Albrechtsen v Albrechtsen

[2014] NZHC 1254

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2013-470-000499 [2014] NZHC 1254

BETWEEN

BARRY NEIL ALBRECHTSEN

Plaintiff

AND

DIANNE MARIE ALBRECHTSEN First Defendant

ELIZABETH MARY LAMBERT Second Defendant

Hearing:	On the papers
Appearances:	A H Brown for plaintiff First and second defendants in person
Judgment:	5 June 2014

JUDGMENT OF LANG J [on costs]

This judgment was delivered by me on 5 June 2014 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

ALBRECHTSEN v ALBRECHTSEN [2014] NZHC 1254 [5 June 2014]

[1]      On 30 April 2014, I delivered a judgment in which I made orders relating to the B N & D M Albrechtsen Family Trust (“the Trust”).1    These included orders removing Mr and Mrs Albrechtsen as trustees, and appointing an independent trustee to replace them.  Although I had heard submissions in relation to costs, I indicated I would deal with that issue in a separate judgment. This I now do.

Background

[2]      The factual background to the proceeding is set out in my earlier judgment.2

The important  feature  for present  purposes  is  that  counsel  for  Mrs Albrechtsen signed a consent memorandum on 20 September 2013 in which Mrs Albrechtsen agreed  to  vacate the  property owned  by the Trust  on  1  November 2013.    Mrs Albrechtsen accepts that her counsel was acting in accordance with her instructions when he signed the memorandum on her behalf.  The Court made consent orders in terms of that memorandum.

[3]      Mrs Albrechtsen subsequently refused to honour the agreement set out in the consent memorandum.  This resulted in Mr Albrechtsen being put to the expense of obtaining a warrant for possession of the property, and the Sheriff was then required to evict Mrs Albrechtsen from it.   Subsequently, on 18 February 2014, Mrs Albrechtsen  purported  to  file  an  application  seeking  an  order  permitting  her  to resume occupation of the property.  All of these issues were ultimately resolved by the judgment I delivered on 30 April 2014.

[4]      Given this background, counsel for Mr Albrechtsen seeks an order requiring Mrs Albrechtsen to pay indemnity or increased costs.  She points out that her client has now incurred legal fees and disbursements amounting to more than $40,000 by virtue of Mrs Albrechtsen’s actions.   Alternatively, counsel for Mrs Albrechtsen seeks an order requiring her client’s costs to be paid from the assets of the Trust. Costs on a Category 2B basis would amount to $21,293.

[5]      Mrs Albrechtsen opposes any order for costs being made.  She submits that costs should lie where they fall or, alternatively, that any adverse award of costs

1      Albrechtsen v Albrechtsen [2014] NZHC 872.

should be paid from her share of the assets of the Trust when those assets are ultimately distributed.

Decision

[6]      I am satisfied that Mr Albrechtsen is entitled to an award of costs because of the expense to which he has been put by Mrs Albrechtsen’s actions.  By a narrow margin, however, I take the view that an award of indemnity costs would not be appropriate.  Her decision to remain in the property can properly be categorised as flagrant and deliberate disregard of the Court’s orders, and could warrant an award of

indemnity costs.3    I am also mindful, however, that both parties ultimately agreed

that the interests of the Trust were best served by their mutual decision to step down as trustees.

[7]      I am nevertheless satisfied that an award of increased costs is justified by virtue of the fact that Mrs Albrechtsen failed to comply with orders of the Court to which she had earlier consented.4     Her actions are such that an uplift of approximately 50 per cent is appropriate.   I would therefore ordinarily direct that Mrs Albrechtsen should pay costs in the sum of $30,000.00 to Mr Albrechtsen.  In the present case, however, Mrs Albrechtsen plainly has no means to meet such an award.   The order  would therefore  amount to  a hollow exercise of the Court’s discretion.

[8]      It is clear, however, that Mr Albrechtsen has incurred the costs acting not on his own behalf but on behalf of the Trust.  In effect, he has taken the necessary steps to preserve and regain possession of the Trust’s only asset for the benefit of all the beneficiaries.  I therefore direct that, when the Trust is in a position to make such a payment, it shall pay the sum of $30,000.00 to Mr Albrechtsen in order to partially

reimburse him in respect of the costs he has incurred in this proceeding.

Lang J

3      High Court Rules, r 14(4)(b).

Solicitors:

Lamb Bain Laubscher
Counsel:

A H Brown, Tauranga

Copy to:
Defendants