Bilkey v Kyriak

[2021] NZHC 927

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1822

[2021] NZHC 927

BETWEEN

ROBERT MCKENZIE BILKEY and LYNNETTE MARGARET BILKEY
Appellants

AND

MICHAEL THOMAS KYRIAK and CHRISTINA MOIRA JUDITH CIE

Respondents

Hearing:	On the papers
Appearances:	W McCartney for Appellants Respondents in person
Judgment:	29 April 2021

JUDGMENT OF LANG J

[on application for leave to appeal to the Court of Appeal]

This judgment was delivered by me on 29 April 2021 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

Solicitors:

Duncan King Law, Auckland Kyriak Law, Auckland Counsel:

W McCartney, Auckland

BILKEY v [2021] NZHC 927 [29 April 2021]

[1]                On 25 February 2021 I delivered a judgment dismissing an appeal by Mr and Mrs Bilkey against an award of costs made in favour of Mr Kyriak and Ms Cie in the District Court.1 The costs were awarded after Mr Kyriak and Ms Cie succeeded in establishing three of the four causes of action they advanced in the District Court.

[2]                Mr and Mrs Bilkey now seek leave to advance a second appeal to the Court of Appeal.

The test

[3]                The jurisdiction to bring a second appeal is contained in s 60 of the Senior Courts Act 2016. The principles to be applied in determining such an application remain, however, those applied in relation to the predecessor to s 60, s 67 of the Judicature Act 1908.2

[4]                In Waller v Hider, the Court of Appeal confirmed that the function of the Court of Appeal on a second appeal is not for general correction of error.3 Rather, it is to clarify the law and determine whether it has been properly interpreted and applied by the courts below.4 In short, the proposed appeal must raise a question of law or fact that it is capable of bona fide and serious argument and involves some interest, public or private, of sufficient importance to outweigh the cost and delay of a further appeal. This threshold reflects the fact that the time and resources of the Court of Appeal should not be devoted to cases that are not worthy of its attention. In addition, the other party or parties to the proposed appeal should not be put to additional expense without good reason.

Proposed grounds of appeal

[5]                If granted leave, Mr and Mrs Bilkey propose to submit the following issues for determination by the Court of Appeal:

1      Bilkey v Kyriak [2021] NZHC 264.

2      W v C [2019] NZCA 530 at [16].

3      Waller v Hider [1998] 1 NZLR 412 at 413.

4      At 413.

(a)Whether for the purpose of fixing costs following trial a pre-trial open offer of settlement should be treated at least as favourably as an offer made without prejudice as to costs; and

(b)How costs should be awarded where opposing parties each succeed on distinct and unrelated issues.

Pre-trial offers of settlement

[6]                This issue arises because Mr and Mrs Bilkey made open (as opposed to without prejudice) offers of settlement to Mr Kyriak and Ms Cie prior to the trial in the District Court. Mr McCartney contended on behalf of Mr and Mrs Bilkey that these justified Mr and Mrs Bilkey receiving an award of costs under r 14.10 and 14.11 of the District Court Rules 2014.

[7]Rules 14.10 and 14.11 provide as follows:

14:10 Written offers without prejudice except as to costs

(1)A party to a proceeding may at any time make to any other party to the proceeding a written offer that—

(a)is expressly stated to be without prejudice except as to costs; and

(b)relates to an issue in the proceeding.

(2)The fact that the offer has been made must not be communicated to the court until the question of costs is to be decided.

14.11   Effect on costs

(1)The effect (if any) that the making of an offer under rule 14.10 has on the question of costs is at the discretion of the court.

(2)Subclauses (3) and (4)—

(a)     are subject to subclause (1); and

(b)do not limit rule 14.6 or 14.7; and

(c)apply to an offer made under rule 14.10 by a party to a proceeding (party A) to another party to it (party B).

(3)Party A is entitled to costs on the steps taken in the proceeding after the offer is made, if party A—

(a)offers a sum of money to party B that exceeds the amount of a judgment obtained by party B against party A; or

(b)makes an offer that would have been more beneficial to party B than the judgment obtained by party B against party A.

(4)The offer may be taken into account if party A makes an offer that—

(a)does not fall within subclause (3)(a) or (b); and

(b)is close to the value or benefit of the judgment obtained by party B.

[8]                I held that that the pre-trial offers made by Mr and Mrs Bilkey could not be taken into account under rr 14.10 and 14.11 because they did not meet the criteria prescribed in r 14.10(1)(a).5 Those rules require any offer to be “expressly stated to be without prejudice save as to costs”. The offers that Mr and Mrs Bilkey made were open offers and were not marked “Without prejudice save as to costs” as required by the rule.

[9]                I also held, however, that open offers such as those made by Mr and Mrs Bilkey could be taken into account under r 14.7(e)(v). 6 This rule permits the court to refuse or reduce an award of costs in favour of a successful party where that party “failed, without reasonable justification, to an accept an offer of settlement”. On the facts of the case I did not consider that the pre-settlement offers justified the reduction of costs below the level ordered in the District Court.7

[10]            I consider my decision in relation to the requirements of r 14.10 to be an orthodox application of the wording used in r 14.10. I am not satisfied it raises any issue of law of sufficient general or public importance to justify the time and further expense involved in an appeal to the Court of Appeal.

The effect on costs of partial success

[11]            Although Mr Kyriak and Ms Cie advanced four causes of action the proceeding in the District Court was essentially concerned with two issues. Three causes of action related to a claim by Mr Kyriak and Ms Cie that they had a right to use a letter box at

5 At [41].

6 At [42].

7 At [50].

the top of a driveway shared by their property and that owned by Mr and Mrs Bilkey. The fourth related to a claim by Mr Kyriak and Ms Cie that Mr and Mrs Bilkey were required to contribute to the cost of replacing a fence and gate along the boundary of the two properties. Mr Kyriak and Ms Cie succeeded on the causes of action relating to the letter box but failed on the cause of action relating to the fence.

[12]            The Judge who determined costs in the District Court was not the trial Judge. Unfortunately the trial Judge, Judge Christiansen, died before fixing costs following the  trial.  It   was   therefore   necessary   for   another   Judge,   in   this   case   Judge P A Cunningham, to fix costs.

[13]            Judge Cunningham acknowledged that Mr and Mrs Bilkey had succeeded in defending one of the two issues with which the trial was concerned. The present issue arises because the Judge also observed:8

[46]   This cause of action failed. That means that there should be an award of costs in favour of the defendants (the successful party) and not in favour of the plaintiffs (the unsuccessful party). Rule 14.2 of the District Court Rules 2014 says:

14.2 Principles applying to the determination of costs

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

…

[14]            This observation has led Mr and Mrs Bilkey to contend they were entitled to an award of costs in their favour, and that this should be set off against the costs awarded to Mr Kyriak and Ms Cie to mark their success on the causes of action relating to the letter box.

[15]            The approach that the Judge ultimately took did not reflect the observation set out above. Rather, she acknowledged that Mr Kyriak and Ms Cie were the successful parties in the proceeding and were therefore entitled to an award of costs. She then reduced the award by 50 per cent to reflect the fact that Mr and Mrs Bilkey had successfully defended the cause of action relating to the fence. She reduced the award

8      Kyriak v Bilkey [2020] NZDC 16722.

by a further five per cent to reflect shortcomings in the way Mr Kyriak and Ms Cie had met their obligations in relation to interlocutory issues. This resulted in Mr Kyriak and Ms Cie receiving costs according to scale but reduced by 55 per cent.

[16]            I considered the Judge’s ultimate approach reflected an orthodox application of the principles contained in r 14.7(d) of the District Court Rules. Rule 14.7(d) provides that costs may be refused or reduced when the party who is successful overall nevertheless fails in relation to a cause of action or issue and this has significantly increased the costs of the unsuccessful party.9 I remain of that view and do not consider the point Mr and Mrs Bilkey seek to raise in a second appeal to be reasonably arguable.

Enough is enough

[17]            These conclusions are sufficient to dispose of the application for leave to appeal. I consider, however, that there is a further reason to decline to grant leave to bring a second appeal. This flows from the fact that, viewed objectively, the subject matter of the substantive proceeding was a trivial dispute between neighbours that should never have come before the courts. It has already required a disproportionate commitment of judicial and institutional resources. The only matter now outstanding is a costs award amounting to approximately $24,000. I do not consider there is any justification for devoting more resources to that issue.

[18]            To amplify, the disputes between the parties have now been before the courts for six years. They began in the Disputes Tribunal, which was required to issue several decisions in 2015. Extensive interlocutory wrangling continued after the proceeding was transferred to the District Court, including a successful application by Mr Kyriak and Ms Cie for interim relief in February 2017. The substantive hearing then occupied five days in December 2019 and resulted in Judge Christiansen issuing a lengthy judgment later the same month. Mr and Mrs Bilkey appealed against that decision but their appeal was dismissed in June 2020.10 By that stage Mr and Mrs Bilkey had sold their property and the issues raised in the appeal were therefore held to be moot.11

9      Bilkey v Kyriak, above n 1, at [22].

10     Bilkey v Kyriak [2020] NZHC 1264.

11     At [29]-[33].

[19]            The judgment dismissing the substantive appeal concluded with the following observation:12

[33]  The hearing of the appeal would require the parties, and particularly  the respondents, to be involved in further time-consuming and expensive litigation having the effect of further disrupting their lives, in relation to a comparatively trivial issue over the siting of a letterbox that has been escalated out of all proportion by the parties in the course of the dispute that led to the proceedings.

[20]            Mr and Mrs Bilkey did not heed this advice. Instead, they devoted considerable energy to debating the issue of costs before Judge Cunningham. This resulted in the Judge issuing a decision in August 2020 that was longer than the substantive judgment. The Judge subsequently re-issued her decision in September 2020 after Mr and Mrs Bilkey successfully sought recall of it on several grounds. In addition, the parties now have the benefit of this Court’s judgment on the issue of costs.

[21]            Enough is now enough. I suspect the litigation costs Mr and Mrs Bilkey have incurred over the last six years would have built several fences, gates and letter boxes. The inevitable cost and delay involved in a further appeal to the Court of Appeal solely on the issue of costs is plainly not justified. The parties and the courts now need to move on to more worthwhile and cost-effective endeavours.

Result

[22]            The application for leave to appeal is dismissed. Mr Kyriak and Ms Cie are entitled to an award of costs on a category 2B basis together with disbursements as fixed by the Registrar.

Lang J

12     Bilkey v Kyriak, above n 10.