Cooke v Butler

[2023] NZHC 3153

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-124

[2023] NZHC 3153

UNDER

Part 18 of the High Court Rules 2016

IN THE MATTER OF

an application for determination of a beneficiary's claim under a constructive trust

BETWEEN

JANET MARIE COOKE, SHARON MARIE COOKE and STANLEY

CHARLES BARKER, as trustees of The Cooke Family Trust

Plaintiff

AND

PENNY LEE-ANNE BUTLER

First Defendant

CHARLES ANDREW AXELSEN BUTLER
Second Defendant

continued over

Hearing:

On the papers

Counsel:

RA Hearn for Plaintiffs

S M Grieve KC and C Mo for the Defendants

Judgment:

9 November 2023

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

[costs]

This judgment was delivered by me on 9 November 2023 at 2.30 pm.

Pursuant to Rule 11.5 of the High Court Rules.

…………………..

Registrar/Deputy Registrar

Solicitors/Counsel:

Corcoran French, Christchurch Saunders Co, Christchurch

S M Grieve, Barrister, Christchurch

COOKE v BUTLER [2023] NZHC 3153 [9 November 2023]

CIV-2021-409-152

BETWEENJANET MARIE COOKE, SHARON MARIE COOKE and STANLEY

CHARLES BARKER, as trustees of The Cooke Family Trust

Plaintiffs

AND  PENNY LEE-ANN BUTLER

First Defendant

CHARLES ANDREW AXELSEN BUTLER

Second Defendant

Introduction

[1]    On 28 September 2023, I gave judgment dismissing the defendants’ interlocutory application for judgment against the plaintiffs on admission of facts.1 The background is set out in that judgment and need not be repeated. In this judgment, I determine costs in respect of the unsuccessful application.

[2]    The plaintiffs submit that costs should follow the event. Costs are sought on an indemnity basis, or alternatively on a 2B basis with an uplift, on the ground that the application for judgment was hopeless.

[3]    The defendants submit that the Court should reserve costs, to be determined once the substantive proceeding has been dealt with, so that costs in respect of my judgment can be considered in the context of the entire proceeding, including the parties’ positions in respect of various settlement offers made.

[4]    Costs have previously been reserved in respect of other interlocutory applications in this proceeding:

(a)the plaintiffs’ unsuccessful application for summary judgment;

(b)the defendants’ successful application for particular discovery and modification of privilege; and

(c)the plaintiffs’ unsuccessful application for further discovery.

Legal principles

[5]    Under r 14.2(1)(a) of the High Court Rules 2016, the unsuccessful party on an interlocutory application should pay costs to the successful party. Under r 14.8, costs should be fixed when the application is determined, and become payable when they are fixed, unless there are special reasons to the contrary. What will constitute a special reason is highly case dependent.

1      Cooke v Butler [2023] NZHC 2716.

[6]    The defendants’ application for judgment was akin to an application for summary judgment, to which the presumption in r 14.8 does not apply.2 In the context of a failed application for defendant summary judgment, the Court has frequently reserved costs until final determination of the proceeding.3 There are, however, instances where the Court has allowed costs to follow the event.4

[7]    Rule 14.7(f)(v) provides the Court with a discretion to refuse or reduce costs if the party claiming costs has contributed unnecessarily to the time or expense of a step in the proceeding, by failing, without reasonable justification, to accept an offer of settlement.

Discussion

[8]    The plaintiffs are the successful party, and the starting point is that they are entitled to costs.

[9]    I reject counsel for the plaintiffs’ submission that the application was so hopeless as to justify either indemnity costs or an increase in costs. The application for judgment was based on a memorandum of counsel for the plaintiffs dated 28 March 2023, and contemporaneous emails between counsel, which comprised an open offer to settle the proceeding. These documents effectively conceded the defendants’ counterclaim, although not in a form that amounted to an admission of facts sufficient to justify entry of a judgment.

[10]   Before awarding costs to the plaintiffs, the Court must consider any arguments available to the defendants under r 14.7(f)(v). The application of that rule to the present case will require a careful analysis of the long history of offers and counter- offers between the parties, to determine whether the plaintiffs acted unreasonably and without justification in declining the defendants’ offers. That is particularly so in this case, where the parties agreed nearly all terms of settlement other than inter partes costs.

2      High Court Rules 2016, r 14.8(3).

3      See, for example, EBS v CAS [2014] NZHC 2929 at [90]; and Rhodes v Shaw [2015] NZHC 1530, (2015) 16 NZCPR 326 at [31].

4      See, for example, Judge v Dempsey [2014] NZHC 2864 at [57].

[11]   Some of the related correspondence between the parties, and draft settlement agreements, were without prejudice. Most of this material is not before the Court.

[12]   The review of the history of the negotiations, including the plaintiffs’ actions in declining any offer by the defendants, is best undertaken once. It is appropriate that this be at the conclusion of this proceeding, when all relevant material is before the Court and when the Court determines costs on the substantive proceeding, including the other interlocutory applications determined to date.

[13]   In my view, that amounts to a special reason justifying costs being reserved in respect of the application for judgment.

Result

[14]   Costs on dismissal of the defendants’ application for judgment on admission of facts are reserved.

Associate Judge Brittain