Chignall v Keane - [2022] NZHC 3583

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 TRUST

Second 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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Chignall v Keane

Details

AGLC: Chignall v Keane [2022] NZHC 3583
Case: [2022] NZHC 3583
Decision Date: 21 December 2022

CaseChat Overview and Summary

This case concerns a dispute over the costs of a constructive trust claim brought by Ms Chignall against Mr Keane. The claim arose from the breakdown of their relationship in 2018. Ms Chignall claimed a 20 percent interest in a property bought by and registered in the name of the trustees of Mr Keane's family trust, as well as a life interest in the property. The defendants maintained that the $200,000 advanced by Ms Chignall towards the cost of developing the property had been a loan. The parties were unable to agree on the costs of the proceedings, with Ms Chignall seeking scale costs totalling approximately $72,000, and the defendants seeking scale costs totalling around $73,000.

The court considered the various settlement offers made by the parties, noting that the parties were willing to accept $266,000 to resolve the claims at one point. The court also considered the impact of these offers on the costs of the proceedings, taking into account the principles set out in the High Court Rules. Ultimately, the court found that it was unreasonable for Ms Chignall to reject the defendants' settlement offer in December 2019 and decided that costs were to lie where they fell. This decision was based on the fact that the rejected offer was close to the value of the judgment obtained, and that Ms Chignall's rejection of the offer led to largely fruitless and uneconomic litigation. The court also noted that there must be an incentive for parties to make substantial and principled offers at an early stage of proceedings.

Orders