Birchfield v Birchfield
[2025] NZHC 1928
•15 July 2025
IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY
I TE KŌTI MATUA O AOTEAROA MĀWHERA ROHE
CIV-2024-418-5
[2025] NZHC 1928
UNDER the Property Law Act 2007 BETWEEN
EVAN RAYMOND BIRCHFIELD and GARY PAUL BIRCHFIELD
Plaintiffs
AND
ALLAN JOHN BIRCHFIELD
First Defendant
BIRCHFIELD COAL MINES LIMITED
Second Defendant
Hearing: (On the papers) Counsel:
R J Hollyman KC and G K Riach for Plaintiffs
P A Cowey, J J Taylor and L J Peez for First Defendant C L Webber for Second Defendant
Judgment:
15 July 2025
JUDGMENT OF ASSOCIATE JUDGE LESTER
(Costs)
BIRCHFIELD v BIRCHFIELD [2025] NZHC 1928 [15 July 2025]
[1] That a Judicial Settlement Conference (JSC) is confidential does not create immunity for costs where a party’s conduct, attitude and/or lack of engagement warrants an award of costs.
[2] I do not need to disclose what was discussed at the JSC to consider whether Mr Allan Birchfield’s (Mr Birchfield) conduct at and his approach to, the JSC warrants an award of costs. That consideration is not related to the merits of the parties’ position, or whether Mr Birchfield will ultimately be successful in defending this proceeding. A JSC is aimed at trying to avoid a hearing. Attendees are expected to, with the benefit of their legal teams, assess their litigation risk, the costs of litigation, the desirability of avoiding delay and of having some input into shaping an acceptable outcome rather than leaving the matter to a hearing.
[3] The parties attending a JSC know that they will have to move from their pre-JSC position. Indeed, in the significant number of JSC’s I have chaired, I have yet to have a JSC settle on the basis of a party’s pre-existing position. A party going into a JSC knows that their pre-JSC position is not acceptable to the other side, that is why the matter had not settled. Being prepared to at least explore alternatives other than one’s pre-JSC position is required and is inherent in the JSC process. In other words, that is what the party in consenting to attend a JSC agrees to do. A person who is not prepared to budge from their pre-JSC position, who is not prepared to make counter-offers or explore alternative means of settlement that could not be achieved by either party at a hearing, is wasting the other party’s time. There may be an exception for a party who attends on the basis they will not be making an offer or amending an existing offer. If that is the case, the other party knows what to expect at the JSC and attends on that basis. The lawyers know that until a settlement is signed, there is no deal. Because the JSC is without prejudice and confidential, possible solutions can be explored without risk. For that reason, there is no reasonable basis for a party attending a JSC to refuse to make a counter-offer during the course of a day.
[4] However, that is what Mr Birchfield’s position was at the JSC. The plaintiffs had made a pre-settlement offer that had not been responded to prior to the JSC. At the JSC, an alternative form of solution was put up by the plaintiffs. Ultimately, that alternative to the pre-JSC offer was not of interest to Mr Birchfield. But that is where
matters stopped. I called upon Mr Birchfield to make a counter-offer but he refused to do so. In short, Mr Birchfield would not budge from his pre-JSC position which he knew going into the JSC was not acceptable to the plaintiffs.
[5] Mr Birchfield seemed unaware of what a JSC involved or that he had consented to the Court ordering a JSC.
Jurisdiction to award costs in a JSC
[6] I am satisfied there is no jurisdictional barrier to awarding costs against a party who, either through a failure to attend a JSC or their failure to engage in the JSC process in good faith, or at all, wastes the time of the other party or parties. In short, a wasted costs order can be made.
[7] Mr Hollyman KC, counsel for the plaintiffs, notes two cases where the Court appeared to take a different approach. The first is Cull J’s decision in Watts & Hughes Construction Ltd v Biala.1 Her Honour set out the issue as follows:
[8]Counsel for the defendant seeks costs for preparation and appearance at the judicial settlement conference on 3 September 2019. This is not a practice under the High Court Rules. Mr Cottrell argues that, as costs for judicial settlement conferences are provided for under the District Court Rules, these rules should apply by analogy in this case. However, the legislature has not made such similar provision in the High Court Rules. I consider it is inappropriate to apply the District Court Rules in this instance.
[8] The above decision was referred to by Dunningham J in Moorhouse Commercial Park Ltd v Vero Insurance NZ Ltd where her Honour said of some of the claims made:2
many of the invoices cover attendances or costs associated with claims for other buildings which have been settled without being adequately proportioned (being done on a percentage basis in lieu of objective substantiation) or relating to events where costs cannot be claimed for, such judicial settlement conferences and tasks required for the usual claims adjustment process.
[footnotes omitted]
1 Watts & Hughes Construction Ltd v Biala [2021] NZHC 290.
2 Moorhouse Commercial Park Ltd v Vero Insurance NZ Ltd [2023] NZHC 2377 at [69(d)].
[9]Dunningham J gave Cull J’s decision as authority.
[10] However, these are not cases where an ultimately unsuccessful party at trial conducted themselves at the JSC in a manner that warranted costs against them. These were cases where in carrying out the usual post-judgment fixing of costs, the Court held there was no scale items for a JSC, rather than costs being sought on a wasted costs basis. At the conclusion of a hearing when costs are being fixed, costs are not claimable for a JSC as of right as if were any other step in a proceeding and, as I note below, such an application should be made immediately after the JSC.
[11] There are cases where costs have been awarded against a party for failing to turn up at a JSC. The first case referred to by Mr Hollyman KC is Leonardo v Auckland City Council, where the Court awarded costs in respect of a JSC where a party’s non-appearance was on the advice of counsel.3 The Court held on that basis that the absent party had not set out deliberately to flout the Court order, however, the Court said that:4
… by not attending the conference [the party], breached his obligations to do so and as a more general obligation to co-operate with the court in managing the case.
[12] In Alexander v Southern Response Earthquake Services Ltd, Associate Judge Paulsen made a wasted costs order in respect of judicial settlement conferences that were repeatedly cancelled for various reasons.5
[13] To the extent that the authorities referred to at [7] and [8] above declined to award costs on the basis of a lack of a specific rule in the High Court Rules 2016 (the Rules), or the absence of a specific item in sch 3 to the Rules in respect of a JSC, they are correct in my respectful view. In those cases it was the absence of a line item in the costs schedule that meant costs were not awarded. The absence of a line item indicates that the starting point is there should not be an award of costs for a JSC.
3 Leonardo v Auckland City Council HC Auckland CIV-2007-404-1352, 2 November 2009.
4 At [11].
5 Alexander v Southern Response Earthquake Services Ltd [2020] NZHC 1939 at [3].
[14] Rule 14.5(1)(b) and (c) make it clear that the fact there is not a sch 3 line item for a step is not a barrier to an award of costs. Rule 14.1 confirms that all matters in respect of costs are at the discretion of the Court.
[15] Parties should be encouraged to attend a JSC knowing that, if despite their best efforts, the matter does not settle there will not be an adverse costs consequence should they lose the case. In other words, attending an unsuccessful JSC without more does not warrant a costs award for that JSC at the conclusion of the hearing. By analogy with r 14.8 of the Rules, if in exceptional circumstances a party’s conduct might warrant consideration of costs in connection with a JSC, such should be determined immediately after the JSC and by the Judge involved in the JSC. The hearing Judge will not be unable to assess what occurred at the JSC or the circumstances in which it did not take place.
[16] Wasted costs orders are not based on a specific rule or a scale item, although the scale might be used to assist in calculating wasted costs.
[17] Wasted costs are discussed by the learned authors of McGechan on Procedure.6 HR pt 14.16A. The rationale for the jurisdiction to award wasted costs is two-fold. First, to compensate the other party or parties not in default who have wasted costs and secondly, to impose a sanction on the defaulting party in an effort to avoid future wastage of costs and of judicial court resources and the inconvenience to other parties awaiting fixtures in the Court.
[18] While these comments are made in the context of a default that causes a fixture to be vacated or a trial to be abandoned part way through, I see no reason in principle not to apply the same principles to a wasted JSC, which is a Court ordered process albeit where the order is made almost invariably by consent.
[19] Had Mr Birchfield made it clear to the plaintiffs that he had no intention of budging from his pre-JSC position, that is, he would not be presenting a counter-offer,
6 Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [HR pt 14.16A].
then the JSC would not have taken place. That hearing time would have been available to other litigants, and the parties to this proceeding would have avoided wasted costs.
[20] Mr Cowey, senior counsel for Mr Birchfield (albeit he did not attend the JSC), submits that the relief claimed by each side in this proceeding differs materially from the other — sale versus subdivision. The plaintiffs seek an order for sale of jointly owned property and Mr Birchfield seeks partition. Mr Cowey says this makes settlement more challenging than say, a claim for damages, where compromise involves a question of degree rather than outcomes which are conceptually different. That is a fair observation, but it only underscores the failure by Mr Birchfield to contemplate a settlement that sought to find middle ground or a commercial outcome that could have involved Mr Birchfield retaining ownership.
[21] Mr Cowey submits that the only solution tabled by the plaintiffs was “unworkable” and that “there was no material movement — the parties remained poles apart”. Mr Cowey submits that Mr Birchfield, in view of what he considered a lack of engagement with the legal and factual merits of the case, reached the view that a compromise acceptable to him was not going to be reached at the JSC, and he preferred to have the competing legal positions determined by the Court. That submission would have carried weight if Mr Birchfield had sought to explore a compromise acceptable to him other than sticking to the one tabled by him before the JSC, which he knew was unacceptable.
[22] That Mr Birchfield considered the proposal put by the plaintiffs during the morning of the JSC to be unworkable, may have been a valid position for him to take — but it was not a justification for him being unprepared to explore amendments to that proposal which may have made it workable, or to have tabled some other proposal. It is not Mr Birchfield’s declinature of the plaintiffs’ offer that warrants costs, it is Mr Birchfield’s failure to engage in good faith in the process of a JSC which involves exploring possible solutions. Had that been done by Mr Birchfield in a genuine manner with a view to reaching a compromise, but the JSC was nonetheless unsuccessful, then costs would not have been warranted.
[23]Mr Cowey submits:
… there is no authority for an award of costs against a party who fully prepares for a JSC, and complies with all directions, and then determines that further participation is not going to be fruitful.
[24] However, implicit in this submission is that Mr Birchfield fully and properly participated in the JSC in good faith. He did not. At the risk of labouring the point, it is Mr Birchfield’s failure to participate in the JSC in any meaningful way that warrants an award of costs. Mr Cowey submits that characterisation of Mr Birchfield’s involvement in the JSC is not appropriate. He submits:
Through the JSC process [Mr Birchfield] learned more about the plaintiffs’ position, and learned that a settlement was not achievable at that juncture – the plaintiffs learned likewise. This is what a JSC is intended to give the parties an opportunity to do: they were able to “hear it from the ‘horse’s mouth’.
[25] I do not accept that submission. The parties knew before the JSC that their respective positions were not acceptable to the other side. It did not require a JSC for the parties to learn that “a settlement was not achievable at that juncture”. The only point in the parties attending the JSC was if they were going to move from what they knew to be positions unacceptable to the other side.
[26] The JSC commenced at 10.00 am but by 12.30 pm Mr Birchfield said he wanted to leave. Despite my calling upon him to make a counter-offer he refused to do so and essentially abandoned the JSC without making any offer. It is clear to me that Mr Birchfield attended the JSC with no intention of exploring or contemplating an outcome other than that which he had tabled before the JSC. He knew that solution was not acceptable to the other parties — if it had been, it would have been accepted before the JSC. Rhetorically, what then did Mr Birchfield think would happen at the JSC? Mr Birchfield agreed to attend the JSC but adopted a stubborn, unreasonable and unrealistic approach and did not act in good faith to reach a resolution. Because he did not get his way he, as the old expression goes “threw his toys out of the cot” and abandoned the JSC after only 2.5 hours. The JSC was set down for all day and it is common for negotiations to go all day, and at times, into the evening.
[27] I am quite satisfied in the exceptional circumstances of this case that an award of wasted costs against Mr Birchfield is called for.
Quantum
[28] Counsel for the plaintiffs sought two-thirds of their actual solicitor-client costs based on that being the figure adopted in Leonardo. The bulk of the costs are counsels’ time for preparation, being $19,371.25 (plus GST), together with costs of attending the JSC of $6,300 (plus GST).
[29] Given the proximity of the hearing, I consider most of the material filed by the plaintiffs will have some utility for the hearing. I award one-third of counsels’ actual costs of preparation being $6,457.08. However, I consider all of counsels’ time for the day of the JSC was wasted, which was a total of $6,300 (plus GST) together with the wasted disbursements of travel and the filing fee for the JSC of $1,335.53, giving a total of $14,092.61 (plus GST). Mr Birchfield is to pay the plaintiffs $14,092.61 plus GST.
[30] In addition, counsel for the second defendant attended the JSC. They are awarded costs on the same basis, that is, one-third of preparation costs and the costs of attendance at the JSC in full, calculated on the basis of paragraph 4 of Ms Webber’s memorandum of 24 June 2024. Mr Birchfield is to pay that sum to the second defendant.
Associate Judge Lester
Solicitors:
Harmans, Christchurch (for Plaintiffs)
Parry Field Lawyers, Christchurch (for First Defendant) Anderson Lloyd, Christchurch (for Second Defendant)
Copy to counsel:
R J Hollman KC, Barrister, Auckland (for Plaintiffs) G K Riach, Barrister, Christchurch (for Plaintiffs)
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