Ah Chong v Ah Chong

[2017] NZHC 278

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2016-404-003278

[2017] NZHC 278

BETWEEN

KENNY AH CHONG

Plaintiff

AND

FAASALU ESETA AH CHONG

First Defendant

AIARAISA CHU-SING (also known as AIALAISA TUFUGA (nee AH CHONG))

Second Defendant

Hearing:	[On the Papers]
Counsel:	P Amaranathan for the Plaintiff J A Gray for the Defendants
Judgment:	28 February 2017

JUDGMENT OF EDWARDS J

[re Costs]

This judgment was delivered by Justice Edwards on 28 February 2017 at 11.00 am, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

AH CHONG v AH CHONG [2017] NZHC 278 [28 February 2017]

Solicitors:    Rice Craig, Papakura, Auckland Insight Legal Solicitors, Warkworth

[1]                 Both the plaintiff and the defendants seek an order of costs on the plaintiff’s discontinuance of this proceeding.

Relevant background

[2]                 The parties to the proceeding are family members. In 2014 the plaintiff commenced separate proceedings against the defendants claiming a constructive trust over property owned by the defendants. The parties reached a settlement of that proceeding with the terms recorded in a deed signed by the parties in August 2016. The terms of the settlement provided for the sale of the property.

[3]                 The property did not sell at auction, and in November 2016 the plaintiff offered to purchase the property. The defendants refused to execute a sale and purchase agreement. The plaintiff commenced summary judgment proceedings against the defendants in December 2016 claiming that the defendants’ refusal to sign the sale and purchase agreement was in breach of the settlement deed. The defendants contended that the plaintiff was proceeding on a misinterpretation of the settlement deed.

[4]                 The defendants executed the sale and purchase agreement on 4 January 2017. The proceedings were subsequently served on the defendants on 31 January 2017. Settlement under the sale and purchase agreement was 9 February 2017.

[5]                 The summary judgment application was withdrawn and the proceedings discontinued on 14 February 2017. The plaintiff served a copy of the notice of discontinuance the same day. The defendants filed a notice of opposition and affidavits in opposition the following day on 15 February 2017.

[6]                 The plaintiff seeks costs and disbursements in the sum of $4,413.60. That comprises $3,063.60 for actual legal costs (being less than scale costs calculated on a schedule 2B basis) and $1,350 for the filing fee.

[7]                 The defendants oppose an award of costs to the plaintiff, and seek costs on a schedule 2B basis.

Costs decision

[8]                 Rule 15.23 provides for costs on a discontinuance of proceedings. It sets a presumption that the plaintiff will pay costs to the defendant. The presumption is designed to give a certain and predictable outcome unless the Court finds there are circumstances which make it just and equitable that it should not apply.

[9]                 The plaintiff claims costs on the grounds that the defendants breached the deed of settlement and the issuing of proceedings was reasonable in the circumstances. He says that the defendants essentially agreed to the relief sought and he should therefore be awarded costs.

[10]              Generally, the Court will not consider the underlying merits of the respective cases when considering costs upon a discontinuance of proceedings. That is the position in this case. In light of an apparent dispute about the interpretation of the settlement deed, I am unable to determine whether there was, in fact, a breach.

[11]              Furthermore, the proceedings were served a number of weeks after the defendants signed the sale and purchase agreement. It is not clear that the defendants’ actions were in response to proceedings being filed in those circumstances.

[12]              However, the defendants’ notice of opposition and affidavits in opposition were filed a day after the notice of discontinuance on 15 February 2017. I do not accept that that step was necessary in order to protect against a possible deferment of the settlement date. The key dispute between the parties was resolved when the defendants signed the sale and purchase agreement on 4 January 2017, and at the very latest when settlement occurred on 9 February 2017. There was no need to file affidavits and a notice of opposition after 9 February 2017, and certainly not after a notice of discontinuance had been filed and served. In those circumstances, I do not consider it just and equitable that the presumption in r 15.23 should apply.

[13]              In all the circumstances, I consider the only reasonable outcome is to let costs lie where they fall. I decline both applications for costs.

Edwards J