Fursdon v Brian Barclay Trustee Limited
[2024] NZHC 145
•12 February 2024
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2022-409-499
[2024] NZHC 145
UNDER the Property Law Act 2007 and Partnership Act 2019 BETWEEN
VICKI GILLIAN FURSDON
Plaintiff
AND
BRIAN BARCLAY TRUSTEE LIMITED,
as trustee of the BRIAN BARCLAY TRUST First Defendant
BRIAN RAYMOND BARCLAY
Second Defendant
Hearing: (On the papers) Counsel:
M J Sandom for Plaintiff A M Corry for Defendant
Judgment:
12 February 2024
JUDGMENT OF ASSOCIATE JUDGE LESTER
(Costs)
FURSDON v BRIAN BARCLAY TRUSTEE LIMITED [2024] NZHC 145 [12 February 2024].
[1] Ms Fursdon seeks costs against the first and second defendants jointly on the basis that she was the successful party in respect of her summary judgment application, subject to a judgment delivered 29 November 2023.1
[2] The dispute essentially involved Ms Fursdon (Vicki) and Mr Barclay (Brian), the second defendant. Vicki and Brian had been in a relationship but separated in January 2021. As recorded in the judgment, Vicki and Brian formed a partnership under the Partnership Act 1908 to which Vicki sold a property she held when the relationship began in 2015. There is a written partnership agreement.
[3] There is also a contracting out agreement between the parties pursuant to s 21 of the Property (Relationships) Act 1976.
[4] The real issue between the parties was the treatment of the property held in the partnership.
[5] In the proceeding, Vicki sought sale orders in respect of the property which had been occupied by Brian since separation.
[6] The partnership agreement recorded that in the event Vicki and Brian separated and neither of them were able to buy out the other, the property would be sold and the proceeds divided as recorded in their partnership agreement.
[7] The proceeding was commenced on 3 November 2022. Notwithstanding the clear provision of the partnership agreement that the property would have to be sold on separation if neither Vicki or Brian were able to buy out the other, no sale took place.
[8] The statement of claim sought various orders in addition to the sale order including claims against Brian for occupation, rent, adjustments to rates and insurance in favour of Vicki, and recovery of other costs.
1 Fursdon v Brian Barclay Trustee Ltd [2023] NZHC 3422.
[9] The short point is that as neither party was able to fund a purchase of the property, it was always going to have to be sold.
The principles
[10] Rule 14.1(1)(a) of the High Court Rules 2016 (the Rules) encapsulates the primary principle that “costs follow the event”. The starting point is that “success on more limited terms is still success”.2 I consider Vicki was the successful party in her summary judgment application as she ultimately obtained the sale order sought.
[11] Vicki was required to bring this proceeding to obtain the sale order. The parties had attended a Judicial Settlement Conference (JSC) which was unsuccessful and on which I will comment further below. However, after the JSC, Vicki applied for summary judgment which essentially settled by the time the matter was called in court, subject to one issue which was ruled upon.
[12] At the JSC, Brian hoped to be able to buy the property but was unable to raise finance.
[13] I do not consider that either party should be liable for costs for the JSC. Of the scale costs claimed by Vicki totalling 12.8 days, 2.5 days relate to the JSC including
1.5 for preparation of documents such as written submissions and will say statements.
[14] There is an order that there is no order as to costs either way in respect of the JSC. I note that material prepared for a JSC would not have been entirely wasted and would have, to some extent, been utilised for the subsequent summary judgment application.
[15] Ms Corry, counsel for Brian, in her submissions in opposition to costs, refers to the fact that there are outstanding issues in the present proceeding. I will take that into account in the cost orders below.
2 See Robert Osborne and others McGechan on Procedure (online ed, Thomson Reuters) at [HR14.2.01(1)(b)].
[16] Ms Corry argues that until Brian’s proceedings in the Family Court challenging the status of the agreements between the parties are resolved, it is not possible to determine who is ultimately successful. I do not accept that submission. As Brian was unable to purchase Vicki’s share, as I have said, the property had to be sold. The status of the property was controlled by the Partnership Act and the partnership agreement. Once partnership issues are finally resolved the shares received by each partner may well be relationship property, but first the partnership must be wound up to determine what each partner would receive by way of their interest in the partnership.
[17] Ms Corry submits that Vicki’s case was advanced without proving the partnership agreement. I do not see this point as significant given the way the hearing developed. In any event, if the agreement had not been produced through an oversight given it was not in dispute that there was a partnership, it is hard to see how there could be a serious objection to the agreement being available to the Court for the purposes of the hearing.
[18] Ms Corry submits the summary judgment application was made in unusual circumstances but I do not see that as relevant to costs. At the risk of repetition, the property had to be sold when neither party could buy out the other.
[19] Ms Corry refers to a Calderbank offer by Brian to buy out Vicki’s share in the property on the basis that she be paid 50 per cent of the value of the property with further top-up payments. Vicki obtained an order that she receive 57 per cent of the net proceeds of sale, a better result than Brian’s offer. Accordingly, I do not see the Calderbank offer is relevant one way or the other.
[20] As to the quantum of the costs claim by Vicki, Ms Corry submits that costs should be limited to the summary judgment steps. She submits: “The substantive case was not heard nor determined and all remaining issues are now before the Family Court.” Counsel have not advised me of the future of the proceeding in this Court, but in any event, the Family Court will be able to make such costs orders as it thinks fit in respect of issues it has to deal with.
[21] While there are other issues between the parties still to be resolved, as I have said, a sale of the property should not have been resisted.
[22] In respect of all steps following the preparation and filing of the summary judgment, there is an order that Vicki is entitled to costs on a 2B basis plus disbursements as fixed by the Registrar, including the costs of printing the bundle and the filing fee on the application for summary judgment. By my calculation that is
3.6 days in respect of the post summary judgment steps.
[23] Of the remaining 9.2 days, I have ordered that there is no order for costs in respect of the JSC, that is 2.5 days, leaving a remainder of 6.7 days for the balance of the proceeding. Given the proceeding is not entirely resolved it is not appropriate that Vicki receive a costs award that assumes that she is 100 per cent successful in respect of her proceeding albeit she succeeded on the major aspect of her claim.
[24] Accordingly, in respect of the remaining items in the costs schedule annexed to Ms Sandom’s costs submission of 14 December 2023, there is an award of costs of
6.7 days, reduced by 20 per cent to reflect that this proceeding is not yet concluded.
[25]Accordingly, the costs award is as follows:
(a)3.6 days in respect of steps after the summary judgment application; and
(b)5.36 days in respect of the remaining steps set out in the costs schedule.
[26]There is no order as to costs in respect of the JSC.
[27]This is a total of 8.96 days at $2,390.00 per day, making a total cost award of
$21,414.40. The only disbursement sought is in respect of the printing costs for the bundle of $277.15. I allow that disbursement. I assume, however, that there is a filing fee on the application for summary judgment. Vicki is entitled to that disbursement.
[28] I am not aware of whether the property in question has been sold. If it has not been sold then the costs are to be paid from Brian’s share of the sale proceeds before they are distributed to him.
[29] Counsel are to advise on the status of this proceeding given Ms Corry’s advice that all remaining issues are now before the Family Court.
Associate Judge Lester
Solicitors:
Conway Lane Law, Rangiora (for Plaintiff)
Williams McKenzie, Rangiora (for First and Second Defendants)
Copy to counsel:
M J Sandom, Barrister, Rangiora (for Plaintiff)
G M Brodie, Barrister, Christchurch (for Plaintiff)A M Corry, Barrister, Christchurch (for First and Second Defendants)
0