NEW ZEALAND GUARDIAN TRUST COY LTD V PORA AND ANOR HC AK CIV 2005-404-5900

NEW ZEALAND GUARDIAN TRUST COY LTD V PORA AND ANOR HC AK CIV 2005-404-5900 16 April 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2005-404-5900BETWEEN THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED Plaintiff AND NOOMATAITI PORA First Defendant AND PERPETUAL TRUST LIMITED Second Defendant Judgment: 16 April 2007 at 12.00COSTS JUDGMENT OF WINKELMANN JThis judgment was delivered by Justice Winkelmann on 16 April 2007 at 12.00 pursuant to r 540(4) of the High Court Rules 1985.Solicitors: Mr D Clark, Wilson McKay, Solicitors, Auckland Frost & Sutcliffe, Solicitors, Auckland Mr R Sinisa, Sinisa Law, Solicitors, Auckland Mr K Muir, Morgan Coakle, Solicitors, Auckland Price Voulk McCarthy, Solicitors, Manukau City Brennan & Brown-Haysom, Solicitors, Manukau City Mr D Smith, Solicitor, Auckland[1] On 31 October 2006 I issued judgment in this proceeding. The relevant factual background is set out at paragraphs [1] and [2] of the judgment as follows:[1] The plaintiff, New Zealand Guardian Trust (NZGT), is the property manager of the affairs of Ms Judy Pora. In 1974, when she was 7 years old, Judy Pora was struck by a car and was left with permanent physical and intellectual impairment. Over the ensuing 32 year period she has been cared for by various members of her family. Until recently those family members have been unpaid in respect of that care. In 2002 the Accident Compensation Corporation agreed to make payment for attendant care compensation in respect of Judy for the period 22 February 1975 to 22 March 2002. Following the appointment of NZGT as Judy's property manager, and following further negotiations and discussions between NZGT and ACC, ACC made a lump sum payment to NZGT of $1,466,499. [2] NZGT now seeks declaration as to whether it is entitled to hold and retain that amount for the benefit of Judy or whether any of various claimants are entitled to some or all of that lump sum compensation.[2] I made a declaration that the fund was held on trust for those people who provided care to Judy Pora during the period 28 February 1975 to 22 March 2002, and gave directions as to the proportions of the fund payable to each beneficiary. Judy Pora's principal caregivers during that period of time were her parents, both now deceased. Accordingly, the effect of these directions was that the principal beneficiaries of the fund were the estates of Judy Pora's parents, the funds passing in turn to Judy Pora, Judy Pora's siblings, and some grandchildren. [3] There is general agreement that the parties' reasonable costs should be met from the fund, under the provisions of r 48C(4)(c), but the defendants say the plaintiff's costs are excessive so that some reduction is appropriate. [4] The plaintiff seeks an amount of $55,909.07, which includes a filing fee of $1,700. The defendants express particular concern in relation to the last two accounts of the plaintiff's solicitor for trial preparation and attendance at trial which the defendants say are excessive in total. The defendants point to other questions raised by the accounts as follows: a) The amount charged for the pleadings. The defendants say that the pleadings were not complex.b) With respect to an account dated 28 April 2006, the defendants refer the Court to minutes of Associate Judge Abbott of 30 November 2005 and 4 April 2006, where it was left to Price Voulk McCarthy to advance the appointment of Perpetual Trust as administrator of Mrs Pora's estate, yet the plaintiff has charged for attendances related to that. [5] The defendants say that the plaintiff acted in two capacities. As the holder of the fund it is accepted that it was necessary for it to seek clarification as to how the fund should be dealt with. But it also acted as Judy Pora's property manager in advancing her personal interest in retaining the entire fund. It is said to be in the second capacity that much of the effort was undertaken by the plaintiff. As costs should follow the event, so the plaintiff's claim for costs should be discounted to the extent that additional cost was incurred in advocating for the retention of the fund by Judy Pora. [6] In the round, the defendants submit that an allowance of 50% over and above the fees charged by the second defendant, Perpetual Trust Limited, (i.e. $25,177.76) should be granted. The balance of the costs should be borne by Judy Pora from her share of the funds once they have been disbursed through her parents' estates. [7] Having received the defendants' memorandum, I requested that the plaintiff reply to the defendants' criticism as to the level of the costs claimed by it. Plaintiff's counsel has now filed a memorandum explaining that in relation to the fees billed over the months June and July 2006 (total fees $35,650 for trial preparation and trial) the time charged falls into four categories as follows: a) discovery and inspection of ACC documentation and compilation and preparation of agreed bundles for trial; b) research and preparation of argument for trial including further evidence and submissions; c) correspondence and contact with the defendants' counsel prior to trial;d) attendance at trial. [8] As to the two particular criticisms raised, the plaintiff says in relation to the pleadings that it required considerable work in order to establish exactly what type of proceeding needed to be issued, setting out the substantive matters which were at issue, and requesting orders which would appropriately deal with the matters at issue. The preparation of the proceedings also involved filing and service of an ex- parte application for directions to service which, given the numbers involved in the greater Pora family, was also a time consuming process. [9] As to attendances by the plaintiff's solicitor relating to the role of Perpetual Trust Limited in the proceeding, counsel for the plaintiff submits that it was the plaintiff who nominated Perpetual Trust Limited as administrator, and it was suggested by the plaintiff that Mr Muir should act on Perpetual Trust Limited's behalf. All of that was facilitated by the plaintiff with assistance from its legal advisors. The work that was undertaken and charged during this period therefore was properly incurred.Analysis[10] I accept that this is a case in which all parties are entitled to indemnity costs under the provisions of r 48C(4)(c) which provides that the Court may order a party to pay indemnity costs if "costs are payable from a fund, the party claiming costs is a necessary party to the proceeding affecting the fund, and the party claiming costs has acted reasonably in the proceeding". [11] I do not accept the defendants' contention that the plaintiff should not be entitled to full indemnity costs because part of the argument advanced for the plaintiff was directed at the fund being retained for Judy Pora's use. In circumstances where it was known that the defendants would be arguing that the fund should be held for the caregivers during the relevant period, it was necessary that the interests of Ms Pora be represented and advanced before this Court, and the plaintiff was the natural party to fulfil that role. Indeed, if the plaintiff had notfulfilled that role, the Court would likely have appointed counsel to represent Judy Pora's interests, and those costs would clearly have been met out of the fund. [12] I also accept the plaintiff's submission that the costs charged by it were reasonable. It is of note that the total costs claimed by the plaintiff are less than the total claimed by the defendants. As the defendants concede, they were able to act co-operatively with each other. But the plaintiff was the "stage manager" of the entire proceedings. It took on the responsibility of the commencement of the proceeding. It was principally responsible for collating the information which was necessary to be placed before this Court, and in particular the contents of the ACC file. The plaintiff also undertook a great deal of the analysis of the relevant legislation which over the almost 30 year period was a significant task, given the nature of the particular provisions involved. [13] In all the circumstances therefore I am satisfied that the plaintiff is entitled to indemnity costs in the sum of $52,905.32 together with disbursements allowed by the Registrar, those fees being reasonably incurred. [14] In relation to the defendants' costs, there is nothing on the material before me to suggest that the defendants' costs were other than reasonably incurred. Accordingly, the defendants are entitled to indemnity costs in the amounts set out in the schedule A to the plaintiff's memorandum of 27 November 2006. ______________________________ Winkelmann J