Belle v Pearsall

[2023] NZHC 3673

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2207

[2023] NZHC 3673

UNDER

Property Law Act 2007

IN THE MATTER OF

An agreement for sale and purchase of land and the division of the proceeds of sale

BETWEEN

ANTHONY CARL WARREN BELLE

Plaintiff

AND

LEAH ISOBEL PEARSALL

Defendant

Hearing:

On the papers

Appearances:

K J Sheehan for Plaintiff

T M Newman for Defendant

Judgment:

13 December 2023

JUDGMENT OF O’GORMAN J

This judgment was delivered by me on 13 December 2023 at 12.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Kate Sheehan Lawyeres, Auckland Keam Law, Auckland

BELLE v PEARSALL [2023] NZHC 3673 [13 December 2023]

[1]                 In a judgment dated 9 November 2023, the plaintiff’s application for urgent interim orders was dismissed, on the basis that the High Court does not have jurisdiction. The subject matter falls within the exclusive  jurisdiction  of  the  Family Court. The defendant was successful on that issue.

[2]                 That judgment set a timetable for the parties to file memoranda on costs in the event that they could not agree.

[3]                 The defendant has filed a memorandum seeking costs in the amount of $4,780 on a 2B basis, in accordance with the High Court Rules 2016, rr 14.1, 14.3 and 14.4. Those costs are made up of three items:

(a)notice of appearance (item 7): 0.2 days = $478;

(b)interlocutory application (item 23) 0.3 days = $717; and

(c)written submissions (item 24): 1.5 days = $3,585.

[4]The plaintiff opposes costs.

(a)The first two items are wrongly claimed when they were not incurred. The application for urgent interim orders was determined before any opposition or defence documents were filed, and the defendant did not file any notice of opposition to the interlocutory application.

(b)For the third item, and if any costs were considered in respect of the first two items, the plaintiff opposes any award of costs and asks for costs to lie where they fall. The plaintiff continues to assert that the defendant’s conduct has been unreasonable and/or in breach of aspects agreed in the settlement negotiations, and that costs will be unnecessarily  incurred  by  commencing  proceedings   in   the Family Court, seeking relief in respect of company issues, and seeking to transfer the matter back to the High Court. The plaintiff relies on

Bradford v Te Hei for its proposal that costs should simply lie where they fall.1

(c)The plaintiff also annexes further settlement negotiation correspondence and says that the plaintiff and/or the company will seek costs for the further steps now being taken, including a claim for increased costs for unreasonable conduct.

[5]                 The Court has a general discretion to award costs under r 14.1, but r 14.2 provides a clear statement of the principles to be applied in most cases.

(a)Under r 14.2(1)(a), the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds.

(b)Under r 14.2(1)(b), an award of costs should reflect the complexity and significance of the proceeding. For those purposes, r 14.3 provides for three categories of proceeding. Category 2 applies to proceedings of average complexity requiring counsel of skill and experience considered average in the High Court. Rule 14.4 provides that the appropriate daily recovery rates are specified in sch 2: $2,390 for Category 2 proceedings.

(c)Rule 14.2(1)(c) provides that costs should generally be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application. For those purposes, r 14.5 specifies that a reasonable time is set out in sch 3 for each step, or a reasonable time should be determined by analogy. This is done by reference to whether the step falls within band A, B or C. Band B applies if a normal amount of time is considered reasonable.

(d)Rule 14.2(1)(f) provides that an award of costs should not exceed the actual costs incurred by the party.

1      Bradford v Te Hei [2022] NZHC 575.

[6]                 I agree that this is a Category 2 proceeding, and the steps should be classified as band B (requiring a normal amount of time).

[7]In respect of the three items claimed by the plaintiff:

(a)A notice of appearance is item 7 of sch 3, with a band B time allocation of 0.2 days. No formal notice of appearance document was filed in this case. However, counsel for the defendant first appeared at a call of the matter on 1 November 2023. Item 12 in sch 3 applies for an appearance at a mentions hearing, with a band B time allocation of 0.2 days. I consider that an item 12 claim for that appearance is appropriately made.

(b)An opposition to an interlocutory application is item 23 of sch 3, with a band B time allocation of 0.6 days. No conventional notice of opposition   document   was   filed   in   this   case.     However,   on   1 November 2023, counsel filed a “memorandum for the defendant in opposition to the orders sought”, setting out the defendant’s grounds of opposition. This included a ground that the subject matter was within the exclusive jurisdiction of the Family Court. The time allocated under item 11 for filing a memorandum for a first or subsequent case management conference or mentions hearing is 0.4 days. By analogy with that step, I consider that the defendant is entitled to the claimed time allocation of 0.3 days for that document.

(c)Preparation of written submissions is at item 24, with a band B time allocation of 1.5. As acknowledged by the plaintiff, these costs were incurred    by    the     defendant’s     written     submissions     dated   7 November 2023. Accordingly, item 24 is claimable.

[8]                 For the above reasons, I find that the amount of $4,780 is validly claimed on a Category 2 band B basis for steps taken by the defendant in this proceeding.

[9]                 The presumption in r 14.2(1)(a) applies. I do not consider that the circumstances referred to in the plaintiff’s cost opposition material justify any departure from that default position. The jurisdiction  issue  was  raised  by  the  High Court in the minute dated 2 October 2023, at a time before the defendant had been served or required to take any steps. The principles in Bradford v Te Hei are not particularly relevant. That cost decision was made after the substantive disputes had been determined, with costs assessed to reflect the substantive outcome as determined under the Property (Relationship) Act 1976. That has not occurred in this case because the plaintiff has commenced the proceeding in the wrong jurisdiction. Any argument about what an appropriate costs allocation might be in the substantive proceeding is premature and not for determination in this context.

[10]For the above reasons, I award the defendant costs in the sum of $4,780.

O’Gorman J