Clayton v Clayton

[2015] NZHC 267

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980.  FOR FURTHER INFORMATION, PLEASE SEE COURT/LEGISLATION/RESTRICTIONS-ON-PUBLICATIONS.

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2014-463-000067 [2015] NZHC 267

IN THE MATTER OF	the Property (Relationships) Act 1976
BETWEEN	MARK ARNOLD CLAYTON Appellant
AND	MELANIE ANN CLAYTON Respondent

On papers

Judgment:                25 February 2015

RESERVED JUDGMENT OF DOBSON J (Costs revisited)

[1]      At the conclusion of my judgment dismissing Mr Clayton’s appeal from costs orders made against him in the Family Court in these proceedings, I ordered costs on a 2B basis in favour of Mrs Clayton, consistently with the outcome of the appeal.1

[2]      Subsequently, solicitors for Mrs Clayton requested that I reconsider the basis for the costs order I had made, in light of a previously undisclosed exchange of Calderbank letters.

[3]      Mrs Clayton’s  Calderbank offer  was  made  on  30 October  2014,  about  a fortnight before the hearing on 12 November 2014.  Had Mr Clayton accepted that

1      Clayton v Clayton [2014] NZHC 3086.

CLAYTON v CLAYTON [2015] NZHC 267 [25 February 2015]

offer, it would have improved his position, relative to the position that pertains

subsequent to my judgment on the appeal, to the following extent:

·	Mrs Clayton would have given him a credit of $8,000 for previous costs liabilities he had been ordered to pay to her.    (Mrs Clayton was not
volunteering to  make a  cash payment, but rather to  offset  the  credit
against  Mr Clayton’s  subsequent  obligations  to  distribute  relationship property.)
·	Mrs Clayton would not seek costs on the present appeal, so that they would lie where they fell.
·	Mr Clayton would have avoided the costs of his solicitors’ and senior counsel’s preparation for, and appearance at, the full day hearing of the
appeal on 12 November 2014.
[4]	M	r Clayton rejected the offer and counter-offered on terms that he would

compromise his appeal for a cash repayment of some $158,000 of the Family Court costs orders that he has paid to Mrs Clayton.

[5]      The  outcome  brings  the  making  of  the  offer  and  its  rejection  within r 14.11(3)(b)  of  the  High  Court  Rules.     The  consequence  is  a  presumptive entitlement to costs (which I have already ordered in favour of Mrs Clayton), and it is a factor that might properly influence the Court’s decision in granting increased costs.  However, it is only one factor, and I do not treat it as determinative in this protracted and extremely hard-fought relationship property litigation.

[6]      Once  reconsideration  of  the  costs  order  I  made  without  submissions  is warranted because of the Calderbank offer, another factor relevant to the appropriate costs order is the somewhat obdurate stance Mr Clayton adopted in insisting that the hearing of the appeal proceed.  The parties were awaiting a decision from the Court of Appeal on the substantive issues in the proceeding, which could alter the outcome on the costs entitlement if Mr Clayton had succeeded.  Mrs Clayton was prepared to consent to an adjournment of the costs appeal pending the Court of Appeal decision,

provided  Mr Clayton  paid  the  costs  of  preparation  for,  and  attendance  at,  the adjourned hearing. Mr Clayton was not prepared to agree to that course. 2

[7]      Reviewing the stance adopted on behalf of Mrs Clayton in relation to an adjournment   in   light   of   the   Calderbank   exchange   tends   to   confirm   the reasonableness of the stance adopted on her behalf at the hearing.   It comes after years of judicial recognition of Mr Clayton’s tactics in frustrating progress, as the following  list  of  observations  drawn  from  Mrs Clayton’s  present  submissions demonstrated:

I find that Mr Clayton has been dilatory in providing the first basic steps of discovery.  Neither the usual obligation under the rules nor a solicitor’s specific request, nor a judicial order produced his documents in a timely manner.  I find that it is likely that the application to require him to attend for examination produced the documents.  Even then, his narrative affidavit is inadequate.3

Again, it must be noted that the husband has been recalcitrant.4

Lack of progress towards the substantive hearing of Ms C’s application to set aside the s 21 agreement arising through interlocutory applications - when the parties’ respective financial circumstances are taken into account - strongly hints at Mr C using his resources to delay the merits of the matter being adjudicated upon in accordance with the statutory purposes and principles and the rules reviewed.  Mr C’s application for the grant of leave to the Court of Appeal is dismissed.5

The parties are engaged in seemingly interminable litigation under the Property (Relationships) Act 1976.   … The application appears to be of a tactical character; or at least it has that unfortunate effect.  6

I have formed the view that there was no valid reason to apply to have the notices of claim lapse pending appeal.  The applications were vexatious, designed to involve Mrs C quite unnecessarily in further litigation costs.7

The Court considers there is some force to Ms Hosking’s submissions that his purpose in these applications is to cause as much expense as he can in frustrating recourse to sensible outcomes.8

2      Clayton v Clayton, above n 1, at [4]–[8].

3      MAC v MAC FC Rotorua FAM-2007-063-000652, 2 July 2008 at [27].

4      C v C [2009] NZFLR 322 at [28].

5      C v C HC Auckland CIV-2008-404-004864, 7 April 2009 at [33].

6      C v C [2009] NZCA 319 at [1], [7].

7      MAC v MAC [2012] NZFC 904 at [7].

8      Clayton v Clayton [2014] NZHC 135 at [36].

[8]      In  addition, Mrs Clayton  is  entitled  to  treat  the  arguments advanced  for Mr Clayton as being without merit.  Many of the arguments raised would only be tenable if one ignored the history of earlier stages in the proceedings.

[9]      The extent of concession in Mrs Clayton’s Calderbank offer was relatively insignificant, in terms of the quantum of costs ordered by the Family Court against Mr Clayton.  It was not so generous as to be compelling.  However, the terms on which it was rejected, and the conduct of Mr Clayton’s appeal thereafter, tend to reflect a war of attrition in which Mrs Clayton is required to continue committing resources to protect her position.

[10]     Reviewing  all  the  factors  relevant  to  costs  in  light  of  the  additional information I now have, I am satisfied that an increase from 2B scale costs is warranted.

[11]     Mrs Clayton has sought an uplift of 50 per cent. That is more significant than

I consider is justified, and I will allow an uplift of 35 per cent.

[12]     The 2B scale costs are calculated at $16,119.  35 per cent of that is $5,641.65. Accordingly, the total costs award is $21,760.65.  In addition, disbursements not covered by other awards amount to $120.38 for printing.  I order that Mrs Clayton is entitled to costs and disbursements on this present appeal in those amounts.  There will be no further order for costs on Mrs Clayton’s application for reconsideration of the original costs order in my judgment.

[13]     I note that Mr Clayton has sought leave to appeal from my judgment.  I will not deal with that application until payment of this present costs award is confirmed.

Dobson J

Solicitors:

Tompkins Wake, Hamilton for appellant

Phillips Hosking, Rotorua for respondent