Douglas v Douglas - [2014] NZHC 602

NOTE: PURSUANT TO S 169 OF THE FAMILY PROCEEDINGS ACT 1980, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO
11D OF THE FAMILY COURTS ACT 1980. FOR FURTHERINFORMATION, PLEASE SEE COURT/LEGISLATION/RESTRICTIONS-ON-PUBLICATIONS.

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2013-463-118 [2014] NZHC 602

BETWEEN
JOHN DOUGLAS

Appellant

AND

SARAH DOUGLAS

Respondent

Hearing: On the papers

Counsel:

D Williamson for Appellant
R O Gowing for Respondent

Judgment:

28 March 2014

JUDGMENT OF KATZ J (Costs)

This judgment was delivered by me on 28 March 2014 at 4.30 pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors: Wadham Goodman, Palmerston North
Gowing & Co. Ltd, Whakatane

DOUGLAS v DOUGLAS [2014] NZHC 602 [28 March 2014]

Introduction

[1] In Douglas v Douglas1 I partially allowed an appeal by Mr Douglas from a decision of the Family Court. In particular, I quashed an economic disparity award of $63,000 made by the Family Court in favour of Mrs Douglas. I upheld, however,
a spousal maintenance award in her favour, in the sum of $38,775.

[2] Mr Douglas now seeks an award of 2B scale costs in respect of his appeal, in the sum of $20,027.18. Mrs Douglas was in receipt of a grant of legal aid
for these proceedings and accordingly Mr Douglas must establish “exceptional

circumstances” before an award of costs can be made.2

He submitted that

exceptional circumstances existed on three key grounds, namely that Mrs Douglas:

(a) engaged in conduct that caused him to incur unnecessary cost;3

(b) failed to comply with the procedural rules/orders of the Court;4 and/or

(c) unreasonably refused to negotiate a settlement.5

Relevant legal principles

[3] Section 45 of the Legal Services Act 2011 (“Act”) provides, relevantly, that the liability of a legally aided person for costs is as follows:

(1) If an aided person receives legal aid for civil proceedings, that person's liability under an order for costs made against him or her with respect to the proceedings must not exceed an amount (if any) that is reasonable for the aided person to pay having regard to all the circumstances, including the means of all the parties and their conduct in connection with the dispute.

(2) No order for costs may be made against an aided person in a civil proceeding unless the court is satisfied that there are exceptional circumstances.

1      Douglas v Douglas [2013] NZHC 3022. Pseudonyms have been used for the names of the parties to protect their identities.
2      Legal Services Act 2011, s 45.
3      Section 45(3)(a).
4      Section 45(3)(b)
5      Section 45(3)(e).

(3) In determining whether there are exceptional circumstances under subsection (2), the court may take account of, but is not limited to, the following conduct by the aided person:
(a) any conduct that causes the other party to incur unnecessary cost: (b) any failure to comply with the procedural rules and orders of the
court:

(c) any misleading or deceitful conduct:

(d) any unreasonable pursuit of 1 or more issues on…

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 Douglas v Douglas

Details

AGLC: Douglas v Douglas [2014] NZHC 602
Case: [2014] NZHC 602
Decision Date: 28 March 2014

CaseChat Overview and Summary

In Douglas v Douglas, the appellant, Mr Douglas, sought an award of costs against Mrs Douglas, who was receiving legal aid, following an appeal against a Family Court decision. The Family Court had awarded Mrs Douglas $63,000 for economic disparity and $38,775 for spousal maintenance. The appeal partially succeeded in quashing the economic disparity award but upheld the spousal maintenance award. Mr Douglas sought an award of 2B scale costs against Mrs Douglas, amounting to $20,027.18, under the Legal Services Act 2011, which requires exceptional circumstances to be established before costs can be awarded against a legally aided party.

The court considered whether Mrs Douglas engaged in conduct that caused Mr Douglas unnecessary costs, failed to comply with procedural rules or orders of the court, or unreasonably refused to negotiate a settlement. The court determined that Mrs Douglas's refusal to negotiate a settlement prior to the appeal was not unreasonable, as she had been awarded a legal entitlement in the Family Court decision, which remained in effect until the appeal was heard. The court found that her decision to pursue the appeal was justified and did not constitute exceptional circumstances warranting a costs award against her.

The court concluded that the application for costs was dismissed, and costs were to lie where they fell. The judgment underscores the principle that a legally aided party is not obliged to compromise their legal rights, established at trial, especially when the issues raised on appeal are not straightforward. The decision highlights the importance of assessing each case on its own facts when determining whether exceptional circumstances exist for awarding costs against a legally aided party.

Orders