EDEN REFUGE TRUST and ORS v HOHEPA and ORS HC AK CIV-2003-404-000539

EDEN REFUGE TRUST and ORS v HOHEPA and ORS HC AK CIV-2003-404-000539

Given the unchallenged and confirmed factual findings of dishonest conduct by the second defendant, his third party claim against insurers was without merit; coupled with late discovery, failure to accept a reasonable settlement and misleading assertions about a costs agreement, his conduct unjustifiably increased...

Source-derived case information.

Citation
openlaw-c8b6451d_615b_4afc_930b_8b7771e899d4.pdf
Parties
Plaintiff (first): Eden Refuge Trust; Plaintiff (second): Joanne Lydia Maletino; Plaintiff (third): Callum MacDonald; Plaintiff (fourth): Attorney-General; Defendant (first): Charles Hohepa; Defendant (second): Charles Fletcher; Third Party: Lloyds of London; Third Party: Markel (Australia) Pty Ltd; Third Party: American Home Assurance Company
Court
High Court
Jurisdiction
New Zealand
Judgment Date
12 April 2012
Procedural Posture
Civil (trusts/fiduciary/insurance) / Costs Hearing and Judgment (third Party Indemnity Costs)
Outcome
Application by third party insurers granted in part: increased costs and disbursements awarded relating to the discontinued third party claim; indemnity costs awarded for the costs hearing; interest awarded on costs
Legal Topics
Dishonest Assistance, Knowing Receipt, Breach of Trust, Insurance Fraud/dishonesty Exclusion, Increased Costs, Indemnity Costs, Discontinuance
Trusts Fiduciary Duty Civil Procedure Insurance Law Costs Dishonest Assistance Knowing Receipt Breach of Trust +4 more

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Parties

Eden Refuge Trust

Plaintiff (first)

Joanne Lydia Maletino

Plaintiff (second)

Callum MacDonald

Plaintiff (third)

Attorney-General

Plaintiff (fourth)

Charles Hohepa

Defendant (first)

Charles Fletcher

Defendant (second)

Lloyds of London

Third Party

Markel (Australia) Pty Ltd

Third Party

American Home Assurance Company

Third Party

Procedural Posture

Civil (trusts/fiduciary/insurance) / Costs Hearing and Judgment (third Party Indemnity Costs)

  1. 1 Whether the insurer third parties validly declined indemnity under the policy fraud/dishonesty exclusion and whether the second defendant's third party claim against them lacked merit
  2. 2 Whether the second defendant's conduct (late discovery, failure to answer interrogatories, pursuing an unmeritorious claim, refusal of a settlement) justified an award of increased costs under r 48C(3)(b)
  3. 3 Whether the second defendant's conduct in relation to the costs dispute warranted indemnity costs under r 48C(4)

Ratio Decidendi

Given the unchallenged and confirmed factual findings of dishonest conduct by the second defendant, his third party claim against insurers was without merit; coupled with late discovery, failure to accept a reasonable settlement and misleading assertions about a costs agreement, his conduct unjustifiably increased the insurers' expense, justifying a 75% uplift on category 2B scale costs (to $49,560) plus disbursements, and indemnity costs of $63,383.15 for the costs hearing together with interest and reasonable disbursements.

Court Disposition

Application by third party insurers granted in part: increased costs and disbursements awarded relating to the discontinued third party claim; indemnity costs awarded for the costs hearing; interest awarded on costs

Orders

  • Increased costs in relation to the claim against the third parties awarded to the third parties in the sum of NZD 49,560 (75% uplift on category 2B scale costs of NZD 28,320)
  • Disbursements relating to the claim against the third parties awarded to the third parties in the sum of NZD 17,453.45