Boswell v Millar

[2013] NZHC 1583

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2007-419-392 [2013] NZHC 1583

BETWEEN  KATHRYN FRANCES BOSWELL Plaintiff

ANDOWEN ROSS MILLAR Defendant

Hearing:                   On the papers

Appearances:           K F Boswell in person

D S Quinn for Defendant

Judgment:                27 June 2013

JUDGMENT OF KATZ J [Costs]

This judgment was delivered by me on 27 June 2013 at 3:00 p.m.

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:           Chatwin Legal Limited, Hamilton

Copy to:            K F Boswell, Paeroa

BOSWELL v MILLAR [2013] NZHC 1583 [27 June 2013]

Introduction

[1]      The plaintiff, Kathryn Boswell, leased part of the defendant, Owen Millar’s farm (“Property”).  A dispute arose between the parties as to whether Ms Boswell had the right to purchase the Property and, if so, on what terms.  That dispute was settled  on  12  February  2008,  the  first  day  of  the  original  trial.    The  terms  of settlement  were  recorded  in  a  settlement  agreement.    Unfortunately,  however, various disputes then arose as to the meaning and effect of the settlement agreement.

[2]      The statement of claim was amended to reflect the new disputes and a new trial scheduled.  Prior to the second trial a number of issues were resolved, leaving four key issues raised by Ms Boswell, as well as Mr Millar’s counterclaim, to be determined.

[3]      In  a  judgment  delivered  on  10  April  2013  (“Judgment”)  I  dismissed Ms Boswell’s  claims.    I  also  dismissed  Mr  Millar’s  counterclaim.    I  gave  a preliminary indication that, in my view, costs in favour of Mr Millar on a Category 2, Band B basis would be appropriate.   I invited the parties  to file memoranda if agreement could not be reached based on this indication.

[4]      Agreement could not be reached and accordingly both parties have filed memoranda.  I must determine whether costs should be awarded against either of the parties and, if so, the quantum of such costs.   Finally, I consider Ms Boswell’s application that any award of costs against her be stayed pending the outcome of her appeal against the Judgment.

Should an award of costs be made?

[5]      Ms Boswell filed a memorandum in respect of costs, dated 6 June 2013.  That memorandum was rejected for filing by the registry due to its use of intemperate language.  Ms Boswell was asked to re-draft her memorandum.  She did so and on

18 June 2013 filed a revised memorandum.  In it, however, she asserted that she had been prejudiced as a result of her first memorandum being rejected, as it had “addressed every issue raised by the defendant’s counsel”.  I accordingly requested

the  registry to  provide  me  with  a  copy of  Ms  Boswell’s  original  6  June  2013 memorandum.  I have therefore considered both of Ms Boswell’s memoranda.

[6]      Ms Boswell’s primary submission as to why costs should not be awarded against her is that the Judgment was wrong.  However that is an issue for the Court of Appeal to consider, in the context of the appeal that Ms Boswell has filed.  For present  purposes  any  assessment  of  costs  must  proceed  on  the  basis  that  the Judgment stands, pending determination of the appeal.

[7]      Costs issues are at the discretion of the Court, although that discretion must be exercised on a principled basis, having regard to the matters outlined in the High Court Rules and in previous authorities.

[8]      The general principle is that costs follow the event, and that the losing party should make a reasonable contribution to the costs of the successful party.  Both the claim and the counterclaim were unsuccessful.  However, the key focus of the case was on the various claims made by Ms Boswell.  Virtually all of the evidence was directed to such matters.   The issues raised by Mr Millar’s counterclaim involved almost no additional evidence.   The legal issues raised by the counterclaim were narrow in scope.  Ms Boswell appears to accept that dealing with the counterclaim “took little time of the Court”.  She states that:

The reason for this was because the little merit his case had, meant he had little to present in his favour.

[9]      Ms Boswell’s claims were unsuccessful.   They were the primary focus of both the evidence and the submissions in this case. Ms Boswell should accordingly make a reasonable contribution to the costs of Mr Millar.

Quantum of costs

[10]     Counsel for Mr Millar notes that the matter has had a long history.  The trial before me was to determine the claims set out in the fourth amended statement of claim dated 31 May 2012 and the counterclaim set out in the statement of defence and counterclaim dated 2 July 2012.  Counsel for Mr Millar accordingly proceeded on the basis that steps taken prior to 31 May 2012 should be disregarded.  Mr Millar

accordingly seeks costs only in respect of steps taken after that date.  In my view that was an appropriate concession.

Should indemnity or increased costs be awarded?

[11]     Prior to trial Mr Millar made three offers to settle the proceedings on a

“without prejudice except as to costs” basis.  His offers were as follows:

(a)       Mr Millar offered Ms Boswell the sum of $15,000 on the terms set out in an email dated 11 October 2012;

(b)Mr Millar offered Ms Boswell the sum of $40,000 on the terms set out in an email of 16 October 2012; and

(c)       Mr Millar offered Ms Boswell the sum of $50,000 on the terms set out in an email dated 25 October 2012.

[12]     The offers are clearly reasonable on their face, as borne out by the Judgment

(in which Ms Boswell failed in all of her claims).

[13]     Counsel  for  Mr  Millar  indicated  that  his  client  had  initially  considered seeking increased costs or indemnity costs on the basis that Ms Boswell had contributed unnecessarily to the time and expense of the proceeding by pursuing arguments that lacked merit and failing, without reasonable justification, to accept the various settlement offers made by Mr Millar.  However, Mr Millar has elected not to pursue increased or indemnity costs in the interests of simplicity, and in the hope of avoiding a prolonged dispute in respect of costs.

[14]     Accordingly it is  not necessary for me to consider whether an award of indemnity or increased costs is justified in this case.

Scale costs

[15]     Mr Millar sought costs on a Category 2, Band B basis.

[16]     Ms Boswell submitted that the time claimed by Mr Millar’s counsel for trial preparation  (calculated  on  that  basis)  was  excessive  in  light  of  the  amount  of evidence given, the time taken to deliver it and the narrow scope of the counterclaim. This submission overlooks however that much of the trial preparation would have been directed to meeting the plaintiff’s claim rather than presenting the counterclaim.

[17]   Mr Millar’s memorandum states that his actual solicitor-client costs “comfortably” exceeded scale 2B costs.  Given the multiplicity of issues raised in the proceedings I have no difficulty in accepting that submission.  Scale costs on a 2B basis for the steps taken after 31 May 2012 are clearly appropriate and will not in my view result in any over-recovery by Mr Millar.

[18]     Scale costs on a 2B basis amount to $33,830.00, as set out in a schedule attached to counsel for Mr Millar’s memorandum.  Disbursements are sought in the sum of $108.80 (filing fee).  Costs are awarded accordingly.

Stay of the costs award

[19]     The High Court has power to stay execution of a judgment pending the determination of an appeal.

[20]    The substantive Judgment is already under appeal and Ms Boswell has foreshadowed that any costs judgment against her will also be appealed.  She applies to stay the execution of any costs judgment pending the outcome of her appeal(s).  In particular, she submitted that payment of any costs should be stayed pending appeal on the basis that Mr Millar is over 80 years of age and in failing health.  Ms Boswell expresses concern that he will pass away before her appeal is resolved:

There is no assurance that the estate would have the money to be refunded, or that if they did, that it would be refunded.

[21]     In my view, however, Mr Millar’s age and health are factors which weigh against a stay rather than in favour of one.   Although costs were only sought in relation to the final stages of the litigation, proceedings have been on foot for at least six years.  Mr Millar has behaved reasonably (at least in relation to the disputes that

were before me) as evidenced by his three pre-trial settlement offers on a “without prejudice save as to costs” basis.

[22]     Since May 2012 Mr Millar has incurred significant legal costs in defending claims against him which ultimately failed at trial.  The costs regime is intended to reimburse him, at least in part, for such costs.  Given his age and health he should not be “out of pocket” while Ms Boswell’s appeal is progressed.  Given that he owns the farm which the Property formed part of, any concern about his ability to refund any costs award, should that prove to be necessary, do not appear to be well founded.

[23]     I decline to stay the enforcement of costs.

Result

[24]     The  plaintiff  is  to  pay  costs  to  the  defendant  in  the  sum  of  $33,830.00 together with disbursements of $108.80 (totalling $33,938.00).

[25]     The  application  that  payment  of  such  costs  be  stayed  pending  appeal  is declined.

Katz J