Cassidy v Calian

[2018] NZHC 3191

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2018-485-711

[2018] NZHC 3191

BETWEEN

DARRIN HUGH CASSIDY

Appellant

AND

ALEXANDRINA DENISA CALIAN

Respondent

Hearing:

19 November 2018

Appearances:

Appellant in Person

J M Greally for the Respondent

Judgment:

5 December 2018

JUDGMENT OF CULL J

[1]    Mr Darrin Cassidy (Darrin) seeks leave to appeal against the costs decision of Judge Black, awarding $17,825 in costs against him, from a property dispute over the family home.1 The dispute over the family home of Darrin and Ms Alexandrina Denisa Calian (Denisa), following their separation, was the subject of a property relationship claim by Denisa and trust claims by Darrin’s parents. The dispute was resolved in a decision by Judge O’Dwyer on 2 February 2017,2 and on 20 June 2018, Judge Black issued a decision determining costs.

[2]    Darrin, who is self-represented, applies for leave to appeal out of time against Judge Black’s decision ordering him to pay costs to Denisa. Darrin applies for a stay of execution of the decision pending his appeal. His appeal was filed 61 working days after the costs decision and was served 62 working days after that decision.

1      Calian v Cassidy [2018] NZFC 4239.

2      Cassidy v Cassidy [2016] NZDC 26113.

CASSIDY v CALIAN [2018] NZHC 3191 [5 December 2018]

[3]    Denisa opposes leave to appeal. Denisa submits the delay is not insignificant, and there is no good evidence or credible explanation for the delay. Further, she will be prejudiced by the delay and there is little merit to the appeal.

Factual background

[4]    Two sets of proceedings were issued in respect of the family home (the property). The first set of proceedings was issued by Denisa under the Property (Relationships) Act 1976 against her former husband, Darrin. He was the legal owner of the property, but it became their family home. The property was also subject to a mortgage debt.

[5]    Darrin acquired the property in 1989. It was initially occupied by Darrin and his former partner, Ms McLoughlin. In 2001, they separated, and Darrin continued to live at the property.

[6]    The second set of proceedings were issued by Mr and Mrs Cassidy Snr (Darrin’s parents) against Darrin and Denisa, claiming that Darrin holds 78 per cent of the property on trust for them through a resulting trust, or alternatively, a constructive trust. They claim that they provided Darrin with $93,529.72 to assist in his settlement of relationship property matters with his former partner, Ms McLoughlin. They say that there was an understanding between them and their son that they would have an interest in the property, which was undefined. They claimed that they acquired a 78 per cent share in the property. They also claimed that in consideration for the property being used as security for further borrowing to complete renovations at a later stage, their son granted Mr and Mrs Cassidy Snr a life interest in the bottom floor of the property (which was converted into a separate flat). This life interest was in addition to their equitable interest.

[7]    In 2005, Darrin and Denisa began a relationship and they married in late 2006. In 2008, they moved into the property in question and borrowed money to complete the renovations described above. Mr and Mrs Cassidy Snr lived at the property with the couple. Darrin and Denisa separated in August 2013. Denisa commenced Property (Relationships) Act proceedings in March 2014.

[8]    Darrin supported his parents’ claim. He maintained that he informed Denisa that the property was his parents’ home, although legal title was in his name.

[9]    Denisa disputed this and claimed that throughout their marriage, she understood that Darrin owned the home. Based on his assurances to that effect, she agreed to Darrin incurring debt for the renovations, believing that she owned a half-share in the property.

District Court decisions

[10]   The two sets of proceedings, the Property (Relationships) Act claim and the trust proceedings, were consolidated and came before Judge O’Dwyer for a two-day hearing. Judge O’Dwyer made the following determinations:3

(a)Mr and Mrs Cassidy Snr have an interest in the property pursuant to a constructive trust, such that they had a reasonable expectation that Darrin should reasonably expect to yield an interest to his parents.

(b)It would be reasonable to award Mr and Mrs Cassidy Snr a 50 per cent interest in the property. This equally recognised the contributions made by Darrin and Denisa to the increased value of the home.

(c)As Darrin holds a 50 per cent interest in the property on constructive trust for his parents, the Judge made an order that 50 per cent of the property vest in Mr and Mrs Cassidy Snr.

(d)In relation to the mortgage debt for the renovations, the Judge held that Mr and Mrs Cassidy Snr bear responsibility for 50 per cent of the renovation costs ($50,000).

(e)In relation to the remainder of the mortgage debt, the Judge ordered Darrin to pay $77,000 and Denisa to pay $46,000, both to Mr and Mrs Cassidy Snr to restore their equity in the property.

3      Cassidy, above n 2.

[11]   The Judge reserved leave for the parties to seek further directions as to the implementations of the orders.

Costs decision

[12]   Judge Black made orders with regard to the implementation of Judge O’Dwyer’s orders. Judge Black ordered Darrin to pay Denisa an amount representing a quarter-share of the value of the property ($101,250) and five years’ occupational rental ($29,380) by 28 July 2018. If payment was not made, the Judge ordered that the disposition of Darrin’s interest in the property will be set aside and a one-half share in the property will vest in Denisa as her separate property.

[13]   The Judge held that in relation to costs between Denisa and Darrin in “an overall sense Ms Calian is the successful party.”4 Denisa had made an offer to settle at an early stage of the proceedings which was for a sum considerably less than that to which she is now entitled. Denisa’s actual costs were less than costs calculated on a 2B basis and therefore the Judge ordered an award of costs of $17,825 that reflected her actual costs.

[14]   Darrin now seeks leave to appeal Judge Black’s decision determining costs and implementation orders.

[15]   The Judge observed that Mr and Mrs Cassidy Snr were not the successful party in the proceedings. The Judge ordered that costs lie where they fall and said:5

[15]   Although I agree that Mr and Mrs Cassidy Senior are victims in this situation, they are not victims of Ms Calian. They are victims of their son. Any costs award against their son would be futile.

Mr Cassidy’s position

[16]      Darrin provides the following reasons for the delay in bringing his appeal in his application for leave to appeal out of time:

(a)an administrative delay and error in the decision leading to late service;

4      Calian, above n 2, at [8].

5 At [15].

(b)the fact that he was in ill-health and suffered influenza;

(c)five years of being harassed in the Family Court has caused him a level of emotional paralysis in dealing with Court matters; and

(d)he had difficulty securing High Court representation for legal aid.

[17]      Darrin’s appeal against the substantive costs decision is brought on the following grounds:

(a)the Judge failed to take into account the limited involvement he had in the original proceedings as first defendant;

(b)he accepted the position of Mr and Mrs Cassidy Snr and withdrew from proceedings early on;

(c)he opposes the costs awarded on the grounds that the matter was primarily between Denisa and his parents;

(d)he was legally aided during the proceedings until he conceded allowing matters to proceed; and

(e)Darrin takes issue with a number of particular statements the Judge made, including noting that the Judge failed to accept that his parents were the overall winners and Denisa failed in her bid to have them dispossessed of their equity in the property.

[18]      In his application for stay of execution of the costs decision pending appeal, Darrin submits:

(a)he was the first defendant in his parents’ trust proceedings and had conceded he had no interest in the property, at the outset. He then withdrew from further litigation;

(b)he should not be held liable for costs in a proceeding between two other parties, when he had bowed out and when Denisa dragged out proceedings; and

(c)the costs should sit squarely with Denisa.

Relevant law

Leave to appeal

[19]      Section 39 of the Property (Relationships) Act provides for a right to appeal any order made under that Act to the High Court. No time period for filing an appeal is specified in that section. The High Court Rules 2016 apply to appeals made under that section.6

[20]      Rule 20.4(2) of the High Court Rules specifies that where an enactment does not specify a time period for a right of appeal to be filed, it must be filed within 20 working days after the decision appealed against is given. This appeal was filed 61 working days after the costs decision was made and was served 62 working days after that decision.

[21]Subsection (3) of that rule provides:

(3)By special leave, the court may extend the time prescribed for appealing if the enactment that confers the right of appeal—

(a)permits the extension; or

(b)does not limit the time prescribed for bringing the appeal.

[22]      There are a number of factors relevant to a decision as to whether time to appeal should be extended, including the reason for the delay, the length of the delay, the conduct of the parties and the extent of any prejudice caused by the delay.7 The overall test, however, is whether granting an extension would “meet the overall interests of justice”.8

6      Property (Relationships) Act 2016, s 39(3).

7      My Noodle Ltd v Queenstown Lakes District Council [2009] NZCA 224, (2009) 19 PRNZ 518.

8 At [19].

[23]      The Court of Appeal has further held that where there has only been a short delay which is properly explained, leave is likely to be granted in the absence of prejudice.9

[24]      Given that there is a significant delay in filing the appeal, I turn to consider first the merits of the appeal and the interests of justice threshold.

Substantive appeal

[25]      Darrin seeks three things in this appeal, if he is granted leave. He seeks that the legal costs decision should be overturned, because his parents were successful in claiming a half-share of the house and obtaining an order that Denisa and Darrin pay back some of the money his parents had provided. Second, he seeks the occupation rental award be amended and third, that the property costs should be recalculated to take into account insurance, rates, and mortgage, plus mortgage interest.

[26]      At the outset of the hearing, I directed the parties to deal with the first two matters which Darrin has raised, namely, the costs decision and the occupational rental award. I indicated to the parties, and will make a direction at the end of this judgment, that the calculation of property outgoings, being the insurance, rates, mortgage payments and interest, will be transferred to the Family Court for further directions, should they be necessary. Judge Black specifically reserved leave for the parties to apply for further implementation directions and any amendment to the calculations or further directions in relation to the property costs should be made by Judge Black in the Family Court. This Court does not have the detail, nor the submissions, addressing those issues.

[27]      Judge Black has made determinations in relation to the quarter-share of the value of the property at $101,250; five years’ occupational rental at $29,380, and a costs award of $17,825.

[28]      This appeal addresses the costs and occupational rental determinations. The Judge has not made any determination in relation to property outgoings and

9      Whaanga v Smith [2013] NZCA 606, (2013) 21 PRNZ 655 at [7]–[8].

calculations, and it is fitting and proper that those are determined at first instance by Judge Black. I consider first the costs appeal.

Costs award

[29]      The essence of Darrin’s claim is that his parents own the family home outright and Darrin claimed he had no share in the property. Darrin submits that he had withdrawn from the proceedings and his part in the proceedings was minimal. The amount of costs now awarded, he says, did not reflect his part in the proceedings and should not have been awarded against him.

[30]      Darrin says his parents were the winners of these proceedings, obtaining a 50 per cent share, and the reference in Judge Black’s decision to Mr and Mrs Cassidy Snr being “victims” in this situation was misconceived. He says further that the Judge’s comments that his parents were not victims of Denisa, but were victims of Darrin, and any costs award against their son would be futile, was uncalled for and contrary to awarding costs on a principled basis.

[31]      I deal first with Darrin’s submission that his part in the proceedings was minimal and he effectively withdrew.

[32]      On a perusal of the documentary record, I consider it indicates that Darrin took a significant role in the proceedings.

[33]      The most telling memorandum is that filed by Mr and Mrs Cassidy Snr’s counsel, when he sought costs on their behalf against Denisa. Counsel records:

We note that we claim two days of hearing time. That is on the basis that we claim for one day, but in accordance with the costs schedule for a simplified trial in the District Court Rules, time claimed is for twice the actual time. While the hearing took more than one day, it is conceded that the additional time was largely due to Mr Darrin Cassidy.

[34]      In her judgment, Judge O’Dwyer made adverse findings about the reliability of Darrin’s evidence, observing that:10

10     Cassidy, above n 2, at [48].

… he went to some lengths to mislead her and the bank as to his financial position. He has been inconsistent in how he has represented his parent’s interest in the property to Ms Callian and his siblings.

[35]      I am unable to accept, therefore, Darrin’s submission that he played a minimal part in the hearing or, indeed, in the consolidated proceedings. He was a named party in both proceedings and filed substantive evidence in support of his position. Discovery and the obtaining of bank records and solicitors’ records were the subject of application and directions, with Darrin ultimately producing documents which Denisa had been seeking for a period of time. I note that costs were made against Darrin in respect of discovery.

[36]      In the steps of the proceeding and in the proceeding itself, I am driven to the conclusion that Darrin played a significant part. The case advanced by his parents, which Darrin supported, failed and Denisa received a quarter-share of the property as a result of the hearing. It is telling that Judge O’Dwyer described Mr and Mrs Cassidy Snr as following their son’s advice in respect of the property. The Judge said:11

[49] Mr and Mrs Cassidy presented as now elderly parents who  had followed their son’s advice in respect to the property, and trusted that he would protect their interests. However in so doing they have acquiesced in misleading others including their other children and Ms Callian as to the nature of their interest in the property.

[37]      Judge Black’s description of Mr and Mrs Cassidy Snr being victims of their son derives support from Judge O’Dwyer’s considered findings. I do not uphold Darrin’s submission that his part in the proceedings was minimal.

[38]      I turn, then, to the submission that the costs were not reflective of the outcome in the proceedings and the ultimate successful party.

[39]      In his costs decision, Judge Black referred to an offer of settlement, which was not accepted by Darrin as being relevant to the award of costs. The offer of settlement was less than the judgment ultimately received by Denisa. I consider the Judge’s view that Denisa was, “in an overall sense”, the successful party in the proceedings, correct.12

11     Cassidy, above n 2.

12     Calian, above n 1, at [8].

[40]      Although Darrin submits he was not in a position to accept Denisa’s offer, because his parents needed their claim to be decided, his parents’ claim to 100 per cent ownership was unsuccessful. Denisa had made an offer to settle at an early stage of the proceedings, at a sum less than her current entitlement. I am unable to uphold Darrin’s submissions.

[41]      I consider the Judge’s view of these proceedings is fair and appropriate. Under s 40 of the Property (Relationships) Act, the Court may make any order for costs that it considers fit. Denisa’s actual costs in his case were less than a 2B basis award of costs. This makes the award by Judge Black of $17,825 reasonable. I find that Judge Black’s approach to costs in this case reflects Denisa’s success, and the costs against Darrin are both reasonable and appropriate. There is no merit in this ground of appeal.

Occupational rental

[42]      Darrin challenges the finding of the Judge that the claim for occupational rent is unanswerable. He also challenges the calculations provided by Ms Greally, Denisa’s counsel, quantifying Denisa’s claim at $5,786 per annum.

[43]      Darrin submits that the Judge did not take into account that Mr and Mrs Cassidy Snr own one half-share of the property and alleges that Denisa is claiming rental monies for a share of the property owned by his parents. Part of Darrin’s argument turns on the calculation of rental of the upstairs portion of the property. This was assessed at $380 a week. Darrin submits that the rental upstairs cannot be a calculation applicable to Denisa and himself, when his parents occupy that half of the house and his parents’ share has not been factored in.

[44]      Ms Greally disputes the validity of Darrin’s challenge. She referred the Court to the record of a settlement conference, where Darrin agreed to pay Denisa occupational rental calculated at 50 per cent of $380 per week, less 50 per cent mortgage interest, rates, and insurance. The agreement was recorded in a letter from Ms Greally to Darrin on 10 July 2017, drawing his attention to the fact that it had been agreed that occupational rental was payable by Darrin to Denisa and was to be calculated as half of $380 per week, less Denisa’s share of the rates, insurance, and

mortgage interest. Ms Greally set out the total amount due for four years since separation as $23,500.

[45]      No issue appears to have been taken to these figures by Darrin, providing the basis for Judge Black’s decision that the claim for occupational rent was unanswerable.

[46]      I accept Ms Greally’s submission that no other calculations have been put forward and the position which she set out in her letter of 10 July 2017, referred to above, was accepted by the parties.

[47]      The claim for occupational rental, as with any other relationship property case, is based on a notional rental of either the property as a whole or a portion of the property. In this case, the notional rental of $380 per week was based on a previous valuation of the upstairs part of the property. This was adopted as an appropriate notional rental figure for one-half of the property. As Darrin and Denisa have each been awarded a quarter-share of the property, the adoption of the notional rental value for one-half of the property was appropriate. Further, the amount claimed by Denisa is 50 per cent of the notional half-share, equalling a 25 per cent claim for occupation of her share of the property.

[48]      I consider the occupational rental claim to be very reasonable and appropriate, and I respectfully concur with Judge Black that Denisa’s claim for occupational rent in these circumstances is unanswerable. There is also no merit in this ground of appeal.

Leave to appeal

[49]      Darrin filed his appeal 62 working days after Judge Black’s decision. Following the Judge’s decision, Darrin sought an extension of time to comply with paragraph [18] of the decision. Judge Black extended it to 14 September 2018, noting that an adjustment for occupational rental would be required.

[50]      Ms Greally submits that on the day that Darrin was to pay the sums ordered by the Family Court, he had filed a notice of appeal on 13 September 2018, with service

effected on 14 September. Ms Greally submits that there was no indication from Darrin that he was upset at the costs order, or that he was seeking further time to lodge an appeal. The appeal was lodged when compliance with the Family Court orders was due, and Ms Greally submits leave to appeal should not be granted. Ms Greally also submits that, notwithstanding Darrin’s ill-health, he was able to appear in the Family Court on 23 July 2018, when no steps were taken to file this appeal.

[51]      I have considered the length of the delay and the reasons for it; the timing of filing the appeal when payment of the orders was due, following the Court’s extension for that purpose; and the extent of any prejudice caused by the grant of leave. In this decision, I have also assessed the merits of the grounds of appeal and find they have no prospect of success and lack merit. I am satisfied, therefore, that leave to appeal out of time in this case is not in the interests of justice and I decline leave. The appeal is dismissed.

Result

[52]Leave to appeal is declined and the appeal is dismissed.

[53]      The proposed ground of appeal regarding the property outgoings and deductions, if needing to be pursued, should be brought before Judge Black in the Family Court, pursuant to leave, which he reserved for the parties to apply for further implementation directions should they be necessary.

[54]2B costs are awarded to the respondent.

Cull J