Taylor v Vernon - [2024] NZHC 1483

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-1350

[2024] NZHC 1483

UNDER the High Court Rules 2016, Part 18

IN THE MATTER OF

declarations of a constructive trust

BETWEEN

DIANNE FAYE TAYLOR

Plaintiff

AND

SCOTT FRANCIS VERNON

First Defendant

SCOTT VERNON and HORIZON HURSTMERE TRUSTEE LIMITED

as trustees of the Scott F R Trust Second Defendants

SCOTT VERNON and HORIZON HURSTMERE TRUSTEE LIMITED
as Trustees of the Horizon Hurstmere Trust Third Defendants

HORIZON THORNES TRUST LIMITED
as trustees of the Horizon Thornes Trust Fourth Defendant

SCOTT VERNON and HORIZON HURSTMERE TRUSTEE LIMITED

as Trustees of the Horizon Family Trust Fifth Defendants

On the papers: 6 June 2024

Counsel:

Jan McCartney KC/John Cox for the Plaintiff

Vivienne Crawshaw KC/Felicity Monteiro for the First Defendant Adam Ross KC/Nick Frith for the Second to Fifth Defendants

Judgment:

6 June 2024

TAYLOR v VERNON [2024] NZHC 1483 [6 June 2024]

COSTS JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 6 June 2024 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

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

TABLE OF CONTENTS

Paragraph No.

Relevant background [3]

Ms Taylor’s position [14]

Stay applications [14]
Leave application [19]

Defendant’s position [20]

Costs on the leave application  [22]
Defendant’s costs on the original statement of claim  [26]
The stay applications  [28]
Effect of the new causes of action in the stay application                 [30]
Costs on costs memoranda  [31]

Result [32]

Orders [33]

Solicitors:
Rennie Cox (John Cox / Anne Paterson), Auckland, for the Plaintiff
Wilson Harle (Felicity Monteiro / Portia Baine), Auckland, for the 1st Defendant
MinterEllisonRuddWatts (Nicholas Frith / Alex Church), Auckland, for the 2nd to 5th Defendants

Copy for:
Jan McCartney KC, Auckland, for the Plaintiff
Vivienne Crawshaw KC / Samantha M Wilson, Hobson Chambers, Auckland, for the 1st Defendant Adam Ross KC, Shortland Chambers, Auckland, for the Second to Fifth Defendants

[1] Ms McCartney has filed submissions in relation to costs dated 21 December 2023. Counsel for the defendants first filed a joint memorandum in response, dated 24 January 2024. Ms McCartney has filed a reply dated 1 February 2024.

[2]The costs in issue relate to two interlocutory applications:

(a)the defendants’ stay application;

(b)the plaintiff’s application for leave to file an amended statement of claim.

Relevant background

[3] On 8 June 2023, Ms Taylor applied in the Family Court for orders for division of relationship property. At the same time, she applied to transfer the proceedings to the High Court. On 13 June 2023, Ms Taylor applied to the High Court for orders declaring the property held by the second to fifth defendants is subject to a constructive trust in favour of Ms Taylor as beneficiary.

[4] On 5 July 2023, the defendants filed stay applications in this proceeding. The stay applications were on the grounds, in summary, that Ms Taylor’s claim was the subject to two contracting-out agreements (COAs) which prevent claims being brought in equity.…

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 Taylor v Vernon

Details

AGLC: Taylor v Vernon [2024] NZHC 1483
Case: [2024] NZHC 1483
Decision Date: 6 June 2024

CaseChat Overview and Summary

The case of Taylor v Vernon involves Dianne Faye Taylor suing Scott Francis Vernon and others over claims of a constructive trust. The defendants contested the jurisdiction of the High Court and sought to stay the proceedings, arguing that the claims were subject to contracting-out agreements (COAs) that barred the claims in equity. Taylor subsequently sought leave to amend her statement of claim to include new causes of action related to the alleged fraudulent cancellation of the COAs. The case raised significant issues about the jurisdiction, the validity of the COAs, and the appropriate allocation of costs between the parties.

The court had to decide several legal issues, including whether the stay applications were justified, whether leave to amend the statement of claim was necessary and if so, whether it should be granted, and the appropriate allocation of costs between the parties. The court also had to consider the effect of the new causes of action on the stay applications and whether any costs associated with these applications should be awarded. The court was required to weigh the principles of justice, efficiency, and the proper allocation of litigation costs in reaching its decision.

In its judgment, the court found that the stay applications were not bound to fail and that the merits of the stay applications remained undetermined. The court held that the transfer of the proceedings from the Family Court to the High Court, while ultimately occurring, was not inevitable and involved a proper exercise of discretion by the Family Court judge. The court also found that leave to amend the statement of claim was not inevitable and that the application involved a proper weighing of the relevant factors. The court ruled that rule 7.77(8) of the High Court Rules 2016 applied, meaning that costs occasioned by the original pleading and the application for leave should lie where they fall. The court categorised the costs as 2B, reflecting the nature of the interlocutory applications. The court ordered that costs should lie where they fell for the stay applications and the costs memoranda, as the stay applications were undetermined and overtaken by the transfer of proceedings. The court awarded costs on a 2B basis to Taylor for her leave application, reduced by 25%, and to the defendants for their statements of defence and joint memoranda.

In summary, the court's decision emphasised the importance of proper judicial discretion in transferring proceedings and granting leave to amend pleadings. The court rejected the notion that certain outcomes were inevitable and found that the defendants were entitled to costs for their successful arguments. The court also ruled that the new causes of action did not justify an uplift in costs and that the stay applications were not sufficiently meritorious to warrant increased costs for the plaintiff.

Orders