Defendant

AND

O’SHEAS TRUSTEES (SUTTON) LIMITED

Second Defendant

Hearing:	On the papers at Auckland
Judgment:	6 September 2023

JUDGMENT OF POWELL J

[Costs]

This judgment was delivered by me on 6 September 2023 at 11.00 am pursuant to

R 11.5 of the High Court Rules

…………………..

Registrar/Deputy Registrar

ALAN MICHAEL CORNELIS SUTTON v MARK WILLIAM SUTTON [2023] NZHC 2493 [6 September 2023]

[1]    These proceedings under the Trustee Act 1956 were discontinued by the plaintiffs 10 days prior to the trial. It is not in dispute that pursuant to r 15.23 of the High Court Rules 2016:

Unless the defendant otherwise agrees or the Court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[2]    The plaintiffs were legally-aided and the defendants do not seek to argue that exceptional circumstances exist for the purposes of s 45(2) of the Legal Services Act 2011 (“the LSA”) so as to obtain an order for costs directly against the plaintiffs. Instead, an order is sought pursuant to s 45(5) of the LSA which provides:

If, because of this section, no order for costs is made against the aided person, an order may be made specifying what order for costs would have been made against that person with respect to the proceedings if the section had not affected that person’s liability.

[3]    In this case the defendants seek an order that, together with disbursements in the sum of $280.00:

(a)scale costs on a 2B basis, uplifted by 50 per cent, which they calculate to be $34,774.50, would have been ordered, or

(b)alternatively, and at the very least, costs on a 2B basis in the sum of

$23,183 would have been awarded.

[4]The order sought is opposed by the plaintiffs.

The position of the plaintiffs

[5]    Mr Depledge, on behalf of the plaintiffs, submits that the presumption on costs in the case of a discontinuance is displaced in this case. Mr Depledge acknowledges that the discontinuance was filed after receipt of the defendants’ submissions, which the plaintiffs conceded raised “jurisdictional issues” which meant that “the matter had to be approached differently”. However, Mr Depledge also submits that there were a range of practical issues that made proceeding to hearing inexpedient, and also notes

that the plaintiffs had COVID-19 in the weeks leading up to the hearing and had not been well at the time the discontinuance was filed.

[6]    In the event that costs are found to be payable, Mr Depledge submits that increased costs should not be ordered “as this case was not so hopeless as to warrant an increase, nor was the plaintiffs’ conduct in the course of the litigation unreasonable”.

[7]    Mr Depledge also takes issue with the defendants’ calculation of the 2B costs sought and further submits that preparation (item 32) includes the preparation of written submissions such that a separate claim for the preparation of written submissions is inappropriate. As a result, Mr Depledge submits that 2B scale costs should be $18,642 rather than the $23,183 claimed by the defendants. A disbursement of $50 for NZLS Library charges is also challenged.

Discussion

[8]    Having considered the submissions of the parties I am satisfied that costs would have been ordered had the plaintiffs not been legally-aided. It is clear from the plaintiffs’ own submissions in relation to costs that the plaintiffs had belatedly realised they faced significant issues at trial and I conclude costs would therefore have been appropriate on the discontinuance for the purposes of s 45(5) of the LSA.

[9]    As copies of the substantive submissions prepared by the parties have not been filed or otherwise been made available in relation to the costs application it is difficult to assess the magnitude of the issues that arose in relation to the plaintiffs’ case. I therefore have insufficient information to conclude that r 14.6(3) of the High Court Rules 2016 is engaged such that increased costs would properly have been payable. Instead, I conclude that costs on a 2B basis without further uplift would have been appropriate.

[10]   With regard to the quantum of those costs I accept the plaintiffs’ submission that preparation in terms of Item 32 properly includes preparation of written

submissions and agree that the total costs payable on a 2B basis would therefore be

$18,642.1

[11]   Finally, I cannot see any basis for the plaintiffs to challenge any of the disbursements claimed by the defendants including the NZLS Library disbursement which is, in any event, so minor that it does not warrant further investigation.

Decision

[12]   Pursuant to s 45(5) of the Legal Services Act 2011 I make an order that the plaintiffs would have been ordered to pay the defendants $18,642 costs together with disbursements of $280 had the plaintiffs not been legally-aided.

Powell J

1      The calculation of the total costs, on a 2B basis, stated in the defendants’ memorandum is incorrect. The correct total of the defendants’ sought-after 2B costs is $22,227.   Subtracting $22,227 from

$3,585 (the defendants’ separate costs for the preparation of written submissions), gives $18,642.