Harrison v Frieswijk

[2014] NZHC 2791

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4089 [2014] NZHC 2791

UNDER	Section 339 Property Law Act 2007
BETWEEN	DONALD ALEXANDER HARRISON Plaintiff
AND	WILHELMUS JOHANNES FRIESWIJK Defendant

Hearing:	3 October 2014
Appearances:	B P Molloy for Plaintiff R D Butler for Defendant
Judgment:	11 November 2014

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 11 November 2014 at 2 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

Solicitors:           Haigh Lyon, Auckland

Greenwood Roche Chisnall, Auckland

Counsel:             R D Butler, Auckland

HARRISON v WILHELMUS JOHANNES FRIESWIJK [2014] NZHC 2791 [11 November 2014]

[1]      This judgment determines an application for costs following discontinuance of the proceeding.  Each party seeks an award of costs against the other.

Background

[2]      The Plaintiff (“executor”) is the executor of the estate of John Frieswijk

(“deceased”).

[3]      The deceased owned a half share in land situated on Great Barrier Island (“the land”).   The Defendant (“Mr Frieswijk”), the deceased’s father, owned the other half share.  By his will the deceased appointed Mr Frieswijk an executor of the estate, an appointment Mr Frieswijk resigned.

[4]      The executor wished to sell the estate’s half share in the land.  Mr Frieswijk did not wish to sell his half share.  The executor commenced proceedings seeking an order for sale of the land and division of the proceeds of sale, pursuant to s 339

Property Law Act 2007.

[5]      The executor sought summary judgment on the claim.   By judgment dated

9 December 2013, Gilbert J refused summary judgment and reserved costs.1

[6]      Mr Frieswijk commenced attempts to sell the land to a third party after the application for summary judgment was dismissed.

[7]      The proceeding was set down for a two day hearing on 16 June 2014.

[8]      On or about the date of trial the parties entered into an agreement to sell the land to third parties.  The executor filed a notice of discontinuance on 14 July 2014, with costs left at large.  The parties have since filed memoranda and I have heard from counsel.

[9]      The costs in issue comprise:

(a)       costs on the application for summary judgment; and

1      Harrison v Friewijk [2013] NZHC 3267.

(b)      the costs otherwise incurred in the proceeding.

Defendant’s memorandum

[10]     Mr  Frieswijk  seeks  costs  of  $6,268.50  on  the  application  for  summary judgment, these costs being calculated on a 2B basis.  Mr Frieswijk submits that he is entitled to costs because he was the successful party and because the summary judgment  procedure  is  inappropriate  per  se  to  resolve  a  contested  application pursuant to s 339.

[11]     Mr Frieswijk also seeks the costs of steps taken in the proceeding following a without prejudice letter to the executor dated 11 June 2014.

Plaintiff ’s memorandum

[12]     The executor submits that costs on the application for summary judgment should lie where they fall.  The executor seeks an award of costs on the balance of the proceeding.

Decision

Summary judgment

[13]     I am satisfied that Mr Frieswijk should have costs on the application for summary judgment.   Mr Frieswijk was the successful party and I do not consider there are grounds on which to depart from the usual rule that costs follow the event.

[14]     That said, I am not sympathetic to the grounds expressed for Mr Frieswijk’s opposition.  Those grounds (as they appear from counsel’s submissions) were that the market on Great Barrier Island was depressed and illiquid and that Mr Frieswijk considered the ancillary arrangements proposed by the executor to be unsatisfactory. These arrangements proposed the appointment of an independent valuer, the appointment of a real estate agent to market and sell the property and an equal division of the net proceeds of sale.

[15]     I do not consider any of these grounds meritorious.   A party who owns a share of real property with another (or others) is always at risk of an application pursuant to s 339.  Moreover, I do not consider it unreasonable for a vendor to seek a contemporaneous valuation by a registered valuer or for that vendor to appoint a licensed real estate agent to conduct the marketing and sale of land.   Nor is there evidence before me that Mr Frieswijk agreed in principle to a sale subject to some other arrangements being made as to the costs of sale.

[16]     Regardless, an application for summary judgment in a proceeding such as the present will often face difficulty simply because of the nature of the issue before the Court. This case was no exception.

Balance of proceedings

[17]     In respect of costs incurred in the balance of the proceedings, counsel for Mr Frieswijk relies on two letters dated 11 June 2014 and 26 June 2014.  The gist of his submission is that the executor failed, without reasonable justification, to accept offers  conveyed  in  these  letters  and  that  he  should  have  costs  for  steps  taken thereafter accordingly.

[18]     The first letter, written without prejudice and dated 11 June 2014, was a proposal  by  Mr  Frieswijk  to  the  executor  that  he,  Mr  Frieswijk,  continue negotiations subject to the executor withdrawing his application and filing fresh proceedings if it should prove necessary to do so.

[19]     The executors response was contained in a without prejudice letter dated

12 June 2014.  Mr Frieswijk has attached this reply to his submissions, although it is not apparent to me that the executor waived privilege in his letter.   Regardless, nothing turns on the point.  The executor declined to withdraw his proceedings but proposed that Mr Frieswijk consent to an order for sale, the order to lie in Court for five weeks.  Mr Frieswijk declined.

[20]     I am not satisfied that either party acted unreasonably in declining the other’s offer and do not consider there are grounds for awarding costs on the basis of this correspondence.

[21]     The second letter on which Mr Frieswijk relies is to the executor and dated

26 June 2014.  This letter is expressed to be “Without Prejudice save as to costs”. Mr  Frieswijk  proposed  that  the  estate  should  pay  costs  of  $16,964.30  being

$6,268.50 on the summary judgment application, and $10,447.50 for procedural steps taken after the letter dated 11 June 2014 and disbursements.

[22]     The executor declined this offer.  His response was that the settlement agreed with Mr Frieswijk was no more than the estate had sought from the beginning.  The executor proposed that all costs lie where they fall.

[23]     I do not consider anything turns on this correspondence.  By his letter dated

26 June 2014, Mr Frieswijk was not making a proposal that he be paid more than he now seeks.

[24]     Counsel for Mr Frieswijk submits that the general rule is that a plaintiff who discontinues a proceeding will pay the costs of the defendant.2   I do not consider that rule relevant in the present case, given that the parties agreed on a course of action which avoided the need for the matter to go to trial.

[25]     I do not consider that either party was unreasonable in the manner in which they conducted themselves after Gilbert J declined the executor’s application for summary judgment.   In my view, costs and disbursements on the balance of the proceedings should lie where they fall.  I order accordingly.

Result

[26]     The Plaintiff is to pay costs of $6,268.50 to the Defendant.

..................................................................

M Peters J

2      High Court Rules, r 15.23.