Chignall v Keane
[2022] NZHC 3583
•21 December 2022
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE
CIV-2020-488-12
[2022] NZHC 3583
BETWEEN RHODA CHIGNALL
Plaintiff
AND
STEPHEN KEANE
First Defendant and First Counterclaim Plaintiff
STEPHEN KEANE and KAREN
DRINKROW as trustees of the STEVE KEANE FAMILY TRUSTSecond Defendants and Second Counterclaim Plaintiffs
RHODA CHIGNALL and STEPHEN
KEANE as trustees of the RHODA CHIGNALL FAMILY TRUST
Counterclaim Defendants
Hearing: On the papers Appearances:
SJ Tee for the Plaintiff
RJ Thompson and GAR Bowker for the Defendants
Judgment:
21 December 2022
JUDGMENT OF FITZGERALD J
[As to costs]
This judgment was delivered by me on 21 December 2022 at 2.00pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Morton Tee Limited, Auckland Kemps Weir, Auckland
To: R Thompson, Auckland
CHIGNALL v KEANE [2022] NZHC 3583 [21 December 2022]
Introduction
[1] This judgment determines costs of what was ultimately a modest constructive trust claim based on Lankow v Rose constructive trust principles.1 The claim arose out of the breakdown of Ms Chignall and Mr Keane’s relationship in September 2018.
[2] The proceeding was heard over five days in the High Court. At the outset of the hearing, I observed that after taking into account an open settlement offer made by the defendants, the difference between the parties was only around $87,000. This was based on the quantum Ms Chignall’s pleaded claims, said in her opening submissions to be approximately $353,000, and an open settlement offer made by the defendants in November 2021 of $266,000.
[3] In October 2022, I delivered judgment in favour of Ms Chignall in an amount of $296,000.2 This was made up of $281,000 reflecting a 20 percent interest in the property in question, plus $15,000 in recognition of the second defendants’ benefit of the use and enjoyment of Ms Chignall’s share in the property since separation.
[4] Given the modest amounts in issue, it is most unfortunate that the parties were not able to resolve the substantive dispute between them. This is particularly so given the rather extraordinary scenario that over a one month period, each party was willing to accept or pay (as the case may be) $266,000 to resolve the claims, and over a period of three days, the parties were only $12,500 apart.
[5] The parties have also been unable to agree on the costs of the proceedings. Ms Chignall says she is the successful party overall and seeks scale costs totalling approximately $72,000, with an uplift of 30 percent (or $12,296.55) on steps taken after she says the defendants unreasonably rejected a settlement offer she made. Conversely, the defendants say that they should be awarded scale costs totalling around $73,000, based on what they say was Ms Chignall’s unreasonable rejection of a settlement offer made by them shortly prior to these proceedings being commenced.
1 Lankow v Rose [1995] 1 NZLR 277 (CA).
2 Chignall v Keane [2022] NZHC 2566.
Background
[6] In order to put the competing costs claims in context, it is necessary to say a little bit about the background to the claims.
[7] Ms Chignall claimed a 20 percent interest in the property in which she and Mr Keane had been living, but which had been bought by and registered in the names of the trustees of Mr Keane’s family trust. Ms Chignall also claimed a life interest in the property. Her primary claim to relief was framed in the following terms:
A declaration that the first and/or second defendant hold Grahamtown as trustee for the plaintiff’s interest as beneficiary arising in terms of a constructive or resulting trust as to a life interest together with a one-fifth share of legal title to that property.
[8] The claim to a 20 percent (or one-fifth) interest in the property was primarily based on the undisputed fact that Ms Chignall had advanced $200,000 towards the cost of developing the property. The defendants’ position was that the $200,000 had been advanced as a loan (though they always acknowledged it was required to be repaid), a proposition which I ultimately rejected.
[9] Given Ms Chignall and Mr Keane had separated and Ms Chignall had moved out of the property, the claim to a life interest was always going to encounter difficulties. I was not referred to any authority in which a life interest had been granted in the context of a relationship breakdown such as that in this proceeding. No doubt recognising these difficulties, at the conclusion of the hearing, Ms Chignall sought leave to amend her pleadings so that, if her claim to a proprietary interest in the property was accepted, the Court could, in addition to financially compensating her for that interest, order the defendants to “disgorge the benefit they [had] derived from the use of [Ms Chignall’s] share of the property” since separation.
[10] Readers familiar with relationship property disputes will recognise this as similar to a claim for “occupation rent”, often made in the context of Property (Relationships) Act 1976 claims.3 An alternative to making an award of occupation
3 Pursuant to s 18B of the Property (Relationships) Act 1976, which confers on the court a broad discretion to compensate a spouse or partner for post-separation contributions made by them to the relationship
rent is to order the occupying party to pay interest on the non-occupying party’s share of capital in the family home.4
[11] I declined to grant relief on the basis of a claim akin to occupational rent, including on the basis that it had not been pleaded and was therefore being advanced in an evidential vacuum. Ms Chignall had, however, pleaded a claim of interest, in addition to the 20 percent share in the property. This formed the basis of the additional monetary award (of interest) I made in her favour.
[12] At least on the basis of the interest calculator pursuant to the Interest on Money Claims Act 2016, interest on the sum of $281,000 from mid-September 2018 (being the date of Ms Chignall and Mr Keane’s separation) to the date of judgment would have been around $27,000. Given the equitable nature of the claims, however, I considered whether awarding interest in that sum was necessary in order to do justice between the parties. I took into account a series of open offers made by the defendants to Ms Chignall to settle the proceedings, culminating in the offer of $266,000 referred to earlier in this judgment. While I accepted that as a matter of fact, the second defendants had had the benefit of the use and enjoyment of Ms Chignall’s share in the property since separation and that should be reflected in the relief granted to her, I reduced the interest award to $15,000.
[13] It is also worth noting by way of background that Ms Chignall had pleaded three other causes of action, though these were abandoned by the end of the hearing. I interpolate to note that I do not consider these causes of action materially added to the evidence or legal submissions that were required at trial, or significantly increased the defendants’ costs. Rather, the constructive trust claim itself involved factual evidence of the parties’ relationship in a broader sense from inception to separation, such that there would have been no material saving in time or cost had the additional causes of action not been pleaded.
[14] Finally by way of background, Mr Keane also advanced a counterclaim, seeking – in the event Ms Chignall’s claim to a proprietary interest was successful – a
4 See for example E v G HC Wellington CIV-2005-485-1895, 18 May 2006 at [24]; and Griffiths v Griffiths [2012] NZFLR 327 (HC) at [37].
proprietary interest in the assets owned by Ms Chignall’s family trust. I observed in my substantive judgment that the defendants’ counterclaim appeared to be somewhat makeweight, advanced on a tactical basis in response to Ms Chignall’s claims. Mr Keane was clear in his evidence that he did not expect to be compensated for work he carried out on properties owned by Ms Chignall’s family trust, or had any expectation of an interest in them. I therefore dismissed Mr Keane’s counterclaim.
The settlement offers
[15] It is helpful next to set out the various “without prejudice save as to costs” or open settlement offers made by the parties over the course of the proceedings:5
(a)On 12 August 2019, the defendants offered to pay Ms Chignall
$200,000 plus interest (at a rate of seven percent, accruing from the date of separation).
(b)On 30 October 2019, Ms Chignall offered to accept payment of
$566,000, comprising $280,000 for a 20 percent share in the property, plus $288,000 for the life interest.
(c)On 20 December 2019, the defendants offered to pay Ms Chignall
$240,000, based on a hypothetical 20 percent share in the property, using a value of $1.2 million, said to be the most recent value that Ms Chignall had claimed and relied on. The settlement letter explained why the defendants rejected the life interest claim.
(d)On 15 September 2021, Ms Chignall offered to accept payment of
$295,000, comprising $266,000 for a 20 percent share in the property (a registered valuation having been received valuing the property at that time at $1.33 million), plus an additional amount to reflect the claimed life interest (which was valued in the settlement letter at $455,530.32).
5 These proceedings were commenced in the High Court in February 2020 and went to a substantive hearing in May 2022.
(e)On 29 September 2021, the defendants offered to pay Ms Chignall
$241,000, based on a 20 percent share in the property, reflecting the registered valuation obtained by Ms Chignall, but taking into account additional costs incurred by the defendants to that point in time. The letter again reiterated why the claimed life interest was misconceived and unlikely to succeed.
(f)On 1 October 2021, Ms Chignall offered to accept payment of
$266,000, the offer said to be non-negotiable.
(g)On 3 October 2021, the defendants offered to pay Ms Chignall
$253,500.
(h)On 3 November 2021, the defendants offered (on an open basis) to pay Ms Chignall $266,000.6
(i)On 11 February 2022, the defendants offered to pay Ms Chignall
$237,300, based on “the rationale of the 29 September 2021 offer”, reduced by the costs incurred by the defendants since that date ($3,700).
(j)On 16 February 2022, Ms Chignall offered to accept payment of
$266,000.
[16] It is helpful to set out the contents of Ms Chignall’s counsel’s email of 16 February 2022 in which the above final offer was made. It reflects many of the concerns the Court has about the matter proceeding to trial when the parties were not far apart, and at times not apart at all, in terms of what each would settle for:
Happy to discuss, but I need to be clear $266,000 is my clients (sic) final offer. I have worked incredibly hard to get her to that figure, which she considers to be a concession. There is no further room for negotiation on my instructions.
If you client is not prepared to accept settlement at that figure, then so be it, as that will be an end of settlement discussions and I will just get on with completing the reply affidavit.
6 Ms Chignall rejected this settlement offer on 8 November 2021.
Personally, I do not believe this matter proceeding to a hearing is in the best interests of either of our clients given the modest size of the claim. Both carry risks of costs, or even costs lying where they fall, which will represent a worse outcome for both.
As Counsel I feel some responsibility to avoid that – which is why I reached out to you on a Counsel to Counsel basis to see if we could get a settlement at
$266,000 – a figure both of our clients have agreed to accept at various times. If you client is not prepared to pay $266k then so be it, I cannot do anymore!
[17]The matter proceeded to a substantive hearing in May 2022.
The parties’ submissions on costs
Ms Chignall’s submissions
[18] Counsel for Ms Chignall, Mr Tee, acknowledges the claim was modest yet required five days of hearing in the High Court, but submits that this was mainly due to the defendants refusing to agree the claim could proceed in the Family Court, and their continued denial of Ms Chignall’s constructive trust claim or any proprietary interest in the subject property. Mr Tee submits that the existence of a constructive trust was undeniable, and a negligible amount of hearing time was taken in dealing with Ms Chignall’s other causes of action (and certainly no more time than Mr Keane’s unsuccessful counterclaim).
[19] Mr Tee submits that Ms Chignall was the successful party overall, her claimed interest in the property having been upheld and being awarded a sum of money in recognition of it. Mr Tee notes that Mr Keane’s concession that he and Ms Chignall had agreed that she would have a 20 percent interest in the property was only obtained under cross-examination, and the proprietary interest had been consistently denied in the defendants’ affidavits and pleadings. Mr Tee says that this denial was unsuccessful and significantly increased Mr Chignall’s costs. He refers in this context to r 14.6 of the High Court Rules 2016, submitting that the denial of a proprietary interest and insistence on there being only a loan was unreasonable and lacked merit, justifying an increased costs award. Further, Mr Tee submits that the fact the defendants declined settlement offers which provided a better outcome to them than trial also warrant an increased costs award.
[20] Mr Tee acknowledges that the defendants also made various settlement offers, but highlights that the effect of Ms Chignall not having accepted these offers has already been taken into account in the substantive judgment, by way of the reduced award of interest as discussed at [12] above. In terms of the particular settlement offers, Mr Tee notes that neither party had obtained a registered valuation when the defendants’ offer to pay $240,000 was made on 20 December 2019. He notes that the offer was made before the proceedings were commenced, and on that basis, would not ordinarily be taken into account. Further, Mr Tee emphasises that the defendants never offer an interest in the property itself, which was sought in the proceeding and which the Court subsequently found to exist. Mr Tee notes that this entitled Ms Chignall to a share in the ensuing capable gain in the property, and if she had accepted the defendants’ December 2019 offer, she would have been worse off than the position obtained at trial. Mr Tee further submits that it was not unreasonable to reject an offer which was based on a different claim (repayment of a loan) to that which succeeds at trial (interest in a property).7
[21] Mr Tee also notes that having obtained a registered valuation of the property, on 15 September 2021, Ms Chignall offered to accept $295,000 in settlement of her claims. Mr Tee notes that that is less than the amount actually awarded against the defendants in Ms Chignall’s favour, and that offer should therefore have been accepted but was not. Mr Tee emphasises that that offer was made before the costs of preparing evidence were incurred, and would have avoided subsequent costs including preparing the common bundle, preparing for the hearing, preparing submissions and attending the hearing itself.
[22] Mr Tee submits that Ms Chignall then made what he describes as an “even more generous offer” on 1 October 2021, offering to accept a payment of $266,000, submitting that there was no reasonable basis to reject that offer which was based on a bare 20 percent of registered value. That offer was available for acceptance until 4 October 2021, and Mr Tee submits the defendants knew Ms Chignall would incur the cost of preparing her evidence if the offer was not accepted by that date. Mr Tee submits that the defendants waited until 3 November 2021, after Ms Chignall had
7 Referring to Aldrie Holdings v Clover Bay Park No. 2 Ltd [2016] NZHC 1482 at [32].
incurred the cost of preparing her evidence, before offering to settle at that same sum. Mr Tee notes that on 15 February 2022, Ms Chignall again offered to accept a payment of $266,000, and thus offered to accept less than the sum awarded.
[23] In terms of the quantum of costs sought, Ms Chignall seeks costs on a scale 2B basis of $72,058.50, plus disbursements of $15,980.16. Ms Chignall also claims an uplift on costs beyond scale in relation to those steps following the September 2021 settlement offer of $295,000, being steps 30 to 34 and costs associated with a recall application (step 11). Mr Tee submits that scale costs on a 2B basis for those steps would be 17.15 days totalling $40,988.50. Ms Chignall seeks a 30 percent uplift on these steps, which leads to increased costs of $12,296.55. This results in a total costs award sought of $84,355.05, plus disbursements.
The defendants’ submissions
[24]The defendants seek an award of scale costs against Ms Chignall in the sum of
$73,683.70. The principle ground upon which they rely is that it was unreasonable for Ms Chignall to decline their 20 December 2019 offer of $240,000.
[25] Counsel for the defendants, Mr Thompson, submits that the reasonableness of the offer is to be assessed by the yardstick of the Court’s judgment. He notes that with reference to the only evidence before the Court as to the value of the property at December 2019, a 20 percent interest was then worth $225,000. The defendants submit that if Ms Chignall had accepted that offer, she would have achieved an outcome slightly better than she obtained under the judgment at a time before proceedings were even issued, and would have had immediate access to and use of the
$240,000.
[26] Mr Thompson further notes that the offer was open for acceptance for nearly one year, providing substantial time for Ms Chignall to consider it in the light of the proceedings she then issued. Mr Thompson submits that Ms Chignall’s offer made seven weeks earlier, to settle for $566,000, is important context to her declining the
$240,000 offer, given it was based on unreasonably maintaining a claim for a significant additional sum for her claimed life interest. Mr Thompson submits that the
defendants have been put to the cost of defending Ms Chignall’s entire claim as a result of her declinature of the December 2019 offer.
[27] Mr Thompson also notes that on 2 April 2019, Ms Chignall swore an affidavit of assets and liabilities in which she has assessed the property as being worth
$1.2 million as at the date of separation, and thus it was reasonable for the defendants to reference that claimed value to underpin their calculation and offer $240,000. Mr Thompson notes that Ms Chignall took no steps to engage an expert valuer until late 2021. Mr Thompson also notes that the defendants always accepted a liability to repay Ms Chignall $200,000.
[28] Mr Thompson further submits that the balance of the offers following the December 2019 offer are irrelevant. This is on the basis that had the December 2019 offer been accepted by Ms Chignall, they would not have been necessary. If the Court considers those later offers to be relevant, however, Mr Thompson says that they each need to be considered in the context of the 10 offers made, the stage the proceedings were at and the parties’ knowledge when each offer was made. For example, he notes that it was not until after all of the offers had been made, on 26 April 2022, that the valuers agreed an updated valuation of the property of $1.405 million. Mr Thompson further notes that Ms Chignall pursued her claim for a life interest until the end of trial, when the amendments to the pleadings were sought to be made.
[29] In summary, Mr Thompson submits that Ms Chignall put the defendants to significant costs which led her to achieve a notional gain of $56,000 over and above the amount she could have received nearly three years earlier. Mr Thompson submits that properly analysed, the $56,000 “gain” did not in fact arise from Ms Chignall doing any better at trial than the December 2019 offer, but only because the property had increased in value in the two and a half years that had elapsed by the time of the hearing. Mr Thompson further submits that it is incorrect for Ms Chignall to say that the defendants’ offer was based on a different claim (repayment of a loan) to that which succeeded at trial. He notes that all of the offers, including the December 2019 offer, were based squarely on paying Ms Chignall the equivalent of a 20 percent interest in the property. Further, Mr Thompson notes that it is irrelevant that the offers did not
actually offer a 20 percent interest in the property, given Ms Chignall’s own evidence at trial was that she would have always wanted to be paid out her interest.
Discussion
[30] The starting principle is that the successful party to litigation is entitled to an award of costs in the ordinary way. This is so even though there has been partial success. As the Court of Appeal stated in Weaver v Auckland Council, success on more limited terms is still success.8 In that context, the Court referred to the Supreme Court’s judgment in Shirley v Wairarapa District Health Board, in which the Court made clear that “the loser and only the loser pays, unless there are exceptional reasons”.9
[31] I accordingly start with what is the uncontroversial proposition that Ms Chignall is the successful party overall in this proceeding. The Court accepted her claim to a 20 percent interest in the property and granted her a monetary award in recognition of it. The starting point is, therefore, that there should be an award of scale costs to Ms Chignall in the ordinary way. I agree with counsel that costs are appropriately quantified on the basis of a 2B categorisation.
[32] The real issue, not without some difficulty given the multitude of offers, is what impact, if any, the various settlement offers should have on costs. Should they result in there being no award of costs in Ms Chignall’s favour, or at least a reduced award? Should they instead result in a costs award in the defendants’ favour? Or should there be an increase to any costs award in Ms Chignall’s favour? Should costs lie whether they fall?
[33] The effect of so-called “Calderbank” or “without prejudice save as to costs” offers on costs is specifically addressed in r 14.11. Pursuant to r 14.11(3), a party who makes a Calderbank offer that exceeds the amount awarded at trial is presumptively entitled to their costs for steps taken after the offer was made. This is, however, subject to the Court’s overall discretion.10 And where a Calderbank offer is less than but
8 Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].
9 Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [15].
10 Rule 14.11(1).
“close” to the amount awarded at trial, r 14.11(4) permits (though does not mandate) such an offer being taken into account on the question of costs.
[34] In Craig v Donaldson, it was held that the effect of r 14.11(4) is not to entitle the unsuccessful party to costs, but rather to enable the court to discount or cancel out the costs that the successful party would otherwise have been entitled to.11 It is certainly clear that unless the offer exceeds the amount secured at trial, the party making the offer has no presumptive entitlement to an award of costs. But I am not persuaded that the effect of r 14.11(4) is limited to discounting or cancelling out costs otherwise payable to the successful party. That ability is already provided for through r 14.7, which permits a court to reduce (including to zero) costs otherwise payable to the successful party, including for failing, without reasonable justification, to accept a Calderbank offer.12 For that reason, I consider that in an appropriate case, r 14.11(4) permits the Court to make a costs award in favour of the unsuccessful party where it has made a settlement offer that was close to (but did not exceed) the actual outcome. In such a case, all relevant circumstances must be taken into account.
[35] I therefore start with the defendants’ December 2019 offer to settle the proceedings by paying Ms Chignall $240,000. As noted, this is the primary basis upon which the defendants, being the unsuccessful parties, nevertheless seek a costs award in their favour.
[36] First, I do not consider this offer falls within the scope of r 14.11(3) which would presumptively entitle the defendants to costs for all steps after that offer was made. The offer was less than the $296,000 Ms Chignall was ultimately awarded at trial. Further, had Ms Chignall accepted the offer and received $240,000 in December 2019, and assuming a return of around five percent per annum (before tax), that would have amounted to around $33,000, being a total of $273,000. Putting aside the costs Ms Chignall will have inevitably incurred in pursuing her claims, that sum still falls short of the judgment sum.
11 Craig v Donaldson [2012] NZHC 3100 at [17].
12 Rule 14.7(f)(v).
[37] As noted, however, pursuant to r 14.11(4), the Court may nevertheless take into account the offer on the basis that it is “close to the value or benefit” of the judgment obtained. As I have already explained, this could include making a costs award in favour of the (unsuccessful) defendants, or reducing the costs otherwise payable to Ms Chignall.
[38] I am of the view that it is appropriate to take this offer into account for costs purposes:
(a)It was a substantial offer that, once the time value of money is taken into account, was only around $23,000 less than what Ms Chignall obtained at trial some two and a half years later.13
(b)While made prior to the proceedings having commenced, it was made immediately prior to that step being taken. Indeed, in a letter dated 10 December 2019, Mr Tee forwarded Mr Thompson a copy of the draft High Court statement of claim, and confirmed he had instructions to commence the proceedings in the New Year absent “any significant settlement proposal” by the defendants. This directly led to the 20 December 2019 offer being made.
(c)Had Ms Chignall accepted the offer, both she and Mr Keane would have avoided the costs and – in a proceeding of this kind – personal stress in continuing the proceeding for what was ultimately a relatively nominal gain, over and above that represented by the December 2019 offer. Ms Chignall and Mr Keane would have had a much earlier clean break, rather than having to engage in the unfortunate exercise of raking over the details of their relationship in court.
(d)The offer was made on a principled basis, by reference to a hypothetical 20 percent interest in the property, based on a value of the property Ms Chignall had previously claimed and relied on.
13 And potentially less than $23,000, had Ms Chignall invested the funds in, say, property, which it can be assumed increased in value over the period from December 2019 to trial in May 2022, prior to the drop in prices during the latter part of this year.
(e)Ms Chignall had not obtained a valuation of the property, but appears to have rejected the offer, in part at least, on the basis of her own subjective views as to what the property was worth.
(f)In addition, it is clear that Ms Chignall’s rejection of the December 2019 offer was also based on her view of the value of her claim to a life interest, which lacked merit and was ultimately not pursued at trial in any event. The maintenance of that claim, particularly as it was “entwined” with the claimed 20 percent interest, clearly complicated efforts to resolve the proceedings.
(g)The offer did not take into account the costs of the proceeding, but did not need to do so, given no substantive costs had been incurred at that point in connection with the proceedings.
(h)The offer was open for acceptance for approximately one year.
[39] I do not consider the fact the defendants did not actually offer a 20 percent interest in the property, and maintained the position the $200,000 advance was a loan, undermines the reasonableness of the offer. Ultimately, it is clear from Ms Chignall’s own offers and her evidence at trial that she wanted to be paid a sum of money to reflect her claimed interest in the property.
[40] That said, I do not consider that it was so unreasonable for Ms Chignall to reject the defendants’ December 2019 settlement offer that a costs award in the defendants’ favour ought to follow. Such a course suggests that at that early stage of the proceedings, Ms Chignall ought to have ascribed a zero percent prospect of success on her life interest claim (or something in addition to the claimed 20 percent interest), and conversely, that the defendants had zero exposure to a claim that exceeded the value of a 20 percent interest in the property. As Kós J observed in Eastern Agricultural Ltd v Manawatu-Wanganui Regional Council, “[it] will be a rare case
where it was unreasonable for a plaintiff to take a more optimistic view of their own prospects than ‘zero percent’”.14
[41] Given those factors referred to at [38] above, however, I am satisfied that Ms Chignall’s rejection of the December 2019 offer was “sufficiently unreasonable” that an appropriate outcome is to reduce her costs award to zero.15 In other words, costs are to lie where they fall. I consider this to be the proper outcome for what was, for Ms Chignall, largely fruitless and uneconomic litigation once the December 2019 offer is taken into account. In the event, she continued to pursue costly and stressful proceedings over the ensuing two and a half years, to be awarded only around $23,000 more than the inherent value of the December 2019 offer. There must also be, in my view, an incentive for parties such as the defendants in this case to make a substantial and principled offer at an early stage of proceedings, that reflects a value close to the outcome ultimately achieved at trial. This is particularly so in proceedings of this kind, arising out of the breakdown of a relationship, which are notoriously fraught and difficult. Finally, I do not consider this approach “double counts” the effect of the December 2019 and other offers made by the defendants, given the reduction in the interest award discussed at [12] above. The impact of the offers on substantive compensation to Ms Chignall pursuant to equitable principles, and their impact on costs (in light of the principles of the costs regime set out in the High Court Rules) give rise to quite different considerations, as flagged in my substantive judgment.16
[42]There will accordingly be an order that costs are to lie were they fall.
[43] For completeness, the subsequent offers that passed between the parties do not “undo” or override this outcome. Ultimately I have concluded that it was unreasonable for Ms Chignall not to accept the December 2019 offer, though I have declined to make a costs award in the defendants’ favour as a result. Ms Chignall cannot, effectively, “pull herself up by the bootstraps” by reliance on later conduct said to be reasonable (by her) and unreasonable (by the defendants). I merely record that both parties took reasonable, and unreasonable, stances during the exchange of offers in
14 Eastern Agricultural Ltd v Manawatu-Wanganui Regional Council, HC Palmerston North CIV- 2008-457-31, 22 December 2011 at [17].
15 Either on the basis of r 14.7(f)(v) or r 14.11(4).
16 Chignall v Keane, above n 2, at fn 56.
2021 and early 2022. An analysis of those steps may well have led to an outcome of costs lying where they fall in any event (as Mr Tee anticipated as a potential outcome in his email of 16 February 2022), or at the very most, a much reduced costs award in Ms Chignall’s favour for steps taken after her settlement offer of 1 October 2021.
Result
[44]The costs of the proceeding are to lie where they fall.
Fitzgerald J
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