Ahuriri v Etheredge
[2016] NZHC 1390
•24 June 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2013-404-000514 [2016] NZHC 1390
UNDER the Property Law Act 2007 IN THE MATTER OF
an application for a division of property in kind among co-owners
BETWEEN
FRANCES ANN AHURIRI AND JOSEPH ISAAC TAHITAHI AND JACOB WIREMU TAHITAHI Plaintiffs
AND
ARINA FRANCES ETHEREDGE Defendant
Hearing: On the papers Judgment:
24 June 2016
COSTS JUDGMENT OF DUFFY J
Counsel: M J Koppens, Warkworth
D J Taylor, Hamilton
Solicitors: Dyson Smythe and Gladwell Lawyers (B J Lupton), Warkworth
A N McAllen, Hamilton
AHURIRI AND ORS v ETHEREDGE [2016] NZHC 1390 [24 June 2016]
[1] The plaintiffs were successful in their application for a division of property in kind among co-owners. In accordance with the general rule that costs follow the event, the plaintiffs seek an award of costs.1 The proceedings were categorised as being 2B by Christiansen AJ on 5 June 2013. However, the plaintiffs seek increased costs as provided for in r 14.6 of the High Court Rules. In particular, they rely upon r 14.6(3)(b)(ii)(v) and also 14.6(3)(d).
[2] The defendant opposes the application. The defendant contends that the best approach is that costs should lie where they fall as this was a case where the parties needed the assistance of the Court to establish what the partition proposal was to be, and there was no successful party as the ultimate form of the partition differs from that which the plaintiffs sought. The defendant does accept that in terms of disbursements, court hearing costs should be paid for equally. In the alternative, the defendant submits that any costs award to the plaintiffs should be calculated from February 2014 onwards. The defendant is also critical of the way in which the plaintiffs have calculated their costs application.
[3] There were two separate and distinct hearings of this proceeding. The first commenced on 18 November 2013 and ran until 27 November 2013. It was adjourned part heard after a site visit which led to a new proposal (the third option) being considered.2 There was a level of agreement between the parties on the form of the third option. After the adjournment of the hearing, the focus of both parties was on finalising the form of the third option in a way that best met their individual concerns. The second part of the hearing, which resumed on 18 August 2014 and then went for a further day on 2 October 2014, dealt with finalising the third option.
[4] I acknowledge that at the time when the parties moved their attention to the third option, this was done on a without prejudice basis.3 In this regard they were concerned to protect their original proposals should the third option prove to be unacceptable. However, once the third option came into consideration, no-one
sought to return to their original position.
1 Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305.
2 See Ahuriri judgment no 2 at [2] and [3].
3 Interim Ahuriri judgment 2 December 2013 at [3].
[5] I do not consider it fruitful to attempt to assess to what extent, if at all, the original proposals each party put forward resemble the third option, either in its embryonic state when first raised following the site visit in 2013, or later when it attained a finalised form. The short point is neither of the original proposals has been approved and implemented. Both parties abandoned their original proposals in favour of developing the third option. So, I consider the circumstances leading up to and at the time of the first hearing resulted in a neutral outcome for all parties.
[6] I have carefully considered the relevant parts of the plaintiffs’ submissions. I understand that they bear strong feelings about the initial stance taken by the defendant.4 Nonetheless, in terms of the well settled principles regarding costs I can see no basis for recognising their earlier efforts in this proceeding given that their original proposals came to nothing. Furthermore, much of the evidence I heard in the first hearing was not helpful to resolving the third option, and so this evidence
was put to the side once the focus turned in that direction. Accordingly, I consider that the appropriate outcome is for costs to lie where they fall for the period from the commencement of the proceeding until the close of the first hearing on 27 November
2013.5
[7] Work towards the third option commenced in early 2014. I consider the defendant’s alternative submission that costs be calculated from February 2014 to be reasonable. When the hearing resumed in August 2014 the third option was almost finalised. The parties were agreed on all but two aspects of it: (a) the realignment of a boundary; and (b) valuation of an occupancy interest that the defendant believed she held.6
[8] However, the resumed hearing on 18 August 2014 did not run smoothly. The outstanding matters could have been completed within the two day hearing allocation. However, the defendant applied for leave to amend her counterclaim so
that she could make new claims based on restitution/unjust enrichment. The
4 She initially demanded the house Joseph Tahitahi had built on the land be removed as it did not have the necessary local authority authorisation.
5 Much the same approach was taken in similar circumstances in Bayly v Hicks [2016] NZHC
504.
6 See Ahuriri reasons judgment 5 September 2014 at [1] and [2].
application for leave was heard the following day. Leave was refused. The background to those events is set out in the judgment I delivered on 5 September
2014 giving reasons for refusing the defendant’s application. This all necessitated a further day’s hearing time in October 2014.
[9] Despite the refusal of the application to amend the counterclaim, at the time of the final day of hearing the defendant was still shifting her position. This is noted in the final judgment I delivered.7
[10] The defendant was unsuccessful in her opposition to the plaintiffs’ stance on the two outstanding issues. Regarding the boundary realignment, the plaintiffs sought the realignment as shown in the Buckton plan (the finalised third option). This allowed for potential building sites to be included in the block of land K3A to be transferred to the plaintiffs. The defendant objected to the building sites being included in K3A. For the reasons set out in the judgment she was unsuccessful. The approved realignment was that as shown in the Buckton plan. Thus the proposal promoted by the plaintiffs was successful.
[11] By the final day of the hearing the defendant had realised her claim based on having an occupancy interest was lost. She then changed her stance on the valuation of K3A and K3B and sought to have the valuation of K3A take into account Mr Tahitahi’s home. Up until then she had been content for K3A to be valued excluding the home that Mr Tahitahi had built on land to be included in K3A. The parties had earlier agreed that this was how the valuation would be made and this
agreement had flowed through to the instructions given to the valuers.8 I was critical
of the defendant’s late change of stance.9 I rejected her approach.
[12] It follows that at the hearings in 2014 on the issues that remained to be determined by the Court, those determinations were made in favour of the plaintiffs. I am satisfied therefore that the plaintiffs were the successful parties. Further, I
consider that the late attempt by the defendant to amend her pleading, and then to
7 See judgment No. 2 1 December 2014.
8 See [22] of judgment.
9 At [27] of the judgment.
change her stance on the valuation of the K3A block reflect poorly on her. I consider that she acted unreasonably in those regards.
[13] I acknowledge that by the time the 2014 hearings had commenced the defendant had moved somewhat from her original stance, and so she deserves recognition for the extent to which she was prepared to modify her wishes. Nonetheless, I consider that on the matters that were opposed before me her stance was unreasonable and obdurate. The stance she took went beyond that of a party who simply requires assistance from the Court in resolving the partitioning of land. She attempted to backtrack as well as to alter her position in order to arrive at a decision which satisfied her concerns as much as possible. Parties in litigation are always free to attempt to achieve their desired results as much as they are able to. But, once they have committed to a certain course, they cannot at the very end of litigation attempt to effect a change of position in order to improve their circumstances beyond where their chosen course would take them, and then avoid costs if they fail to achieve their objective.
[14] The plaintiffs seek increased costs. Those are usually assessed by reference to scale costs.
[15] The cost items sought by the plaintiffs appear to omit the entitlement to claim preparation for the hearing in August 2014. Three days preparation is permitted under the scale and I consider they should be entitled to that.
[16] There was some dispute between counsel regarding the hearing time. Court records show that the actual time taken was approximately two and a quarter days. The hearing between 18 and 20 August 2014 occupied a total of two days’ hearing time. The hearing on 2 October 2014 occupied a further quarter day.
[17] Scale costs from February 2014 onwards are therefore as follows:
Item Step Date Rate 2 Time B Scale costs 11 Memorandum 13/2/2014 $1,990.00 0.4 $796.00 11 Memorandum 2/4/2014 $1,990.00 0.4 $796.00 11 Memorandum 5/5/2014 $1,990.00 0.4 $796.00 13 Appearance, case
management conference
8/5/2014 $1,990.00 0.3 $597.00 33 Preparation for hearing - $1,990.00 3 $5,970.00 34 Hearing 18/8/2014,
19/8/2014,
20/8/2014
$1,990.00 2 $3,980.00 23 Opposition to inter-
locutory application
- $1,990.00 0.6 $1,194.00 24 Written submissions to
interlocutory application
- $1,990.00 1.5 $2,985.00 34 Hearing (adjourned) 2/10/2014 $1,990.00 0.25 $497.50 11 Memorandum 15/5/2015 $1,990.00 0.4 $796.00 13 Appearance, case
management conference
20/5/2015 $1,990.00 0.3 $597.00 11 Memorandum 8/6/2015 $1,990.00 0.4 $796.00 13 Appearance, case
management conference
10/6/2015 $1,990.00 0.3 $597.00 11 Memorandum 29/6/2015 $1,990.00 0.4 $796.00 Total
$21,193.50
[18] The defendant contends that item 11 should be reduced as the memoranda filed were not for case management conferences but rather memoranda filed in the course of the proceedings. With the latter time is allocated at the discretion of the Court. The defendant also submits that allowing 0.4 days for each memoranda is excessive given the memoranda were only about a page each. However, the memoranda were necessitated by the course the proceedings took. I consider the time and effort the plaintiffs were required to spend on them warrant some recognition. I consider an appropriate recognition is to reduce the claimed sum in respect of those memoranda by 50 per cent, which brings it to costs of $398 per memorandum. This brings the total to $19,999.50.
[19] The plaintiffs seek increased costs to reflect the unreasonable stance taken by
the defendant. I have already commented that the defendant’s stance at the hearing
in 2014 went beyond what might be expected of a reasonable defendant. Further comment is warranted in the context of assessing whether to increase the award of costs.
[20] The defendant opposed the plaintiffs having the potential building sites in K3A, even though she knew there were three plaintiffs and that two of them might want to build their own dwellings on the land. She wanted the building sites to be on the block of land she was to receive (K3B) so she could access bush behind the building sites. I found she could access the bush without needing to cross the building sites, and in any event she was getting the more valuable block of land.10
[21] I found that the defendant’s change of stance on the valuation exercise suggested a desire to avoid compensating the plaintiffs once she had learned that she would obtain the more valuable block of land and she had no basis for her compensation claim.11 Earlier, the defendant had an expectation she would receive compensation for the loss of an occupation interest in the homestead on the original block of land. However, later she learnt that was lost. One of the features of a proceeding that proceeds over split hearings is that towards the end of the proceeding the parties will have a better idea of the measure of success they have achieved from
the interim judgments the Court has issued. I can understand that the knowledge gained from those judgments may tempt parties to modify their positions to advantage themselves. Here the extent to which the defendant attempted to do this exceeded what is reasonable and therefore acceptable. Accordingly, some uplift from scale costs is appropriate. I consider the appropriate uplift here to be one of
20%. Parties who unsuccessfully attempt late changes of their case increase the burden of the litigation for the opposing party. Where this occurs unreasonably such parties can expect to have higher awards of costs than scale costs ordered against them.
[22] Here the scale costs are only an approximation, given that costs are only being awarded for part of the proceeding, and so they do not fit as readily into the
10 See [19] and [20] of the judgment.
11 See [27] to [29] of the judgment.
Schedule 3 allocations. The increase better reflects the time and effort the plaintiffs
were required to undertake to meet the defendant’s unreasonable opposition.
[23] The plaintiffs are entitled to reasonable disbursements. Here they seek: Filing fee for statement of claim $1329.20
Filing defence to counterclaim $108.80
Hearing fees $14,283.60
Total $15,721.60
[24] Whilst their statement of claim did not originally set out the Court approved proposal, it commenced the proceeding and provided the foundation for the approved proposal. I therefore consider the plaintiffs are entitled to recover the filing fee in respect of the statement of claim.
[25] As plaintiffs they covered the court hearing fees. I consider they are entitled to recover all hearing fees for the period from February 2014 onwards. However, I consider that hearing fees for the 2013 hearing and earlier should be shared equally. The plaintiffs are therefore entitled to recover $8,000.00 in respect of hearing fees.12
[26] The plaintiffs seek $1820.20 in expert witness fees as a disbursement. I
consider they are entitled to this.
[27] The plaintiffs are entitled to costs of $23,999.40 (scale costs of $19,999.50 uplifted by 20 per cent) and disbursements of $11,149.40.
12 I note that the plaintiffs originally paid $9,600.00 in hearing fees for the 2014 hearing; however,
$1,600 was subsequently refunded.
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