Van Heeren v Hermans

[2023] NZHC 1941

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-1839

[2023] NZHC 1941

UNDER

the Trusts Act 2019

IN THE MATTER

of an application under s 133 of the Trusts Act 2019

BETWEEN

ALEXANDER PIETER VAN HEEREN and BEATTIE RICKMAN TRUSTEE

COMPANY LIMITED as trustees of the Huka Trust

Applicants

AND

JOHANNA ALIDA MARIE HERMANS

First respondent

ALEXANDER PIETER VAN HEEREN

Second respondent

Hearing:

On the papers

Counsel:

K E Cornegé for applicants

R C Knight, M D Arthur and E G Littlewood for first respondent M D O’Brien KC and S D Williams for second respondent

Date of judgment:

25 July 2023

JUDGMENT OF JAGOSE J

[Costs]

This judgment was delivered by me on 25 July 2023 at 11.00am. Pursuant to Rule 11.5 of the High Court Rules.

…………………………

Registrar/Deputy Registrar

Counsel/Solicitors:
Mark O’Brien KC, Auckland

Daisy Williams, Barrister, Auckland Ross Knight, Barrister, Auckland Tompkins Wake, Hamilton | Auckland Chapman Tripp, Auckland

Fee Langstone, Auckland K3 Legal Limited, Auckland

VAN HEEREN v HERMANS - Costs [2023] NZHC 1941 [25 July 2023]

[1]                 My 23 June 2023 judgment — dismissing the trustees’ application for leave to commence a proceeding for orders under s 133 of the Trusts Act 2019, to give effect to aspects of a mutually-agreed final accounting between Mr van Heeren and the estate of the late Michael David Kidd,1 by way of originating application — reserved costs for Ms Hermans to claim,2 observing:3

In my preliminary view — from what I presently know, and particularly given likely pt 18 proceedings to come, and the various prospective claims to the trust property — costs should lie where they fall or fell in preference to the unsuccessful trustees bearing any additional costs liability to be met from the trust property.

[2]                 Ms Hermans claims 2B costs (including of her application for costs, but uplifted to band C for her substantive opposition) and disbursements amounting to

$14,201.50, largely on the basis she was put to unnecessary expense in opposing the trustees’ procedurally inappropriate originating application,4 particularly absent any indication the substantive proceeding is to be pursued. She seeks Mr van Heeren bear those costs as the sought disposition from the trust is contended to be in breach of his duties as trustee.

[3]                 While not specifying any intention to issue substantive proceedings, the trustees resist all points. Preferring my preliminary view, to meet settlement’s terms, they propose any costs nonetheless payable to Ms Hermans be ordered paid from amounts held on behalf of the trust in its solicitors’ trust account. Mr van Heeren resists personal liability as effectively predetermining the (im)propriety of his conduct, notwithstanding the settlement requiring his support and the trust deed affording his indemnity as trustee.

[4]                 I do not consider Ms Hermans’ participation was such as reasonably required “a comparatively large amount of time” for step 23; “a normal amount of time is considered reasonable” meaning band B applies throughout. Neither do I consider costs should be awarded on this costs application; such is exceptional in following the

1      van Heeren v Hermans [2023] NZHC 1557 at [5] and [24].

2 At [26].

3 At [25].

4      At [14]–[15].

event,5 and coordinate authority is conflicting.6 And — particularly as I did not decide the Kidd estate’s application to intervene, which will be for determination in any substantive proceeding7 — nor will I allow her costs on opposing it.

[5]                 With those deductions, I conclude the trustees should be liable to pay 2B scale costs to Ms Hermans in the amount of $7,767.50 and the remaining $110 disbursement. Without any determination of Mr van Heeren’s involvement, there is no basis for his personal liability.

[6]                 I therefore order the trustees pay Ms Hermans $7,877.50 in costs and disbursements from amounts held on behalf of the trust in its solicitors’ trust account.

—Jagose J

5      Strata Title Administration Ltd v Body Corporate Administration Ltd [2014] NZCA 96 at [10]– [14]; Hojsgaard v Chief Executive of Land Information New Zealand [2019] NZCA 84, [2019] 2 NZLR 864 at [130].

6      David Bullock and Julian Long “Costs of costs applications” [2014] NZLJ 348.

7      van Heeren v Hermans, above n 1, at [16].