Barry v Carlisle
[2015] NZHC 2980
•26 November 2015
IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY
CIV 2014-406-000005
CIV 2014-406-000019
CIV 2014-406-000020 [2015] NZHC 2980
BETWEEN LYNDA ROSE BARRY
Plaintiff
AND
FRANCIS CARLISLE Defendant
Hearing: On Papers Counsel:
S J Zindel for Plaintiff
M G Locke for DefendantJudgment:
26 November 2015
COSTS JUDGMENT OF BROWN J
[1] This judgment addresses costs in three different proceedings involving the parties, namely:
(a) CIV-2014-406-20 – a proceeding brought by the plaintiff under the
Property (Relationships) Act 1976, which was discontinued.
(b)CIV-2014-406-5 – a proceeding brought by the plaintiff seeking an order to prevent the lapse of a caveat she had registered against the title to the defendant’s property to preserve her rights pending the disposition of the specific performance proceeding.
(c) CIV-2014-406-19 – the plaintiff’s proceeding seeking specific performance of a deed, which was the substantive proceeding that ultimately proceeded to trial on 4 to 8 May 2015 and which was
determined in my Judgment dated 6 July 2015.
BARRY v CARLISLE [2015] NZHC 2980 [26 November 2015]
[2] The related nature of the proceedings is demonstrated in the following
succinct chronology:
August 2013
The plaintiff commenced a proceeding under the Property (Relationships) Act 1976 (the PRA) in the Blenheim Family Court (which later became CIV-2014-406-20).
August 2013 to
August 2014
The defendant filed 13 affidavits in opposition to the CIV-2014-406-20 proceeding deposing to the absence of any qualifying de facto relationship under s 4C of the PRA.
3 February 2014
The plaintiff lodged a caveat against the defendant’s property based on her claim to an interest under the deed (the subject of the CIV-2014-406-19 proceeding).
4 March 2014
The plaintiff filed the CIV-2014-406-5 proceeding seeking an order that the caveat not lapse.
13 March 2014
The High Court made an order that the caveat not lapse on the basis that the plaintiff would file proceedings in relation to the deed no later than 11
April 2014. Costs in the caveat proceeding were reserved.
8 April 2014
The plaintiff filed the proceeding CIV-2014-406-19.
23 April 2014
The PRA proceeding was transferred to the
Blenheim High Court.
4 November 2014
A notice of discontinuance of the CIV-2014-406-20 proceeding was filed.
15 December 2014
Costs judgment of Associate Judge Matthews.
4-8 May 2015
Trial in Blenheim High Court of CIV-2014-406-19 proceeding.
6 July 2015
Judgment in CIV-2014-406-19 proceeding.
[3] The plaintiff initially applied for legal aid in September 2014 and was eventually granted legal aid on 20 March 2015. Consequently the defendant requests the Court to:
(a) Fix costs against the plaintiff personally in respect of the period prior to the date of her application for legal aid.
(b)Find extraordinary circumstances and fix costs against the plaintiff for the period in respect of which she was legally aided or such part thereof as the Court may consider just.
(c) In the event that the Court declines to grant (b) above, to fix the costs that would have been awarded against the plaintiff if she had not been legally aided so that the defendant may make application to the Legal Services Agency for payment of those costs pursuant to s 46, Legal Services Act 2011.
CIV-2014-406-20
[4] Costs on the PRA proceeding were considered by Associate Judge Matthews in his judgment of 15 December 2014 which concluded in this way:
[11] Secondly, in Powell v Hally Labels Ltd, the Court of Appeal reviewed the principles relating to awards of costs following discontinuance. The Court notes that discontinuance should not necessarily be seen as failure where a plaintiff has succeeded by other means, or having discontinued for reasons not connected with the merits. In my view there is sufficient before the Court on this application for this principle to apply. Whilst in the extant proceeding the issue is enforcement of a property agreement, whereas in the discontinued proceeding the principal issue was whether Ms Barry and Mr Carlisle were in a de facto relationship as defined by the Act, in both cases their relationship will come under scrutiny and indeed this is borne out by the fact that Mr Zindel says that the evidence produced in affidavit format for the Family Court will form the basis of the briefs of evidence on the extant proceeding in this court. I am satisfied that it has been established to a sufficient extent that Ms Barry has discontinued this proceeding for reasons not connected with its merits, as in Powell where Hally Labels Limited had discontinued a claim in the High Court against Mr Powell while continuing a claim in the Employment Court.
[12] In my opinion the appropriate course is for costs on the discontinuance to be reserved, and to be decided when costs are under consideration in the extant proceeding.
[5] It proved to be the case that much of the evidence prepared for the PRA proceeding did surface in the specific performance proceeding although as noted1 a substantial amount of it was not relevant to the essential matters for determination in
the latter proceeding.
1 Barry v Carlisle [2015] NZHC 1554 at [9].
[6] For the reason first that the work undertaken in the PRA proceeding prior to discontinuance was channelled into the specific performance proceeding and secondly that the specific performance proceeding was unsuccessful, I do not consider that there should be a departure from the general rule that the ultimately successful party should be entitled to costs.
[7] In a memorandum dated 20 August 2014 the defendant submitted that there should be an order for increased costs because the plaintiff had contributed unnecessarily to the time and expense of the proceeding and had acted vexatiously, frivolously or improperly.
[8] Consequently the defendant seeks costs of $13,833.75 (which incorporates a
50 per cent uplift) but in the alternative $9,222.50 calculated according to the
District Court Rules scale.
[9] Plainly there has been much ill-feeling generated by this proceeding (and the continuation with the specific performance proceeding). However I am not persuaded that an uplift is appropriate. In my view the defendant is entitled to scale costs only.
CIV-2014-406-5: The caveat proceeding.
[10] The defendant seeks costs calculated on a 2B basis in the sum of $4,014.00. He contends that as the Court ultimately found that the plaintiff had no claim to an interest in his property, it must follow that at no time did she have a caveatable interest. Hence the merits are said to lie in favour of the plaintiff being liable for the defendant’s costs albeit he was unsuccessful in opposing the application for an order that the caveat not lapse.
[11] Mr Zindel submits that it was unnecessarily combative for the defendant to seek to lapse the caveat on 24 February 2014 when there was a PRA proceeding on foot and he suggests that costs should be awarded in favour of the plaintiff.
[12] In my view both points of view are valid. I consider that the appropriate outcome is that there should be no order of costs in the caveat proceeding.
CIV-2014-406-19: The specific performance proceeding
[13] Mr Locke submitted a costs calculation on a 2B basis which totals
$55,750.00 with disbursements of $4,185.00 including an item of $4,025.00 for the expert witness, Dr R Schnabel.
[14] Of that sum he submits that costs of $6,690.00 can be claimed as of right as relating to steps taken in the period prior to the plaintiff’s application for legal aid. The defendant recognises that there is no automatic entitlement to costs after the date of the plaintiff’s application but argues that there are exceptional circumstances which justify the making of an order for the balance.
[15] Section 45 of the Legal Services Act 2011 materially provides:
45 Liability of aided person for costs
…
(2) No order for costs may be made against an aided person in a civil proceeding unless the court is satisfied that there are exceptional circumstances.
(3) In determining whether there are exceptional circumstances under subsection (2), the court may take account of, but is not limited to, the following conduct by the aided person:
(a) any conduct that causes the other party to incur unnecessary cost:
(b) any failure to comply with the procedural rules and orders of the court:
(c) any misleading or deceitful conduct:
(d) any unreasonable pursuit of 1 or more issues on which the aided person fails:
(e) any unreasonable refusal to negotiate a settlement or participate in alternative dispute resolution:
(f) any other conduct that abuses the processes of the court.
(4) Any order for costs made against the aided person must specify the amount that the person would have been ordered to pay if this section had not affected that person’s liability.
(5) If, because of this section, no order for costs is made against the aided person, an order may be made specifying what order for costs
would have been made against that person with respect to the
proceedings if this section had not affected that person’s liability.
[16] Although the fact specific nature of each application precludes any intrinsic test for exceptional circumstances, it is well established that to qualify as exceptional circumstances the circumstances must be “quite out of the ordinary”: Laverty v Para Franchising Ltd.2 Furthermore exceptional circumstances must relate to the conduct of the proceeding, not to the events (however unusual) which led to it.3
[17] Before addressing the factors listed in s 45(3) the defendant’s submission recited a number of circumstances which it was contended gave rise to exceptional circumstances in the present case:
(a) although the plaintiff was successful in some aspects of her claim (eg that the 17 October 2002 document was a deed and not an agreement) and although not all of the defences put forward by the defendant succeeded, the final result was that the plaintiff’s claim to an interest in the defendant’s property failed in its entirety;
(b)the facts on which the specific performance claim would turn were known to the plaintiff from the outset and she should have appreciated that her claim was not seriously arguable;
(c) the plaintiff did not accept various offers by the defendant to settle the proceeding.
[18] With reference to s 45(3)(d) the plaintiff submits that the plaintiff’s lack of contributions to the property and the other technical obstacles she faced in relation to whether any contributions made could qualify as consideration meant that her claim was never realistically capable of success. Furthermore it was said that the plaintiff’s conduct fell within the definition of misleading or deceitful conduct in terms of s 45(3)(c) with reference to the asserted de facto or close personal
relationship.
2 Laverty v Para Franchising Ltd [2006] 1 NZLR 650 (CA) at [31].
3 Wall v Gannon HC Rotorua CIV-2006-463-239, 31 July 2007.
[19] It was also submitted that the failure to entertain the defendant’s settlement offer in 2014 amounted to an unreasonable refusal to negotiate a settlement or participate in alternative dispute resolution in terms of s 45(3)(e).
[20] In my view none of these matters either singly or in combination warrant the conclusion that the way in which the plaintiff’s claim was conducted amounts to circumstances quite out of the ordinary. Consequently I decline to make an order for costs against the plaintiff in respect of the period that she was an aided person.
[21] The defendant seeks an order under s 45(5) specifying what order for costs would have been made against the plaintiff if her liability for costs had not been affected by s 45. In my view the plaintiff would have been liable for the balance of the schedule 2B costs as detailed in the chart in the defendant’s submissions from the point at which the plaintiff’s application for legal aid was made, that is $53,245.50 being the figure of $59,935.50 less the amount of $6,690.00 which the defendant is entitled to recover in any event.
Disposition
[22] The following costs orders are made:
(a) the defendant is entitled to costs in the sum of $9,222.50 in the discontinued PRA proceeding (CIV-2014-406-20);
(b) there is no order for costs in the caveat proceeding (CIV-2014-406-5);
(c) the defendant is entitled to costs in the sum of $6,690.00 in the specific performance proceeding (CIV-2014-406-19);
(d)an order that the defendant would have been entitled to an order for costs against the plaintiff in the specific performance proceeding in the further sum of $53,245.00 if s 45 had not affected the plaintiff’s
liability.
Brown J
Solicitors: Zindels, Nelson
M G Locke, Barrister, Nelson
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