Blanchard v Littlejohn

[2022] NZHC 3196

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2022-419-000123

[2022] NZHC 3196

IN THE MATTER

of s 339 of the Property Law Act 2007

AND IN THE MATTER

of an application for orders for the sale of a property

BETWEEN

IAN DAVID BLANCHARD as trustee and executor of the estate of Maria Nita Amy Jeffries

First Applicant

AND

HELEN MARY LITTLEJOHN, MICHAEL JOHN TAYLOR and STEPHEN CHARLES

MUNRO as administrators of the estate of Jeanette Florence Littlejohn as trustee and executor of the estate of Arthur George

Littlejohn
Second Applicants

AND

THERESA MARIE JEFFRIES

Respondent

Hearing:	(On the papers)
Counsel:	David Sheppard for the Applicants Respondent in Person
Judgment:	6 December 2022

JUDGMENT OF MOORE J

[Costs]

This judgment was delivered by me on 6 December 2022 at 4:00 pm. pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

BLANCHARD & ORS v JEFFRIES [2022] NZHC 3196 [6 December 2022]

Background

[1]                 This case concerned an application under s 339 of the Property Law Act 2007 (“the PLA”) for orders for the sale of a family property in Tamarunui.

[2]                 The property is presently occupied by the respondent, Theresa Jeffries. Her interest in the property was bequeathed to her by her late husband, Keith Jeffries. She presently holds a one third share of the property.

[3]                 The first and second applicants are the representatives of Keith Jeffries’ two siblings, Maria Jeffries and Arthur Littlejohn. Both are also deceased. Each was bequeathed a one third share in the property upon the death of their mother, as was Keith Jeffries.

[4]                 The first and second applicants wished to liquidate their interests by selling the property. They proposed that Theresa Jeffries acquire their shares or alternatively that the property be sold on the open market. She originally refused, leading the applicants to apply to the Court for the sale of the property.

[5]                 The matter was called before me  by  way  of  telephone  conference.1  Theresa Jeffries modified her position. She would not oppose the sale of the property if the applicants agreed that they will not take any action against her if she disposes of or destroys items of family property stored there.

[6]                 I granted the order for the sale of property, conditional upon the applicants providing an undertaking allaying Theresa Jeffries’ concerns about the items of family property.

[7]                 Although the applicants filed a memorandum addressing the issue of costs, I did not make an order as to costs. I explained to Theresa Jeffries, who self-represented, that the applicants sought 2B scale costs. While costs would ordinarily be payable to the successful party, the Court enjoys a wide discretion as to whether costs should be

1      Blanchard v Jeffries HC Hamilton CIV-2022-419-123, 1 September 2022.

awarded. She told me that she is unable to pay costs because she is in straightened circumstances and ill health.

[8]                 I directed that she file and serve a memorandum as to why she should not be liable for the costs sought. The applicants were permitted to file and serve any submissions in reply.

[9]                 Theresa Jeffries did not file a memorandum. Counsel for the applicants subsequently filed one noting that fact and reiterating their submissions as to why 2B scale costs are appropriate.

Should Theresa Jeffries be ordered to pay 2B scale costs and disbursements to the applicants?

[10]              The issue is therefore whether the applicants should be awarded 2B costs and disbursements.

[11]              While costs are at the discretion of the Court,2 the general rule is that the party who fails with respect to a proceeding should pay costs to the party who succeeds.3 The quantum of costs is determined by reference to the categorisation of the proceeding and the appropriate recovery rate for the time spent on it.4 The Court may increase the figure of costs payable “where there is failure by the paying party to act reasonably”.5

[12]              I am satisfied that there is no reason to depart from this general rule, for the reasons which follow.

[13]              First is that the applicants were forced to bring their application due to Theresa Jeffries’ intransigent approach to the sale of the property. Their efforts date back to June 2020, when one of Theresa Jeffries’ nephews corresponded with her via text message. She refused to sell the property.

2      High Court Rules 2016, r 14.1.

3      Rule 14.2(1)(a).

4      Rules 14.3 and 14.4.

5      Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400 at [27].

[14]              The applicants instructed solicitors. On 9 February 2021, their solicitors sought Theresa Jeffries’ agreement to the sale of the property. She again refused to give it.

[15]              It was only after the applicants applied for orders for the sale of the property under the PLA that Theresa Jeffries reconsidered her position. She ultimately consented to the application. While her consent was conditional, it was conditional on a matter which the applicants do not appear to have taken issue with at any stage.

[16]              The effect of this settlement is that the applicants were successful in attaining the outcome sought by their application. An award of 2B scale costs recognises that fact. Further, Theresa Jeffries’ conduct put them to additional time and expense and is the sort of conduct that might well justify increased costs.

[17]              The thrust of Theresa Jeffries’ objection to paying costs is that she is unable to do so, given her straightened circumstances and ill health. Financial hardship is not an answer to a claim for a costs award.6 Costs awards must be made at a meaningful level, even against an impecunious party, particularly where the case is found to have lacked merit.7 It is only exceptional cases which justify an abatement of costs on the basis of the liable party’s personal circumstances.8

[18]              This is not an exceptional case. While Theresa Jeffries’ claims are uncontradicted, she has not adduced any evidence of her means to pay a costs award. In any event, the underlying proceeding relates to the sale of a property in which she holds a share. She will receive a portion of the sale proceeds. Any costs award could be deducted from her share of those proceeds.

[19]              For those reasons, I consider that there is no reason to depart from the general rule that costs follow the event.

6      Foni v Foliaki [2018] NZHC 3126 at [5(a)] citing Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2011] NZCA 640 at [7].

7      At [5(b)] citing Te Whare o te Kaitiaki Ngahere Incorporated Society v West Coast Regional Council [2014] NZHC 2969 at [16]; and Tuck v Keedwall [2016] NZHC 794 at [11].

8 At [11].

Result

[20]              I order that Theresa Jeffries pay to the applicants 2B scale costs of $10,277 together with disbursements of $890.

Moore J

Barristers/Solicitors:

Cooper Rapley Lawyers, Palmerston North

Copy to:
The Respondent