Edmonds v Holland

[2021] NZHC 504

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001820

[2021] NZHC 504

UNDER

Section 339 of the Property Law Act 2007

BETWEEN

JUAN RICARDO EDMONDS

Plaintiff

AND

ANNE HELEN HOLLAND

Defendant

Hearing:	(On the papers)
Counsel:	Rajiv Rao for the Plaintiff Deepal Kumar for the Defendant
Judgment:	15 March 2021

[COSTS] JUDGMENT OF MOORE J

This judgment was delivered by me on 15 March 2021 at 11:00 am pursuant to Rule 11.5 of the High Court Rules.

Registrar / Deputy Registrar Date:

EDMONDS v HOLLAND [2021] NZHC 504 [15 March 2021]

Introduction

[1]                 On 11 February 2021, I made orders by consent for the sale of a property in Pakuranga Heights (“the Property”) jointly owned by the parties under s 339 of the Property Law Act 2007.1

[2]                 I reserved the issue of costs and in accordance with my directions, Juan Edmonds, the plaintiff, filed a memorandum seeking scale costs on a 2A basis of

$4,780.00, together with a sole disbursement of $1,350.00.

Background

[3]                 Mr Edmonds and his mother Anne Holland, the respondent, lived in the Property as joint tenants until their relationship broke down irrevocably in June 2020. Mr Edmonds sought to sell his half share in the Property to Ms Holland. He also gave Ms Holland the opportunity to buy his share or consent to the sale of the Property. Ms Holland purportedly agreed to sell the Property but was dilatory in taking the necessary steps to effect sale. Mr Edmonds believed the only way to achieve the sale was by an order of the Court.

[4]                 Ms Holland accepted that joint ownership of the Property was no longer tenable and that the Property had to be sold as neither party had the financial means to purchase the other party’s share. Ms Holland’s dispute was solely with the conditions of sale and the timeframe.

[5]                 The claim was scheduled to be heard on 3 May 2021. However, prior to that, the parties filed a joint memorandum on 11 February 2021 seeking entry of orders by consent. The parties reached settlement on all matters except costs. In accordance with my orders, they have filed memoranda on costs.

1      Edmonds v Holland HC Auckland CIV-2020-404-1820, 11 February 2021 (Minute of Moore J Civil List Judge (Dealt with on papers)).

Principles

[6]                 The principles relating to costs are set out Part 14 of the High Court Rules 2016 (“the Rules”), with the general principles set out at r 14.2. The starting point is that generally “the party who fails with respect to a proceeding or interlocutory application should pay costs to the party who succeeds”,2 and that “so far as possible the determination of costs should be predictable and expeditious.”3 Rule 14.7 sets out the circumstances in which a Court may reduce or refuse an order for costs. Rule 14.7(g) is a “catch-all” exception which allows Courts to reduce or refuse to award costs where a good reason has been identified to depart from the general principles.4

[7]                 Where, as in this case, there has been no judicial determination reached in the proceedings, this Court has held that costs may be awarded against one of the parties if it is obvious they would have failed with respect to the proceeding.5

[8]                 Clark J helpfully summarised the approach to costs where there has been no judicial determination of the proceedings in the following way:6

“(a) The court has power to make a costs order when the substantive proceedings have been resolved without trial but the parties have not agreed on costs. There is no tradition of “no order as to costs” merely because a dispute has been settled except as to costs. That said, if it is not possible for the Judge to say what the likely outcome would have been, that in itself is a possible order.

(b)        The overriding objective is to do justice between the parties without incurring unnecessary court time and consequent additional costs.

(c)        At each end of the spectrum will be cases where the merits and likely successful party will be obvious. In between, to differing degrees, there will be cases that are less clear. How far the court will be prepared to inquire into the unresolved substantive issues will depend on the circumstances of the case.

(d)        In the absence of a good reason to make any other order the fall-back position is to make no order as to costs.”

2      High Court Rules 2016, r 14.2(1)(a).

3      Rule 14.2(1)(g).

4      Taylor v District Court at North Shore (No 2) HC Auckland CIV-2009-404-2350, 13 October 2010 at [9].

5      Ng v Pauatahanui GS Ltd [2014] NZHC 3396, at [11].

6      Byrne v Rose [2017] NZHC 2886, at [14].

Submissions

[9]                 Mr Edmonds submits that he should be considered the successful party and costs should be awarded in his favour. He says that the consent order for sale was granted on largely the same terms as those he sought in his statement of claim. Further, Mr Edmonds submits that the proceedings needed to be issued to provide the impetus for the resolution of the dispute.

[10]              Ms Holland submits that she would suffer financial hardship if the Court granted a costs order against her. She says that she is a 77-year-old pensioner of limited financial means. She submits the financial position of herself and her husband has been worsened by Mr Edmonds’ conduct which resulted in criminal charges and a protection order being made against him. She says that the proceedings were unnecessary and the dispute could have been resolved privately between the parties.

Discussion

[11]              In her statement of defence, Ms Holland offered no alternative conditions or timeframe to those proposed by Mr Edmonds. As Mr Edmonds submits, the draft orders contained in the joint memorandum of counsel were broadly consistent with those in his statement of claim. Had the parties not settled, it appears likely similar orders would have been made by the Court.

[12]              This Court has previously found that financial hardship may be considered under r 14.7(g) when determining whether to reduce or refuse a costs award if there is evidence of limited financial means in a sworn affidavit.7 However, a reduction of costs due to financial hardship will not typically be justified under the Rules, and the discretion under r 14.7(g) should be reserved for exceptional cases.8

[13]              Ms Holland’s submission that she is of limited financial means is thus of limited relevance, particularly in absence of evidence to support her submission. Furthermore, as the consent order for sale stipulates, any award of costs would be deducted from the net sale proceeds of the Property. There is no mortgage on the

7      Lowe v Auckland Family Court [2017] NZHC 656, at [5].

8      Foni v Foliaki [2018] NZHC 3126, at [11].

Property and it will be sold at auction with a reserve of $1.2 million. Assuming a sale at or about that sum, I regard it as unlikely an award of costs would cause Ms Holland financial hardship.

Result

[14]              Mr Edmonds is awarded costs on a 2A basis and may recover this amount, and the disbursement, from Ms Holland’s share of the net sale proceeds pursuant to the orders for sale.

Moore J

Solicitors:

Inder Lynch, Manukau Mr Kumar, Auckland