Talbot v Talbot
[2017] NZHC 832
•28 April 2017
IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY
CIV-2015-476-000037 [2017] NZHC 832
UNDER the Family Protection Act 1955 BETWEEN
JILLIAN KATE TALBOT Plaintiff
AND
GRAHAM EDWIN LAWRENCE TALBOT (AS EXECUTOR FOR THE WILL OF EDWIN KELLAND TALBOT) First Defendant
AND
GRAHAM EDWIN LAWRENCE TALBOT (AS EXECUTOR FOR THE WILL OF PAMELA LISBETH TALBOT) Second Defendant
Hearing: Dealt with on the papers Counsel:
E J Horner and L D Tidey for Plaintiff
A J Shaw for First and Second DefendantsJ Ormsby and H T Shaw for GEL Talbot (in his personal capacity)
RLD Paul for R L Cashin
Judgment:
28 April 2017
JUDGMENT OF GENDALL J As to Costs
Introduction
[1] This judgment relates to the quantum of costs to be awarded against the plaintiff in this proceeding.
[2] On 6 October 2016 I issued a judgment in this proceeding dismissing an application by the plaintiff Jillian Kate Talbot (Jillian) for further provision under the Family Protection Act 1955 (the Act) which she was seeking from the estates of her
late parents. Jillian’s unsuccessful application had been opposed by her brother
TALBOT v TALBOT) [2017] NZHC 832 [28 April 2017]
Graham Edwin Lawrence Talbot (Graham) in his personal capacity and by her sister Rachel Louise Cashin (Rachel). The named first and second defendant in this proceeding Graham, in his capacity as executor of the estates of his late mother and father took the position that the estates would simply abide the decision of this Court.
[3] In my 6 October 2016 substantive decision in this proceeding I reserved costs so counsel could make further submissions on that issue.
[4] Those further submissions were made and then, on 23 February 2017, I
issued a costs judgment which specifically made the following orders:
(a) As to Graham’s personal costs as a beneficiary in the estates, Jillian is to pay reasonable costs on the basis of Graham’s claimed category 2B scale costs, together with an appropriate uplift, and his reasonable disbursements.
(b) As to Rachel’s costs, Jillian is to pay on an indemnity basis Rachel’s
reasonable costs and disbursements with respect to this proceeding.
(c) As to Graham’s costs and disbursements in his capacity as executor of the estates (as the first and second defendant), Jillian is to pay the reasonable indemnity costs and disbursements of the estates appropriately incurred with respect to the proceeding.
[5] In making the costs orders outlined at para [4] above I made directions regarding the filing of further submissions by counsel relating to the quantum of the awards to be made.
[6] Subsequently, counsel have now filed additional memoranda directed at these issues of quantum. These memoranda are:
(a) Memorandum dated 1 March 2017 from counsel for Graham personally as a beneficiary in the estates.
(b) Memorandum dated 7 March 2017 from counsel for Rachel.
(c) Memorandum dated 8 March 2017 from counsel for Graham in his
capacity as executor of his parents’ estates.
(d)Memorandum dated 16 March 2017 in reply from counsel for the plaintiff.
(e) Memorandum dated 21 March 2017 in response from counsel for
Graham in his personal capacity as a beneficiary in the estates.
(f) Memorandum dated 22 March 2017 in response from counsel for
Rachel.
[7] I have now had an opportunity to consider those memoranda together with all the other material filed in this proceeding and give this decision relating to the quantum of costs to be paid here by Jillian. In doing so it is useful to address each costs claim in turn, which I now do.
Costs claim by Graham in his personal capacity as a beneficiary in the estate.
[8] The final costs claim from Graham in his personal capacity seeks $63,499.25. In addition, a disbursement being a Ministry of Justice filing fee of $110 is sought.
[9] So far as this costs claim is concerned as I have noted above, the costs sought by Graham are calculated on a category 2B scale basis together with various uplifts on certain matters outlined in a detailed costs schedule. These uplifts amount to
50 per cent on a number of matters including certain discovery issues, and preparation for and appearance at the hearing of this matter for two counsel. It is my view that these 50 per cent uplifts are entirely justified here.
[10] In addition however, Graham seeks a 100 per cent uplift on a discovery item. This relates to an item labelled “Item 21”, “Inspection of Documents” on the basis of what he maintains is Jillian’s various inadequacies with her discovery and her non- compliance with discovery orders which were made. On this particular aspect,
however, I am of the view that only a 50 per cent uplift on this “Inspection of Documents” category is justified here. As McGechan on Procedure at para HR14.6.02(01) states in relation to questions of increased costs:
(1) The correct approach
(a) The Court uplifts from scale, it is not a question of awarding a percentage of actual costs…
Step 4: the applicant for costs should step back and look at the costs award it could be entitled to at this point. If it considers it can argue for additional costs under r 14.6(3)(b) it should do so, but any increase above 50 per cent on the costs produced by steps 1 and 2 (applying the scale) is unlikely, given that the daily recovery rate is two-thirds of the daily rate considered reasonable for the particular proceeding.
[11] Accordingly, this 100 per cent uplift on Graham’s claim for “Inspection of Documents” on a 1.5 day allocation amounting to a total of $6690 is reduced to a simple 50 per cent uplift. Accordingly, this figure is now to total $5017.50 given the reduction in the uplift of $1672.50.
[12] Taking this reduction into account the total amount due for category 2B costs with the adjusted uplift is now $61,826.75. In her submissions Ms Horner for Jillian suggested that any costs uplift for Graham here should be limited further to a maximum of only 25 per cent. In my view that is not appropriate given the particular circumstances prevailing in this case. The 50 per cent uplift I have noted above is entirely justified here.
[13] Finally, the $61,826.75 amount I note at [12] above does include a sum of
$1784 which was sought by Graham on the basis of the various memoranda filed by his counsel to resolve the issue of costs, given that this was unable to be resolved by counsel direct. No significant issue was taken with this aspect on behalf of Jillian. In addition, this Court has recognised the right to award costs for memoranda or other attendances related to the resolution of costs disputes – Tukuafu v Glenfield
Investments Ltd.1
1 Tukuafu v Glenfield Investments Limited (HC) Auckland CIV-2010-404-6628 Venning J,
29 November 2010 at [37].
[14] Overall, I am satisfied that the adjusted costs claim brought by Graham here of something in excess of $61,800 and including this $1784 claim for resolution of the costs dispute is appropriate in all the circumstances of this case.
[15] An order is now made that Jillian is to pay to Graham costs in this proceeding on a category 2B partially uplifted basis of $61,826.75 together with the Ministry of Justice filing fee disbursement of $110, making a total of $61,936.75.
Costs claim by Rachel
[16] As I have noted at para [4](b) above, in my costs judgment of 23 February
2017 I determined that Rachel was entitled to an award of proper indemnity costs and disbursements for this proceeding to be paid by Jillian.
[17] From the memoranda that have been filed it is apparent that the actual indemnity costs Rachel seeks here total $70,267 (GST exclusive) together with a further $892 representing costs said to be incurred on a category 2B basis on completing memoranda relating to the costs application itself.
[18] At the outset it is clear from my earlier judgment that Rachel is entitled to an award of reasonable indemnity costs here for two reasons:
(a) First, her claim for costs related generally to the position Rachel had found herself in when she was herself making no claim under the Act and, as a residuary beneficiary in the estates, along with Jillian, she simply did not wish to be prejudiced by the main dispute which was between Jillian and Graham.
(b)Secondly, it related to Rachel’s need in being involved in the proceeding to ensure that her position as such a residuary beneficiary was not prejudiced, and therefore her legal costs needed to be met by Jillian, rather than the estates.
[19] As to the quantum of those costs sought here, Ms Paul, Rachel’s counsel confirms in her 22 March 2017 memorandum to the Court that they represent actual
costs charged to Rachel with respect to this proceeding only. She notes too that they are charged out at an hourly rate of $330 per hour. As to the hourly rate aspect, I am satisfied it is an acceptable rate for a senior practitioner having the level of experience exhibited by Ms Paul here.
[20] As to the actual time engaged, Ms Horner, Jillian’s counsel suggests that this is excessive, particularly given her contention that the main opposition to Jillian’s application before the Court was mounted by Graham in his personal capacity. It is true also, as I note above, that the costs awarded to Graham personally have ended up at a figure of $61,826.75, which is some $8500 less than Rachel’s claim here for actual costs incurred. On this aspect, however, although Rachel’s costs do appear to be reasonably high, given what might be said to be her subordinate role in opposing Jillian’s application, the fact that Graham chose to make a costs claim calculated only on a category 2B scale basis (albeit with an uplift in some areas) may well account to some degree for the difference between the respective costs claims.
[21] In the end, Rachel is clear first, that she has incurred costs of $70,267 relating solely to this proceeding and secondly, that in all the circumstances here they are reasonable. This too is in a situation where, as I have already noted, Rachel sought to ensure that her position as a residuary beneficiary in the estates was not prejudiced by Jillian’s actions and therefore she should not be out of pocket.
[22] Jillian has failed entirely in all her claims in this proceeding, a proceeding in which Rachel supported Graham in mounting a successful opposition to those claims. If, hypothetically, costs were to be met by the estates here, then first, Jillian as one of the residuary beneficiaries in any event would effectively have been responsible for one-half of Rachel’s costs, and secondly, Rachel would have been responsible to meet the other one-half personally (a situation which all parties including Jillian accepted as unfair).
[23] That said, and given also the matters I have noted at [19], [20] and [21] above, overall I am of the view that Rachel’s claim for $70,267 actual costs incurred on this proceeding must be broadly seen as proper in all the circumstances here.
[24] In addition, the further $892 sought by way of category 2B costs for completion of memoranda relating to the costs application, as was the case with Graham’s claim, is appropriate here. An award to include this amount will follow.
[25] The final position therefore is that Rachel is entitled to be reimbursed for the actual costs charged to her here by way of an award of costs against Jillian totalling
$70,267 plus $892 relating to the costs application. This makes an all up total of
$71,559. An order to this effect is now made. These costs are GST exclusive.
[26] As to this GST issue, in the costs claim advanced by counsel for Rachel, an amount sought by way of GST on the costs award was included. On the question of GST on costs, McGechan on Procedure at para HRPT14.03 states in part:
HRPt14.03 GST on costs
New Zealand Venue and Event Management Ltd v Worldwide NZ LLC
[2016] NZCA 282,…lays down these principles:
(a) Scale costs: Awards of scale costs are GST neutral. The successful party is not required to account for GST and the losing party not able to claim a GST input credit. An award of scale costs therefore should not allow GST on those costs. Thus the expression “GST neutral”.
(b) Increased costs: Increased costs represent an uplift from scale.
Nevertheless, the costs actually incurred by the successful party, including any GST component, can be a relevant consideration in
awarding increased costs. If the successful party is not able to
recover GST, it should inform the court. Otherwise the court will follow its usual practice of awarding increased costs on the basis that
the successful party is GST registered and able to recover GST.
(c) Indemnity costs: Indemnity costs aim to provide the successful party with full recovery of its actual costs. To achieve this the court must know the GST liabilities of the successful party. When awarding increased costs, the court proceeds on the basis the successful party is GST registered and entitled to a GST input credit. This approach avoids double recovery, but places, on a successful party not GST registered, the onus of informing the court of its inability to recover GST if it wants to be fully indemnified for its costs.
[27] Here, neither Rachel nor her counsel has informed the Court of any inability on her part to recover GST if she wishes to be fully indemnified for costs which have been rendered to her. As a result, the award of costs at this point is one excluding
GST. Leave is reserved however should Rachel wish to approach the Court further with regard to this GST question.
Costs claim of the estates – i.e. by Graham in his capacity as executor of the estates
[28] The estates seek an award of costs against Jillian based upon the actual costs said to be incurred in this proceeding on a time recorded basis. This is claimed as totalling $38,771. In addition, disbursements are claimed which include the following:
(a) Court filing fees $110 (b) Mileage $260
(c) Accommodation $320 (d) Courier fee $5.50
(e) Carter valuation (farm valuation) $3208.50
(f) Carter valuation (Rangitata Hut valuation) $672.75 (g) Brian Maxwell’s fees $3654.10
(h) Administration fee $40.
[29] As to the estates’ costs claim of $38,771, in my earlier costs judgment dated
23 February 2017 I made the following comments which are usefully repeated here:
[20] As to these costs, Mr Shaw, counsel for the estates, has confirmed that the estates have adopted a neutral view throughout this proceeding and they have consistently confirmed a willingness simply to abide the decision of the Court. Given that, the involvement of the estates in this proceeding, it is presumed, should only have been minor with their costs reflecting this.
[21] As to the question of those indemnity costs and disbursements, these have been detailed by Mr Shaw in his 16 December 2016 memorandum. The actual legal fees claimed, which he says are “based on time recorded”,
totalled $38,771. At first glance, this seems a surprisingly large figure, given
the comments I note at [20] above…
[22] No comment is made in her submissions by Ms Horner on the quantum of these costs and disbursements claimed for the estates. If there may be some query or challenge as to this quantum, also bearing in mind what might have been the proper role of the estates here, then that is a matter which needs to be advanced and addressed.
[30] As a result and since that 23 February 2017 costs judgment, Ms Horner for the plaintiff on 16 March 2017 filed her memorandum on behalf of the plaintiff relating to the quantum of costs to be awarded.
[31] From Ms Horner’s memorandum, it seems that issue is taken with several
matters concerning the estates’ costs claimed here. These are:
(a) The costs claimed seem high given that the estates have taken the
position of simply abiding the Court’s decision.
(b)It is said the solicitors for the estates initially defended the proceedings (presumably on behalf of Graham in his personal capacity) before later filing an amended statement of defence to simply abide the Court’s decision.
(c) The costs of the estates include some costs which should be more
properly attributed to Graham’s personal costs.
(d)Some of the costs charged, it is suggested, should be more properly categorised as costs relating to administration of the estates and not in relation to these proceedings.
(e) Lastly, it is said a large proportion of the estates’ costs appear to be related to discovery matters. Jillian contends there were considerable deficiencies in the initial discovery undertaken by the estates and it was not until some considerable “back-and-forth between counsel” took place that critical documents were discovered on behalf of the estates.
[32] As to all these matters, I repeat the comment I made earlier that, given the final position of the estates which was one simply to abide the decision of this Court, the total claim for legal costs incurred by the estate said to relate to this proceeding appear somewhat high.
[33] In his costs memorandum dated 8 March 2017, Mr Shaw, counsel for the estates provided a significant amount of detail as to the $38,771 costs breakdown sought here. In particular, he outlined attendances of Mr Walton, himself Mr Shaw and Mr Nation at Timpany Walton the solicitors to the estates.
[34] In response, Ms Horner in her costs memorandum dated 16 March 2017, made relatively brief comments at paras [20], [21] and [22] relating to certain amounts for costs claimed for the estates.
[35] Notwithstanding this material, it has been virtually impossible for me to discern which costs claimed here truly relate to the role of the estates in this proceeding as opposed to costs which might well be seen as merely estate administration costs, or indeed costs properly charged to Graham. Rather than simply endeavouring to guess an outcome, with considerable reluctance I have decided to make certain directions which follow concerning the ultimate award of costs to be made in favour of the estates. This costs matter I acknowledge has dragged on and I apologise for the need to prolong it further. The interests of justice however require that all parties must have a reasonable opportunity to be properly heard before delicate costs decisions are made.
[36] That said, the following directions are now made relating solely to the costs claim made for the estates:
(a) Counsel for the plaintiff and counsel for the estates are within the next
15 working days to liaise in an endeavour to resolve this issue.
(b)In the event that agreement cannot be reached on this aspect, then counsel for the plaintiff is to have 10 working days from that date to file and serve any memorandum she may wish directed to this issue.
(c) Counsel for the estates is then to have a period of a further 10 working days from that date to file and serve any memorandum in response.
(d)Those memoranda are then to be referred to me and I will make a final decision on the quantum of costs to be awarded to the estates based upon the material then before the Court.
[37] As to the claim for disbursements by the estates which I have outlined above at para [28] and which total $8270.85, Ms Horner for the plaintiff has made no comment or criticism regarding this claim in her memorandum of 16 March 2017. It is presumed therefore that no objection is taken to this disbursements claim.
[38] Accordingly an order is now made that Jillian is to pay to the estates (being the first and second defendants here), an amount to cover their disbursements on this proceeding totalling $8275.85.
...................................................
Gendall J
Solicitors:
Mahony Burrowes Horner, Wellington
Timpany Walton Lawyer
Wynn Williams, Christchurch
Lana Paul, Christchurch
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