VICTORIA MARGARET MCEVEDY AND MICHAEL THOMAS MCEVEDY AND MICHAEL THOMAS MCEVEDY and BENJAMIN WILLIAM MCALPINE TOTHILL s AND CATHERINE MCEVEDY and ALEXANDRA RUTHERFORD s AND BENJAMIN WILLIAM MCALPINE TOTHILL AND THE...

[2024] NZHC 2902

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-583

[2024] NZHC 2902

BETWEEN

VICTORIA MARGARET MCEVEDY

Plaintiff

AND

MICHAEL THOMAS MCEVEDY

First Defendant

AND

MICHAEL THOMAS MCEVEDY and BENJAMIN WILLIAM MCALPINE TOTHILL

Second Defendants

AND

CATHERINE MCEVEDY and ALEXANDRA RUTHERFORD

Third Defendants

AND

BENJAMIN WILLIAM MCALPINE TOTHILL

Fourth Defendant

AND

THE PARTNERSHIP OF DUNCAN COTTERILL

Fifth Defendant

Hearing:

On the papers

Counsel:

M D Arthur for the Plaintiff

G J Ryan for the First and Third Defendants

A Gaborieau for the Second and Fourth Defendants P McKinnon for the Fifth Defendant

Judgment:

7 October 2024

JUDGMENT OF HARLAND J

(as to costs associated with application under r 11.10 (slip rule) by defendants)

MCEVEDY v MCEVEDY [2024] NZHC 2902 [7 October 2024]

Introduction

[1]    The defendants were unsuccessful in their application under r 11.10 (the slip rule) of the High Court Rules 2016 (the Rules) to correct [83] of my decision in McEvedy v McEvedy1 (the slip rule judgment).2 The plaintiff now applies for costs and disbursements of $5,162 under r 14.2(1)(a) of the Rules.

[2]    I have decided to allow the plaintiff’s application for costs. This judgment sets out my reasons for doing so.

The slip rule judgment

[3]On 21 December 2023, I issued a judgment determining:

(a)        an application by the defendants for security for costs against the plaintiff; and

(b)        an application by the plaintiff for preservation orders in relation to a family trust.

[4]    I granted the security for costs application and rejected the preservation order application. In determining the preservation order application, I stated the following:3

[83] Further, I am satisfied that the first defendant is taking a responsible approach to these proceedings. He has advised the Court, via his counsel, that he will not be drawing on his loan in the meantime until these proceedings are resolved but, further, the amount of the loan concerned, contrary to the plaintiff’s contention, will not completely dissipate the Trust fund even if it was to be drawn down.

(emphasis added).

[5]    Prior to determining the slip rule application, I obtained the Court transcript of the part of the hearing relevant to the issue highlighted in [83] of my judgment. I referred to this in the slip rule judgment. The relevant portion of the transcript is as follows:4

1      McEvedy v McEvedy [2023] NZHC 3875.

2      McEvedy v McEvedy [2024] NZHC 2314 [Slip rule judgment].

3      McEvedy v McEvedy, above n 1.

4 Slip rule judgment, above n 2, at [28].

A. … Now in relation to the loan, the debt owing back to Mr McEvedy, that is recorded there under non-current liabilities, settlors advance MT McEvedy 233,960 and you’ll see in the previous year your Honour that it was 287,585 and if we went back through previous accounts and I won’t do that unless your Honour wants me to, but if we went back through previous accounts, we would see that there is a gradual reduction in that loan and the reason for that is that Mr McEvedy outlines this in his evidence that he essentially has been for some years, he’s been retired for some years, been receiving what he quaintly recalls – calls perhaps an allowance from the Trust and the way this is done is, of course he’s an income beneficiary so he’s receiving the income but the income has - of course it fluctuates and it hasn’t been sufficient to sustain the allowance the trustees have deemed is appropriate to pay to Mr McEvedy. So what’s happened is, he’s paid, I think it’s $8,000 a month and there’s a wash-up at the end when the accounts are done and to the degree that the income that the Trust has earned in that year is not sufficient to cover the allowance that has been paid to him, the rest of it is debited from his settlor’s advance account. Does that make sense your Honour?

Q.    Absolutely.

A. So essentially he’s been paid by accommodation of income and reduction of debt.

Q.    Yes, so that’s why it’s different each year?

A.    Correct, yes.

Q. So it’s not him making demand necessarily on it during the year, it’s the wash-up at the end of the year?

A.    Exactly your Honour, yes, yes.

Q.    So not seeking to access extra funds for anything else?

A.    Correct.

Q.    No.

A. And that’s why we say it’s not capital and this is the fundamental difference I think between the plaintiff and the defendants in this case is the plaintiff, you’ll hear a lot I think when you hear the plaintiff’s case about this idea that the plaintiff believes that capital has been depleted and the defendant’s response to that is no it’s not because capital, capital is the net assets of the Trust. It’s the assets of the Trust less its liabilities and so the reduction of the settlor’s advance account is not the payment of capital to Mr McEvedy at all.

Q.    And the 8,000 is to enable him to live a comfortable life in his retirement?

A. Essentially your Honour yes. Yes. And he relies on it, he says in his evidence he relies on that. He relies on that allowance to give him a reasonable – a comfortable life. Now there’s just before we move off this page –

Q. Well can I just take that idea a bit further and it might be crystal ball gazing and you might say I’m not able to do this, but say, for example, there was an improvement in the income that could be received and that it was sufficient to meet the 8,000, is it the position that there wouldn’t be a call on the loan?

A. I imagine, I mean that would be a decision for the Trustees your Honour.

Q.    Yes.

A. But I imagine it would be, yes, yes.

Q. So the current understanding you have is that it’s the 8,000 per month that’s the desire is to continue with that rather than to continue making drawings over or making requests for a repayment of the loan over and above that?

A. Correct. That would be my understanding your Honour, yes that’s the position which as I understand it historically has been fairly settled. There has been an allowance paid at a very, you know, at a, at that level.

[6]    The defendants submitted that my finding at [83] (above at [4]) was in error, contending that no such advice was given to the Court. Accordingly, they submitted that para [83] should be amended as follows:

[83] Further, I am satisfied that the first defendant is taking a responsible approach to these proceedings. He has advised the Court, via his counsel, that he will not draw from the trust more than $8,000 per month (whether by way of distribution of income or repayment of any loan) be drawing on his loan in

the meantime until these proceedings are resolved and but, further, the amount of the loan concerned, contrary to the plaintiff’s contention, will not completely dissipate the Trust fund even if it was to be drawn down.

(emphasis added)

[7]The plaintiff opposed the application and submitted that:

(a)        the slip rule does not extend to reasons for the judgment;

(b)        the passage in question was not an error and recorded the Court’s understanding of the submissions advanced; and

(c)        even if there was power to amend as suggested, the requested deletion sought to avoid the assurance that the monthly allowance would be limited to $8,000, such assurance having been relied on by the Court as one of the four reasons given to refuse the plaintiff’s application.

[8]    I accepted the plaintiff’s submission that the “assurance” in [83] was not an accidental slip in my judgment, but, instead, formed “part of the reasons of the judgment”.5 I found the reference to “judgment” in r 11.10 has a narrow meaning and referred to rr 11.1 and 11.8 of the Rules, as well as r 8 of the Court of Appeal (Civil) Rules 2005, where the slip rule in that Court expressly covers “the reasons for any judgment” as well as the “judgment or order”. Because there is no reference to reasons in r 11.10, I was satisfied “judgment” does not encompass reasons under that provision.

[9]    I referred to cases where the slip rule was applied correctly as a means of fixing clerical errors or mistakes6 as well as Jagose J’s finding in Bhullar v Auckland Co- Operative Taxi Society Ltd that the slip rule cannot be used “to improve on, or to permit second thoughts about, the judgment obtained”.7

[10]   I referred to the Court of Appeal’s ruling in Nakhla v McCarthy that “there can be no challenge to the right of a judge to ensure by correction that the transcript of the reasons for the order… is not wrong”, with that Court noting that it is “equally clear” that judges cannot and must not attempt to “modify or change the effect of” the order once it has been formally made and perfected.8 At paras [45] and [46] of my judgment I said:9

[45]   …To remove the statement at [83] may amount to a modification of my reasoning and further, Nakhla v McCarthy was not subject to [the Rules].

[46]   The distinction in r 11.1 means, pursuant to r 11.10(1), corrections may be made only to a “judgment” or “order”. It does not permit the correction of “reasons”. I agree with the plaintiff that any residual doubt is removed by comparing the distinction expressly made in other rules of pt 11 of [the Rules] and the Court of Appeal (Civil) Rules. For example, r 11.8(1) of [the Rules] states “A Judge or the Registrar may give a judgment or deliver the reasons for a judgment…”. Rule 8 of the Court of Appeal (Civil) Rules provides:

5      Nakhla v McCarthy [1978] 1 NZLR 291 (CA) at 296; R v Ireland (1970) 126 CLR 321 at 330, referred to with approval in Attorney-General v Siemer [2022] NZHC 917 at [52]–[53]; Rawlinson v Rice (1998) 12 PRNZ 639 (HC).

6      Proprietors of Wakatu v Curnrow HC Nelson CIV-2014-442-27, 11 November 2014; Kilduff v Tower Insurance Ltd [2018] NZHC 1243 at [9].

7      Bhullar v Auckland Co-Operative Taxi Society Ltd [2018] NZHC 1375 at [3].

8      Nakhla v McCarthy, above n 5, at 296.

9      Slip rule judgment, above n 2.

8 Correction of accidental slip or omission

(1)This rule applies if—

(a)   any judgment or order contains, or the reasons for any judgment or order contain, a clerical mistake or an error arising from an accidental slip or omission, whether or not made by an officer of the Court; or

(b)   any judgment or order is drawn up in a way that does not express what was actually decided and intended.

(2)The Court of the Registrar may correct the judgment or order or the reasons for the judgment or order on—

(a)   the Court’s or Registrar’s own initiative; or

(b)   an informal application made for that purpose.

(emphasis added)

[11]   As a result, I found there was no jurisdiction under r 11.10 of the Rules to amend [83], which formed part of the reasons for my judgment. Regarding costs, I noted that while the application was made by the defendants, the plaintiff also sought to amend the paragraph in issue.

Discussion

[12]   The plaintiff submits that costs should follow the event. She submits that, although she sought to amend [83], this was offered as an alternative in the event I accepted that an amendment to [83] was appropriate. Having reviewed the submissions, I accept this is correct.

[13]   The defendants oppose the plaintiff’s application for costs and submit that costs should lie where they fall. They highlight the discretionary nature of costs and submit there is no automatic entitlement to costs by virtue of the plaintiff’s success.10 The defendants submit that the law regarding the slip rule represents a lacuna in the Rules and the outcome in my judgment was far from an obvious one. They submit that the statement I made at [83] was not entirely accurate and that the application needed to be brought to prevent reliance on it by the plaintiff.

10     High Court Rules 2016, rr 14.1(1) and 14.2(1)(a).

[14] The memoranda filed in relation to costs on this application highlight further disagreements between the parties about their respective interpretations of para [83]. So far as this application for costs is concerned, it relates to the application brought by the defendants when one option might have been to appeal the judgment so far as it related to the preservation order application and para [83], or another option might have been to do nothing and see whether any future problems in fact arose which would engage the need for another court to consider either the meaning of para [83] or a new application for preservation orders. Other options may also have been available to the defendants.

[15]   It is also not appropriate for me to comment on whether my slip rule judgment clarifies the issue about reasons for judgment not being able to be addressed via the slip rule or not, or whether the outcome in my judgment was far from obvious.

[16]   I therefore elect to deal with this matter in a conventional way based on the principle outlined in r 14.2(1)(a) of the Rules. I see no reason why costs should not follow the event and the reasonableness of the costs and disbursements sought is not challenged.

[17]The application for costs and disbursements as sought is granted.

Result

[18]The defendants are ordered to pay the plaintiff the claimed costs in the sum of

$5,019 and disbursements of $143.

Harland J