Bird v Bird

First instance costs 8By its judgment of 16 August 2013, the Court ordered the respondents, Warrick, Rodney and Mr Cannington, to pay Deborah's costs of the proceedings at first instance. By their Notice of Motion, Warrick and Rodney sought a variation of the order to provide that the respondents pay 50 per cent of those costs. By his Notice of Motion, Mr Cannington sought a variation of the order to provide that Warrick and Rodney pay 50 per cent of those costs, with the three respondents to pay the remaining 50 per cent. Warrick and Rodney seek their variation on the basis that the failed Barnes v Addy claim against them was severable from the successful devastavit claim and that the former occupied more than 75 per cent of the hearing and preparation time at first instance. Mr Cannington's variation is sought on the basis that the Barnes v Addy claim, which was not pleaded against him, took in excess of 50 per cent of the hearing time at first instance. These percentages are supported by estimates in affidavits of the respective solicitors. On the other hand, Deborah's solicitor deposes that, on his calculations, 50 per cent of the 12 days upon which evidence was taken "did not touch upon nor was it directed to the Barnes & Addy claim" and that the balance was occupied with evidence relevant to both claims. 9As I have indicated above, whilst the Court has jurisdiction to vary the orders it made on 16 August 2013, considerable caution is required before there is any exercise of its discretion to do so. The effect of the decisions to which I have referred, particularly that in Atkas v Westpac, is that parties should not be allowed to argue or reargue matters that were, or were able to be, argued at the appeal hearing. The position is otherwise where at the appeal hearing the parties have requested the Court to defer consideration of an issue such as costs and the Court has agreed to do so. Where that has not occurred, a revisiting of orders may be appropriate if there was some arguably good reason for the parties not to raise a matter at the appeal hearing, for example where an Offer of Compromise or a Calderbank offer was made and it was not desired to put the evidence of it before the Court prior to judgment. 10As often happens, the parties here chose not to make submissions concerning costs at the appeal hearing, leaving it to the Court to make such orders as it considered appropriate in light of the outcome of the appeal. Furthermore, the parties did not request that they be given an opportunity at a later time to make submissions concerning costs. 11In these circumstances, I consider that the Court should decline to entertain the applications for variations of the costs orders. The position in relation to those costs orders is different from that in relation to the application for variation of the amount of the judgment as the latter was based upon the Court's misapprehension as to a specific evidentiary matter and the misapprehension was not due to the fault of the parties. 12I should note that I am not in any event persuaded by the evidence that has now been adduced that Deborah's failed Barnes v Addy claim gave rise to a severable issue, such that she should be deprived of part of her costs of the hearing at first instance. This claim appears to me to have been intertwined with her successful devastavit claim, with Warrick and Rodney's knowledge and conduct, and that of Mona, being relevant to both claims. 13This being so, there is likewise no reason that would justify variation of the costs order in the manner sought by Mr Cannington. Contrary to his contention, the Barnes v Addy claim was not clearly severable, with the result that he, as a losing party, has been properly ordered to pay the costs of the successful party of the hearing at first instance. I note that it is possible that he will recoup from Warrick and Rodney some or all of the costs which he is liable to pay to Deborah as a result of the determination of his cross-claim on remission to the Equity Division (see order (6) made on 16 August 2013).

Appeal costs 14By its judgment of 16 August 2013, this Court ordered Mr Cannington to pay Deborah's costs of the appeal and ordered Warrick and Rodney to pay 50 per cent of those costs. By his Notice of Motion, Mr Cannington seeks to have this order varied so that it provides for Warrick and Rodney to pay 50 per cent of Deborah's costs of the appeal, with the three respondents to pay the remaining 50 per cent. He contends that this is appropriate because Deborah failed on appeal in respect of a clearly severable issue (the Barnes v Addy claim) which occupied a not insignificant part of the appeal hearing time. He also says that he should not have to bear the burden of recovering from Warrick and Rodney 50 per cent of the costs payable by him to Deborah. Warrick and Rodney do not seek any variation of the order made on 16 August 2013. 15For the reasons given in [9] to [11] above, Mr Cannington's application should not be entertained. In any event, I do not consider that the order made on 16 August 2013 was inappropriate. As is reflected in the proportions of the judgment devoted to the Barnes v Addy and devastavit claims, my assessment is that the latter (upon which Mr Cannington lost) occupied most of the appeal hearing time.

Interest on damages 16The first issue between the parties in respect of interest concerns the date from which interest under s 100 of the Civil Procedure Act 2005 should be awarded. Deborah seeks it from 28 November 1996, when the executors made the first partial distribution to Mona of her legacy. However, the respondents rightly point out that interest may only be awarded under s 100 from the date upon which the relevant cause of action accrued. As I held in the judgment of 16 August 2013 at paragraph [79], when considering the respondents' Limitation Act 1969 defence, the devastavit claim accrued when any action that the executors might have been able to bring against Mona became statute barred, that is after the expiration of six years from Mona's misappropriations. 17The first misappropriations were in late 1993, with the last (of $171,773.42) occurring in consequence of the sale of the property known as "No. 161" on 28 October 1994 (see judgment of Rein J at [8]). The respondents assert that interest should run from six years after 2 December 1994 which was presumably the date of settlement of the sale of No. 161. I agree with the respondents that, as the damages to which Deborah is entitled were not assessed by reference to individual misappropriations by Mona, but by reference to an hypothetical settlement agreement between the parties, it is not appropriate to calculate interest by reference to a period running from each individual misappropriation. 18In my view, interest should be awarded from 2 December 2000 which is the date by which the cause of action in respect of all of the misappropriations had clearly arisen. I note that the Court is not concerned with whether the executors could have recovered interest from Mona. The parties chose not to agitate that on the appeal hearing. Rather, what is relevant is that, if the executors had performed their duties, the estate would have received the amount of the damages assessed in the Court's judgment of 16 August 2013 (as now to be varied) and because they did not do so the estate has been "out of pocket". For this, Deborah should be compensated, to the extent of her share in the estate, by an award of interest. 19The second issue between the parties concerning interest relates to delay. The respondents contended that Deborah should be deprived of some of her interest entitlement by reason of delay on her part. 20I do not accept this contention. The purpose of an award of interest is in essence to compensate a party for his or her loss of use of money. Even if Deborah was guilty of the delay alleged by the respondents (which she denies), that delay was not of such a character as to justify a conclusion that Deborah should not be compensated for her loss of use of the money in question.

Conclusion 21As the parties have each had some success (and lack of success) on the issues dealt with in this judgment, there should be no order as to the costs of the respondents' Notices of Motion or as to the post 16 August 2013 interest submissions and calculations. 22The following orders should be made: (1)Vary order (3) made on 16 August 2013 to substitute the amount of $122,652.35 for the amount of $188,920.25. (2)Otherwise dismiss the respondents' Notices of Motion. (3)Note that the Court declines to make any order as to the costs of the respondents' Notices of Motion or as to the post 16 August 2013 interest submissions and calculations. (4)Direct Deborah Bird to lodge with the Court, and serve on the respondents, within seven days of the date of this judgment a calculation of the interest to which she is entitled in accordance with the Court's reasons for judgment, with a view to the Court making a final order in chambers as to the amount of the judgment inclusive of interest. 23WARD JA: I agree with Macfarlan JA.

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