Campbell v Goldie

[2019] NZHC 1573

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2018-404-002874

[2019] NZHC 1573

IN THE MATTER

Of an appeal under s 39 of the Property (Relationships) Act 1976 and s 124 of the District Courts Act 2016

BETWEEN

ROBIN MCGREGOR CAMPBELL

Appellant

AND

DENISE KAY CAMPBELL GOLDIE

Respondent

Hearing:	27 June 2019
Appearances:	L La Mantia for Appellant K Puddle for Respondent
Judgment:	8 July 2019
Reissued:	21 August 2019

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 08 July 2019 at 10am and Re-delivered on 21 August 2019

Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors:

L La Mantia, Barrister, Auckland Martelli McKegg, Auckland

K3 Legal Limited, Auckland

CAMPBELL v CAMPBELL GOLDIE [2019] NZHC 1573 [8 July 2019]

Introduction

[1]    Robin Campbell wants to appeal costs decisions in two related proceedings brought by his former wife, Denise Goldie, regarding the division of their relationship property under the Property (Relationships) Act 1976 (the PRA). The litigation started as a single proceeding but was split at Mr Campbell’s request so that the part that did not require Ms Goldie to give evidence could continue when Ms Goldie was on medication and unable to cope under cross examination.

[2]    The proceeding that was heard first – before Judge Maureen Southwick QC – concerned whether Mr Campbell’s powers in relation to the family trust that owned the house in which Mr Campbell and Ms Goldie had lived before and during their marriage constituted a property interest for the purposes of the PRA. Judge Southwick held that they were not.1

[3]    The proceeding that was heard second – before Judge A P Goodwin – concerned the duration of the relationship of Mr Campbell and Ms Goldie and, as a consequence, which assets were relationship property and which were separate property, and the division of assets held to be relationship property. Judge Goodwin held that the only qualifying relationship between Mr Campbell and Ms Goldie for the purposes of  the  PRA  was  from  March  2005  to  January  2010,  as  argued  by  Mr Campbell. As a consequence of that determination, Judge Goodwin held that many of the assets under consideration were separate property. However, certain assets were agreed to be relationship property and Judge Goodwin ordered accordingly. The effect of those orders was that Mr Campbell was to pay Ms Goldie approximately $65,000, subject to final adjustments relating to the value of Ms Goldie’s Kiwisaver account.2

[4]    Mr Campbell considered he was the successful party in both proceedings and applied for costs in relation to each. However, both Judge Southwick and Judge Goodwin held that costs should lie where they fall.3

1      Campbell Goldie v Campbell [2016] NZFC 4757.

2      Goldie v Campbell [2017] NZFC 1811.

3      Campbell Goldie v Campbell [2018] NZFC 7105; Campbell Goldie v Campbell [2018] NZFC 9052.

[5]    Mr Campbell did not, within the appeal period of 20 working days stipulated in the High Court Rules 2016, appeal Judge Southwick’s decision which related to costs of $21,120.   However, when Judge Goodwin issued his decision declining    Mr Campbell’s claim for costs of $95,638, Mr Campbell applied for an extension of time to appeal Judge Southwick’s decision and filed notices of appeal against both decisions.

[6]    Mr Campbell’s application for an extension of time was heard together with the two appeals. Ms Goldie opposed the application to extend time and the two appeals.

Application for an extension of time

[7]    Rule 20.4(3) of the High Court Rules provides that the High Court may, by special leave, extend the time for an appeal.

[8]    Ms La Mantia for Mr Campbell and Mr Puddle for Ms Goldie agreed that the Supreme Court’s decision in Almond v Read sets out the principles that apply to the exercise of the Court’s discretion on whether to grant an extension of time.4 While that case concerned r 29A of the Court of Appeal (Civil) Rules 2005, it has been held also to apply to appeals from decisions of the Family Court.5

[9]    In Almond v Read, the Supreme Court held that the ultimate question when considering the exercise of the discretion is what the interests of justice require, that this necessitates an assessment of the particular circumstances of the case, and that factors likely to require consideration include:6

(a)The length of the delay;

(b)The reasons for the delay;

(c)The conduct of the parties, particularly that of the applicant;

4      Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.

5      C v M [2018] NZHC 1330.

6 At [38].

(d)Any prejudice or hardship to the respondent;

(e)The significance of the issues raised.

[10]   The Supreme Court also held that the merits of a proposed appeal may, in principle, be relevant to the exercise of the discretion to extend time but said there are three qualifications to this principle:

(a)Where the merits or otherwise of a proposed appeal are overwhelmed by other factors such as the length of the delay and prejudice to the respondent or others;

(b)Where there has been insignificant delay caused by a legal adviser’s error and there is no prejudice to the proposed respondent;

(c)Where it cannot be said with confidence that the merits of a proposed appeal are either very strong or very weak because of the difficulty of reaching a view on the merits of a case in the context of an application to extend time.

[11]   Mr Puddle observed that the commentary in McGechan on Procedure states that a proper explanation should be provided on affidavit as to the circumstances surrounding a failure to appeal in time,7  and that no such affidavit was filed by     Mr Campbell in support of his application. I agree that an affidavit should have been provided but it is not a requirement of the Rules. Ms La Mantia’s submissions addressed the reasons why Mr Campbell did not appeal in time, as Mr Puddle accepted. Accordingly, I did not regard the absence of an affidavit as fatal to the application.

[12]   After hearing submissions from Ms La Mantia and Mr Puddle at the hearing on 24 June 2019 I dismissed Mr Campbell’s application for an extension of time. I

7      Andrew Beck and others McGechan on Procedure (loose-leaf ed, Brookers, updated to 10 May 2019) at [HRPt 20.4.02.].

said I would give full reasons in my written decision but summarised my reasons as follows:

(a)Appeal periods are set for a reason, to ensure litigants know where they stand and can take steps accordingly;

(b)The decision not to appeal was deliberate and by not appealing within the prescribed time period, Mr Campbell had impliedly accepted the result;

(c)While there may be some public importance in the issue Mr Campbell wanted to take on appeal, the same issue arose in his appeal against Judge Goodwin’s decision so would be before the High Court in any event.

[13]My detailed reasons follow.

Length of delay

[14]   On the basis that Judge Southwick’s decision was released on 25 September 2018, even though it was dated 17 September 2018, Mr Campbell’s application was filed 42 working days after the end of the appeal period. That is, the delay was more than double the statutory maximum. This counted against Mr Campbell’s application, particularly in view of the fact that the decision not to appeal within the appeal period was deliberate.

Reasons for delay

[15]    Ms La Mantia acknowledged that the  delay  was  not  from  oversight  on Mr Campbell’s part or that of his counsel and said that Mr Campbell had decided not to continue what had been protracted and emotionally draining litigation by lodging an appeal. Ms La Mantia said that the decision not to appeal was also taken in the expectation that Mr Campbell would succeed in his more substantial application for costs in the proceeding before Judge Goodwin. However, when Judge Goodwin also dismissed that application for costs, Mr Campbell had decided to appeal both

decisions. Ms La Mantia also suggested that the Family Court’s delay in issuing Judge Goodwin’s costs decision contributed to Mr Campbell’s delay.

[16]   As Mr Puddle said, the Supreme Court in Almond v Read distinguished between situations where the application for an extension was the result of a change of mind  or  indecision  rather  than  the  result  of  error  or  inadvertence.8  While  Mr Campbell’s change of mind after receiving Judge Goodwin’s decision may be understandable, the reality is that he made a conscious decision not to appeal Judge Southwick’s decision. He could have protected his position by filing a notice of appeal against Judge Southwick’s decision pending the receipt of Judge Goodwin’s decision. The responsibility for Mr Campbell losing the opportunity to appeal as of right lies with Mr Campbell and his advisers and cannot be visited on the Family Court.

Conduct of the parties

[17]   Both counsel made submissions that the conduct of the other side in the substantive proceedings had been wanting and should count against them. I said at the hearing that I was not interested in revisiting matters of conduct when both Judge Southwick and Judge Goodwin had held that conduct was not a relevant factor in their decisions. I also considered there was little merit in Ms La Mantia’s assertions of unwarranted delay on Ms Goldie’s part because of the illness of Ms Goldie’s counsel and then of Ms Goldie herself.

Prejudice or hardship to the respondent

[18]   I accepted that there would be no real prejudice to Ms Goldie by granting an extension of time given that, if the extension were granted, the appeal against Judge Southwick’s decision would be heard at the same time as the appeal against Judge Goodwin’s decision.

Significance of the issues raised

[19]    Ms La Mantia emphasised this point in particular, saying that Judge Southwick’s decision was another example of a Family Court Judge not following the

8      At [38](b).

clear direction set by the High Court that in deciding costs in relation to relationship property proceedings, the starting point should be the District Court Rules 2014 and its presumption that costs follow the event, and that it is not open to the Family Court to approach costs decisions as entailing the exercise of an unfettered discretion. Ms La Mantia also said in this regard that the merits  of the appeal were strongly in     Mr Campbell’s favour.

[20]   I accepted that the issue raised with respect to Judge Southwick’s decision, namely the correct approach to be taken to an award of costs, was an issue of public importance. However, the same issue arose in relation to Judge Goodwin’s decision which Mr Campbell had appealed as of right. Accordingly, there was no need to grant an extension of time to allow Mr Campbell to appeal Judge Southwick’s decision in order for that issue to be considered by the High Court.

[21]   For these reasons, I considered it was not in the interests of justice to allow Mr Campbell’s application for an extension of time to appeal Judge Southwick’s costs decision. Accordingly, Mr Campbell’s application and his appeal against that decision are dismissed.

Appeal against Judge Goodwin’s decision

[22]   The essence of Mr Campbell’s appeal against Judge Goodwin’s decision is the Judge failed to follow the guidance of the High Court, which is binding on the Family Court, as to the approach to be taken to the award of costs in property relationship proceedings. Ms La Mantia submitted that under that approach, the starting point is that the District Court Rules on costs should be applied and, in particular, that costs should follow the event; that is, costs are awarded to the successful party. Ms La Mantia accepted that an award of costs is at the discretion of the Court but says that the discretion has to be exercised by reference to whether there are good reasons for the Court not to apply the District Court Rules rather than from the perspective of whether to follow the Rules.

[23]   Ms La Mantia further submitted that Judge Goodwin gave inadequate and inaccurate consideration to who was the successful party and says that on an objective assessment, Mr Campbell had been the successful party. Ms La Mantia also says that

Judge Goodwin failed to give adequate consideration to the conduct of the parties and, in particular, failed to give adequate consideration to the  Calderbank letter that     Mr Campbell had sent to Ms Goldie and which, if accepted, would have resulted in a settlement for a sum greater than that which Ms Goldie achieved under Judge Goodwin’s substantive judgment.

[24]   Mr Puddle submitted that the PRA confers a wide discretion on the Family Court both generally and about whether to apply the District Court Rules Court, and that Judge Goodwin’s decision was consistent with that wide discretion. He also submitted that the approach taken by Judge Goodwin was consistent with the High Court’s guidance and said that Judge Goodwin’s conclusion that the decision made was not “black and white” as to who had been and had not been successful reflected that Mr Campbell and Ms Goldie had each succeeded on some points. He said that Judge Goodwin’s decision not to award costs to either party was open to him and was not plainly wrong and so should stand.

What did Judge Goodwin decide?

[25]   When Judge Goodwin gave his decision he was considering costs applications from both parties as each had claimed to be the successful party. Ms Goldie’s claim was for costs of $55,836, based on category 2, band B costs for all steps except for the inspection of documents for which band C costs were sought. Ms Goldie also sought an uplift of 50 per cent be ordered in respect of the strike out application brought by Mr Campbell following delays caused by the illness of Ms Goldie’s counsel.

[26]   In his decision, Judge Goodwin summarised the essential elements of each party’s claim, including Mr Campbell’s claim for indemnity costs or an uplift in costs because of Ms Goldie’s refusal to  accept  Mr  Campbell’s  Calderbank  offer  and Mr Campbell’s claim for category 3 classification for costs up to the point the proceedings were split.

[27]   Judge Goodwin referred to s 40 of the PRA which, he said, confers an unfettered discretion on the award of costs. He also referred to s 207 of the Family Court Rules 2002 which states that costs are at the Court’s discretion and that the Court may apply provisions of the District Court Rules 2014 in determining costs. He

recorded that Rule 14.2(a) provides that the party who fails with respect to a proceeding should pay costs to the party who succeeds.

[28]   Judge Goodwin said that while the award of costs is unfettered, the discretion needs to be exercised in a principled fashion. To that end, he adopted the list of matters considered by Judge E Smith in Powell v Allison:9

(a)The objects of the Act;

(b)The outcome of the proceedings;

(c)The material issues;

(d)The conduct of the parties;

(e)The means of the parties;

(f)The actual costs incurred;

(g)The overall interests of justice.

[29]   Before considering each of those matters, Judge Goodwin acknowledged that there had been a shift in approach to relationship property costs in the Family Court from the traditional approach of costs not being awarded to one where costs are awarded referenced Duffy J’s decision in van Selm v van Selm.10 However, the Judge stated that the legislative provision of costs in the PRA remains one of discretion and said that the approach he took was that the factors to be considered in exercise of the discretion should be fully considered.

[30]Judge Goodwin then considered each of the matters he had identified from

Powell v Allison:

9      Powell v Allison [2013] NZFC 7976.

10     van Selm v van Selm [2015] NZHC 641.

(a)He made no finding as between the parties regarding the objects of the Act, noting that the Court must divide the property according to the PRA as opposed to the outcome sought by a party;

(b)On the outcome and the material issues, Judge Goodwin held that although  Ms  Goldie   had   been   successful   in   some   respects,  Mr Campbell had been successful on the primary issue of the classification of the relationship. However, Judge Goodwin then said he did not view the decision as ‘black and white” in respect of who had been and who had not been successful, and that consideration had to be given to Ms Goldie’s experience of, and emotional capital in, what had been a long-standing and, at times, difficult relationship given Mr Campbell’s situation where he remained married for a time to his former wife who was suffering illness.

(c)On the means of the parties, Judge Goodwin said that while there was no updated evidence on the exact means of either party, it appeared that Mr Campbell was in a stronger financial position than Ms Goldie, in terms of both assets and income.

(d)On costs, the Judge held that both parties had incurred significant costs.

(e)On the interests of justice, Judge Goodwin said he did not consider that there were other relevant matters that raised an interests of justice argument.

[31]   The Judge concluded that there should be no order for costs in favour of either party. He acknowledged that Mr Campbell had “on the whole” succeeded with regard to the issues raised. However, Judge Goodwin said that taking account of what he had said about the emotional and subjective views of the parties and their de facto relationship, as well as the parties’ current financial means, he was not persuaded that a costs order was warranted.

Analysis

[32]    As Ms La Mantia and Mr Puddle agreed, it is well-established that because a decision on costs involves an exercise of discretion, an appellate court should not interfere with a costs decision unless satisfied that the judge acted on a wrong principle, failed to take into account some relevant matter, took account of some irrelevant matter, or was plainly wrong.11 However, the Supreme Court has also made it clear that although the costs jurisdiction is discretionary, it is not unprincipled and the discretion is to be exercised generally in accordance with the relevant rules.12

Relevant provisions

[33]   Section 40 of the PRA provides that, subject to any rules of procedure, in proceedings under the Act the Court may make “such order as to costs as it thinks fit.” The relevant rules for present purposes are the Family Court Rules 2002.

[34]   Rule 207(1) of the Family Court Rules provides that the Court has discretion to determine the costs of any proceeding. Rule 207(2) of the Family Court Rules provides that in exercising that discretion the Court may apply any or all of rr 14.2 to

14.12  of the District Court Rules 2014 relating to costs “so far as applicable and with all necessary modifications”. These include:

(a)14.2 – principles applying to the determination of costs:

(b)14.3 – categorisation of proceedings:

(c)14.4 – appropriate daily recovery rates:

(d)14.5 – determination of reasonable time:

(e)14.6 – increased costs and indemnity costs:

(f)14.7 – refusal or, or reduction in costs:

…

(i)14.10 – written offers without prejudice as to costs:

(j)14.11 – effect on costs:

(k)14.12 – disbursements.

11     Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [15].

12 At [17].

…

[35]   Rule 14.2 provides that the principles that apply to the determination of costs include:

(a)The party who fails with respect to a proceeding … should pay costs to the party who succeeds;

(b)An award of costs should reflect the complexity and significance of the proceeding;

…

(g) So far as possible the determination should be predictable and expeditious.

[36]   Rule 14.7 provides that despite rr 14.2 to 14.5, the court may refuse to make an order or may reduce the costs payable under those rules if certain circumstances apply. Paragraph (f) of r 14.7 also provides:

(f) some other reason exists that justifies the court refusing costs  or  reducing costs despite the principle that the determination of costs should be predictable and expeditious.

[37]   On a straight-forward textual analysis, it can be argued that the wide discretion conferred by s 40 of the PRA is not significantly narrowed by r 207 of the Family Court Rules which empowers but does not explicitly require the Court to apply the District Court Rules on costs. In addition, prior to the enactment of s 40 of the PRA in 2002 and the adoption of the Family Court Rules in the same year, the usual rule in matrimonial property proceedings was that each party bore their own costs, based on the rationale that the resolution of the dispute was something of a benefit to both parties and neither should be regarded as the winner or loser.13

Relevant authorities

[38]   There has been at least one High Court decision in recent years that has emphasised the discretionary nature of costs decisions in relationship property proceedings and held that the basic approach in civil matters, where costs follow the

13     Gerbic v Gerbic (1991) 8 FRNZ 518, [1992] NZFLR 481 (HC) at 504.

event, should not necessarily apply in relationship property matters except when there was some particular reason for doing so.14

[39]   However, as Clifford J said in Thompson v Public Trust, there are now numerous High Court authorities to the effect that in property relationship cases, costs should follow the event and be dealt with in accordance with the normal civil rules.15 Similarly, in Martin v Marsh, Brewer J said that since r 207 of the Family Court Rules came into force, the Courts now treat costs awards in relationship property proceedings in the same way as in ordinary civil proceedings.16 In van Selm v van Selm, the decision referenced by Judge Goodwin in his decision, Duffy J also said that she was satisfied that the recent High Court cases dealing with costs have consistently supported costs awards being made in the Family Court in accordance with general costs principles.17

[40]   The above decisions came after Radisich v Taylor in which Randerson J reviewed the statutory framework within which s 40 of the PRA and the Family Court Rules then applied, and concluded that the clear legislative intention was that in proceedings in the Family Court costs were to be dealt with in accordance with the District Court Rules, as applicable. Randerson J also held that it followed that the authorities dealing with costs rules were also applicable to proceedings in the Family Court.18 Randerson J reached these conclusions because:

(a)Rule 207 of the Family Court Rules, as it was then promulgated, provided that r 45 of the District Court Rules 1992 applied to proceedings of the Family Court;

(b)Rule 45 both conferred a general discretion as to costs and provided that r 46 applied, subject to that general discretion; and

14     LRS v JML HC Wellington CIV 2008-485-002594, 3 May 2010.

15     Thompson v Public Trust (as administrator of the estate of Hillman) [2014] NZHC 2434.

16     Martin v Marsh [2015] NZHC 416.

17     van Selm v van Selm [2015] NZHC 641 at [41].

18     Radisich v Taylor HC Auckland CIV 2007-404-7578, 16 April 2008, at [23].

(c)Rule 46 provided that if a Court made an order as to costs, it “shall” order that the costs shall follow the event of the proceeding except where it appeared to the Court that some other order should be made.

[41]Randerson J’s analysis was endorsed by Keane J in FT v JML.19

[42]   Rule 207 was replaced in November 2009 with a version identical to the current version except that it referred to r 4 of the District Court Rules 2009 which came into effect  at the same time.  The current version of r 207 came into force on  1 July 2014, the same date the District Court Rules 2014 came into force.

[43]In SB v DC, Toogood J said:20

[36]   It cannot be doubted that the Family Court has a broad discretion as   to costs. Nevertheless, bringing r 207 of the Family Court Rules 2002 into force on 1 November 2009 must have been done for the purpose of ensuring that the Family Court’s costs discretion should be exercised in a principled manner. While principles such as those to be derived from the rules which are listed at r 207 are not mandatory, they provide guidance to the exercise of the discretion.

[44]   That conclusion applies with added force given that r 207 and the District Court Rules have again been amended with effect from the same date. The decisions in Thompson v Public Trust, Martin v Marsh and van Selm v van Selm further reinforce the point.

[45]    I accept, therefore that the weight of authority of recent High Court decisions is that while the Family Court has a wide discretion on costs decisions, when deciding how to exercise that discretion on the principled basis required by the Court of Appeal in Shirley v Wairarapa District Health Board, the Family Court should have regard to the principles to be derived from the District Court Rules as set out in r 207(2) of the Family Court Rules.

[46]   In addition, the Court of Appeal has endorsed this approach in Thomas v Owen, an appeal from a costs order made by Duffy J.21 In commenting on the merits of the

19     FT v JML [2012] NZHC 1388 at [26].

20     SB v DC HC Auckland CIV 2011-404-1005, 4 October 2011.

21     Thomas v Owen [2016] NZCA 178.

appeal, Wild J recorded the Court’s view that s 40 of the PRA says that the usual costs rules apply. He also noted that the Court’s decision on costs in Clayton v Clayton, a property relationship case that went to the Supreme Court for other reasons, the Court of Appeal had held that costs should follow the event.22 Wild J also said in Thomas v Owen that the costs decision in Clayton was a costs order of a routine nature.23

[47]   For these reasons, I accept that costs decisions in relationship property cases at least should be treated in the same way as costs decisions in ordinary civil proceedings.

Approach taken by the Family Court

[48]   In his decision, Judge Goodwin had regard to the District Court Rules on costs in a general sense but did not seek to apply them directly. Rather, he had regard to the matters identified by Judge Smith in Powell v Allison which, as in Powell v Allison itself, were applied as an alternative to the principles to be derived from the District Court Rules, even though there is some overlap between the Powell v Allison matters and the principles to be derived from the District Court Rules.

[49]   In Powell v Allison, Judge Smith considered Randerson J’s decision in Radisich v Taylor but concluded that the approach mandated by Radisich required only that the Family Court select the appropriate category and band for costs and consider whether to award increased or indemnity costs, and said that before turning its mind to those matters the Family Court first had to exercise its discretion as to whether or not it was to award costs. Judge Smith then identified that matters to which Judge Goodwin had regard in his decision as relevant to the exercise of that initial discretion.24

[50]   Judge Smith referred to her own decision in AHM v EAD25 in which she had also discussed Radisich v Taylor, and stated:

[18] With respect to relationship property matters there has never been a maxim that costs follow outcome or the event, which must be the case given the wide discretion afforded in the Act towards costs and the myriad of relevant matters to be taken into account. There may have been a time when there was a move in relationship property matters to consider them more akin

22     Clayton v Clayton [2015] NZCA 30, [2015] 3 NZLR 293 at [182]-[183].

23     Thomas v Owen [2016] NZCA 178 at [27].

24     Powell v Allison [2013] NZFC 7976 at [10]-[13].

25     AHM v EAD FC Christchurch, FAM 2007-009-001579, 16 March 2010.

to “civil” matters and more of a tendency to award costs than not. I do not ascribe to a view that simply because relationship property matters are more akin to a civil matter costs follow the event at all. Relationship property proceedings in themselves have particular family nuances. …

[51]   It is apparent from the High Court decisions discussed above that Judge Smith’s views have been superseded and it is not correct to approach costs in relationship property proceedings from the perspective set out in Powell v Allison and in AHM v EAD.

[52]   There is scope in the principles in the District Court Rules, notably r 14.7(f), and in the overall discretion to take account of the particular family nuances to which Judge Smith referred. But the fact of such nuances does not provide a basis for refusing to have regard to the principles in the first place. Accordingly, it is not appropriate to consider first whether to impose costs by reference to the matters such as those identified by Judge Smith in Powell v Allison and followed by Judge Goodwin in the present case before considering the principles to be derived from the District Court Rules.

Conclusions

[53]   I am satisfied, therefore, that in making his decision on costs by reference to the matters identified in Powell v Allison rather than by reference to the principles to be derived from the District Court Rules, as set out in r 207 of the Family Court Rules, Judge Goodwin acted on a wrong principle and that his decision should be set aside.

[54]   The above conclusion does not mean that Judge Goodwin was required to apply the District Court Rules. As Toogood J observed in SB v DC, the Rules are not mandatory. The Court maintains a discretion. But as Toogood J also observed, the principles to be derived from the District Court Rules provide guidance on how the discretion is to be exercised.

[55]   Nor does the conclusion in [53] mean that the Family Court must start from the position that the District Court Rules apply unless the Court decides otherwise in the exercise of its discretion – the proposition advanced by Ms La Mantia. Rule 207 is not written that way. But in deciding how to exercise its discretion, the Court must

consider the principles derived from the District Court Rules. It may not come up with some other separate set of principles, as Judge Goodwin did.

Consequences of finding Family Court error

[56]   Having set aside a Family Court decision on costs because of error, this Court would usually refer the determination of costs back to the Family Court for reconsideration in the light of this Court’s decision. Mr Puddle submitted that this would be the appropriate course because there was a substantial difference between the parties as to how the scale would apply and whether there would be uplifts and reductions. Ms La Mantia, however, urged this Court to finalise costs on the basis that it had sufficient information to determine the matter and in the interests of bringing an end to what had been a protracted and stressful proceeding for the parties.

[57]   In his application for costs to Judge Goodwin and in his appeal, Mr Campbell sought costs on the basis that the steps in the proceeding relating to whether the house owned by Mr Campbell’s family trust was relationship property prior to the proceeding being split, should be category 3, band C costs, on the basis of their complexity and the number of experts required to give evidence on them. Mr Campbell also sought indemnity costs or, in the alternative, an uplift of 30 per cent on the remainder of the costs, calculated as category 2, band B, on the basis of Ms Goldie’s failure to accept the Calderbank offer made by Mr Campbell and delay caused by the illnesses of Ms Goldies’ counsel and Ms Goldie herself, and the impact of delay on Mr Campbell. This resulted in claim for costs of $79,830 plus disbursements of $16,869.07, making a total claim of $96,699.07.

[58]   I said to Ms La Mantia at the hearing that if Mr Campbell wished to pursue a claim based on category 3, band C costs as well as indemnity costs or an uplift to the remaining costs, I would refer the case back to the Family Court because I considered that Court would be in a better position that this Court to decide those matters. From the information before me, I also doubted whether any steps in the proceeding merited category 3, band C costs or whether indemnity costs or an uplift in costs were warranted.

[59]   After taking instructions, Ms La Mantia informed me that Mr Campbell was content to seek this Court’s decision on the basis of a claim in which all steps in the proceeding would be costed on the basis of category 2, band B, with no indemnity or uplift. As a consequence, Mr Campbell’s claim for costs before this Court was for

$53,951 plus disbursements of $16,869.07.

[60]   With that amendment,  I  consider  this  Court  is  in  a  position  to  decide Mr Campbell’s application because the major concerns identified by Mr Puddle have been removed from consideration.

Mr Campbell’s revised claim for costs

[61]   Having regard to High Court decisions that have held that costs in property relationship proceedings should be treated in the same way as in ordinary civil proceedings, I make my determination of Mr Campbell’s claim having regard to District Court Rules 14.2 to 14.12.

R 14.2 - Costs should follow the event

[62]   Having regard to the principle in r 14.1(a) that the party who fails in a proceeding should pay costs to the party who succeeds, I consider that Ms Goldie should pay costs to Mr Campbell. Notwithstanding Judge Goodwin’s statement that he did not view the decision as ‘black and white” in respect of who had been and who had not been successful, I accept Ms La Mantia’s submission that Mr Campbell largely succeeded in his defence of Ms Goldie’s property relationship claim. Judge Goodwin’s decision on the duration of the relationship and on the assets that were separate property accorded with the position advanced by Mr Campbell - as Judge Goodwin accepted in the concluding section of his judgment where he acknowledged that Mr Campbell had on the whole succeeded with regard to the issues raised. Furthermore, Mr Campbell had agreed to the division of the assets which were held to be relationship property.

Rules 14.3 – 14.5: Categorisation of proceedings and appropriate recovery rates

[63]   Ms La Mantia and Mr Puddle agreed that all costs should be assessed on a category 2, band B basis, and I confirm that assessment.

[64]   Mr Puddle made no submissions contesting the individual steps making up Mr Campbell’s claim. Similarly, in the memoranda that were filed before Judge Goodwin made his decision, Ms Goldie’s then counsel focused on Ms Goldie’s claim and did not address the specific steps claimed by Mr Campbell. Accordingly, I accept the steps and the amounts claimed by Mr Goldie, which, on a 2B basis, come to

$53,951.

Rules 14.6, 14.10 and 14.11: Increased costs and indemnity costs; offers without prejudice except as to costs

[65]   While Ms La Mantia informed me that Mr Campbell was content for me to make my decision on the basis of 2B costs for all steps, for the sake of completeness I record that I do not consider that indemnity costs or an uplift in costs would have been warranted on the basis of Ms Goldie’s non-acceptance of the Calderbank offer from Mr Campbell. The offer was made in November 2015, two weeks before the date on which Ms Goldie’s initial application under the PRA had been set down as a back-up hearing. The letter was over 10 pages long and covered all of the matters at issue between Ms Goldie and Mr Campbell. It was open for acceptance for two days. The offer was not renewed after the back-up hearing was adjourned when the priority fixture went ahead. In these circumstances, I do not consider it would have been reasonable to impose any uplift in costs because of Ms Goldie’s not accepting the offer. It was open for only a very short period. It would have been difficult for Ms Goldie to have taken advice and reached a considered decision on the important issues bearing on her future welfare. It would also have been difficult for Ms Goldie to have complied with the requirements of s 21F of the PRA if the agreement resolving her relationship property differences with Mr Campbell was not to be held void.

[66]   I also consider it would not have been reasonable to impose any uplift in costs because of the delays which were said to have occurred in relation to the illness of Ms

Goldie’s counsel or Ms Goldie’s inability to cope with cross examination while under medication.

Rule 14.7: Reduction in costs

[67]   As already noted, r 14.7(f) provides that a court may refuse to make an order for costs or may reduce the costs otherwise payable if some other reason exists that justifies the court refusing costs or reducing costs, despite the principle that the determination of costs should be predictable and expeditious.

[68]   Judge Goodwin’s decision itself provides reasons why a reduction of costs is justified. While Judge Goodwin relied on these reasons to explain his decision not to award costs against Ms Goldie, they are also relevant to deciding the quantum of costs awarded. These reasons are:

(a)Ms Goldie was successful in some aspects of the claim, as reflected in the orders requiring Mr Campbell to make a payment to Ms Goldie of approximately $65,000;

(b)Mr Campbell was in a stronger financial position than Ms Goldie in terms of assets and income;

(c)While Mr Campbell was largely successful in defending Ms Goldie’s claims, those claims were not unreasonable having regard to the impact of the relationship on Ms Goldie, as referred to by Judge Goodwin.

[69]   In addition, given Ms Goldie’s more limited means, and the need for both parties to get on with their lives, I consider it would be contrary to the interests of justice to require Ms Goldie to pay costs greater than the share of relationship property she receives from Mr Campbell. I am satisfied that these reasons warrant a reduction of 30 per cent of Mr Campbell’s claim for costs, not including disbursements, despite the principle that the determination of costs should be predictable and expeditious.

Rule 14.12: Disbursements

[70]   Mr Campbell sought disbursements of $16,869.07 for the costs of reports from an expert accountant and an actuary, and a registered valuation, all of which were obtained for the purposes of the proceeding. Mr Puddle did not challenge this claim which I accept is in accordance with Rule 14.12.

Result

[71]For all the above reasons:

(a)I dismissed Mr Campbell’s application for an extension of time to appeal Judge Southwick’s costs decision dated 17 September 2018 and therefore dismissed his appeal against Judge Southwick’s decision;

(b)I uphold Mr Campbell’s appeal against Judge Goodwin’s costs decision dated 23 November 2018 on the basis that Judge Goodwin acted on a wrong principle;

(c)I direct that Ms Goldie pay Mr Campbell costs of $37,765.70 plus disbursements of $16,869.07.

Costs on appeal and application for extension of time

[72]   Mr Campbell has succeeded in his primary appeal against Judge Goodwin’s decision. However, the total amount of costs awarded in Mr Campbell’s favour of

$37,765.70 plus disbursements is less than half the sum sought of $79,830 plus disbursements. Mr Campbell has also not succeeded in his application for an extension of time to appeal Judge Southwick’s costs decision or his appeal against Judge Southwick’s decision, for which Ms Goldie’s counsel had to prepare because these matters were heard together.

[73]   For these reasons, I direct that the costs of the appeals and the application for an extension of time are to lie where they fall.

G J van Bohemen J