IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE	
CIV 2018-443-72
[2020] NZHC 2428	

IN THE MATTER	of the Judicial Review Procedure Act 2016
and the Declaratory Judgments Act 1908 and Part 5 of the High Court Rules and in the
inherent jurisdiction of the Court	
BETWEEN	M A PAYNE TRUSTEE LIMITED as trustee of the M A PAYNE FAMILY TRUST
First Plaintiff

DOREEN EDNA MALONEY-COLES,
RAYMOND JOHN KURTH AND JAMES PETER FISHER
Second Plaintiffs	
AND	NEW PLYMOUTH FAMILY COURT
First Defendant

JOHN PATRICK LARMER AND SHEREE
ANN PAYNE as trustees of the BERNARD AND NANCY PAYNE FAMILY TRUST
Second Defendants

SHEREE ANN PAYNE
Third Defendant

STUART TRUNDLE AND NEIL ROBERT
MAULDER as executors and trustees in the estate of MARK ANDREW PAYNE
Fourth Defendants NICHOLSONS
Fifth Defendants

NANCY PAYNE
Sixth Defendant	

M A PAYNE TRUSTEE LTD & ORS v NEW PLYMOUTH FAMILY COURT & ORS [2020] NZHC 2428
[17 September 2020]

On the papers		
Counsel:	M Phillipps for Plaintiffs
I D Matheson for Second, Third and Sixth Defendants	
Judgment:	17 September 2020	

COSTS JUDGMENT OF ELLIS J

[1]	In late May last year, I heard and declined an application by the plaintiffs to set aside consent orders made in the Family Court in 2003.1 The orders reflected a settlement of claims arising from the terms of Mark Payne’s will, brought under the Family Protection Act 1955. The claims had been made following Mark’s death, both by Mark’s parents (Bernard and Nancy Payne) and by his de facto partner, Sheree. The effect of the orders was that the residue of Mark’s estate—including his large farm and other dairy-related assets—was transferred from the MA Payne Family Trust (the MAPFT) to a Trust settled for the benefit of Bernard, Nancy, Sheree, and her two children.

[2]	In my decision I found that there were no grounds to set aside those consent orders: no breach of natural justice, no jurisdictional error, and no doubt that leaving the orders undisturbed, 16 years after the event, was in the interests of justice. I concluded my judgment by saying:

[114]	2B costs should follow the event in the usual way. If they cannot be agreed memoranda may be filed.

[3]	Before making that order, I had not heard specifically from the parties on the question of costs; it merely reflected the costs categorisation that had been agreed by the parties at the time of the first case management conference.

1	MA Payne Trustee Ltd v New Plymouth Family Court [2019] NZHC 1215. While the claim was advanced as a judicial review, it presented in form—and was dealt with by me—as an application to set aside.

[4]	In January this year, counsel for the second, third and sixth defendants filed a memorandum both advising that the issue of costs had not been resolved and foreshadowing an application to the Court.2 The memorandum referred to post- judgment events that had given rise to a Police investigation, and flagged the possibility of an application for “full indemnity costs”.

[5]	Next, in June 2020, counsel for those same defendants filed a further memorandum advising both that there was a disagreement as to the quantification of the 2B costs3 and that they were seeking indemnity costs of $104,006.54 plus disbursements of $2,246.75. Alternatively, they sought whatever increased costs the Court might be willing to order.

The claim for indemnity costs

[6]	The claim for indemnity costs is based, in particular, on r 14.6(4)(a) of the High Court Rules, which provides:

The court may order a party to pay indemnity costs if—

(a)	the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or

[7]	The defendants justify their claim for indemnity costs on a number of grounds.

[8]	First, and in terms of the issue of indemnity costs not being raised at the hearing before me, they say:

4.      The issue of whether costs should be awarded in excess of scale was not even [in] issue before the Court at the time Your Honour’s decision was delivered. A Court cannot rule on an issue not before it and certainly not before hearing from the parties. …

…

9.   The events giving rise to the application for costs in excess of scale   have largely occurred after the conclusion of the hearing. In particular, the conduct of the Plaintiffs relating to the “Anthony incident” [the threats]

2	There is no issue of costs in relation to the other defendants.
3	The plaintiffs’ 2B costs calculation comes to $31,220; the defendants’ 2B costs calculation comes to $55,081. Both sides have annexed tables showing their calculations, and the plaintiffs have included a comparison table in which they explain the differences.

occurred in September 2019. In addition, the submissions relating to the lack of merit in the Plaintiffs’ claims are, at least partly, based on findings by Your Honour contained within the decision. They are not matters which could have been addressed at the conclusion of the hearing.

[9]	Of these post-hearing events, they refer, in particular, to an incident in September last year where Sheree was allegedly threatened at gunpoint by an associate (named “Anthony”) of the plaintiff Raymond Kurth who claimed to be a “hit man”. The defendants say that Anthony showed Sheree copies of court documents from the proceedings and told Sheree both that she was being watched and that the manner of her death was yet to be determined. Anthony had a gun in his car, which he showed her.

[10]	After the incident was reported to police, charges were laid against Mr Kurth and “Anthony” (Tony Wade). It is not presently known whether (and how) those charges have been resolved.

[11]	The defendants say:

(a)	this incident demonstrates that the plaintiffs brought the proceedings for an improper purpose, namely to intimidate and victimise Sheree (in particular) due to historical resentments towards her; and

(b)	the threats were made to influence the negotiations about costs which were at that time in train, and are so reprehensible as to justify full indemnity costs.

[12]	As well, the defendants seek to justify indemnity costs by reference to two allegations made by the plaintiffs that, they say, were without foundation:

(a)	The allegation that the FPA claim made in 2003 was fraudulent, in breach of r 13.8 of the Lawyers: Conduct and Client Care Rules 2008. The defendants suggest that this indicates that the proceeding was brought to pressure the defendants into settling.

(b)	The allegation that the MAPFT had not been represented in the Family Court at the time the FPA proceedings were settled. At [26] of my judgment, I found this not true. The defendants now say that it was “patently obvious” that the MAPFT was so represented and the plaintiffs’ position in this respect was baseless.

[13]	The defendants refer to other flaws in the plaintiffs’ position that they say reveal fundamental error. But in my view, they are not of a kind that are out of the ordinary, in the context of a failed claim; I do not consider them further.

[14]	The defendants lastly say that 2B costs do not provide a fair contribution to costs in this proceeding because it involved multiple parties. The defendants say that the time taken to complete pre-hearing steps is greater when multiple parties are involved, and that this is not properly reflected in the 2B scale.

Discussion

[15]	I agree with the plaintiffs that I have no jurisdiction to make an award of indemnity costs. I have ruled on costs already and cannot now revisit that issue. I am unable to agree with the defendants that my costs order could be corrected as a slip rule r 11.10. Rightly or wrongly, my order did not involve a clerical mistake or accidental omission and nor does it fail to express what was intended.

[16]	Accordingly, if the defendants are dissatisfied with the costs order—or wish to contend that it was made in breach of natural justice—the proper remedial avenue is to file an appeal.

[17]	For completeness, however, I record that even if I was of a different view, I would not make an award of indemnity or increased costs here. In particular, I do not accept that post-hearing events can be relevant to the question of costs. Moreover, the specific matter of the threats made to Sheree last September was properly referred to the Police and is for them (and the criminal process) to deal with. Any suggestion that the threats were intended to influence the resolution of the question of costs is, similarly, a matter for Police. It is certainly beyond the ability of this Court to determine the truth of the allegations or to unravel the quite complex background,

which goes back years and appears to involve both players who are not parties to this litigation and disputes that are beyond the scope of the present claim.

[18]	Nor do I accept that the two “baseless” contentions referred to at [12] above would warrant increased or indemnity costs. More particularly:

(a)	the allegations of fraud were not dealt with in my judgment, because they related to the claims of knowing assistance and knowing receipt which were predicated on the plaintiffs’ success in the “judicial review” proceeding;4 and

(b)	the suggestion that the MA Payne Family Trust was not represented in the Family Court is, in my view, a minor matter.

[19]	I also observe that the claim for indemnity costs appears excessive. It was agreed and ordered at the first case management conference that the claims for knowing assistance and knowing receipt would be “parked” pending resolution of the “judicial review”. There was a mere six months between the filing and hearing of that application, which was a relatively straightforward matter; the hearing took a day. It is difficult to see how costs of over $100,000 (which, I note, appear to include some post-hearing costs) could be justified.

2B costs

[20]	I begin by noting that these costs issues are between the plaintiffs and the second, third and sixth defendants only.

[21]	There is no dispute that the relevant daily rate is $2,230. Yet the difference between the parties in terms of their respective calculations of 2B costs is significant. The defendants claim $55,081; the plaintiffs say this figure should be $31,220.

4	I record, however, that there was nothing in the material before me that would have supported the allegation of any “dishonest and fraudulent design”.

[22]	I discuss and determine the specific costs items in dispute by reference to the third schedule to the High Court Rules (as it was at the material time), and in the exercise of my discretion, below:

(a)	The defendants have made the standard 2.5 day claim for preparing a list of documents on discovery. I agree with the plaintiffs that this is inapt. As the Court file makes clear, discovery was done on a limited and informal basis, at the defendants’ suggestion. Indeed, Mr Matheson advised the Court that “the Second and Third Defendants have nothing in the way of discoverable documents”.5 No formal lists of documents were prepared. I allow a generous one day for this.

(b)	The defendants have also claimed 4.5 days for inspection. This comprises three separate 1.5 day claims for inspection of the documents held by the plaintiffs, the first defendant, and the fifth defendant. I accept that there may have been more involved in inspection for the second, third and sixth defendants than there was in discovery. But I regard 4.5 days as excessive. Two days will be allowed.

(c)	The defendants claim a total of 1.2 days for filing two interlocutory applications (an application for security for costs and an application for the release of funds). Only a combined, single, application (relating to both matters) was filed. I allow 0.6 of a day.

(d)	Although the plaintiffs say that only 2 days is permitted for the preparation of affidavits (under item 30) under the Schedule, at the time of and before the hearing the allocation was 2.5 days, as claimed by the defendants. The claim for 2.5 days is allowed.

(e)	So too, with the 3 days claimed for the preparation for the hearing. That was the correct time allocation under item 33 at the relevant time and the defendants’ claim in that regard is allowed.

5	At that stage the sixth defendant had not been joined, but there is nothing to suggest that she was later likely to have possessed any relevant documents or that she was required to give any kind of discovery.

(f)	The one day claimed for an application made to the District Court to inspect the file does not relate to a step in the proceedings and is disallowed.

(g)	The 1.5 days claimed for responding to a post-hearing minute issued by me giving counsel the opportunity to make submissions on a discrete point is excessive. I allow half a day.

(h)	The 0.4 days claimed for “receiving appearances from first defendant and Trundle in ongoing communications” does not relate to a step in the proceeding and is disallowed.

(i)	In light of the outcome of this judgment I do not allow time for preparing submissions on costs.

Result

[23]	After adding the items in the previous paragraph to those items that are agreed, the total amount of 2B costs payable by the plaintiffs to the second, third and sixth defendants is $37,241. I make an order accordingly.

[24]	The claim for indemnity costs is declined, for the reasons I have given.

Rebecca Ellis J

Solicitors:
Vicki Ammundsen Trust Law, Auckland for Plaintiffs
RMY Legal, New Plymouth for Second, Third and Sixth Defendants