Goodwin v Rocket Surgery Limited - [2015] NZHC 749

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2013-454-000397 [2015] NZHC 749

UNDER Section 145 of the Land Transfer Act 1952

BETWEEN

WAYNE ERNEST GOODWIN AND MARY ELIZABETH GOODWIN Applicants

AND

ROCKET SURGERY LIMITED Respondent

Judgment: 17 April 2015

JUDGMENT (ON THE PAPERS) OF COLLINS J [Costs]

Introduction

[1] This judgment determines an application for costs brought by Rocket Surgery Limited (RSL) against Mr and Mrs Goodwin (the Goodwins). The application relates to a proceeding in which RSL initially obtained summary judgment and an order for costs against the Goodwins. That judgment and costs order was made by Associate Judge Abbott.

[2] The summary judgment was set aside, as was the costs order. The Court of Appeal quashed the costs order made by Associate Judge Abbott because the Goodwins’ legal aid application had not been resolved by the time Associate Judge Abbott considered s 45 of the Legal Services Act 2011 (the Act) when he awarded costs against the Goodwins.

[3] The Court of Appeal ruled the costs application should have been adjourned until resolution of the Goodwins’ legal aid application. I have now been assigned this matter. The parties are content for me to determine the application on the
papers.

GOODWIN v ROCKET SURGERY LIMITED [2015] NZHC 749 [17 April 2015]

[4] As the Goodwins were in receipt of legal aid, RSL is prevented by s 45(2) of the Act from obtaining a costs order against the Goodwins personally, unless there are exceptional circumstances. RSL seeks costs on a 2B basis notwithstanding that the Goodwins were in receipt of legal aid.

[5] Against this background, the key issues I must determine are:

(1)Are there exceptional circumstances justifying an order of costs against the Goodwins?

(2)If so, having regard to the means of the Goodwins as well as their conduct, should an order of costs be made against the Goodwins personally?

(3)If, because of s 45, no order for costs is made against the Goodwins, what is the quantum that would have been made under s 45(5) of the Act?

Background1

[6] The Goodwins owned a residential property in Mosgiel near Dunedin. They fell into financial difficulties and faced a sale by the mortgagee, Westpac Banking Corporation (Westpac).

[7] The Goodwins’ son-in-law, Mr Harvey, assisted them in holding onto the property. Mr Harvey and some colleagues were shareholders in RSL, which is a small private company. RSL agreed to borrow a sufficient sum to buy the property at the mortgagee’s sale and to cover financing costs for a year while the Goodwins recovered financially. The ultimate purpose was to enable the Goodwins to buy the property back in their own names or through a nominee.

[8] It was agreed that RSL would derive some reward for providing the finance. Apart from an understanding that when repurchasing the Goodwins would repay
RSL all outgoings spent on the property, they were also to pay a fee for providing the

1 Background summary taken from Goodwin v Rocket Surgery Ltd [2013]…

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 Goodwin v Rocket Surgery Limited

Details

AGLC: Goodwin v Rocket Surgery Limited [2015] NZHC 749
Case: [2015] NZHC 749
Decision Date: 17 April 2015

CaseChat Overview and Summary

In this case, Rocket Surgery Limited (RSL) brought an application for costs against the Goodwins after obtaining summary judgment in a property dispute. The Goodwins, who were in receipt of legal aid, appealed the decision, and the Court of Appeal quashed the costs order. The Court of Appeal ruled that the costs application should have been adjourned until the Goodwins' legal aid application was resolved. The matter was referred to Collins J, who determined the application on the papers. The key issues Collins J had to decide were whether there were exceptional circumstances justifying an order of costs against the Goodwins, whether such an order should be made against them personally, and if no order was made, what the quantum of costs would have been under s 45(5) of the Act.

Collins J found that there were exceptional circumstances justifying an order of costs against the Goodwins, as they pursued the appeal unreasonably and put RSL to unwarranted expense. However, Collins J determined that it would not be reasonable to impose a personal liability for costs on the Goodwins due to their lack of means. Instead, Collins J ordered that a costs award on a 2B basis together with disbursements ($11,362.26) would have been made against the Goodwins if their means had not prevented the making of such an order against them personally. The Goodwins were not held personally liable for the costs, and the order specified the quantum of costs that would have been awarded under s 45(5) of the Act.

Orders