B v B HC Auckland CIV-2007-404-5016
[2008] NZHC 2525
•26 August 2008
ANYPUBLICATION OF A REPORT OF THESE PROCEEDINGS MUST COMPLY WITH S 139 OF THE CARE OF CHILDREN ACT 2004
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2007-404-5016
BETWEEN B Appellant
ANDB Respondent
Hearing: (On the Papers)
Appearances: W W Galvin for the Appellant
J H Wren for the Respondent
C L Armstrong for the Child
Judgment: 26 August 2008
JUDGMENT OF DUFFY J [Re Costs]
This judgment was delivered by Justice Duffy on 26 August 2008 at 11.30 am, pursuant to
r 540(4) of the High Court Rules
Registrar/Deputy Registrar
Date:
Counsel: C L Armstrong P O Box 302795 North Harbour 0751 for the Child
Solicitors: Galvin Law P O Box 331000 Takapuna Auckland for the Appellant
Duncan Cotterill P O Box 5 Christchurch for the Respondent
B V B HC AK CIV-2007-404-5016 26 August 2008
[1] The successful appellant in this appeal seeks full solicitor/client costs. The apparent reasons for seeking costs on this basis are:
a) The appellant has incurred a lot of debt as a result of the proceedings;
b)The respondent enjoys a better financial position and has been able to meet the costs of the proceedings; and
c) The appellant’s actual costs ($21,606.93) are very similar to the scale
2B costs as calculated by the appellant ($21,120.00).
[2] The respondent opposes an award of costs either on a full solicitor/client basis or full scale costs. The respondent argues that part of the costs incurred in prosecuting the appeal are the result of errors that were completely outside of the respondent’s control. Furthermore, an award of costs on either basis is said to be contrary to the interests of the child. The respondent contends that her opposition to the appeal was in the child’s interests; she is responsible for the majority of the child’s costs; and she has incurred her own costs as a result of the appeal. Finally, she makes the point that no costs were awarded to her in the Family Court where she was the successful party.
[3] The appellant’s costs application raises a difficult question on which this Court has expressed differing views. In H v A [costs] (2002) 22 FRNZ 447, after reviewing the authorities in relation to costs in Family Court proceedings and noting there was no authority on matters to be taken into account when making costs awards on appeals from the Family Court, Pankhurst J summarised the position at [17]:
In custody and access appeals to [the High] Court costs do not necessarily follow the event. This follows in part from [a requirement that] the welfare of children is “the first paramount consideration”. Where, for example, on the break up of a marriage parties genuinely seek the assistance of the Court in resolving issues affecting their children, and do so in the interests of such children, then a costs award may be inappropriate. Where, by contrast, one or both parties unnecessarily prolong litigation, contrary to the interests of the children involved, then costs may well be awarded. If an award is made the same matters as affect informed costs decisions generally will need to be considered, as well the impact which making an order may genuinely have upon the welfare of the children who are the subject of the proceeding. Such impact may be an economic one, or an emotional one (in terms of the likely influence upon the attitude of the parent concerned), or both.
[4] H v A involved an appeal under the Guardianship Act 1968, the costs provision of which has been recognised by the Court of Appeal to be in similar terms to s 142 of the Care of Children Act 2004: Hawthorne v Cox CA509/07 4 June 2008.
[5] In H v A Pankhurst J went on to say at [18] that he did not think it was helpful to say that costs awards will be “rare” in the Guardianship Act context, rather it was preferable to acknowledge that costs do not follow the event in the usual way, but may be awarded after a consideration of all relevant factors. Relevant factors were said to include those developed in Family Court costs cases and High Court appeals costs cases, which may be summarised as comprising:
a) The outcome of the proceedings;
b)The way in which the parties and their legal advisers conducted the proceedings;
c) The means of the parties;
d) The actual costs incurred by the parties;
e) The overall interests of justice; and
f) The impact any costs order will or might have on the welfare of the children.
[6] In DLB v DLS [2007] NZFLR 422, Cooper J considered H v A but was unable to agree with it. In his view, the difficulty with the approach in H v A was that s 143(4) of the Care of Children Act specifically states that the High Court Rules are to apply to appeals, stating at [21]:
Costs have to be approached … under the framework of the High Court Rules, and not on the basis that appeals under the Care of Children Act are sui generis.
[7] The general principles of the High Court Rules are that the party who fails is to pay the costs of the party who succeeds and that there should be predictability and expediency. Cooper J at [21], did recognise that there could be circumstances, in Care of Children Act appeals, in which costs would not be appropriate:
[W]here on the facts it can genuinely be said that an award of costs would be contrary to the welfare of the interests of the child.
In those circumstances, the Court could properly act under r 48D(f) to reduce or to refuse costs. In DLB v DLS costs were awarded “because the appeal was largely without merit”.
[8] In Hawthorne v Cox, the Court of Appeal had the opportunity to express its views on costs in Care of Children Act appeals. But, as it had not heard full argument, it would only outline a tentative view. The case involved an application for leave to appeal against the decision by the High Court not to award the applicant costs upon her successful appeal in the High Court. The application was declined on the basis that the lack of a costs award in the High Court was well within the Judge’s jurisdiction. The Court stated at [26]-[28]:
In our view the starting point must be s 4(1) of the CCA [Care of Children Act]. This provides that the welfare and interests of the child must be the first and paramount consideration both in the administration of the CCA, including any proceedings under the Act, and in any other proceedings involving the guardianship of, day to day care of or contact with the child. The High Court Rules, as subordinate legislation, have to be interpreted in accordance with that principle.
Our preliminary view is that this favours the approach to costs outlined in H v A where the welfare of the child is the overriding and paramount consideration (as required by s 4 of the CCA). However, it seems to us that the conflict between the two decisions may be more apparent than real. Although Cooper J would start with the High Court Rules, he did acknowledge that the welfare and best interests of the child may well legitimately override the normal rules as to costs.
We would also accept, as pointed out by Cooper J, that different considerations might arise on appeal than in the lower Court. While parents should not be discouraged from raising all genuine and responsible arguments they believe in the best interests of the child in the lower Court, the same might not apply on appeal given that litigation and uncertainty will be prolonged – see E v C [1995] 3 NZLR 310 at 314 (CA).
[9] Although the Court of Appeal in Hawthorne v Cox makes it clear that its view is a preliminary one only, its synthesis of the two High Court decisions is a helpful pointer to the approach to be taken in a costs application. The principles which may be derived from the judgment are that the welfare and interests of the subject child or children are the starting point and the vantage-point from which other considerations should be viewed. The other considerations include those identified by Pankhurst J in H v A, such as the forum in which the costs are sought,
since different considerations can arise on appeal than in the lower Court, and the normal rules as to costs in this Court. To these I would add a further consideration; this is the respective parties’ reasons and motives for bringing or resisting an appeal and how they might be influenced by the availability or otherwise of an award of costs. This additional consideration is relevant because the cases reveal that the reasons and motives for bringing or resisting an appeal have influenced judgments on costs.
[10] In R v S (2003) 22 FRNZ 1017 at [63] in an appeal under the Guardianship Act 1968, which included an appeal against costs awarded to the successful party in the lower Court, the Full Court said:
… it is wrong in principle to make an adverse order for costs against a parent who advances a genuine and responsible argument in what he or she regards as the best interests of the child. If costs orders are made in those circumstances they may operate as a disincentive for such arguments to be put to the Court. As the Family Court, in guardianship proceedings, exercises an inquisitorial jurisdiction it is important that all relevant arguments be put before the Court.
Though the statement was made in relation to costs awards in the lower Court, the policy concerns it expresses are equally applicable to costs awards when these cases are heard in appellate Courts. Furthermore, the converse is equally applicable. A party who advances a genuine and responsible argument in what a Court finds to be the best interests of the child should not be discouraged from taking that step by an inability to recover some of the costs expended in doing so.
[11] In H v A the successful respondent in an appeal under the Guardianship Act was denied costs, as Pankhurst J was satisfied that the appellant had genuinely and responsibly acted for the welfare and in the interests of the child.
[12] In DLB v DLS Cooper J awarded costs to the successful respondent on the ground the appeal was “largely without merit”.
[13] In Hawthorne v Cox the Court of Appeal declined leave on an application for leave to appeal against a refusal of the High Court to award costs. The applicant/appellant had appealed to the High Court and succeeded in having a guardianship order made in the Family Court set aside. Despite this measure of success, the High Court refused to award costs to the appellant. It found that the
appellant had caused the litigation in the Family Court. In the Court of Appeal the appellant was described as not having enjoyed a “total victory” in the High Court and the lack of a costs award was found to be well within the High Court’s discretion.
[14] The next question is how to assess the impact of a costs award on a child’s welfare and interests. In cases where there is clear evidence of benefit or harm to a child there will be no difficulty in making this assessment. But in other cases where the connection between an award of costs and the impact it will have on a child’s welfare or interests is less clear, thought needs to be given to whether the assessment should proceed from the basis of looking for affirmative or for negative evidence.
[15] In the present case I consider there is clear evidence to support an award of costs as being a positive influence on the child’s welfare and interests. This is a case where the appellant’s actions in bringing the appeal have been of substantial benefit to the child. Had it not been for the appellant taking the step of appealing the Family Court judgment, the child would have been placed in a situation where he was compelled to live a part of his life in the northern hemisphere and the other part in the southern hemisphere. As counsel for the appellant submitted in the appeal hearing, once the child was at school he would not, under the orders made by the Family Court, have experienced a summer season. During his holidays he would have returned to New Zealand in winter, and thereby missed the best of the English summer. This would have occurred in circumstances where, other than his mother’s own evidence, there was no evidence to support her assertion that her mental well- being depended on her return to England with the child.
[16] The appellant has taken this action at what he says was considerable expense to himself and in circumstances where his financial means are considerably less than the respondent’s. This to me is a factor supporting an award of costs. For persons in the appellant’s position, an inability to recover costs through a Court’s reluctance to award costs in these type of cases, can be a disincentive to bring genuine and responsible arguments that are in a child’s best interests. The Court has to be careful to guard against the occurrence of such disincentives just as much as it needs to ensure that a potential award of costs is not a disincentive to a party making such
arguments. My assessment of the reasons and motives for bringing the appeal favours an award of costs.
[17] I now turn to consider the factors identified in H v A. Whilst the outcome of the appeal was successful for the appellant, the ultimate beneficiary of the appellant’s action has been the child. This supports an award of costs.
[18] There is no evidence before me to suggest that the conduct of either party in the litigation was such that it should affect an award of costs. I see this as a neutral factor.
[19] In terms of the parties’ means, the respondent’s financial means are greater than the appellant’s. The appellant describes the costs involved in the Court proceedings overall as “crippling” and is still in debt to his solicitors for the original proceeding. The evidence before the Court was that the respondent enjoys financial independence through the support of a trust fund, which provides her with an income and a home. This disparity of financial circumstances favours an award of costs to the appellant to help reimburse the financial cost to him of the appeal.
[20] The interests of justice also support an award of costs to the appellant. The respondent failed in the appeal because I found she had not made out a case for the orders she obtained. This is not a case where an applicant for a relocation order presents a well-founded case to the Court and an appellate Court takes a different view on the correctness of the original decision. In this case I found that the application for the relocation order lacked the evidence required to found such an order. The respondent had control of her case and could have sought the necessary expert evidence to support her application. The absence of expert evidence on the effect of a relocation order on the child and on the respondent left the appellant little choice but to act in the child’s interests and to resist the application. There is no evidence to suggest that the appellant would have maintained his stance in the face of persuasive expert evidence that relocation was in the child’s best interests. In such circumstances, the interests of justice favour a costs award to the appellant.
[21] There is no evidence to suggest that an award of costs will have a detrimental impact on the ongoing welfare and interests of the child. The respondent submits that “traditionally” an award of costs can be seen as punitive and that it would for
that reason have a damaging effect on the ongoing relationship of the parties who must continue to have contact as parents of the child. Whilst that may be so, there is no evidence to suggest it will be the case here. Indeed given the disparity of their financial resources a failure to award costs is likely to make the appellant feel aggrieved and generate negative feelings towards the respondent. Given the absence of evidence to indicate what the impact of a costs award might be in this regard I am not prepared to make assumptions either way. I see this as a neutral factor.
[22] There is nothing in the other factors I have identified (the forum and the normal rules relating to costs in the High Court) that tells against an award of costs.
[23] When I stand back and look at matters in the round, it seems to me that there is much to be said for an award of costs in this case being in the interests of the child, and nothing to support the contrary view. I have already dealt with those aspects of the respondent’s submission that fall under the various factors identified in H v A. The other reasons she gives against an award of costs are not persuasive. She contends that part of the costs incurred in prosecuting the appeal were outside her control. Here she refers to the Family Court’s loss of the oral record of the evidence before it. This is an issue that might affect the quantum of a costs award rather than the making of an award. Whether costs should be full solicitor/client costs or scale costs goes to the amount of the award, not whether there should be an award. That she has incurred her own costs and that no costs were awarded in the Family Court are not relevant to a costs award in this Court.
[24] The respondent submits that relocation cases can be finely balanced and that here the appeal was successful as a result of “judicial error of the Trial Court Judge.” However, this submission needs to be put in context. In some respects all successful appeals can be attributed to error on the part of the lower Court. That in itself is not a reason to not award costs to the successful party. Furthermore, in this case the Judge erred owing to the process that the respondent adopted in the lower Court. In R v S (2003) 22 FRNZ 1017 at [77] the Full Court said that:
A Court faced with a relocation dispute must … give close attention to the process. The brief given to a psychologist preparing a s 29A report, particularly in respect of young children, must specify critical issues. The s
29A report itself must be focused, non-partisan, and free from gratuitous comment on extraneous issues or matters solely within the province of the Judge.
[25] One of the issues in R v S was whether or not the psychologist responsible for the s 29A report had acted independently. The requirements of a s 29A report which the Full Court stipulates seem to me to convey the implicit assumption that in a relocation case expert evidence from a psychologist is necessary, especially for a young child. It was open, therefore, to the respondent to prepare her case in such a way that it conformed to the expected process. That she did not do so is a matter entirely within her control. I do not, therefore, accept the argument that no costs should be awarded because the respondent has no responsibility for the errors identified in the appeal.
[26] Based on the reasoning in H v A and Hawthorne v Cox, it seems to me that a costs award is appropriate in this case. I now turn to the quantification of that award. I propose to approach this exercise first on the basis of assessing costs in terms of the standard scale in the High Court rules. In this case the scale set at the appeal case conference was scale 2B. Then I will consider if there are factors from Hawthorne v Cox and H v A that warrant a discount. Finally I will determine the appellant’s request for full solicitor client costs.
[27] The respondent does not object to the appellant’s calculation of scale costs for steps one to six as set out in the appellant’s schedule of costs. I propose, therefore, to adopt those calculations. Steps one to six come to a total of $2,880.
[28] The respondent opposes recovery of any costs for steps seven to 18 of the schedule on the ground the actions covered by those steps relate to the lost record of the oral evidence in the Family Court and the appellant’s initial rejections of the respondent’s solution. The costs the appellant seeks for steps seven to 18 come to
$13,280. This is an extraordinarily high amount when compared to what the scale permits. This has come about because the appellant has applied the permitted scale costs for the preparation for and hearing of a substantive matter to what was, in fact, the preparation for and hearing of an interlocutory matter. The result has been to inflate the costs claimed for some of the steps. Scale costs do not and are not meant to reflect actual time spent. Scale costs provide no more than a standard scale rate. When the mistakenly inflated steps in steps seven to 18 are calculated in accordance with the scale for defended interlocutory steps, the scale rate is considerably reduced.
[29] These are the adjustments that I consider should be made to the mistakenly
inflated steps in steps seven to 18 of the appellant’s schedule:
Preparation for a joint memorandum of the .2 parties is appropriately set at:
Preparing interlocutory application and any .6 supporting affidavits (which I see as being
analogous to the appellant’s claim for preparation of affidavits):
Preparation for hearing of defended interlocutory application (which I see as analogous to the appellant’s claim for preparation of lists of issues and authorities and selecting documents for common bundle of documents and all other preparation of hearing on 5 December 2007:
Time occupied by the hearing measured in quarter days here:
.25
My reading of the Court file informs me that the hearing of 5 December 2007 was set down for one hour at 11.45 am (see Minute (No 4) of Asher J dated 28 November 2007. The Minute (No 5) of Asher J dated 12 December 2007 refers to the 5 December 2007 hearing as a “short” hearing. I propose, therefore, to treat the hearing as qualifying under the scale as 1/4 day. The scale allows for hearing fees to be calculated as 1/4 days. This figure will affect the scale time for preparation which turns on the length of hearing time.
.25
I have reduced the time spent on the .2 “admission of facts”, including the Minute of
Ryan DCJ to .2 as I consider this is more analogous to receipt of a Minute from the Court.
I have increased the cost of an appearance at a case management conference from .2 to the scale .3.
.3
$480
[30] The arithmetical impact of the adjustments to the inflated steps, when coupled with the correctly calculated steps (which I have not identified herein), in steps seven to 18 comes to a subtotal of $4,800.
[31] Steps 19 to 23 accord with the scale and come to $4,960.
[32] Once the adjustments I have made are taken into account, the total of all steps in the appellant’s schedule comes to $12,640.
[33] The sum of $12,640 is the amount of costs on scale 2B. In my assessment of the factors from Hawthorne v Cox and H v A for the purpose of determining if any award of costs should be made, I reached the view that all the relevant factors either favoured an award or were neutral. I did not identify any factor that weighed against an award of costs. Had I done so, the presence of such a factor could have been reflected in a discount of the scale costs.
[34] The next issue is whether there should be a discount to take into account steps 7 to 18 being the result of the Family Court losing the record of the oral evidence. Whilst this is not the fault of the respondent, neither is it the fault of the appellant. The respondent points to the steps taken and costs incurred as having been brought about by the appellant’s refusal to accept the substitute of using the records the respondent’s junior counsel had taken of the Family Court hearing. Although the appellant was initially resistant to this approach, I can understand the reasons for this. Certainly, once everyone had the benefit of Ryan DCJ’s Minute and Asher J had opined in his Minute (No 6) that his tentative view was that the record of the respondent’s junior counsel was adequate, the appellant accepted this was so. Until then, the appellant was entitled to take steps to ensure he had a fair appeal. While it is regrettable that the parties were put to the trouble of having to deal with the consequences of the Family Court’s loss of its record of the oral evidence taken before it, I do not see why that should be a cost borne by the appellant. There is nothing in my view about the appellant’s conduct in relation to the lost record of evidence which should disqualify him from enjoying the benefit of costs incurred for these steps. They were steps that this appeal required.
[35] I see no reason in this case to discount the costs under r 48D(f).
[36] The appellant has sought actual costs. However, this was in the mistaken view that the actual costs of the appeal ($21,606.93) were very similar to scale 2B costs ($21,120). That view is incorrect. Scale 2B costs come to $12,640 which is significantly different from $21,606.43.
[37] The case law shows that a high threshold must be passed before an order for indemnity costs is made: Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3
NZLR 188. And that indemnity costs are reserved for cases where “truly exceptional circumstances exist”: Hedley v Kiwi Co-operative Dairies Ltd (2002) 16 PRNZ 694.
[38] The appellant’s application for actual costs has proceeded on a mistaken premise. No other argument was advanced. There is nothing about this case that I can see that places it in the category of cases that the Courts have recognised to warrant special treatment. Accordingly, the application for actual solicitor/client costs is refused.
[39] It is usual for a successful appellant to be entitled to reasonable disbursements. If the parties are unable to reach agreement on the amount for disbursements, they have leave to file and serve memoranda on this issue within 10 days of the date of this judgment.
Result
[40] The appellant is entitled to costs of $12,640 and reasonable disbursements.
Duffy J
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